FIKIR KRITIS #15

How does the stock market work?

Story #1

Once upon a time, a man appeared in a village 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 a piece and, as soon as the supply started to diminish, the villagers stopped their effort. He then announced that he would buy them for $20 each.

This renewed the villager's efforts and they started catching monkeys again. Soon the supply diminished again even further and people started going back to their farms. The offer was increased to $25 each, and the supply of monkeys became so small that it was a great effort to find even one monkey, let alone catch it!

The man then announced that he would buy the monkeys for $50! However, since he had to go to the city on some business trip, his assistant would now buy them on his behalf.

While the business man was away, 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 all their savings and bought all the monkeys.

They never saw the man nor his assistant again, only monkeys, everywhere! Now you have a better understanding of how the stock market works.

Story #2

It was autumn, and the Red Indians asked their New Chief if the winter was going to be cold or mild. Since he was a Red Indian chief in a modern society, he couldn't tell what the weather was going to be.

Nevertheless, to be on the safe side, he replied to his Tribe that the winter was indeed going to be cold and that the members of the village should collect wood to be prepared.

But also being a practical leader, after several days he got an idea. He went to the phone booth, called the National Weather Service and asked 'Is the coming winter going to be cold?' 'It looks like this winter is going to be quite cold indeed,' the weather man responded.

So the Chief went back to his people and told them to collect even more wood. A week later, he called the National Weather Service again.

'Is it going to be a very cold winter?'

'Yes,' the man at National Weather Service again replied, 'It's definitely going to be a very cold winter.'

The Chief again went back to his people and ordered them to collect every scrap of wood they could find. Two weeks later, he called the National Weather Service again.

'Are you absolutely sure that the winter is going to be very cold?'

'Absolutely, ' The Man replied. 'It's going to be one of the coldest winters ever.

''How can you be so sure?' the Chief asked.

The weatherman replied,'The Red Indians are collecting wood like crazy.'

This is how stock markets work!!!