Animals dominate stock market-Find out which species of investor are you?

The Wall Street jargon is used in every stock market. Although there are several financial jargons used in the Wall Street, few words are used in our day to day lives yet hold a deeper meaning. There are few names of animals that are used to determine the type of investor one is.

Which are the most popular names of animals that you have heard in the stock market? Those must be bulls and bears. Besides these two, there are few other names of animals used in the stock market. Let us find out what each one, including bulls and bears, represents:

Bull: Bull typically refers to an upward market or an optimistic market environment. In the bull market, the stock prices keep on increasing regardless of companies’ performance. The bull term for an upward market is believed to have originated probably because a bull up thrusts with its horns. Bull investors are believed to be investors who are convinced that the market will take an uptrend. Nepal was in the bull market until the NEPSE index hit 1800.

Bear: Bear typically refers to a downward trend of the market or a pessimistic market environment. In the bear market, stock prices keep on decreasing. The bear term for a downward market is believed to have originated because a bear usually swipes down with its paws. Bears are those investors who are convinced that the market will take a downtrend. Currently, Nepalese stock market is in a bear market.

Stags: Stags are the type of investors who are not interested in the bull and bear of the market. These investors buy Initial Public Offering (IPO) and sell those shares as soon as they are listed in the stock exchange. They basically want to take advantage of the increased stock price in a short term.

Chickens: Chickens refer to those investors who try to stay away from the stock market and are dependent on safe heavens of the market such as bond and deposits. The risk tolerance is very low among these investors.

Pigs: Pigs refer to those investors who take high risks in the market. These investors are impatient with their trade, are willing to trade hot stocks and want to make money fast. Jim Cramer’s old saying goes “Bulls make money, bears make money and pigs get slaughtered”.  

Wolves: Wolves are those investors who use unethical and illegal means to manipulate the market. Wolves are those powerful investors who have powerful networks in the market and can come together to push the price of some stocks to a certain direction. Most of the insider trading and stock manipulation that we see in Nepalese stock market provides evidence that wolves exist in Nepalese stock market.

Ostrich: One of the common behaviors among ostrich is that the bird usually buries its head in the sand at the arrival of danger. Those investors who dig their heads into the sand even when the market is falling down and patiently wait for things to get into the right track are called ostriches.

Rabbits: Rabbits are the type of investors who usually trade for a very short period of time. In fact, the trading time usually lasts for a minute to two. Since, online trading has just initiated in Nepal, an investor of the rabbit kind is difficult to find.

Turtle: Turtles are the long term investors. These investors usually look at the long term time frame and are least concerned about the short term fluctuations.

Sheep: The type of investors who do not change their investment styles as per the market trends. They are usually the ones who follow a market guru and do not apply their own trading strategy. These investors usually enter and exit the market late.

The stock market represents a community of different values and principles. The bulls and bears are always at odds. Even the chickens and turtles can attain gains in the stock market. However, if you are the ultimate pig in the market, who is too greedy to earn and is not ready to enter the market, then chances are high, you will be slaughtered by the bulls and the bears. The best advice for any investor would be to know the type of investor that you are, work on your weakness and build on your strength.