Moby
10-26-2008, 11:56 PM
One day a man comes to a village and tells everyone that he'll buy monkeys for $10. Since monkeys are plentiful and easily caught, the villagers catch many monkeys and make lots of money. As the villagers catch more monkeys the number of monkeys declines, they become harder to find and the villagers have more money now so many stop catching monkeys.
The man then claims that he'll buy monkeys for $25 and a new monkey catcher arrives from the city selling traps. Since the monkey catcher is making lots of money with his new traps the villagers want those traps but they can't afford them. They borrow money to buy the traps, catch more monkeys and soon they're making more money than they were before.
One day the man tells the villagers that he has to go to the city but when he returns he'll start buying monkeys for $50. The man's assistant goes to the villagers and tells them that he's unhappy with the man and that the he'll sell the monkeys for $35 and when the man comes back he'll buy those same monkeys for $50 so they can make a profit. All they have to do is borrow some money from the bank to buy the monkeys and some monkey cages from the monkey catcher.
The villagers buy all the monkeys, buy all the traps and never see the man, the assistant or the monkey catcher ever again.
Now you know how the stock market works.
The man then claims that he'll buy monkeys for $25 and a new monkey catcher arrives from the city selling traps. Since the monkey catcher is making lots of money with his new traps the villagers want those traps but they can't afford them. They borrow money to buy the traps, catch more monkeys and soon they're making more money than they were before.
One day the man tells the villagers that he has to go to the city but when he returns he'll start buying monkeys for $50. The man's assistant goes to the villagers and tells them that he's unhappy with the man and that the he'll sell the monkeys for $35 and when the man comes back he'll buy those same monkeys for $50 so they can make a profit. All they have to do is borrow some money from the bank to buy the monkeys and some monkey cages from the monkey catcher.
The villagers buy all the monkeys, buy all the traps and never see the man, the assistant or the monkey catcher ever again.
Now you know how the stock market works.