No matter how smart and savvy a person may be, investing can be an emotional rollercoaster.
If you are like me, the investment marketplace just continues to baffle me. I’m all for the prognosticators who make a living buying, selling and investing in the market – some of them are real geniuses… and others, maybe not so much- Just look at SVB! At times, the market inertia, discussions, and articles remind me a bit of sports talk radio – tons of comments, thoughts and insights by these “experts in the know”… until the “no brainer, sure winner, bet on me” team loses – then they are off on a new tangent. Seems like throughout my life, I’ve heard how the “Tribe”, sorry Guardians, we’re poised to win it all and sweep the World Series, only to be reminded once again just how hard that really is. The terms “bear” and “bull” are often used to describe general actions and attitudes, of the markets as a whole. I tend to be “bullish” on business, as I believe in all my customers and their drive to beat the odds and remain successful. Here’s a bit of trivia on the “bears” and the “bulls”. Enjoy and thanks to Wikipedia and Investopedia.com.
- Bull and bear markets are two opposing phenomena that are often used to describe the state of the financial markets. While bull markets are characterized by rising prices and optimistic investor sentiment, bear markets are characterized by falling prices and pessimistic investor sentiment. Understanding the history of bull and bear markets is crucial for investors and financial analysts in order to make informed decisions about investment strategies.
- A bear market refers to a decline in prices, usually for a few months, In contrast, a bull market is when prices are rising. Typically, a move of 20% or more from a recent peak or trough triggers an “official” bear or bull market.
- This relationship to speculation seems to have at least partial origins from the gruesome blood sports of bull and bear-baiting. These contests began in medieval times around the 1200s and reached their height of popularity during the Elizabethan era. People would flock to the events and gamble on the outcomes, betting vast sums of money on a contest featuring a bull or a bear. It’s not hard to see how this corresponds to the usage of the terms in today’s stock market speculations.
- 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.
- “Etymologists point to a proverb warning that it is not wise ‘to sell the bear’s skin before one has caught the bear.’ By the eighteenth century, the term bearskin was being used in the phrase ‘to sell (or buy) the bearskin’ and in the name ‘bearskin jobber,’ referring to one selling the bearskin.”
- Historically, the middlemen in the sale of bearskins would sell skins they had yet to receive. As such, they would speculate on the future purchase price of these skins from the trappers, hoping they would drop. The trappers would profit from a spread—the difference between the cost price and the selling price. These middlemen became known as “bears,” short for bearskin jobbers, and the term stuck for describing a downturn in the market. Conversely, because bears and bulls were widely considered to be opposites due to the once-popular blood sport of bull-and-bear fights, the term bull stands as the opposite of bears.
- The history of bull and bear markets dates back to the early 17th century, when the Dutch East India Company issued the first stock in history in 1602. This marked the beginning of the stock market, and over the next few centuries, bull and bear markets emerged as a result of economic cycles, political instability, and other factors.
- One of the earliest examples of a bull market was the South Sea Bubble, which occurred in England in the early 18th century. The South Sea Company was granted a monopoly on trade with the Spanish colonies in South America, and investors poured money into the company’s stock, driving prices up to astronomical levels. However, when the company’s trade deals fell through, the bubble burst, resulting in a bear market and the loss of many investors’ fortunes.
- One of the worst bear markets in U.S. history was precipitated by the stock market crash of 1929, which led to the Great Depression and a bear market that lasted almost three years. 2008, while not a severe, was no picnic, and the pandemic and inflationary tactics of today are sure smashing the marketplace.
- In the post-World War II era, the stock market experienced a series of bull and bear markets. The 1950s and 1960s were characterized by a long-term bull market, which was driven by a growing economy and rising consumer confidence. However, the 1970s saw a bear market due to the oil crisis, inflation, and a stagnant economy. The 1980s and 1990s saw another long-term bull market, with the creation of new investment products.
- In contrast, when used to discuss the financial markets, the term “bull” has a much more positive connotation than “bear.” A bull market and a bull (or “bullish”) speculator refers to speculative purchases made with the expectation of an increase in stock prices.
- Warren Buffett, also known as the Oracle of Omaha, is one of the most successful investors of all time. He is known for his value investing approach and long-term investment strategy. Here are some of my favorites of his quotes:
- “Price is what you pay. Value is what you get.” – this quote highlights the importance of looking at the intrinsic value of an investment rather than just its price.
- “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – this quote emphasizes the importance of investing in high-quality companies with a sustainable competitive advantage, even if they are trading at a premium.
- “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” – this quote emphasizes the importance of risk management in investing. Buffett believes that avoiding losses is more important than maximizing gains.
- “Be fearful when others are greedy and be greedy when others are fearful.” – this quote highlights the importance of contrarian investing. Buffett believes that market sentiment can be a good indicator of when to buy and sell.
- “In the business world, the rearview mirror is always clearer than the windshield.” -this quote emphasizes the importance of learning from past mistakes and experiences in order to make better decisions in the future.
- “Risk comes from not knowing what you’re doing.” – this quote highlights the importance of education and research in investing. Buffett believes that investors should thoroughly understand the companies they are investing in before making any investment decisions.
- “Our favorite holding period is forever.” – this quote emphasizes the importance of long-term thinking in investing. Buffett believes that investors should focus on buying and holding high-quality companies for the long term.
- “You only have to do a very few things right in your life so long as you don’t do too many things wrong.” – this quote emphasizes the importance of focus in investing. Buffett believes that investors should focus on a few high-quality investments rather than trying to diversify too much.
Good luck out there…and as I like to say, “Remember, Safe Investing is No Accident” … wonder if Warren can use this one too 😊.
DO YOU LIKE CONTESTS?
As you may know the Kowalski Heat Treating logo finds its way
into the visuals of my Friday posts.
I. Love. My. Logo.
One week there could be three logos.
The next week there could be 15 logos.
And sometimes the logo is very small or just a partial logo showing.
But there are always logos in some of the pictures.
So, I challenge you, my beloved readers, to count them and send me a
quick email with the total number of logos in the Friday post.
On the following Tuesday I’ll pick a winner from the correct answers
and send that lucky person some great KHT swag.
So, start counting and good luck!
Oh, and the logos at the very top header don’t count.
Got it? Good. :-))))