After years of studying the market, I have concluded that bears have more enthusiasm than bulls. Maybe it is that bears are higher in the evolutionary scheme, meaning they have more intelligence and physical capability. Having more intelligence allows bears to make more choices, to make decisions based on something other than primal needs.
In fact, now that I think about it, because bears are more intelligent, they actually have more fear in their lives. Bulls, simple minded as they are, often look at something bears would see as scary, shake their head, and continue munching the grass at their feet. That “scary” thing just doesn’t exist. The reason for this is that bears are smarter, they can “perceive” more, thus “reality” is often perception based. In other words, bears “spook” more easily than bulls. Since bears spook more easily than bulls, they tend to overreact, and when they do, my-oh-my do are they enthusiastic when it comes to selling.
Bulls, on the other hand, just plod along, moving from one green pasture to another, simply and slowly pulling in as much green grass they can eat. Little by little, they move forward, inch by inch. Mind you, when they see the bear coming, rushing headlong toward the abyss, the bull simply steps aside, watching and wondering why that bear is running so hard …
I wrote the above more to amuse myself than enlighten anyone, but in the metaphor, a little wisdom does reside. Bears tend to overreact; bulls tend to be passive. In times of great fear, such as we are seeing now in Japan, the bears easily and quickly take charge. The bears begin wildly running toward the abyss, and this is the reason I suggested yesterday that it is time to get to cash.
The situation in Japan will not resolve easily or quickly. The problems there could actually get worse, much worse, and the residual effects will go on for some time, years more than likely. The question, though, are the myriad problems Japan is facing right now enough to throw the global economy into a tailspin, or will some other enterprising Asian economy, such as South Korea or China, pick up the lost market share and loss of production capability?
This remains to be seen, but one thing we do know is that commerce never sleeps, or as Gordon Gekko said, “Money never sleeps.” Given this, and given what I know about bulls and bears, I have reason for some optimism here. True, it is slight for the near and medium term, but I have to believe that in the longer run, the bears will hit a bottom after plunging into the abyss and the plodding bulls will once again find a green pasture to slowly much their way through. Maybe there is some evolutionary advantage to lacking intelligence, after all. Maybe, in the end, the bulls have a better chance of surviving and thriving because all they really think about is slowly but surely taking in the green grass, while the bears are frantically running from their perception of fear that is real or possibly not.
Trade in the day – Invest in your life
