Stock market & the Jungle Book: Pigs, frogs, vultures and apes -- Can you guess the animal?

If one were to talk about similarities between stock market and jungle, one common thing that comes to mind is that both are not places for egos and animals in a jungle (read stock market) knows that there is only one king of the jungle -- the jungle itself.

Kotak Institutional Equities in its latest strategy note talks about different types of animals, the ones -- if one wants -- can be compared with stock investors today, though Kotak insisted any resemblance of 'animals' to any occupation or practitioners of that occupation is totally coincidental.  

It talked about frogs, pigs, vultures and apes. It said frogs are having a gala time in an ever-replenishing magical pond. Pigs are rolling in lucre. Vultures, it said, are back in the sky, but have nothing much to eat. Apes are at their best -- their usual nonsensical chattering. 

In market, vultures are generally seen as investors who buy distressed stocks at a fraction of their value. A pig, on the other hand, is seen as a greedy risk-taking investor who seeks unrealistic gains. Apes are generally seen as investors, who do not sell stocks, even in market falls, as they won't settle for anything less than peak price. Frogs are investors who give less attention to gradual information but overreacts to dramatic stock market changes. 

The frogs, Kotak said, are having a swell time, having discovered a magical pond that keeps replenishing itself. The pond seems to have overheated of late, visible in the bubbles in the water. 

"However, the frogs are oblivious, as (1) their bodies have adjusted to the rising temperatures and (2) they have confidence about the pond cooling itself automatically. Some jungle observers blame a monthly plan of the pigs to dump cold, hard stuff in the pond’s water (some technical jungle folks vaguely term it ‘liquidity’) for the anomalous behavior of the frogs (they are not jumping out of the boiling water)," Kotak said.

The pigs, Kotak said, are having a great time too. 

"They are smug about the fact that the water in the pond is reaching higher and higher levels (all those bubbles in the water), but ignorant about the fact that the temperature of the water has reached extremely high levels. In fact, the pond’s water could be at risk of turning into steam and disappearing altogether," it said.

"However, they are too busy rolling in the lucre to pay heed to such a potential calamitous event, as they remain (1) largely ignorant about the rules of the jungle and (2) massively confident about their ability to siphon off the water from the pool at the right time before other animals and their fellow pigs do the same," it said.
  
Kotak also talked about apes, who sit in their usual arboreal hauteur, rarely descend to the floor of the jungle and drop overripe fruit periodically for other animals in the jungle. 

"Other animals have learned to ignore these droppings, which has spurred the apes into fighting for existential relevance. Their chattering and nattering have reached unprecedented levels of late, and they have started to speak some unrecognizable language (it sounds like English but has only superlatives and no facts, figures and numbers). It seems like a new form of monkey business," Kotak said.