Animals in Stock

Have you ever wondered what does bull and bear markets mean? As requested by a colleague, here's a quick lesson in investment:

Although the term "bull market" is most often used to refer to the stock market, it can be applied to anything that is traded, such as bonds, currencies and commodities. Investopedia defines bull markets as being characterised by optimism, investor confidence and expectations that strong results will continue. It would be difficult to predict consistently when the trends in the market will change as part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets.

The "bear market" is defined as a market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market, selling continues, which then creates further pessimism. (This not to be confused with a correction, which is a short-term trend that has a duration shorter than two months. While corrections are often a great place for a value investor to find an entry point, bear markets rarely provide great entry points as timing the bottom is very difficult to do.)

The use of "bull" and "bear" to describe markets comes from the way the animals attack their opponents. A bull thrusts its horns up into the air while a bear swipes its paws down. These actions are metaphors for the movement of a market. If the trend is up, it's a bull market. If the trend is down, it's a bear market.

To end off with a joke: What do you call a bull when it is asleep?

A bulldozer