The Bull and the Bear

           Ever since I was kid, the image of the Bull has always meant something to me. My father is a stockbroker, and one who has often talked to us about the culture associated with Wall Street. When my brother and I were still in elementary school, the both of us had already begun investing our money in stocks. As a kid, my Dad used to bring home paper that my brother and I could draw on. On the paper, there was the transparent image of a bull and a bear over a crest. I think that it is important, that when analyzing the bull, one also has to understand the significance of the bear.

Standing alone, the signifiers are simply big, strong animals. But what they connote is much more significant. Both animals are powerful and potentially dangerous, but there is key difference between the two. Bulls can be domesticated, whereas bears cannot. It is readily accepted in every society that bears are inherently dangerous, unpredictable and (ultimately) something to avoid at all times. Nothing but trouble has ever come from standing between a momma bear and her cub. Thus bear markets are always bad. A bear market means that the stock drops and people lose money.

Bulls however, serve a function, and are a common commodity on the average farm. Bulls are not only strong, but they also have the capability of going long distances. They can be controlled. Usually, they can be restrained to pasteurize within the parameters of nothing more than a fence. They are useful for pulling large weights long distances, but more importantly, they are used to impregnate the female cows, which will thus bring more wealth to the farmer. The bull symbolizes the market (or a stock) going up, and thus wealth for the investor.

There is, however, a flip-side to that coin. Bulls have been known to go out of control. While they are typically tame and well mannered, they can easily be provoked. And when they are provoked, they go crazy, throwing caution to the wind. A predominately bull market is also not a good thing. When a stock shoots up as fast as a charging bull, the market is no longer fairly priced. It is only a matter of time before the same stock plummets (more often than not) below the equilibrium. A seasoned stockbroker will tell you, the best market to be in, is not one where the stock shoots thru the roof, but rather one that steadily goes up, pulling its weight, just like a bull pulling its master to the promised land of financial security.