Friday, October 10, 2008

How the stock market works

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 t hat 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 again, only monkeys
everywhere!
Now you have a better understanding of how the stock market works.

I know who I am in this story (see gambling post below), How about YOU?

8 comments:

dietrich509 said...

I am the guy in the village telling the villagers this is all a scam. I then am either ostracized by the community when I run the man and his assistant out of town or have the smug satisfaction of telling my neighbors "I told you so" in the face of their personal tragedy/greed. Where there is an absence of greed, there is an absence of fraud.

Brenton said...

Are monkey futures traded on the Merc?

The Microblogologist said...

I think I would be the one watching from the sidelines holding onto my money too paranoid to get involved.

dietrich509 said...

If you can articulate it, someone is probably selling futures for it.

dietrich509 said...

Oh, and Brenton for President!

Kimmguru said...

Yeah....I'm definitely the monkey. So dumb that I get caught, then sold & finally re-purchased to my capturer. It's all good as long as I get to fling poop on somebody!

dietrich509 said...

In case you didn't see Daily Show last night, their financial expert recommended investing in "Food" and "Weapons", if financial problems persist they think investing in "Fire" might be advantageous.

Kimmguru said...

This poop flinging monkey tagged you in a picture game!