Once upon a time................
Posted: Sun Oct 12, 2008 4:26 pmOnce 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 hundreds at $10 and as
supply started to diminish, the villagers stopped their efforts.
At this point the man announced that he would now buy at $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 offer increased to $25 each and the supply of monkeys became so limited 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 each! However,
since he had to go to the city on some business, his assistant would now buy on
his behalf for 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 each 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.
They never saw the man nor his assistant again, only monkeys everywhere!
Now you have a better understanding of how the stock market works.
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 hundreds at $10 and as
supply started to diminish, the villagers stopped their efforts.
At this point the man announced that he would now buy at $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 offer increased to $25 each and the supply of monkeys became so limited 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 each! However,
since he had to go to the city on some business, his assistant would now buy on
his behalf for 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 each 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.
They never saw the man nor his assistant again, only monkeys everywhere!
Now you have a better understanding of how the stock market works.
