Once upon a time in a village, a Merchant announced to the
villagers that he would buy goats for $ 20. The villagers, seeing that there
were many goats around, went out to the forest and started catching them.
The Merchant bought thousands at $20 and as supply started
to diminish, the villagers stopped their effort. He further announced that he
would now buy at $30. This renewed the efforts of the villagers and they
started catching goats again. Soon the supply diminished even further and
people started going back to their farms.
The offer rate increased to $35 and the supply of goats
became so little that it was an effort to even see a goat, let alone catch
it!
The Merchant now announced that he would buy goats at $60!
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 goats in the big cage that the man has
collected. I will sell them to you at $50 and when the man returns from the
city, you can sell it to him for $70.
" The villagers squeezed up with all their savings and
bought all the goats. Then they never saw the man nor his assistant, only goats
everywhere!
Welcome to the 'Stock Market' .....
