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The Stock Market simply illustrated. ... is there a lesson here?
Once upon a time in a village, a man appeared and announced to the villagers
that he would buy monkeys for Rs10. The villagers seeing that there were many
monkeys around, went out to the forest and started catching them. The man
bought thousands at Rs10 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 Rs25 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 Rs50! 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 Rs35 and when the man returns from the city, you can sell it to him for
Rs50." The villagers squeezed up with all their savings to buy the monkeys.
Then they never saw the man nor his assistant, only monkeys everywhere!! !! -
Welcome to the Market!!!!!
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