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

Doesn’t even need to be a situation where someone loses – though in the short term it is.

Let’s imagine an imaginary stock that only ever goes up.

You buy this stock for your retirement, and it keeps going up. Eventually you retire.

Now you need to sell that stock to get money to live on. Who are you selling it to?

The young buck early in his career, now saving for his own retirement.

Like catching a moving train. He hops on when you hop off.