On This Day
Ray
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
and, as supply started to diminish, the villagers stopped their effort.
He further announced that he would now buy at $20 for a monkey.
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 increased to $25 each, and
the supply of monkeys became so small that it was an effort to even find
a monkey, let alone catch it!
The man now announced that he would buy monkeys at $50! 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 $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."
regards
Ray
GuyP...@webtv.net
GAP
Ray
> Have never really understood the stock market but this clears it up!
>
> GAP
>
For everyone who sells a share, someone else buys that share. Both think
they are being astute! Interesting ........
regards
Ray
tigercat
investors are seeing nothing more than a bunch of bananas in their
portfolios this evening, and by tomorrow and the next day it may be even
less.
The Tulip Bulb Mania
Extraordinary Popular Delusions And The Madness Of Crowds
Some of you may have heard of the speculative tulip bulb craze that gripped
seventeenth-century Holland. At the peak of the mania, a single tulip bulb
sold for the equivalent of $150,000 - $1,500,000, depending on which
historian you believe. And if you've never heard the story, you won't
believe it's true. But it is. It really happened, and if we're not careful,
it could happen again.
The story begins in 1559 when Conrad Gestner brought the first tulip bulbs
from Constantinople to Holland and Germany, and people fell in love with
them. Soon tulip bulbs became a status symbol for the wealthy - because they
were beautiful and difficult to get.
Although early buyers were people who truly prized the lovely flowers, later
buyers were merely in for the money, and it didn't take long for speculators
to get involved. They created trading activity, and eventually, tulip bulbs
were placed onto the local market exchanges. By 1634, the rage for owning
tulips had spread to the middle classes of Dutch society. Merchants and
shopkeepers began to vie with one and another for single tulip bulbs.
How bad did it get? Well, at the height of tulip mania in 1635, a single
tulip bulb was sold for the following items:
. four tons of wheat
. eight tons of rye
. one bed
. four oxen
. eight pigs
. 12 sheep
. one suit of clothes
. two casks of wine
. four tons of beer
. two tons of butter
. 1,000 pounds of cheese
. one silver drinking cup.
The present day value of all these items? Nearly $35,000! Can you imagine
spending $35,000 for a single tulip bulb? This was happening in Holland in
the mid-17th century. It was getting so bizarre that people were selling
everything they owned - their homes, their livestock, everything - for the
privilege of owning tulips, on the expectation that the bulbs would continue
to grow in value.
As a result, prices - in today's dollars - ranged from $17,000 all the way
up to $76,000 for a single bulb.
By 1636, tulips were established on the Amsterdam stock exchange. Popular
interest had shifted from hobbyists and collectors to speculators and
gamblers. People from all walks of life liquidated their homes and real
estate at incredibly low prices in order to speculate in tulip trading.
Tulip notaries and clerks were appointed to record transactions, and public
laws and regulations were developed to control the tulip craze. But in 1636,
some began to liquidate their tulip holdings. Tulip prices began to weaken,
slowly at first, and then rapidly. Confidence was soon destroyed, and panic
seized the market. Within six weeks, tulip prices crashed by 90%. Defaults
on contracts and liens on owners were widespread.
At first the Dutch government refused to interfere. Instead, it simply
advised tulip holders to agree among themselves on some plan to stabilize
prices and restore public confidence. These plans failed. Eventually,
assembled deputies in Amsterdam declared null and void all contracts that
were made at the height of the mania, meaning prior to November 1636. Tulip
contracts made subsequent to that date were settled if buyers paid merely
10% of the prices to which they had earlier agreed.
But tulip prices continued to fall. Next, the provincial council in the
Hague was asked to invent some measure to stabilize tulip prices and public
credit. Those efforts failed. Tulip prices again fell even lower. In
Amsterdam, judges unanimously refused to honor tulip contracts, regarding
them as gambling activities. The court rules that gambling debts were not
debts in the eyes of the law. No court in Holland could - or would - enforce
payment. Tulip collectors, speculators, and gamblers who had tulips at the
time of the collapse were left to bear ruinous losses.
Tulip prices soon plunged to less than the present equivalent of a dollar
each. Imagine having bought a tulip for $76,000, only to discover six weeks
later that it was now worth less than one dollar. Commerce in Holland
suffered a severe shock, and did not recover for many years.
Now I know what you are saying, "Come on! . who on earth could possibly have
gotten caught up in that?" I know how you feel. After all, we're talking
tulips here - not food, shelter, clothing, or firearms for defense! We're
talking TULIPS! What practical value could tulips have had in Holland in
1636? And what could cause people to lose such control of their senses?
Well, if you think the story is too preposterous to be true, trust me it did
happen. And believe me, too, when I tell you that it could happen again. No
way, you say? Well, I have only two words for you: Beanie Baby.
"Ray" <r...@nowhere.com> wrote in message
news:00f15117$0$20617$c3e...@news.astraweb.com...
Bob Cowell
Gee. I learned TWO new things from Ray today,
how the stock market really works,
and
now I know "astute" isn't something to do with flatulence
Juan M
"Bob Cowell" <trash...@hotmail.com> wrote in message
news:n7a4e4d43s20jv1dk...@4ax.com...
That's why they are called brokers!
Ray
A stockbroker is someone who invests your money until it is all gone.
One of the strangest delusions of some people is that the stockmarket
has no top
The secret of making a small fortune in the stock market is to start
with a big one
An officer in the tax department is writing a book titled, "How We Made
$1,800,000 off the Person Who Wrote A Book Titled, “How I made
$2,000,000 in the Stock Market"
Don't gamble. Take all of your savings, buy some good stock and hold it
until it goes up, then sell it. If it don't go up, don't buy it
I talk regularly to my brokers - both stock and pawn
Never trust a stockbroker who's married to a travel agent.
You know you have the wrong stockbroker when you ask him to buy you 1000
IBM shares, and he asks you how to spell it
Predicting a stock market crash is easy when you realise if you say,
“It’s five o’clock, it’s five o’clock” often enough, then eventually
you’ll be right - twice a day
The main purpose of the stock market is to make as many people as
possible look stupid
Stock market axiom: The public is always wrong.
The Bible says that we came into this world without riches and that we
shall take no riches with us into the next; so, in a sense, stockbrokers
are just doing the Lord's work.
regards
Ray
Polly the Parrot
wrote:
> The Tulip Bulb Mania
>
>
>
> Extraordinary Popular Delusions And The Madness Of Crowds
>
> Some of you may have heard of the speculative tulip bulb craze that
> gripped seventeenth-century Holland. At the peak of the mania, a single
> tulip bulb sold for the equivalent of $150,000 - $1,500,000, depending on
> which historian you believe. And if you've never heard the story, you
> won't believe it's true. But it is. It really happened, and if we're not
> careful, it could happen again.
More here:-
Onkel Petey
Wouldn't that be ASStute?