stock value is also strictly based on perceived value rather than real value. companies are incentivized to lie about their performance to inflate their stock value for their biggest shareholders
The lies would also happen if it was about the current value of the company.
But that it is about the perceived value or future value is simply a logical consequence: If you assume the company will be much better off in 2 years, you will buy those socks, just like everyone else. So it goes up without the company actually being any better.
They can’t lie about the dividends they paid out, and dividends are a big part of perceived value. To lots of people, they are the only important part.
stock value is also strictly based on perceived value rather than real value. companies are incentivized to lie about their performance to inflate their stock value for their biggest shareholders
The lies would also happen if it was about the current value of the company.
But that it is about the perceived value or future value is simply a logical consequence: If you assume the company will be much better off in 2 years, you will buy those socks, just like everyone else. So it goes up without the company actually being any better.
They can’t lie about the dividends they paid out, and dividends are a big part of perceived value. To lots of people, they are the only important part.
look into how many “high value” stocks actually render dividends. dividends are an extremely minor part of these “financial markets”
More than half of the top ten companies by market cap do pay dividends: Apple, Microsoft, Nvidia, Meta, Broadcom, and Walmart.
Not all do, of course. That’s exactly why some of those “high value” stocks are probably in a bubble, and soon to become not so high value.