Right now there’s much
discussion about whether gold is headed for a bear market after its
decade-long bull run. Time will tell, but the current debate may make you
wonder how ‘bull’ and ‘bear’ entered the financial
A bull is a boisterous, charging
animal that throws its victim up in the air. A bear is slower, hibernates for
long periods and is more likely to throw its quarry to the ground. Investopedia says these “actions
are metaphors for the movement of a market. If the trend is up, it's a bull
market. If the trend is down, it's a bear market.”
But the murky origins of the use
of these terms suggest the explanation is probably not so straight forward.
One of the most frequently cited
stories relates to bear skin jobbers in early 18th century London.
In anticipation of falling prices, these middle men (or ‘bears’)
sold their wares before the animals had even been caught - an early form of
short selling. The contemporary proverb "don't sell the bear skin before you've
killed the bear" highlighted the risks they ran.
This type of selling was also
used by people involved in the South Sea Bubble, the share speculation mania
that ruined many British investors in 1720. According to the Merriam Webster New Book of
Word Histories, the scandal brought the term bear into widespread
Both bear-baiting and
bull-baiting were popular blood sports at the time and from this it seems the
bull was chosen to describe the opposite kind of trader. Just before the
South Sea Bubble burst, poet Alexander Pope penned the lines: Come, fill
the South Sea goblet full; The gods shall of our stock take care; Europa
pleased accepts the Bull, And Jove with joy puts off the Bear.
In America, an attempt to corner
the gold market in 1869 resulted in plunging gold prices and a stock-market
panic. Reinforcing the symbolism, famous American cartoonist Thomas Nast portrayed dead bulls and a bear in a
heap in front of a roped-off Wall Street with a sign reading This
‘Street’ is closed for repairs.
Today, New York’s renowned
Bull sculpture symbolises aggressive
financial optimism and prosperity. Other notable sculptures include a bull
and bear facing each other outside Frankfurt’s Stock Exchange (below).
Image: Metro Centric