The history appears to be repeating itself for the nth
time in the stock market. The small time traders, who normally join the band wagon
right at the top of the market cycle, have once again jumped into the market
arena. Completely overwhelmed by the left-out syndrome, they are queuing in
hordes in front of the counters where they had lost their fortunes, not long
ago. Many of these scrips are trading at a fraction of the price they were
trading just six months ago. Some notorious stocks are topping the volumes
charts. A strong urge to prove a point, rather than greed, appears to be the
dominating factor here. Everyone wants to prove that it was their bad luck
rather than lack of financial acumen, which caused them loss last time. I wish
luck favours these traders this time. But in my heart I know for sure, this is
not going to be the case. This reminds me of a very popular stock market story,
which I think needs to be revisited.
“Once upon a time in a village a man appeared and announced to
the villagers that he is willing to buy monkeys @ Rs. 10 each. The villagers
lured by his offer, went out in the forest and started catching monkeys. The
man bought thousands @ Rs. 10 and as supply started to diminish and villagers
appeared tiring in their effort, he revised his offer. He announced that now he
would buy monkeys @ Rs. 20 each.
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 man increased his offer rate to Rs. 25. The villagers
would now spend hours in the forest to catch even a few monkeys. Soon no monkey
was left in the forest. The man would coax the villagers every day to go and
get more monkeys. The villagers would try their best but in vain. As the
frustration grew, the man made the offer even more lucrative. He announced that
he would now buy monkeys @ Rs.50 each! But there was no monkey.
At this point in time, the man left his servant in the village
and left for the city. In the absence of the man, the servant told the
villagers, "Look at the monkeys in the big cage that my principal has
collected. To help the poor villagers, I am willing to cheat my master. I will
sell these monkeys to you @ Rs. 35 each, so that you could sell them back to my
master @ Rs. 50 when he comes back from the city.” The villagers queued up with
all their saving to buy the monkeys. Soon the servant had sold all the monkeys
back to the villagers. He then also left for the city with all the money he had
collected. Then there was no trace of the man or his servant. Only monkeys were
left in the village.
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