> That is done via dividends or buybacks.

Nope, dividends (and buybacks) are irrelevant: only total return matters:

* https://www.pwlcapital.com/the-irrelevance-of-dividends-stil...

The amount the company pay shareholders, and what people believe the company will pay shareholders, is what defines a companies price. If the a company never pays dividends or does buybacks its value will plummet. It's idiotic to say well dividends and buybacks are irrelevant: only total return matters because future dividends and buybacks are the only factors that play into total return.

> If the a company never pays dividends or does buybacks its value will plummet.

AAPL went public in December 1980. It paid dividends from 1987 to 1995. It then restarted in 2012. Steve Jobs returns to Apple in 1997. Somehow I see AAPL rising in value during its non-dividend paying years.

AMZN when public in May 1997, and has never paid a dividend. AMZN has done some share buybacks in its history, but has not since 2012. Somehow I see AMZN rising in value.

See also the history MSFT: somehow it has had a good total return despite not doing buybacks or dividends for most of its existence.

There is no explanatory power in dividends or buybacks when it comes to stock returns:

* https://en.wikipedia.org/wiki/Factor_investing

* https://www.pwlcapital.com/the-irrelevance-of-dividends-stil...

The value of an asset is how much it will pay out. If a company never pays its shareholders deciding instead to burn profits it becomes worthless. Apple has value because people believe that at some point in the future apple will decide to give its hundreds of billions of dollars in cash back to investors. Amazon was in a growth phase which is why investors were/are ok with profits being reinvested. Shareholders would not allow that strategy to continue indefinitely. Eventually they've got to see a return.

> The value of an asset is how much it will pay out.

No, the value of an asset is how much you will get for it.

Steve McQueen's 1968 Mustang Fastback from the movie Bullitt has neither dividends nor buybacks, but it was auctioned in January 2020 for US$ 3.4M.

* https://en.wikipedia.org/wiki/Bullitt

Paul Newman's personal "Paul Newman" Rolex Daytona sold for US$ 17.75M:

* https://www.hodinkee.com/articles/paul-newman-rolex-daytona-...

> Eventually they've got to see a return.

They can see a return at any point: sell your shares for more than you bought them for. Boom: capital returns.

Dividends do not matter:

* https://canadiancouchpotato.com/2011/01/18/debunking-dividen...

A dollar in your pocket is a dollar in your pocket regardless of whether it came from dividends or sell your shares:

* https://www.moneysense.ca/magazine-archive/the-income-illusi...

You are performing what is called "mental accounting":

* https://ritholtz.com/1982/11/explaining-investor-preference-...

* https://www.etf.com/sections/index-investor-corner/21413-swe...

* https://en.wikipedia.org/wiki/Mental_accounting

Chiming in here after reading this entire thread to say that you are definitely missing the point of the above commentator.

"the value of an asset is how much you will get for it."

and the price of an asset is an estimate of its value. projection of future dividend/buybacks is an important part of determining that value. the idea that its irrelevant to pricing is ludicrous.