Stock market for dummies

Once upon a time, a well dressed gentleman arrived at a certain little town. After checking in at the only inn in town, he ordered an ad to be placed in the local paper. The ad was offering $10 for any monkey that could be captured alive.

The locals knew that the forest was full of monkeys; so they hurried out, got as many as they could and brought them to the gentleman. Just as he had promised, the gentleman paid $10 for each monkey on the spot.

As the monkey population in the forest dwindled the capture of the monkeys was becoming difficult and the locals lost interest in pursuing their newly found career. To re-energize the locals, the gentleman announced that he was raising his offer to $20 per monkey. The locals found a renewed vigor and managed to come back with more monkeys.

Consequently, there were even fewer monkeys now. The gentleman then raised the ante to $25 per monkey. A new wave of expeditions into the forest resulted and the last monkey was finally captured.

At this particular point, the gentleman announced that he was ready to buy any available monkey for $50, but there were no monkeys to be found in the whole forest. Pondering his monkey purchasing enterprise over, this well dressed gentleman left and asked his assistant to stay behind to consolidate his monkey empire.

A few days later, the businessman’s assistant summoned the locals and told them:

“Look. Come over here and see this huge cage. See? It’s full of all the monkeys my boss bought from you to complete his collection. This is the deal: I sell them to you for $35 and then, when he comes back, you can sell them back to him for $50 each, just as he said before he left. This monkey collection is extremely important to him.”

The locals pooled their resources and savings and bought the monkeys and waited for the gentleman to come back.

They have been waiting ever since. They never again saw the gentleman or his assistant. The only thing before their eyes was a huge cage full of monkeys they bought with their savings and retirement money.

This is how the stock market works.

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(Translated from a story that was circulated in Spanish through the internet by the guys at PDA-Toronto. Proof reading: Mary Outhwaite. This could be a story that was originally written in another language -English?- then translated into Spanish and now... once again!).

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