It really isn't.

Some of us invest in things because we expect that in the long run the pay-off will be greater than the investment. In business terms, that means that the cost of buying into a company is less than the profit you are expecting to realise through dividends over the long run.

The idea (modern trend?) of having companies that pay no dividends, whose shares are valuable only because someone else might buy them for more money later, seems to me to be exactly what tomgallard said: a sure sign of a bubble.

I've often wondered why we allow companies, particularly publicly traded ones, to sit on an ever-growing war chest rather than paying out their profits to investors as dividends. I don't know enough grown-up economics to appreciate the realistic consequences of regulating that kind of behaviour, but the zero-dividend, war-chest approach seems to promote all the wrong behaviours in terms of markets and investors, assuming your goal is to have a healthy economy that promotes making useful products and providing useful services.

Because we believe that a large, successful company has investment options available to it that are not available to Joe Average, and can achieve a better return on that capital for its investors than they would be able to achieve themselves if it were returned immediately as a dividend. If you disagree with that analysis, you can easily vote with your investment dollars.

What I'm asking is whether we should allow them to exercise those options. Doing so, as you hinted in your own comment, means that large companies have to become skilled investors, and this will inevitably become a significant or even the dominant part of their existence instead of actually making useful things or providing useful services.

As we've observed all too recently, not all of those extra investment options are quite as effective as they were supposed to be. Moreover, any investment option that is legitimate could probably offered to (now richer) individual investors if large companies were not allowed to use it. So I'm not sure where the big downside is of restoring the natural links between companies that do socially useful things like make good products, companies that make profits, and companies that are attractive to outside investors when they need extra funding to grow faster.

Alternatively, if these companies are going to be allowed to invest their profits on behalf of their own shareholders, perhaps it's about time they were regulated as financial institutions. If nothing else, shareholders should be protected from senior management who are erroneously convinced that they can do a better job gambling^Winvesting their shareholders' profits than the shareholders themselves can do of choosing where to spend a legitimate return on their investment.

Large companies carrying trading/gambling departments not related to the rest of their business is, as you say, probably not a good thing.

If it's no dividend, then the stock is only valuable as a flip-asset. If it's got any dividend at all, then the stock has real value as an income stream.