Once upon a time in a village, a
man announced to the villagers that he would buy monkeys for Rs 10. The villagers,
seeing that there were many monkeys around,
went out to the forest and
started catching them..
The man bought thousands at Rs 10
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 Rs 25 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 Rs 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 Rs 35 and when the man
returns from the city, you can sell it to him for Rs 50. " The villagers
squeezed up with all their savings and bought all the monkeys. Then they never
saw the man nor his assistant, only monkeys everywhere!
Welcome to the 'Stock Market'
