CHAPTER 2E : Market Fundamentals - Bulls, Bears, Chickens and Pigs

On Dalal Street, the bears and bulls are in a constant struggle for profits.

The Bulls - A bullish market indicates that economy is running good, GDP (Gross Domestic Product) is growing, people are finding jobs, and stocks are rising. If a person is optimistic and believes that stocks will go up, s/he is called a "bull" and is said to have a "bullish outlook". 

The Bears - A bearish market indicates that economy is bad, recession is looming and stock prices are falling. In bearish markets some investors make money by short selling whereas others wait until they feel that the bear market is nearing its end, and then buy in anticipation of a bull market. If a person is pessimistic, believing that stocks prices are going to fall down, s/he is called a "bear" and is said to have a "bearish outlook". 

The Chickens - Chickens are afraid to lose everything. Their fear tops their need to make profits and so they invest only in money market securities or get out of the markets entirely.

The Pigs - Pigs are high-risk investors looking for that one big shot in a short span of time. Pigs buy on hot tips and invest in companies without doing their due diligence. They are impatient, greedy, and emotional about their investments, and they usually invest in high-risk securities. Professional traders love the pigs, as it's often from their losses that the bulls and bears reap their profits. 

What Type of Investor Will You Be?

There are ample of investment strategies in market. The bulls and bears constantly struggle, but they both make money with changing trends in the market. Even the chickens see some returns, though not a lot. The only loser in this market is the pig.

You have to make sure what type of investor will you be. Always remember the saying: "Bulls make money, bears make money, but pigs just get slaughtered!"

About DreamGains

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