I understand that a share of stock represents a share of ownership in a company. But if dividends are not paid, what is the actual value of that stock? Why does it have value? The company making more money does not flow to me because I own the stock. So is it basically just like owning a baseball card in that if the player (company) does well more people want to collect (own) their cards (stock) and this the price goes up?
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Simple answer: a company’s stock price is based on the *perception* of that company’s *future* earnings. As that perception improves for any reason whatsoever, the stock price goes up. Buying a share of stock is very much like placing a bet that that’s going to happen.
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