If people make money in stocks and crypto by buying low and selling high, who is buying the stocks from they are high, and why?

Question

Let’s just say for example, I bought a stock at $10. Then it goes up to $500

I can obviously make a profit, but why would someone buy it at such a high price?

Is it like the person who buys it at $500 is hoping that it will go up to $1000, then the person who buys it at $1000 hopes it will go up to $1500, and so on?

In: Economics

Answer 1

If the stock is valued at $500 that’s probably because the company has been very successful and is making more money than it was at $10 and people expect it to keep growing.

Amazon makes much more money now than it did 2 decades ago, that’s why the stock is worth more.