What is a Bull?
The meaning of bull in investing refers an investor who expects stock prices to rise in the near future and is therefore willing to buy and hold stocks for the long term. This is usually in contrast to a bear, who is an investor who expects stock prices to decline in the near future and is therefore more likely to sell and look for opportunities in other markets.
Bulls will often take advantage of market uptrends and look for long-term growth potential in stocks. These investors will often look for stocks that have good fundamentals such as strong balance sheets and high dividends, as well as stocks that are undervalued or have potential to increase in price. Bulls will also use technical analysis to help them identify stocks with positive momentum.
Bulls are often associated with bullish market sentiment and the term “bull” is often used in the media when discussing investor sentiment. This sentiment often drives the market higher even when fundamentals are not supportive of the rise. Bulls will also be more likely to invest in stocks that have had a recent run up in price, as they expect the stock will continue to rise.
Bulls are often seen as the opposite of bears and are associated with a more optimistic outlook on the stock market. Bulls will tend to be more aggressive in their trading and look for opportunities to capitalize on rising stock prices. They will also be more likely to take on more risk than bears in order to capitalize on potential market uptrends.
Simplified Example
A bull in investing terms is like a person who is optimistic and confident about the stock market. This person believes that the market will rise, and that prices of stocks and other investments will increase over time. Just like a bull is strong and powerful, this person believes that the market will also be strong and powerful. The bull is looking to buy investments that they believe will go up in value, just like a bull charges forward with confidence.
History of the Term Bull
In the 1769 edition of Thomas Mortimer's book "Every Man his own Broker" published in London, the terms "bull" and "bear" were first mentioned, describing speculators at Jonathan's Coffee-House in Exchange Alley, considered the original London proto-Stock Exchange. A "bull" referred to those who bought government securities without intending or having the ability to pay for it upfront. They were obligated to sell it again, either at a profit or loss, before the contract's due date. Back then, stock-brokers in London permitted their clients to trade on credit for about two weeks, known as an account. When the account concluded, all transactions had to be settled. If a client incurred a net trading loss, they were required to pay the broker in cash. This practice of trading on credit was phased out around the 1980s in London.
Examples
Bull Market: A bull market is a financial market characterized by a sustained period of rising prices, investor optimism, and overall positive sentiment. During a bull market, stocks, bonds, and other assets tend to increase in value as more investors buy in, leading to a self-reinforcing cycle of upward momentum.
Bull Run: A bull run refers to a rapid and sustained increase in the price of a particular asset or market. This can happen for a variety of reasons, such as positive earnings reports, economic growth, or speculation. A bull run can result in significant gains for investors who are able to buy in early and ride the wave of upward momentum.
Bullish Investor: A bullish investor is someone who has a positive outlook on the market or a particular asset, and is optimistic about its prospects for growth. A bullish investor may buy stocks or other assets with the expectation that they will increase in value, or may take a long position in a particular market or asset. Conversely, a bearish investor has a negative outlook and may take a short position or sell off assets in anticipation of a downturn.