A perspective on the stock market.

Mohammad Ala
by Mohammad Ala
27-Mar-2008
 

Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $5 each.

The villagers seeing that there were not many monkeys around, went out to the forest, and started catching them. The man bought hundreds at $5 and as supply started to diminish, the villagers stopped their effort. He further announced that he would now buy at $10 each. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and villagers started going back to their farms. The offer increased to $20 each and the supply of monkeys became so few that it was an effort to even see a monkey, let alone catch one!

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 buy on behalf of him.

In the absence of the man, the assistant told the villagers. "Look at all these monkeys in these big cages 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. Then they never saw the man or his assistant again. They had only monkeys everywhere!

This is a perspective on how many companies operate in the stock market!

Balatarin
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perfect example

by maziar fayaz (not verified) on Fri Mar 28, 2008 10:05 AM PDT

i really liked your story, and it was really easy to digest. you seem to be a clever guy :D:D


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IRANdokht

ouch

by IRANdokht on Fri Mar 28, 2008 09:20 AM PDT

you just reminded me of all the monkeys I've bought...

 

thank you Professor Ala

IRANdokht


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Stock Market Regulation

by Baabak (not verified) on Fri Mar 28, 2008 04:56 AM PDT

That was a good point which also called market bubbling but if we want to be realistic and fair it is not that the whole market is fake one bubbling the price as according to the NASD this is againt the regulation and they monitor the market and marketing in case any suspicious bubbling might be acting besides controing the leakage of the insider information as a vehicle to leverage to make money in the market.

Not that these issues wont ever happen but realistically they have laws to enforce for the hugest share market in the world

any ways, Thank you Dr Al it was a good point ot side of the box to be careful.


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Ineffective education devoid of wisdom

by Ali A. Parsa (not verified) on Fri Mar 28, 2008 04:25 AM PDT

Thanks Dr. Ala,
The saying, "The more things change, the more they stay stay the same" certainly applies in this case. More and more credit institutions are becoming "loan sharks" in larger scale, interestingly with the blessings of the highest leaders whose first responsibility is protection of the public!
Your enlightening anecdote explains how the public can be made ignorant and then taken for a ride and exploited even during our Information Age and in the hub of technology. Yes, as knowledge is power, so is ignorance especially when ignorants are in power! One wonders why this kind of exploitation is not considered terrorism and dealt with accordingly!
Exploiters have targeted the ignorant publics mind, body and pocketbooks all throughout the history and they keep doing it unless the public is effectively educated and informed. Conversely, ineffective education devoid of wisdom and ethics will always make the innocent public vulnerable not only to predatory lenders, but all kinds of predators in all aspects of society. May the Lord save the innocent and hard working and decent public from the combined power of ignorance, arrogance and greed that I call the universal and real axis of evil.


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David ET

monkey business

by David ET on Fri Mar 28, 2008 01:01 AM PDT

good one.Thanks.


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Good story.

by Anonymous00 (not verified) on Thu Mar 27, 2008 09:33 PM PDT

Prof. Ala,
I have purchased few of those companies in my life time. I never learn. Good story.


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