Bearish on America

What does it mean to be bullish?

Apart from being one letter short of bullshit, the allusion to being ‘bullish” in investment terms is self-explanatory. Bulls are symbols of power; they challenge and charge forward with aggression.

It’s no accident that Merrill Lynch, until recently the largest investment house in the world, had a bull in its logo. It was also famously ‘Bullish on America‘, a corporate slogan first introduced in a 60-minute ad during the telecast of the 1971 World Series.

At its height Merrill’s brokerage network, which reached 15,000 in 2006, was referred to as the “thundering herd”.

In 2008 the bears moved in and Merrill was well and truly savaged. The firm is now part of Bank of America, emasculated and caged. The effete-looking bull in its logo is gone. The mood is bearish.

No more bull

No investment house has dared adopt the slogan ‘Bearish on America’, even during periods of market decline. But why bears of all creatures – how do they characterize a market in retreat?

The term apparently dates to the early 1700s for someone who profits when stocks fall. “To sell a bear skin before one has caught the bear” was an early description of a short seller (someone who borrows shares and then sells them, hoping to buy them back at a lower price and pocket the difference).

A bear market originated from the same metaphor and has since been loosely defined only as “one in which selling preponderates and prices decline”.

According to the Wall Street Journal there is no such thing as an “official” bear market. It defines a bear market as a 20 percent decline from a closing high to a closing low on the Dow or the S&P 500.

Depending on when you start counting, stocks at any one time can either be in a bull market or a bear market. The Journal says they can often be in both at once, which really is bullshit when you think about it.

Sources: The Wall Street Journal, 10 8 11. Wikipedia.

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