Grrr... time for fun with market analogies! You've probably heard that when the market is up, it's a “bull market” and when it's down it's a “bear market.” You may have even heard one of the analysts on CNBC or Bloomberg say they're "bullish" on a particular stock or segment of the market ("I'm bullish on Kmart" or something of that sort), meaning that you're predicting that stock to do well in the future. But, why bears? Why bulls?
Theories are conflicting and pretty varied, but the best I’ve heard comes from the term "bulla" - another name for a contract or bill of sale. When the market is rising, the people holding "bullas" see the value of their contracts increase. Because they’ve already paid for a product, if the value of that product increases, they’ve made money before the product even delivers. In other words, the "bullas" are doing well, or it's a bull market. When the market is doing poorly, on the other hand, the "bearers" of the commodity that the "bulla" is to be exchanged for do better because they've already been paid for the commodity at the higher price. Thus, the "bears" win and it's a bear market.
Another explanation I’ve heard of the term "bear market” comes from bearskin "jobbers" (people who catch and sell bears skins - not the most lucrative practice anymore, but a pretty good way to earn a living a few hundred years ago). Jobbers would sell their bearskins before they had actually been caught, a good way to get yourself into trouble if you can't find yourself enough bears. This lead to the French proverb, ne vendez pas la peau de l'ours avant de l’avoir tué ("don't sell the bearskin before you've killed the bear" -- rolls right off the tongue, no?). It's basically the bear trappers version of "don't count your chickens before they're hatched." I guess if the jobbers can’t find enough bears to meet their sales, it’s a pretty good indication that a lot of people are going to be losing money.
Other possibilities are less complicated:
- Bulls don’t hibernate, but bears do (Don’t worry investors, the market is just sleeping!)
- Bulls move quickly and aggressively, while bears are slower and lazier
- Bulls keep their heads up while bears keep their heads down (I’m not sure if this is even true, any zoologists out there?)
Whatever the terms come from, it’s good to know that when analysts think the financial markets are doing well and will continue to do so for a while, it’s a bull market. When everything is in the dumpster (sort of like now), it’s a bear market.
Here’s to more bulls than bears in our financial future…
Theories are conflicting and pretty varied, but the best I’ve heard comes from the term "bulla" - another name for a contract or bill of sale. When the market is rising, the people holding "bullas" see the value of their contracts increase. Because they’ve already paid for a product, if the value of that product increases, they’ve made money before the product even delivers. In other words, the "bullas" are doing well, or it's a bull market. When the market is doing poorly, on the other hand, the "bearers" of the commodity that the "bulla" is to be exchanged for do better because they've already been paid for the commodity at the higher price. Thus, the "bears" win and it's a bear market.
Another explanation I’ve heard of the term "bear market” comes from bearskin "jobbers" (people who catch and sell bears skins - not the most lucrative practice anymore, but a pretty good way to earn a living a few hundred years ago). Jobbers would sell their bearskins before they had actually been caught, a good way to get yourself into trouble if you can't find yourself enough bears. This lead to the French proverb, ne vendez pas la peau de l'ours avant de l’avoir tué ("don't sell the bearskin before you've killed the bear" -- rolls right off the tongue, no?). It's basically the bear trappers version of "don't count your chickens before they're hatched." I guess if the jobbers can’t find enough bears to meet their sales, it’s a pretty good indication that a lot of people are going to be losing money.
Other possibilities are less complicated:
- Bulls don’t hibernate, but bears do (Don’t worry investors, the market is just sleeping!)
- Bulls move quickly and aggressively, while bears are slower and lazier
- Bulls keep their heads up while bears keep their heads down (I’m not sure if this is even true, any zoologists out there?)
Whatever the terms come from, it’s good to know that when analysts think the financial markets are doing well and will continue to do so for a while, it’s a bull market. When everything is in the dumpster (sort of like now), it’s a bear market.
Here’s to more bulls than bears in our financial future…
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