Your characterization of stocks is just wrong. The definition of a ponzi scheme is that the returns are paid by new investors but when a company is buying back shares it is earning that money by providing a service or selling a product. That product or service is purchased by a customer, not an investor. Money is coming from outside the company.
What you are misunderstanding is that the difference between paying dividends and a stock buyback isn't that great. Both mechanism distribute money owned by the company to shareholders. With dividends you simply receive a payment. With stock buybacks you get the ability to sell the stock back to the original company instead of selling the stock to another investor.
Think about it this way. The company has a valuation of 50 billion dollar. It is buying 1 billion dollar worth of stock back every year. After 50 years the company owns itself and every investor has been paid back. Of course this is an oversimplification but it shows that even if you hold onto your stock after everyone else has "cashed out" you can still earn your money back by selling the shares to the company.
What you are misunderstanding is that the difference between paying dividends and a stock buyback isn't that great. Both mechanism distribute money owned by the company to shareholders. With dividends you simply receive a payment. With stock buybacks you get the ability to sell the stock back to the original company instead of selling the stock to another investor.
Think about it this way. The company has a valuation of 50 billion dollar. It is buying 1 billion dollar worth of stock back every year. After 50 years the company owns itself and every investor has been paid back. Of course this is an oversimplification but it shows that even if you hold onto your stock after everyone else has "cashed out" you can still earn your money back by selling the shares to the company.