Most people might just as well buy a share of the whole market, which pools all the information, than delude themselves into thinking they know somet… - Merton Miller

What counts is what you do with your money, not where it came from.

When I started worrying about stocks, it was the late 1930s and early 1940s and it didn't seem like a good way to make money then, either.

Think of the firm as a gigantic tub of whole milk. The farmer can sell the whole milk as it is. Or he can separate out the cream, and sell it at a considerably higher price than the whole milk would bring. (Selling cream is the analog of a firm selling debt securities, which pay a contractual return.) But, of course, what the farmer would have left would be skim milk, with low butter-fat content, and that would sell for much less than whole milk. (Skim milk corresponds to the levered equity.) The Modigliani-Miller proposition says that if there were no cost of separation (and, of course, no government dairy support program), the cream plus the skim milk would bring the same price as the whole milk.