> You are correct about the empirical facts (there exist some companies don't currently pay dividends), but theory is needed to understand that if those company's never paid dividends, they would be worthless.

But since that is absolutely false, I only need to point out the many companies that don't pay dividends and yet are widely accepted as investments. Here is a list of companies that do not pay dividends:

http://finance.yahoo.com/news/biggest-companies-dont-pay-div...

Note the presence of Google, Amazon and Yahoo on the list -- companies that you have just claimed are worthless investments.

Companies that serve a stable market and that aren't growing any more, will in most cases pay dividends in order to hold onto investors. They take corporate profits and divide them among the shareholders -- that's what "dividend" means.

Companies that are growing, like most modern technology companies, often don't pay dividends. They don't because they need the corporate profits to grow the company.

Many modern high-tech companies do not pay dividends. The stockholders fully understand the reason why (the company is still growing), and those stocks are very attractive to investors because they are growing along with their companies.

> Therefore the value of a share is the expected value of all future dividends.

No, it is the expected value of future growth, regardless of the source (growth and dividends). For God's sake, stop arguing about something about which you know precisely nothing.

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http://trendshare.org/how-to-invest/why-do-some-companies-no...

Quote: "a company that plans to grow much larger might reinvest its profits back into the company so that it's worth more in the near future. You often see this in technology stocks, where acquiring more customers or increasing the value of each customer will hopefully produce even more revenue in the future—and more profits.

A company might also acquire other companies. This is similar to investing in the company. You can see this happen in very large companies, where it's cheaper and easier to buy an established but smaller company than it is to start a new line of business.

Finally, a company might buy back shares of its stock and retire them, so that every remaining share owns a larger piece of the company and thus becomes more valuable. This strategy makes a lot of sense when the price of the company's stock is artificially low.

In one sense, these strategies have one thing in common: they're all intended to make the company itself intrinsically more valuable, whether by expanding the customer base and product offering, by providing opportunities to enter new markets or capture more of an existing market, or by increasing demand and thus raising the price of the stock itself.

A company which can do this is worth more than gold; a company with a solid business that grows and generates more cash every year is a great company to own. Instead of financing its growth (or operations) through debt, it's free to build up its own equity."

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> Your smugness is unwarranted and reflects badly on your character. I suggest you read some books on economics and try to be a better person.

You need to go out and acquire an education. You cannot locate a defense for your beliefs, you have no idea to whom you are speaking, how I made my fortune, and you are certainly not in a position to lecture anyone about equities.