Story reproduced, author unknown
Once upon a time a man told a small village, “I will buy monkeys for $10 each.”
Since there were many monkeys in the forest, the villagers caught them and sold them to the man.
As the supply of monkeys diminished, the villagers’ efforts slowed, so the man offered them $20 each.
They renewed their efforts but the supply of monkeys diminished further, so he increased his price to $25.
Soon no one could even find a monkey in the forest.
The man increased his price to $50, but announced, “Since I must go to the city on business, I authorize my assistant to buy monkeys on my behalf.”
As soon as his boss was gone, the assistant told the villagers, “My boss has collected lots of monkeys. I’ll sell them to you for $35 and then, when he returns, you can sell them to him for $50.”
The villagers rounded up all the money they could and bought as many monkeys as possible. Then they had monkeys everywhere…
… but they never saw the man or his assistant again.
And now you understand the workings of the stock market!
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OHH Great post! I’m loving your website;
The villagers are what we call speculators, people who buy stocks only with the intention of selling them at a higher price without actually looking at what the stock is truly worth. These are people who are gambling on stocks for quick profits without doing much research, and there are plenty of companies out there selling them monkeys 🙂
Investors buy good, well-researched stocks and hold on to them. Investors look at stocks as growing, dividend-paying assets, and not as a shortcut to overnight riches.