World’s richest frog

Once upon a time there was a frog in a pond. Obviously like the porverbial frog in the pond, it did not know too much about the world outside.

One day the frog got a Rs. 5 coin (when my Grandmom told me the story it was a 0.50 Re coin, but lets adjust for inflation!). He knew there was no other frog which had any money at all. So clearly, he was the world’s richest frog. Now as a rich frog he wanted to help other frogs, but first help himself. So he decided to solve the biggest problem first.

A huge elephant used to come to the pond everyday for a bath. And daily many frogs and rats would get killed under the body weight of the elephant. Our frog friend decided that the world’s richest frog can address this problem.

So he decided to stand in the path of the elephant – and stop him from coming to the pond. However, the elephant did not see him and he was crushed to death.

I can see the relevance of this story to how people behave with respect to the equity (general) markets at large. ‘I have been in the markets for 5 years, so I understand markets’ …now replace this 5 with 35 or 45…the concept does not change. The market is a great teacher, but the pupil should not behave like an arrogant fool – the market normally crushes many people for their sheer arrogance. God bless the frogs in the pond…

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