How Share Markets work…

While I am talking monkey, here’s one more joke that I had received a long time ago. I had totally forgotten it. But I remembered this one after seeing the stock markets around the world crash in the last few days.

A man and his assistant walked into a village and stated that they would buy monkeys from the villagers for $10 each. The villagers went into the jungle, caught some and were paid. The man and his assistant would put the monkeys into a cage.

This effectively decreased the supply of monkeys in the jungle and simultaneously increased demand. So it came to be that the villagers began to tire. The man decided to spur them on by increasing his offer price to $20 per monkey.

With renewed vigour the villagers went further into the jungle and “invested” more time but were duly rewarded.

So this continued until one day the price of monkeys was pegged at $40. A time came when literally there were no more monkeys left in the jungle.

The man disappeared, stating that he was going to get more money.

He left his assistant in the village with the cage full of monkeys of all sizes and shapes.

The assistant then calls the villagers around and says: “My master is gone for a little while but I am willing to sell you these monkeys at $100 each so that you can sell them to him for $150.”

The villagers were delighted. They were soon lining up and bought every single monkey in eager anticipation of selling them to the man.

The next day they woke up to find that the young man’s tent was empty. They waited for days on end.

After a week, they realised that they had been swindled and the man and his assistant were not coming back and all they had really was a village full of monkeys (the real ones plus the ones who had fallen for this intricate scheme).

And that is exactly how share markets work :-)

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  • 1 Comment »

    Comment by Bubbles
    2008-02-05 23:01:47
    MyAvatars 0.2

    You have hit the nail right on the head. Many of us fall for this “Scheme” without fail so that the rich guy get richer without fail :)

     
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