If you are not the first hour in investing, you must have heard these two terms, but what do they mean, who are the bulls and who are the bears? After reading this article you will not only learn more about investing and slang of traders, but also what a beastly strategy you follow or at least what it would be called by Warren Buffett, a true trading guru.
Bulls and their "Bull Market"
Bulls are a metaphorical name for traders who make money from rising prices of their shares. It is the bulls are the majority of players on the stock exchange, especially among beginners, this is due to a lot of factors.
First, playing "bullish" a little easier and more reliable, for example, investing in blue chips you are likely to get a small profit. Of course, it will need to wait a little and the income will be no more than 10 percent, but you definitely do not have to lose, and if it happens, then about a couple of percent.
Secondly, to be a bull is more honest from a human point of view, and most always want to be good. It is more correct to hope for the shares you bought, rather than wishing them a speedy fall, as the bears do.
But why are these investors called bulls? The answer is quite simple, a bull in the wild, attacking the victim, takes her on the horns and throws up, if you think about the same trying to do and bulls on the stock exchange, buying shares of growing companies or those that are about to grow.
Bull market or, in the original, Bull market is an asset market in which indices tend to rise, i.e. a market with rising prices. It began to be called that, because the mentioned above bulls, just hunt for similar markets, wanting to raise on their horns new companies.
Bears and what are their benefits?
With bears about the same situation, just the opposite, in the wild, they, attacking another animal with his mighty paw beat him from top to bottom, thus forcing the enemy to settle. The same is happening in the market, the goats are trying to push the price of shares in the market as much as possible and make money on it. But where do such "wild" names come from and how can you earn when your assets get cheaper?
Let's put it in order, bears and bulls are terms that presumably appeared in the 19th century on the London Stock Exchange. Therefore, today to compare people with animals is not only a beautiful metaphor, but also a tribute to the traditions, which were adhered to by many generations of investors.
As for the second question, the scheme is quite simple. Bears defiantly sell some of their securities at a bargain price, forcing to think about selling other market players. After the fish pecked, they try by all legal and not very methods to convince everyone that securities of this category need to be urgently sold, otherwise you can stay with the nose. Creating a stir, they literally collapse the price to critical values and at the peak of the fall buy up everything for nothing.
But do not think that the investor should stick exclusively to this or that strategy, because often the greatest success brings exactly the combination of these techniques, so the most successful player of the market will always be not a bull or a bear, and a person.