You are missing something: the discount rate used in a DCF model is not the &quot;risk free&quot; rate so if everything goes &quot;as expected&quot; you are still making more money than you would buying government bonds.<p>One can say that this &quot;risk premium&quot; actually reflects the expectation that things don&#x27;t go as well as expected. But the fact is that in the aggregate and in the long term equity investors are still doing &quot;better than expected&quot; and there is no agreement on why it is so (this has been called the &quot;equity premium puzzle&quot;).