The Bull And The Bear

I’ve had a ton of positive comments about my logo that I drew. Which I am extremely appreciative of and must say thank you to all those that like it! I’m fairly proud of it. I went through a couple of different ideas/drafts/drawings before this one came about. My family could testify of this, I sent them all my drafts and failed attempts.

It didn’t take me too long to draw it, just a couple of hours is all.

But I have had a few questions as to why I decided on the two animals. Especially the bear. I’ve heard “I think I understand The Bull but the bear… why did you draw the bear?” Well, I’m gonna tell you why I decided to draw them!

It’s because they are my two favorite animals!

Well, actually that isn’t true. My favorite animal is… eh… I would tell you what it is… buuut it tends to be a common security question so… yeah… sorry. But it’s not a bear or a bull, even though they are legit creatures.

So let’s get on and talk about the two animals, shall we?

The Bull

Man, what do you think of when you say THE BULL?  It sounds kind of powerful, doesn’t it? THE BULL.

There are three things that instantly come to my mind when I hear the bull.

First one is kind of cartoonish but I picture this big, muscular, angry looking bull with its head down, snorting and grunting with steam leaving its nostrils. Kicking dirt up with its hooves, ready to charge and completely plow anything in its path.

Then I think of rodeos and those bucking bulls. I absolutely love rodeos, dressing up, placing bets, and watching those cowboys hold on for dear life for 7 seconds.

Lastly, I think of the bronze bull statue on Wall Street and an arrow on a graph pointing upwards.

Walking around Wall Street you might hear someone say “he is a bullish investor” or “we are in a bull market. What this person means is that there is an upward trend in the market. Or that this specific investor is optimistic about the stocks he has purchased and anticipates them to rise in value. Because of this, he can sell them for a much higher price than that he purchased them for.

So why choose a bull for an upward market trend? I thought it was because a bull is strong, full of energy, and fast when charging. It also hase horns which point upwards.

But from the things I have read, it turns out I’m wrong and the reason why these animals were chosen is based on their attacks.

So when the bull attacks its enemies it will charge at them and then thrust them up into the air. The head movement and tossing the enemy into the air (upwards) is the reason why a bull was selected to represent the rising trend of the market.

The Bear

When I think of how a bear attacks its enemy, the victim gets completely obliterated and just torn apart.  The bear stands up on its hind legs and strikes its opponents down, knocking them to the ground. And honestly, this is a good representation of how most people feel during a bear market. Torn apart and useless… just feeling hopeless by the decrease of their securities.

The most difficult thing about a bear market is staying mentally sane. Not letting your emotions get the best of you.  It will be so easy to make irrational decisions watching that hard earned money you have invested drop by 20,30, 40 or even past 50%.

Now the hardest part will be not to sell your securities when everything is dropping. You will need some good self-control. Write it down somewhere that you will not sell during a bear market.

Or if you do tend to make decisions based on your emotions… then maybe don’t let yourself have control of your investments. Have a CPA or other financial professional control them for you.

Most people (the media) will look at a bear market as something extremely depressing and make it seem like a bad thing. But as many great investors have taught, it should actually be an exciting time. These shares are on SALE and who doesn’t like to go on a shopping spree when items are 20-50% off?

Warren Buffet summed it up perfectly:

Practically anybody in this room is probably more likely to be a net buyer of stocks over the next ten years than they are a net seller, so everyone of you should prefer lower prices. If you are a net eater of hamburger over the next ten years, you want hamburger to go down unless you are a cattle producer. If you are going to be a buyer of Coca-Cola and you don’t own Coke stock, you hope the price of Coke goes down. You are looking for it to be on sale this weekend at your Supermarket. You want it to be down on the weekends not up on the weekends when you tend the Supermarket.

-Warren Buffet

Now a bear market isn’t to be confused by a market correction. They are two different things. A market correction is when the price of an asset drops roughly by 10% for a short duration usually less than 2 months. Whereas a bear market has a decrease more than 20% and the duration is much greater than 2 months. Roughly a year and a half is the average duration.

The last bear market that we had (correct me if I’m wrong) was during the years 2007-2009, the great recession. The S&P 500 lost roughly 50% of its total value during this time.

I actually remember my dad looking at his statements during this period, hands in his hair, showing extreme stress. At that time it was not wise to ask permission to go to a friend’s house and definitely not a good idea to ask for $20. I legitimately think this is what caused the gray hairs to really become dominant in my father.

It was not a happy time.

But everything turns out ok in the long run. Many years later his investments are higher than they were before the recession. You just gotta’ curl up in a ball, pretend you’re dead, hold on to dear life (your investments) and wait for the bear to go away.

So What Market Are We In Now?

We are currently in a bull market, that has been going on since 2009.. which is roughly 8 years… which is a long time… which is different… which makes people scared and nervous… which it shouldn’t, but it does.

The market has been booming actually. I keep seeing the Dow hits a new high! The Dow just passed 25,000! Etc.

These statements are actually true. From last year the Dow Jones Industrial Average was 19,887.38 (Jan. 9, 2017) and now it currently is 25,397.84  (Jan. 9, 2018). This is over a 20% increase in a duration of a year. This is extremely impressive for the Dow. The year before that (2016) it was about a 13% increase.

Should I Be Investing Now?

Question: Is it better to invest in a bull market or a bear market?

Answer: Always be investing.

When we are at the top of a bull market…. invest. If we are in a middle of a bear market… invest. While in School… invest (I mean at least I am).

You need your money to be working for you (even if at times it is working against you). I can almost guarantee that in the long run, the money that you invest now will be worth much more in the future.

 

 

4 Comments on “The Bull And The Bear”

  1. That is great art work. I’m unable to draw a straight line with a ruler but my dad was an artist and I always wished that I had inherited just a little of his talent. Like your dad I have lost hundreds of thousands of dollars in the stock market, twice actually, but not really. I never sold a thing and it all came back plus lots more. Great advice, so you let your family read your blog? I haven’t had the nerve to tell family or friends how to find mine.

    1. Thanks! I actually received my artistic skills from my father. But with that I also inherited his horrible eye sight. Guess I can’t take the good without the bad.

      Glad to hear your securities increased after loosing so much. Way to stick it out. It takes some serious will power to hold on, even though it is well worth it to do so.

      I do let my family and friends read my blog! I was really anxious to tell them at first because I thought they would think it was silly. Heck, when I say “ I blog” I cant take myself seriously. Blog is such a funny word.

      But they have been extremely supportive and they actually enjoy reading the posts I make. They make up most of my viewership!
      -FSD

Leave a Reply

Your email address will not be published. Required fields are marked *