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8:13 pm - Monday November 18, 2019

Why Bulls and Bears?

| Economics, Investing | Rating: 4.5
by Numan

Stock market etymology for the curios

The famous New York Stock Exchange Bull sculpture is a beautiful work of art. The bull, seemingly moving, is radiating raw, yet restrained power, with surprisingly gentle grace as it prepares to storm up Manhattan.

The statue, created by artist Arturo Di Modica in 1989, was apparently placed illegally in front of the NYSE. It was created by Modica to symbolize the strength and power of the American people after the market crash “Black Monday” in October 1987. Public protest was strong enough to keep it in place after it was seized by police.

For those of us who are less familiar with stock market lingo a Bull market is a market characterized by an uptrend in stock prices and increased investor confidence while a Bear market is characterized by pessimism and downtrend in stock prices.

But why bulls and bears?

Etymology can be very surprising sometimes. I enjoy learning about the origin of words and phrases we use daily with little knowledge of where they originated from. As bulls and bears go there seems to be on single explanation.

According to Wikipedia (“Market trends”) the most reasonable origin is London bearskin brokers (“jobbers”) who would sell the skin before they had caught the bear (Selling short!). It seems these brokers in did sold short expecting a downtrend in bear skin prices hoping to make a profit by selling high and buying skins lower at a later date. Other possible explanations seem to have been made to fit already existing proverbs. Among these are the animals’ form of attack (while bears strike paw down bulls swings horns up), their speed (which is wholly inaccurate as bears can move at speeds of up to 40 mph easily) and more.

Further explanations ( quoting Merriam-Webster) suggest the term bull was originally used to describe a speculative purchase in expectation that prices will rise. Its’ earliest use is thought to be 1714 and it was apparently chosen to counter “Bear”.

I’d love to hear other explanations you’ve come by.

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