Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys at $10 each. The villagers, seeing that there were many monkeys around, went into the forest and started catching them. The man very gentlemanly bought thousands of monkeys at $10 each, but as supply started to diminish, the villagers slowed down and eventually stopped their efforts.
The man then announced that he would now buy at $20. This renewed the energy and 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 was then increased to $25 each, but the supply of monkeys became so little that it was a almost a miracle to even spot a monkey, let alone catch one.
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 transact on his behalf.
In the absence of the man, the assistant assembled the villagers and told them :
"Look at all these monkeys in the big cages that the man has collected. I will sell them to you at $35 each, and when the man returns from the city, you can in turn sell them to him at $50 each. Deal or no deal ?"
The excited villagers, smelling a quick-profit killer opportunity, immediately rounded up all their savings and bought all the monkeys. Then they never saw the man nor his assistant again, and there were just monkeys everywhere!
Ladies and gentlemen: Now you have a better understanding of how the stock market works. |
