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A spot on look at Bull vs Bear markets

February 10, 2016

I found this posting from the blog “A Wealth Of Common Sense” to be spot on. There is nothing new but a great overall look at what goes though investors heads while in bull and bear markets.

Click here to visit the A Wealth Of Common Sense blog.

Early in my career I received a very simple, yet powerful piece of advice about the markets:

In a bull market you’re not as smart as you think you are and in a bear market you’re not as dumb as you think you are.

The problem is that fear and greed don’t always allow us to come to these conclusions in the moment — we tend to default to the opposite.

As markets continue to fall this year many investors are likely beginning to question their own intelligence just as people in 2013-14 were feeling pretty good about how brilliant they were in a rising market. Along these same lines, here’s a quick comparison of some of the different feelings and perspectives investors have depending on which kind of market we happen to be in:

Bull Markets: Fear of missing out.
Bear Markets: Fear of being in.

Bull Markets: Everything I buy is going up — I’m a genius.
Bear Markets: Everything I buy is going down — I’m an idiot.

Bull Markets: See, fundamentals always win out.
Bear Markets: See, technicals and sentiment rule the markets.

Bull Markets: I knew I should have had more of my portfolio in stocks.
Bear Markets: I knew I should have had more of my portfolio in bonds.

Bull Markets: That guy’s been calling for a crash for years — he’s an idiot.
Bear Markets: That guy just called the crash — he’s a genius.

Bull Markets: I want to be a long-term buy and hold investor.
Bear Markets: I want to be a short-term trader.

Bull Markets: I’m glad I was buying during the last market crash.
Bear Markets: Never try to catch a falling knife.

Bull Markets: I’ll sit tight when the market falls.
Bear Markets: Dear Lord, get me out of stocks NOW!

Bull Markets: Time to buy stocks?
Bear Markets: Time to sell stocks?

Bull Markets: Warren Buffett is washed up.
Bear Markets: Wait, Buffett is buying here?

Bull Markets: Buy & hold works.
Bear Markets: Buy & hold is dead.

Bull Markets: I’ll be greedy when other are fearful.
Bear Markets: I lied — I’m fearful when other are fearful.

Bull Markets: Buy the dip.
Bear Markets: Sell the rip.

Bull Markets: Why didn’t I invest earlier in my life?
Bear Markets: I’ll never invest again.

Bull Markets: Why would I want to diversify?
Bear Markets: Why was I so concentrated?

Bull Markets: I’m just waiting for a healthy correction to put more money to work.
Bear Markets: This market action is not healthy at all.

Bull Markets: Don’t worry, we’ll outperform during the next downturn.
Bear Markets: Don’t worry, we’ll outperform when the market turns around.

Bull Markets: It feels like markets will never fall again.
Bear Markets: It feels like markets will never rise again.

Discussion
8 Comments
    Feb 11, 2016 11:49 AM

    Baby bull:

    The job of a baby bull is to inflict maximum pain on shorts still in denial and unwilling to recognize the trend change.

    And to cause maximum anxiety for longs that have missed the rally or took profits too soon.

    I warned this was coming.

    I’m also warning that this same massive surge is going to happen in the stock market too just as soon as the 7 YCL is finished. Most will miss this one also because everyone is assuming that a long term bear market is beginning. It’s not. This is just stretching the rubber band far to the downside to set up and build the fuel for the bubble phase that will follow.

      Feb 11, 2016 11:51 AM

      Hi Gary….Just watched your presentation over at Goldseek..(go have a look people ) its makes a lot of sense to me..who knows very little about charts .
      BTW. Gary even the Muppet Show had a few hecklers , but it did not stop Kermit & gang coming back week after week….So don’t be a stranger to KER…Just like the Muppets, you have plenty of fans.

    Feb 11, 2016 11:06 AM

    I’m watching for the EURO silver price to get above 14 then I will relaxe a little.

      Feb 11, 2016 11:40 AM

      You will be fine…………I think silver has definitely put in a bottom….with the LONDON FIX screwed up last week, and no one followed it to $13.84, and addition FIVE large mining company turned in their MEMBERSHIP………gave over for the LBMA.

    Feb 11, 2016 11:58 AM

    HELLO IRISH……………..LOOKS LIKE A GOOOOOOD DAY FOR GOLD……….

      Feb 11, 2016 11:24 AM

      Hi Jerry…Yes very good , silver is still lagging but that could change if gold holds this price into next week. I am watching your platinum gold could drag it back up. Have a good day you crazy Moscovite.

        Feb 11, 2016 11:36 AM

        Silver should be accumulated hand over fist…….right now…….today….. the ride is going to get exciting.