[adios]

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why did the stock go up? because there were more buyers than sellers. not everyone who sold at 30 had bought it at 20 like you. but those buyers at 30 had to get the shares from somewhere.. maybe shorts, maybe people who bought at 40 and cutting their loss, etc.

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This is actually simple. As a thought experiment, if you start a company from nothing and it grows to have sales that generate earnings of say $1,000,000 year it has certainly increased in value. A companies valuation is a function of it's future earnings more or less. Asset values also play a role but quite often a lesser one. The function of the stock market is to establish a value for publicly traded companies. That value is based on future earnings discounted for the equivalent risk free rate and the risk premium that investors demand for undertaking the risk of owning stock in the company. The equity risk premium in the past has been such that it is substantially higher than risk free bond yields. This is known as the ex post risk premium. The future risk premium that compensates stock investors for buying stocks is a subject of much debate in financial circles. This future risk premium is called the ex ante risk premium. Now if a company grows their earnings at a certain rate the market more or less determines what the value of these earnings are. If a company actually generates more earnings than the market anticipates, the value of the stock increases all other things being equal. Therefore the long investor makes money "out of thin air" in two different ways. One is by being paid a risk premium over bonds that will be reflected in the earnings of the companies that comprise the market more or less. The stock holders are the "owners" more or less and ultimately earn the profits. The second way is that an individual companies can produce more earnings than the market anticipates. Now there are many things companies do with earnings (such as paring down debt, paying dividends, making acquisitions, R&D, expanding product lines, etc.) and so valuing those earnings is what the whole stock market is about really. Stock valuations are inherently volatile due to the "debate" if you will over what earnings are worth.