The Book on Bears and Bulls

"The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think." – Jesse Livermore

ETR reader Judith wrote in wanting to know why the word "bull" is used for a rising market and the word "bear" is used for a falling market.

First of all, let me point out that these two terms have become part of everyday language. You can be "bullish" (or optimistic, thinking something will get better) not just on the market but on the Red Sox, for example. And you can be bearish (or pessimistic, thinking something will get worse) about Detroit or Pittsburgh or about their baseball teams.

My colleague and office mate Jon Herring tells me "bull" comes from bulls tossing things up in the air with their horns. And that "bear" comes from bears swiping down with their claws.

That makes perfect sense, doesn’t it? But it didn’t prevent me from doing some research.

I found out that an old meaning of the word "bull" (as a verb) was "to inflate, swell." That makes sense, too, in describing a market going higher or getting bigger. It was first used in a stock market sense in 1714.

And just five years later, the phrase "sell the bearskin before one has caught the bear" – referring to anything with falling prices – became popular among investors. A bear was described as "one who sells stock for future delivery, expecting that meanwhile prices will fall."

Just think: Almost 300 years ago, people were celebrating "bull" and bemoaning "bear" markets… when today, we know you can make money in both.

[Ed. Note: Bull market, bear market – Andrew Gordon can help you find the safest stocks with the highest profit potential. Get the details here.

Want to know the meaning of or background behind an investing term you keep hearing? Send your questions to Andrew at Include your name and hometown, and he may answer your question in Early to Rise.]

Andrew Gordon

Andrew Gordon is a former editorial contributor for Early To Rise Investor’s Edition. He has 20 years of experience working in infrastructure and environmental projects around the world. When he wasn't traveling, he taught marketing and finance courses at the state university of Maryland. Mr. Gordon has authored several books for McGraw Hill and other publishing companies on energy markets, global countertrade practices and the hot growth sectors of China and Russia. He is also a top-rated speaker at financial conferences.