Whiskey Neat: The Bear Market

Mar 29, 2018  Emily Lewis, Thinker, Drinker, and Finance Tinkerer

Whiskey Neat is a developing series of explanations for concepts used around Boogey or even in the wild. The goal is to provide you with exactly as much theoretical bullshit as you need (no more, no less), instill the confidence to get moving, and for the whole thing to go down nice and smooth. The titular beverage of this project may or may not be autobiographical, so let’s get to it.

Today’s Selection: The Bear Market

Vintage

This harsh, nutty pick is often made locally in the stock market, but operations have recently moved over to the cryptocurrency Byzantium.

Aroma

The Bear Market is the opposite of a Bull Market, and it’s when stock (or coin) prices are dropping and everyone is selling their shares.

Basically, a bear market is when stock prices are attractively and unreasonably cheap.

So here’s the necessary theoretical bullshit:

The economy doesn’t fall forever, nor will it ever rise to infinity and beyond. The bear market is part of this great circle of finance life, and we see it when the speculative bubbles that were supporting the Bull Market burst. Maybe returns weren’t happening, or maybe an entire business sector got raked through a scandal. No matter the cause, people lose trust in their investment and want their money back before things get worse.

The thing that gets panties in a twist with a bear market is that they are a classic example of a shit storm spiraling out of control. Once a few wary investors pull out, the masses are never, ever, ever far behind in following suit. Wall Street snowballs are a bitch.

That’s Neat!

  • The Stock Market doesn’t crash until there’s a Bear Market. So when you hear people talking about the February “stock market crash”? Yes, the Dow lost more points than ever in a single day, and it’s not back yet, but it didn’t lose a significant enough percentage of the market value, and (knock on wood) we’re not in a bear market. The stock market did not crash in February of 2018.
  • Are you a bear cub in the investing world? If so, a Bear Market is the perfect time to get your feet wet. You should do your research first, of course, but “buy low, sell high” is referring to purchasing stocks in a bear market in something that you know will bounce back (picking a boring company is a good default), and then selling it on a Bull Market. Invest a little while the start-up cost is low!
  • Always enjoy whiskey and investing responsibly.