08 Jun The Etymology Of Bull And Bear Markets

When stock market prices rise dramatically and unjustifiably based on the earnings prospects of companies, it’s called a bull market; when they 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, perhaps a bull market is like a bull charging at a matador’s red cape. The bull is charging ahead at something it sees as real and alive (the moving red cape, rising prices), but which ultimately is a mirage, a delusion. as there is nothing behind the cape or to justify rising prices. Likewise, a bear market is like a hibernating bear which cannot be enticed to eat food it’s offered (like buying stocks that are easy to be had, cheap) because it is sleeping.