Tuesday, September 25, 2007

How stock markets work!!!

It was autumn, and the Red Indians on the remote reservation asked their New
Chief if the winter was going to be cold or mild. Since he was a Red Indian
chief in a modern society, he couldn't tell what the weather was going to
be. Nevertheless, to be on the safe side, he replied to his Tribe that the
winter was indeed going to be cold and that the members of the village
should collect wood to be prepared. But also being a practical leader, after
several days he got an idea. He went to the phone booth, called the National
Weather Service and asked 'Is the coming winter going to be cold?' 'It looks
like this winter is Going to be quite cold indeed,' the meteorologist at the
weather service Responded.

So the Chief went back to his people and told them to collect even more
Wood. A week later, he called the National Weather Service again. 'Is it
going to be a very cold winter?' 'Yes,' the man at National Weather Service
again replied, 'it's definitely going to be a very cold winter.'

The Chief again went back to his people and ordered them to collect every
scrap of wood they could find. Two weeks later, he called the National
Weather Service again. 'Are you absolutely sure that the winter is going to
be very cold?' 'Absolutely,' The Man replied. 'It's going to be one of the
coldest winters ever.'

'How can you be so sure?' the Chief asked. The weatherman replied, 'The Red
Indians are collecting wood like Crazy.'

This is how stock markets work!!!

2 comments:

Amit Gawande said...

Awesome post and a great analogy!!!
Good work :)

Jithin R. J. said...

nice1