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How the stock market works.

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Once upon a time in a village, a man appeared and announced to thevillagersthat he would buy monkeys for $10 each.

Thevillagers, seeing that there were many monkeys around, went out to the

forest, and started catching them. The man bought hundreds at $10 and as

supply started to diminish, the villagers stopped their efforts.

At thispoint the man announced that he would now buy at $20 each. 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 offerincreased to $25 each and the supply of monkeys became so limited

that it was an effort to even see a monkey, let alone catch it!

The mannow announced that he would buy monkeys at $50 each! However, since

he had to go to the city on some business, his assistant would now buy on

his behalf for him. In the absence of the man, the assistant told thevillagers, ‘Look at all

these monkeys in the big cage that the man has collected. I will sell them

to you at $35 each 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.

They never saw the man nor his assistant again, only monkeys everywhere!

Now you have abetter understanding of how the stock market works.

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