Monkey Business

Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers, seeing that there were many monkeys around, went out to the forest, and started catching them. The man bought thousands at $10 and, as supply started to diminish, the villagers' efforts dwindled.

Then the announcement came that he would buy at $20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms.

The gentleman increased his offer to $25 each and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

Then, the most exciting offer of all! He would now be buying monkeys at $50! However, he had to go to the city on some business, so his assistant would now buy on his behalf. In the absence of the businessman, the assistant said to the villagers:

"Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 apiece. When the man returns from the city, you can sell them to him for $50 each!"

The villagers rounded up all their savings and bought every last monkey.

They never saw the man or his assistant again, and they were stuck with lousy monkeys everywhere!

And now...


You have a better understanding of how the stock market works.