Stock market - simple illustration-Who Will make money in market???
Who will make the real money in market...........?
Once upon a time in a village, a man appeared and announced to the
villagers that he would buy monkeys for Rs10. The villagers seeing that
there were many monkeys around, went out to the forest and started
catching them.
The man bought thousands at Rs10 and as supply started to diminish, the
villagers stopped their effort. He further announced that he would now
buy at Rs20. 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 rate increased to Rs25 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 Rs50! 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 Rs35 and when the man returns from the city, you can
sell it to him for Rs50."
The villagers squeezed up with all their savings to buy the monkeys.
Then they never saw the man nor his assistant, only monkeys everywhere!!
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