Understanding the Stock Market

I believe this was from an Irish Newspaper article. It is probably one of the easiest methods of explaining the stock market. Enjoy !!!

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, but as supply started to diminish, the villagers stopped their efforts. At this point the man announced that he would now buy them at $20 each. This renewed the efforts of the villagers, and they started catching monkeys again.

Soon the supply diminished even further so people started going back to their farms.Then the offer increased to $25 each, whereupon the supply of monkeys became so limited 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 each!

However, he had to go to the city on some business so his assistant would now buy on his behalf for 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 each and when the man returns from the city, you can sell them to him for $50 each.'

So the villagers rounded up all their savings and bought all the monkeys. They never saw the man nor his assistant again, but there were monkeys everywhere!

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