Animal Farm at the Stock Market

It's not the bulls and bears you need to avoid -- it's the bum steers. 

- Chuck, Hillis

Although the animal kingdom is not allowed inside, outside or around a stock market, there are a few exceptions to it. These privileged animals are the highlights of the business world and without them, everything would go hay-wire.

The bull, the bear, the chicken, the hog and the ostrich are the eminent personalities here and have reserved places of honour for themselves in the big, mighty world of business.

Histronics aside, lets understand how these ‘animals’ are important to the stock market.

The Bulls : A bull market is where everyone is optimistic and where everything in the economy is great. Everyone is finding jobs, the GDP is growing at a phenomenal rate and the stocks are rising.

A bull market doesn’t last for long because nothing good lasts for long!!

Picking stocks during a bull market is easy because everything is going up and it is also extremely profitable. But, there is a high risk involved in the stocks becoming over-valued.

Investors who are optimistic and believe that the stocks will go up, are known as Bulls.

The Bears : A bear market is exactly the opposite of a bull market. Here, everyone is pessimistic and everything in the economy is bad. There is recession, stock prices are falling, The GDP is growing at a dismal rate and hell is just looming over!

A bear market and a bull market are in a never-ending cycle. When one ends, the other begins and vice-versa.

So, when investors feel that the bear market is going to end, they start buying stocks in anticipation of a bull market or they try to make money while the stocks are falling and get away with whatever comes their way.

Investors who are pessimistic and believe that the stocks will drop, are known as Bears.

The Chickens : Chickens are those who are afraid to lose anything. They are not at all risk-taking people and would rather get out of the market completely.

All they want to do is make profits and, so they invest and divest only during a bull market.

They want to remain safe in their decisions and not risk losing even a bit of their earnings and investments.

The Hogs : Hogs are high-risk investors, looking to make big money fast and furious! They get impatient, greedy and emotional about their investment , and want everything in the minimum amount of time and with the maximum amount of short-cuts.

They don’t put in the proper time and money for the correct investment plans, and very often suffer huge losses because of such temperament and ill-knowledge.

Professional traders love the hogs, as the bears and the bulls reap the profits from their losses and mis-adventures. 

As usual, hogs are always slaughtered!

The Ostriches :  Ostriches are those who stick to age-old traditions and methods and are oblivious to all the changes that are taking place in the world, around them.