Quote:
Maybe my problem is that I don't see any value in the ability to control.
Yes, from reading your posts, I'd say that's probably the issue. The ability to control a company is a huge value I think, if you ever can attain that control, and if the company is a good one. You can strip the company and sell off pieces, for money. You can liquidate the entire thing, for money. If you see great potential you can hang on to it and pocket the profits (rather than reinvesting them), and earn money- this is of course the whole point of dividends. The bottom line is that you have the control over what a company does with its money and assets- giving it/them to you or trying to use it/them to make more money. More often then not its a combination of the two.

Of course, most people never get that kind of control, but the fact that it's there makes the correlation between company performance and the price of the stock more reasonable. And if stock prices don't retain their correlation then it will self adjust. When a stock is undervalued, someone with deep pockets is going to buy it for the control potential and not let go unless the price exceeds the value of their control.

But the whole thing hinges on the notion that someone, somewhere cares about control of companies and is willing to pay for it. It doesn't have to be you or I, but there are plenty of people out there doing exactly that- looking for companies to buy at a good price.


Edited by JeffS (21/03/2006 14:57)
_________________________
-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.