Henry the frog was hopping home when he ran into Mr. Hops.

"How are you doing, Mr. Hops?"

" Well, I'm doing pretty good, Henry. Funny I ran into you. I've been watching the Lily Pad Industry."

"Oh really?" says Henry.

Mr. Hops claims that he plans on investing on some stocks. Henry doesn't understand why he would do such a thing when he could just buy a new den.

Henry and Mr. Hops make their way to a bench to continue their conversation. Mr. Hops explained that there would be no problems because he would sell the stocks for profit once the value went up.

Henry responds by asking if Mr. Hops knows the risks of investing in the stock market. He tells him that he should first understand that all stocks are not the same and that they have different levels of risk.

Mr. Hops says "I've noticed the Lily Pad Company has been doing very well lately and I could use the extra cash. I understand that it is risky, but I know how it should be done."

As an investor, Mr. Hops has already distinguished which stocks to avoid and which ones were safe. He uses the Efficient Market Hypothesis to make decisions. Mr. Hops does not think it actually matters which stock he buys, because he believes all stocks are priced correctly.

Henry acknowledges Mr. Hops experience and decides to tell him about his spending plans as well. He has just received his taxes and tells Mr. Hops that he is going to move to Holly Lakes.

Mr. Hops congratulates him on his decision, and warns him to spend wisely. Money is not infinite, and has many variables.