10-10-2008, 12:54 PM
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.
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.
