Today's Economics Lesson - How The Stockmarket Works

A man appeared in a small village one day and announced that he wanted to buy monkeys. He said that he would pay the villagers $10 for every monkey. The villagers caught all the monkeys they could find and sold them to him for $10 each.

A few days later another man appeared and said that he would pay $20 for each monkey. But there weren't any more monkeys around. They were all owned by the first man.

So the villagers went to the first man and said that they were willing to take the monkeys back and return his money. But the monkey owner was unwilling to sell.

The villagers raised the offer price to $12 per monkey, then $15 and finally to $19.99 but the man just didn't want to sell, even though he clearly didn't have any use for the monkeys

Eventually, just to see whether he would sell, they offered him $25 but he still refused.

The villagers were puzzled by this.

Finally, one of them (a subscriber to The Hot Monkey Secrets newsletter - thanks Mr Enthusiastic) figured out that there must be someone else who was going to come to the village and offer even more money for the monkeys.

Convinced that this was the real explanation, they went and offered the man $50 for each monkey and sure enough, he accepted.

With dollar signs in their eyes, they quickly paid the first man before he changed his mind and took possession of the monkeys. The man went away with his money and presumably lived happily ever after.

The villagers waited for the next buyer to come along and buy the monleys from them.

And waited.

And waited.

And waited.