Financial Deception E06: Low price to book value ratios can be hugely MISLEADING

[@Bchgfu7tnfz5jgujnhj]

Can we go in more detail into the very theory of investing. For example, Amazon. The company does no buybacks and no dividends for the last 30 years of its existence. So what does the average shareholder truly get out of it? Nothing. Small shareholders will only make money if someone is willing to pay a higher share price. And a large shareholder, if he does not start selling assets (trucks, warehouses, etc...) can only wait for the day when they start paying dividends. Very interesting...

[@kostadin_ristovski]

Hey Daniel, thank you for the question. I would disagree with your rationale. Let's keep it simple, imagine that you have the opportunity to invest in a company that owns an apartment. Imagine that all the income that is being generated in the form of rent, is being invested to buy another apartment, and another, and so on. In this case, you can also claim that you did not get anything out of it, as there was no dividend paid out, but it is quite clear that the company is more valuable. I think the management of Amazon did an exceptional job to delay distributing the profits to the shareholders, and instead, continues to reinvest to grow. At some point, when there aren't enough good investment opportunities, they'll have to use the cash either for buybacks or dividends. I'll think of how to cover this, whether in a video, or a series of videos.

[@Bchgfu7tnfz5jgujnhj]

@@kostadin_ristovski Thanks for explaining. Yes, a video on literal theory in investing would be great. 😉

[@gorandamchevski]

Great video, "What am I missing?" is always a good start in an analysis.

[@kostadin_ristovski]

You are absolutely right Goran!

[@lucianocalia4470]

wow! you really went detailed on this one :) really interesting

[@kostadin_ristovski]

This is very high level, going into details would likely require a 2+ hours video

[@Reciprocation_of_goodwill]

thank you for the video, it's great!

[@kostadin_ristovski]

It is my pleasure!

[@andrejvangelski4514]

Love it!

[@kostadin_ristovski]

Glad to hear that Andrej!

[@kidze73]

useful.

[@kostadin_ristovski]

Glad to hear that!