[gieksosz]

This is not exactly like that:

- new companies go IPO, they do it because there is liquidity in the market, so they can count on someone buying their shares and cashing in.

- some blue-chip companies pay out dividends

- as much as many people hate on that, profitable companies engage in shares buy backs which is a way to return money earned by the company to its shareholders. If the company makes no profit, it has less to do buy-backs with.

- in the end a share is a piece of a company, big part of their long term valuation will always be driven by their fundamentals like a ratio between profit and revenue or how likely they are going to default on their debts, no one wants to own a piece of company that is going to disappear

in summary, there is quite some connection to the real economy, but I agree that part of the valuation is just because other people pour money in it is just not that bad.

[alanfranzoni]

It is true that the total market capitalization may be connected with more companies being publicly traded. But the stock market won't create value on its own. It means that somebody pours money into it.