Pyramid anyone?
Bubble, actually. The "correct" value of a stock should be the current cash value of all future dividends plus the present cash value of anything that would end up being paid to stockholders if the company is liquidated. Those who sell buy price below that price or sell it above make money; those who buy above that price or sell below it lose money. Of course, without a crystal ball one can't say what the "correct" price is, except in retrospect, but it's important to note that the real value of a stock, if it's affected by the market at all, would only be affected by the extent to which the market affects future dividends. If people go crazy buying stock at $100/share when it's fundamental value is only $20/share, those people who bought at $100/share are either going to end up losing $80/share, or foist their losses on someone else. The fact that they spent more than $20/share won't make the stock worth that.