Remember the time when your parents were called to the principal's office because of some trouble you got into at school? And after you were sent home with them, remember the long lecture about being a good boy/girl? INEVITABLY, at some point in the whole (almost) one -sided conversation, you would have raised a small argument, a small but very popular one of course. Like this one...
"But ma, all the other kids were doing it" . And then your parents think they can go all Buddha on you and decide to quell you with the 'smart' metaphor of:
"So if all your friends were to jump into the well, would you do that as well??"
[The first well ---->]
and you would probably have shut up. But were they really that awesomely correct for you to admit defeat?
So, now that I'm an economist and with all the buzz about the recession going around, I did get to read up a little about stock market crashes. Now a crash happens largely due to large scale selling of stocks (or any other security) leading to a downward spiral of devaluations. Now, if you held a stock and you DIDN'T sell during a market crash, they would be worthless in a very short time and you'd lose a lot of hard earned money. Now it so happens that in a crash, not all parties know why the stock is so bad and needs to be sold (asymmetric information), they only know that it IS being sold and hence is bad and they'd better start selling as well. So, coming back to the well.. if all your friends are jumping into the well, you'd better to that too... else you're screwed...
Here's why you might want to jump into the well when everyone around you is also doing the same..
1. You're in the
2. There's a nuclear shockwave approaching
3. The aliens from Mel Gibson's "Signs"are here, and as you might know, they are dissolvable
and a million other reasons. Your friend's aren't stupid, if they are all jumping into the well, I'm pretty sure they have a valid reason to do so. And I guess you'll want to as well if you knew that reason.. but only that you dont know it.. yet...
So, we finally realise that what your mommy told you... was.... well....wrong :|