“Bears make money Bulls make money Pigs get slaughtered“
This is very apt in context of the Stock Market.
Let’s see how it works :
Bears represents people who have a very cautious notions about the future of Stock Market.And there is nothing wrong about it and it actually helps them make money in their own cautious way.
When a price rises too much the cautious nature of a Bear helps him to control his Greed and he is ready to sacrifice an apparent chance of further profit for the security of his principal and gets satisfied with his profit which anyways is more than he was targeting.
Bulls represents people who have a very aggressive and positive notion about Stock Market and that too is not a bad thing either and they make money in their own aggressive way with a strategy.
Most of the times they have a tested strategy and they too like Bear are cautious with a difference that they are ready to put their money with calculated risks.
Bulls are generally first to get into the bandwagon during the initial phases of a price rise and many times they start selling parts of their investment to reduce the risk once price start rising further.
Now when the story of price rise starts making rounds in financial world and herds of experts start giving their own reasons that justify the price rise and giving further positive outlook towards the stock making it look more attractive.
Now comes the another species in the picture the Pig and that is the one that buys that story of still untapped potential of the stock with an inevitable price rise that is going to happen very soon.
Afraid to lose an opportunity and getting assurances from so many expert voices.They start buying believing ‘no price is too high’ for such an opportunity.
This is the time when most of the Bears and Bulls are already out and there is an abundance of Pigs which are waiting for many more Pigs which will bring them a handsome financial reward.
Does that dream comes true ?
You know how it turns out…..right
What happens in reality is somewhat different and it’s nothing short of slaughtering.
We’ll explore more …. Stay Tuned.