8971 How the stock market works!

Once upon a time in a village, a man appeared and announced to thevillagers that he would buy monkeys for £10 each.
The villagers seeing that there were many monkeys around, went out tothe forest, and started catching them.
The man bought thousands at £10 and as supply started to diminish, thevillagers stopped their effort. He further announced that he would nowbuy at £20. This renewed the efforts of the villagers and they startedcatching monkeys again.
Soon the supply diminished even further and people started going backto their farms. The offer increased to £25 each and the supply ofmonkeys 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 wouldnow buy on behalf of him.
In the absence of the man, the assistant told the villagers. "Look atall these monkeys in the big cage that the man has collected. I willsell them to you at £35 and when the man returns from the city, youcan sell them to him for £50 each."
The villagers rounded up with all their savings and bought all themonkeys.
Then they never saw the man nor his assistant, only monkeys
everywhere! (scroll down)
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Now you have a better understanding of how the stock market works.

Category
Circolo di Conversazione

Submitted by Anonymous (not verified) on Thu, 03/06/2008 - 08:16

That was a beaut Gio, loved it! I would point out however that when I was left holding a lot of worthless paper after the dot com bubble, it was useful for nothing other than wiping my @rse - whereas, if I had a squad of captive monkeys to show for it I'd have some company, endless amusement and (with the amount of stock I was left holding) also the potential to offset my financial losses by producing some new shakespearian works :-)

Submitted by Anonymous (not verified) on Thu, 03/06/2008 - 09:07

True, not a joke: I once worked in the City -- as a techie, not a trader -- and one of the dealers had heard a rumour that there was going to be a world shortage of goldfish. So he bought several hundred, and had them delivered to his desk in the building. They were sitting around everywhere (in plastic containers, of course). Naturally, there was no shortage and he spent ages ringing round petshops selling them off at a loss.

The same guy also bought a big load of coconuts on a similar rumour. We were tripping over them for weeks.

Submitted by Anonymous (not verified) on Thu, 03/06/2008 - 09:31

he should have cooked themm all up into a big vat of curry and sold it to his colleagues as the next big thing in fusion cuisine ... traders wil believe anyhing if a market analyst tells them so!

Submitted by Anonymous (not verified) on Thu, 03/06/2008 - 10:19

Hi
Being an ex eurobond trader, Christmas was a great time for this type of thing, we "sold" nearly a 100 million USD worth of CUA stock ( Canadian Underground Airways ) in just 4 hours one morning, before anyone twigged.
In house shorting was always a fun time, buying and selling large quantity's of Party Poppers, by the thousands, making sure you were not holding stock on Christmas eve.........then spotting the poor fella that was "holding the stock" trying to talk a cab driver into taking him and his 200 black rubbish bags full of poppers back home to hornchurch....oh those were the dazes.........