Understanding the Stock Market

Old 07-10-2008, 08:33 AM
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Default Understanding the Stock Market

I know we have a lot of finance guys here. I hve never really understood the stock market and exactly what the owner of the shares really has. Is this story a correct description of how a stock market works?......

[story begins below]

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

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 with all their savings and bought all the monkeys.
Then they never saw the man nor his assistant, only monkeys everywhere!

[End of story]

LI Sound Grunt is online now  
Old 07-10-2008, 08:56 AM
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Default Re: Understanding the Stock Market

pretty dang close
rotordriver is offline  
Old 07-11-2008, 05:26 PM
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baypro21 is offline  
Old 07-11-2008, 06:56 PM
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Default Re: Understanding the Stock Market

More like commodities speculation than the stock market. That's why you're paying 4.50/gal for gas.
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