Once upon a time in a village, a man appeared and announced to the villagers that he would like to buy any monkeys that the villagers could collect for $10 each.

The villagers seeing that there were many monkeys around, went out into the forest, and started catching them. The man bought hundreds for $10 each. Eventually, as supply started to diminish, the villagers stopped their effort. The man then announced that he would now buy any monkeys for $20 each. 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 man then increased his offer to $25 each. By this time 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 for $50 each. However, since he had to go to the city on some business, his assistant would now buy the monkeys on his behalf.

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

So, the villagers rounded up with all their savings and bought all the monkeys. Then they never saw the man nor his assistant ever again. All they had now were monkeys everywhere and empty bank accounts.

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