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.