A very apt story considering whatâ€™s going on in the BSE:
Once upon a time in a village a man appeared who announced to the villagers that he would buy monkeys for Rs. 10. The villagers seeing that there were many monkeys went out in the forest and started catching them. The man bought thousands at 10 and as supply started to diminish and villagers started to stop their effort
He announced that now he would now buy at 20 rupees. 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 25 and the supply of monkeys became so scarce that it was an effort to even see 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 the man.
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 comes back you can sell it to him for 50.” The villagers queued up with all their saving to buy the monkeys.
Neither did the man come Nor his assistant. Just only monkeys all around.
That’s how the Share Market Functions….