08 Jun Kotodama 112

When stock market prices rise dramatically and unjustifiably based on the earnings prospects of companies, it’s called a bull market.

When prices precipitously fall, it’s called a bear market.

According to Investopedia: “The terms ‘bear’ and ‘bull’ are thought to derive from the way in which each animal attacks its opponents. That is, a bull will thrust its horns up into the air, while a bear will swipe down. These actions were then related metaphorically to the movement of a market. If the trend was up, it was considered a bull market. If the trend was down, it was a bear market.”

Alternatively, a bull market is like a bull charging at a matador’s red cape. The bull is charging ahead at something that seems real (like stocks with absurdly optimistic earnings prospects), but which ultimately is a mirage.

Likewise, a bear market is like a hibernating bear. The bear has no interest in eating delicacies — like stocks that are cheaply priced — because it is sleeping.