How Stock Market Works

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 stopped their effort.
He further announced that he
would now 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 offer increased
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!

The man now announced that he
would buy monkeys at $50 !

However, since he had to go to
the city on some business,
his assistant would now buy on
behalf of him.

In the absence of the man, the
assistant told the villagers.
'Look at all these monkeys in the
big cage that
the man has collected. I will
sell them to you at $35
and when the man returns from
the city,
you can sell them to him for $50
each.'

The villagers rounded up with
all their savings
and bought all the monkeys.

Then they never saw the man nor
his assistant,
only monkeys everywhere!

Now you have a better
understanding
of how the stock market works.