how the stock market works

barney4001

Some years ago in an African 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 with all 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 work

TheInquisitor

So what you saying is there's a chance of one or two of us who invest in the market to strike it rich... YAHOOOOOOOOOOOOOO!

books4sale

Nice story dude, very nice.

Isoaxe

Not really an analogy of how the market works.

An accurate one of how a 'Pump and Dump' scheme works though.

Scanlas The 2nd

I think the lesson of the story is that the monetary value of a good is pyschological. It's only worth as much as someone is willing to pay in the moment. The price doesn't necessarily relate to a good's value.

draiochtanois

This post has been deleted.

betonit

Scanlas The 2nd wrote: »

I think the lesson of the story is that the monetary value of a good is pyschological. It's only worth as much as someone is willing to pay in the moment. The price doesn't necessarily relate to a good's value.

as in gold?

paddyandy

It's all the legal stuff that i baulk at.I'd love to understand it at least the simple things for a fellah who sees horses and dogs as a ridiculous way to get poor and stay that way.Any book or website???