Friday, February 15, 2008

to much monkey buisness

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
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 all their savings
and bought all the monkeys.

Then they never saw the man nor his assistant, only monkeys everywhere!

Now you have a better understanding of how the stock market works.

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