How the Cow jumped over the moon: a fable on futures and perceived valuation

(this is from a forwarded email - something i think worth sharing)
One day Farmer Abner took his Appaloosa (a fine breed of horse and so are Belgian and Clydesdale) to the livestock market. There he met Farmer Bill with his Belgian and Farmer Clem with his Clydesdale. "What do you reckon they're worth?" each one asked the others. "The value of a thing is what the thing will bring," they agreed.
Abner offered his horse for sale first. The auction opened at $100, but to Abner's surprise and great joy, Bill and Clem entered into a spirited bidding competition for the Appaloosa, finally won by Bill. Abner pocketed $500,less the auctioneer's fee.
Next, Bill put his Belgian up for sale. Abner, who was now without a horse of his own, bid fiercely against Clem, but eventually quit at $500. Bill accepted the money gleefully minus the commission, of course.
Finally, Clem's Clydesdale went on the block. This time Abner outbid Bill and took delivery of the Clydesdale for the same price as the others, $500.
The Cow-Bones index, the dosimeter of the livestock market, was at 500.
That meant that the equity value of their holdings was $500. Since they had done so well, all three went back to the market again the next day, eager to see if they could pick up some bargains or unload their new purchases at a profit. The auctioneer started the bidding at $500. Bill and Clem bid desperately against one another for Abner's Clydesdale; once again, Bill won, but this time at the mind-boggling price of $3000. Then Bill put the Appaloosa up for sale. Abner and Clem bid equally fiercely before the latter triumphed; he too had to go to $3000 to secure his victory. In order to cover the loan he took out to raise the purchase price, he decided to sell his other horse. The bidding between Abner and Bill shot up to the $3000 level before Bill dropped out, leaving the Belgian in Abner's hands. Of course, the auctioneer again deducted his fees, but Abner, Bill, and Clem were overjoyed at their success. They were twenty times wealthier than when they started, at least on paper.
And the Cow stood at 3000.
On the third day, optimistic that the market would continue to rise, the three farmers (though they now thought of themselves as investors who farmed as a hobby) again entered the fray. The bidding was insane; pundits who followed the market had never seen anything like it. When the dust settled, Abner had repurchased the Appaloosa, Bill the Belgian, and Clem the Clydesdale--in each case for the unheard-of, astounding price of $14,000! None of them could believe his luck. Each went around saying, "It's a dream, I never believed that wealth on this scale could be mine." The auctioneer was very satisfied too.
And the Cow jumped over the moon. It ended the day at 14,000.

Moral: The Market will decide.

Epilog:
The next day the market was closed, so Abner, Bill, and Clem went back to their farms, leading their horses on halters rather than riding. "You don't want to take chances with a 14,000-dollar investment," they said.
On the way they met Farmer Zeke, who was riding a bicycle. They told him of their new wealth, understandably proud of the acumen that had earned it, and they bragged a little. "Have you ever before in your life seen a horse worth $14,000?" they asked Zeke.

"Fourteen thousand? Why, I wouldn't give you a hundred dollars for those plugs," exclaimed Zeke. "If they were good for anything at all you wouldn't be walking."