Okay, so I know that the price of a stock rises when there are more buyers than sellers, and this generally happens over time because the company itself is growing over time.
But my question, that I can't find a clear answer to, is why does the growth of a company generally correlate to it's stock price growing over time? I could understand this if it meant buyers had a direct claim to the profits of a company since that would connect you to more cash, but you really don't.
Of course there are dividends which will grow as the company grows, but what about companies with no (or very low) dividends?
It just seems somewhat arbitrary that the value of a stock just goes up over time because the company has grown more valuable. Why would an investor even care about this since it doesn't mean they directly get a share of the profits?
So theoretically, if investors permanently decided that they would only put money into stagnant companies, then the stock of those companies would go up over time and investors would still make money. At what point would the reality of the business even catch up with the stock price? Since there is no direct correlation between the stock price and the company's finances except in the case of bankruptcy and dividend payment.
I suppose maybe it's similar to the concept of fiat currency? Where the currency only has value because a collective has agreed that it does, and a currency gains value when the collective decides that the currency is more valuable than others (based on a multitude of factors).
Is it the company's who are furthest from bankruptcy who generally see the most gains over time?
Just try to understand how a business's finances actually directly connect to the stock price.