Must read. The Monkey and magician story, by Barun Mohanty

[Icham Aidibe]

While browsing the internet, I found a funny post on Quora. It's so nicely explained that I didn't resist to share it 👍

Once a magician came to a village to loot the village.

Magician- I will give you 1000 rupees per monkey. Will you catch monkeys for me?

Villagers- Yes! We will. [They felt happy for making easy money.]

[Magician started buying monkeys. After some days the population of monkeys went down. It was difficult for villagers to find monkeys.Villagers stopped catching monkeys and started firming again.]

Magician- I will give 2000 rupees per monkey.

[Again, villagers started catching monkeys. But the supply decreases because it was hard to find monkeys. Some villagers found and got rich. But many of the villagers went to firm again.]

Magician- I need more monkeys. Please find some.

Villagers- We need more money. We want 5,000 per monkey as there are few monkeys left.

[The supply went down, demand went high, so villagers started charging more. The price went high.]

Magician- Okay. I will give you 5,000 per monkey.

Villagers provided some monkeys for 5,000 rupees. There was no monkey left in the jungle.

Now, the demand was in peak. Villagers asked the magician for 10,000 per monkey and they decided to take monkeys from another village.

Again price went high.

Magician played a trick.

He said his assistant to sell all the monkeys he had for 7, 500 to the villagers.

The demand was high.

Villagers wanted to make more money selling monkeys at 10, 000 to the magician.

So, they bought all the monkeys in ignorance from the assistant of the magician.

Now, the villagers had all the monkeys but the magician had left the village with money.

Now, there was no demand as the magician had gone.

The monkeys were just useless for the villagers.

Now, the price for the monkeys was zero.

Demand went down, price went down.

This is how price of the stock increases and decreases.

And some stock market scams also take place this way.

Manipulators buy stocks in bulk to show the demand, the stock price goes high. When people start buying and the price is in peak, manipulators sell their stock and make money.

Thumbs up if you like it. It will encourage me to write more answers. Thanks.