Here is a post on stock ownership from the perspective of a mouse. What do individuals buy when they buy stock? The books say that you buy rights to a share of future cash flows. When stocks looked more like bonds (when they distributed excess earnings as dividends to shareholders), this was a valid definition. What individual investors buy today is speculative fiction in regards to valuation, potential for acquisition, momentum, earnings surprises, etc. This is a volitile basis for ownership and leads to excess. The books are right in that over the short term dividends don’t matter, but longer term they matter a lot. Why? They force corporate management to avoid low yield investments and opaque accounting. [John Robb’s Radio Weblog] Damn straight. Dividends have always been a major engine of stock market growth. Without them the market can’t grow.