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Encyclopedia > Bull market

A bull market is a prolonged period of time when prices are rising in a financial market faster than their historical average. A bull market tends to be associated with increasing investor confidence, motivating investors to buy in anticipation of further capital gains. The longest and most famous bull market was in the 1990s when the U.S. and many other global financial markets grew at their fastest pace ever [1]. In finance, financial markets facilitate: The raising of capital (in the capital markets); The transfer of risk (in the derivatives markets); and International trade (in the currency markets). ... In finance, a capital gain is profit that is realized from the sale of an asset that was previously purchased at a lower price. ...


In describing financial market behavior, the largest group of market participants is often referred to, metaphorically, as a herd. This is especially relevant to participants in bull markets since bulls are herding animals. Dow Theory attempts to describe the character of these market movements In finance, financial markets facilitate: The raising of capital (in the capital markets); The transfer of risk (in the derivatives markets); and International trade (in the currency markets). ... Categories: Animal stubs | Animal behaviour | Social psychology ... Dow Theory is a theory on stock price movements that provides the basis for technical analysis. ...


The opposite of a bull market is a bear market when prices are falling in a financial market for a prolonged period of time. A bear market tends to be accompanied by widespread pessimism. A bear market is a prolonged period of time when prices are falling in a financial market. ...


Both bull and bear markets may be fueled by sound economic considerations and/or by speculation and/or investors psychological biases. An exaggerated bull market fueled by over-confidence and/or speculation can lead to a stock market bubble. At the other extreme an exaggerated bear market, that tends to be associated with falling investor confidence, can lead to a stock market crash and a depression. A stock market bubble is a type of economic bubble taking place in stock markets, in which a wave of public enthusiasm, evolving into herd behavior, causes an exaggerated bull market . ... Black Monday (1987) on the Dow Jones A stock market crash is a sudden dramatic loss of value of shares of stockin[corporation]]s. ... WORLD OF WARCRAFT IS THE BEST GAME EVER INVENTED AND PLAY IT. IF YOU DONT PLAY WORLD OF WARCRAFT, YOU ARE A nOOb. ...


Expectations play a large part in financial markets and in the changes from bull to bear environments. More precisely, attention should be paid to positive surprises and negative surprises. The tendency is for positive surprises to characterise a bull market (when the news continually tends to exceed investor's expectations) and conversely negative surprises tend to characterise the bear market (with expectations disappointed).


Origins

The precise origin of the phrases "bull market" and "bear market" is obscure. The most common etymology points to London bearskin "jobbers" (brokers), who would sell bearskins before the bears had actually been caught in contradiction of the proverb ne vendez pas la peau de l'ours avant de l’avoir tué ("don't sell the bearskin before you've killed the bear")—an admonition against over-optimism. By the time of the South Sea Bubble of 1721, the bear was also associated with short selling; jobbers would sell bearskins they did not own in anticipation of falling prices, which would enable them to buy them later for an additional profit. Etymology is the study of the origins of words. ... London is the capital city of the United Kingdom and of England. ... Genera Ailuropoda Ursus Tremarctos Arctodus (extinct) A bear is a large mammal of the order Carnivora, family Ursidae. ... A proverb (from the Latin proverbium) is a pithy saying which gained credence through widespread or frequent use. ... Hogarthian image of the South Sea Bubble by Edward Matthew Ward, Tate Gallery More well known than The South Sea Company is perhaps the South Sea Bubble (1711 - September 1720) which is the name given to the economic bubble that occurred through overheated speculation in the company shares during 1720. ... // Events Pope Innocent XIII becomes pope Johann Sebastian Bach composes the Brandenburg Concertos April 4 - Robert Walpole becomes the first prime minister of Britain September 10 - Treaty of Nystad is signed, bringing an end to the Great Northern War November 2 - Peter I is proclaimed Emperor of All the Russias... To meet Wikipedias quality standards, this article or section may require cleanup. ...


The origin of "bull market" is even more obscure, but may relate to the common use of these animals in bloodsport, i.e bear-baiting and bull-baiting. A blood sport is a sport involving bloodshed or the killing of animals for food, pest control, or entertainment. ... Bear_baiting in the 18th century, engraving, 1796 Bear_baiting is a blood sport that was a popular entertainment from at least the 11th century in which a bear is secured to a post and then attacked by a number of dogs. ... Bull-baiting was a popular amusement, particularly in 17th and 18th-century England, in which trained bulldogs attacked a tethered bull. ...


Some say the description refers to the way that the animal attacks. Bull attacks (with its horns) from bottom up (benefitting from buying low, selling high). A bear on the other hand, attacks (with its paw) from above (high prices) down (benefiting from short selling). To meet Wikipedias quality standards, this article or section may require cleanup. ...


See also


  Results from FactBites:
 
Bull market - Wikipedia, the free encyclopedia (491 words)
A bull market is a prolonged period of time when prices are rising in a financial market faster than their historical average.
The longest and most famous bull market was in the 1990s when the U.S. and many other global financial markets grew at their fastest pace ever [1].
The tendency is for positive surprises to characterise a bull market (when the news continually tends to exceed investor's expectations) and conversely negative surprises tend to characterise the bear market (with expectations disappointed).
  More results at FactBites »


 

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