Share Market or Monkey Business

Once a man arrived at a village and announced that he would buy monkeys at 100 bucks each.

Villagers were very happy, as they started catching monkeys from the nearby forest. The man, as promised gave them Rs 100 for every monkey. It was a good source of income for villagers. The man bought hundreds of monkeys, but after a few days, the number of monkeys dwindled and people lost interest.

Then that man said that he would give Rs 200 for each monkey. Hearing this, people again went back to the forest to catch monkeys to sell them to the man at enhanced price.

But after a few days the matter cooled down again. The forest ran out of monkeys.

Now that man said that he would pay Rs.500 for every monkey. But as he had to go to the city, he hired an assistant for the job.

Villagers were desperately trying to get more monkeys, but there was no monkey left in the forest. This is when the assistant stepped in with an attractive offer that villagers could not refuse,

“I’ll sell the monkeys for Rs 300 each. Sell them back to the Sir at Rs 500 each, when he comes back”.

The villagers liked this proposal. They collected all their savings and some of them even borrowed money for easy income. They bought all monkeys at Rs 300 to sell them back at Rs 500.

The next day, there was neither assistant nor his Sir. Just monkeys and monkeys everywhere in the village.

🐒🐒🐒🐒🐒🐒🐒🐒🐒🐒🐒🐒

Greed is the source of evil. This is what happens in a Stock market, which is a different ballgame altogether.

This story reminds me of Princeton University Professor Burton Malkiel, who claimed in his best-selling book, “A Random Walk Down Wall Street”, that “A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well, as one carefully selected by experts.”

The monkeys did a much better job than both the experts and the stock market. It was found that on average, 98 of the 100 monkey portfolios beat the 1,000 stock capitalization weighted stock universe each year.

So monkey business is not always monkey business. Never say, stop being monkeys.

Mahatma Gandhi, India’s famous champion of peace also used the statue of “Three Wise Monkeys” e.g. Mizaru, Kikazaru and Iwazaru representing the principle, “See No Evil, Hear No Evil, Speak No Evil.”

–Kaushal Kishore

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