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

That is not how people make money in stocks. Stocks represent earnings streams that deliver actual cash either now or in the future. Take that away and they are worthless. Yes, some people trade well and make more than the earnings stream would suggest, but in aggregate that is not (cannot) be true.

Crypto is another matter.