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 his behalf.
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 their savings and
bought all the monkeys.
Then they never saw the man nor his
assistant ever again, only monkeys
everywhere!
Now you have a better understanding of how
the stock market works.
Recent Comments