The names “bear” and “bull” are frequently used to represent all-encompassing actions, sentiment, or behaviors, whether they are related to a specific asset or the market as a whole. Investors quickly express their market mood toward particular stocks or financial markets by using the terms “bearish” or “bullish.”
A bear market is characterized by a decrease in prices of a single security or asset, a group of securities, or the whole securities market, typically lasting for a few months. A bull market, in contrast, is characterized by rising prices. Typically, a market becomes “officially” bear or bullish when it moves by 20% or more from a recent top or low.
What Origins Do “Bulls” and “Bears” Have?
Although the phrases are fairly easy to comprehend, it is apparent how a bull or bear market can affect your wealth and portfolio. Both creatures are renowned for their enormous and erratic strength, so the analogy they both make to stock market volatility is undoubtedly accurate.
It’s interesting to note that it’s unknown where these idioms actually came from. Two of the most typical justifications are shown below:
The names “bear” and “bull” are believed to have originated from the manner in which each animal pursues its prey. In other words, a bear will swipe down while a bull will raise its horns into the air. The movement of a market was then used as a metaphor to describe these acts. A bull market was thought to exist when the trend was upward. A bear market was present if the trend was downward.
In the past, middlemen who handled the sale of bearskins would offer for sale skins they had not yet received. As a result, they would make predictions about the potential decline in the price at which they would buy these skins from the trappers. The spread, or difference between the cost price and the selling price, would be profitable for the trappers. The word “bears,” short for bearskin jobbers, remained to refer to these middlemen and describes a market decline. Contrarily, the name bull is used to denote the opposite of bears since historically, due to the once-common blood sport of bull-and-bear fights, bears and bulls were popularly regarded as opposites.
Literature Support for Bear
Merriam Webster defines the phrase “”To sell the bear’s skin before one has caught the bear is not clever, according to a proverb, according to etymologists. By the eighteenth century, the phrase “to sell (or buy) the bearskin” and the moniker “bearskin jobber” were being used to refer to people who sold bearskins.”
The term “bearskin jobber” was eventually abbreviated to just “bear,” and its definition was broadened to encompass stock traders in the financial markets. Richard Steele, editor of the British literary and social periodical The Tatler, used the word “bear” to describe a market transaction for the first time in 1709. In an essay, Steele defines a “bear” as someone who assigns a real value to an abstract concept, or who is “selling a bear.” The Political History of the Devil, written by Daniel Defoe in 1726, maintains this unfavorable portrayal of bears. Every dissembler, false buddy, hidden cheat, and bear-skin jobber has a cloven foot, according to Defoe’s writing in the book.
Literature Support for Bull
In comparison, “bull” has a considerably more uplifting connotation than “bear” when discussing the financial markets. A bull market and a bull (or “bullish”) speculator are terms for those who make speculative investments in the hope that stock prices will rise.
This connection to speculation appears to have its roots in the gory blood games of bull and bear baiting, at least in part. Around the year 1200 in medieval times, these competitions first appeared. During the Elizabethan age, they attained their peak in popularity. People would swarm to the events and wager enormous sums of money on the results of a competition involving a bull or a bear. It is simple to understand how this relates to how the terms are used in today’s stock market speculative activities.
Shakespeare made mention of fights between bulls and bears in his plays. The tragic title character in Macbeth laments that his adversaries have tied him to a stake but that “bear-like, I must fight the course.” The bull is a vicious but honorable animal in Much Ado About Nothing
“I think he thinks upon the savage bull.
Tush, fear not, man; we’ll tip thy horns with gold
And all Europa shall rejoice at thee,
As once Europa did at lusty Jove,
When he would play the noble beast in love.”