Bull and Bear Market Myths

Bull and Bear Market Myths

How to Navigate the Bull and Bear Market Hyperbole

Updated March 2023

We’ve all heard “bull and bear market.” These two terms refer to trends in the stock market, but what do they mean? Generally, a bull market means stocks are rising, and a bear market means stocks are falling. However, there is more to these terms than just the market’s direction.

Bull Market Bear Market nonsense

The Myth of Bull and Bear Markets

The bull and bear markets are often used to describe the stock market’s overall direction. However, we believe that this is an oversimplification of what is happening in the market. The market moves in cycles, and a variety of factors, such as economic conditions, geopolitical events, and changes in monetary policy, can drive these cycles.

One of the investors’ biggest mistakes is trying to be a “bull” or “bear” and investing accordingly. This strategy is misguided because it assumes that the market is always trending in one direction, which is not the case. The reality is that the market is constantly changing, and it is important to adjust your strategy accordingly.

The Importance of Focusing on the Trend

Instead of trying to be a bull or bear, we suggest focusing on the trend. The trend is your friend, and everything else is your foe. When you focus on the trend, you can avoid getting caught up in the noise of the market and make more informed investment decisions.

There are many ways to determine the trend, but one of the simplest methods is to look at the moving average of the market. The moving average is a line that tracks the market’s average price over a certain period. When the market is above the moving average, it is in an uptrend; when it is below the moving average, it is in a downtrend.

Buying Opportunities in Market Crashes

It is important to note that market crashes are not the end of the world. In fact, market crashes represent some of the best buying opportunities in the market. This is because market crashes are often driven by panic and fear, which can cause prices to drop significantly below their true value.

The saying “bulls win sometimes, bears win sometimes, but pigs always get slaughtered” rings true in this scenario. Trying to time the market and catch the exact bottom is a fool’s errand. Instead, focus on buying good companies at a fair price and holding them for the long term.

Weaponized News and the Stock Market

One of the biggest challenges facing investors today is weaponized news. The media has the power to influence public opinion and the stock market. The problem is that the media is often more interested in generating clicks and views than providing accurate and unbiased information.

In recent years, we’ve seen many instances where old news has been spun into something sinister. The media has a tendency to sensationalize stories and take them out of context, which can cause panic and fear in the market.

The role of social media has only made things worse. Anyone with an internet connection can now become a “news” source, regardless of their qualifications or expertise. The result is a constant stream of information, much of which is inaccurate or misleading.

Bull and bear markets are not as simple as they seem. The market moves in cycles, and it is important to focus on the trend rather than trying to be a bull or bear. Market crashes are buying opportunities, and avoiding getting caught up in the noise of weaponized news is important. By staying focused on the long-term trend and buying good companies at a fair price, investors can build wealth over time.


Other Random thoughts

The stronger the deviation, the better the opportunity; markets always revert to the mean.  No matter how much one might be tempted to disagree, the above charts state otherwise.


If you look at any long-term chart, the pattern is obvious; all sharp corrections and or crashes represent an opportunity.

The crash of 2008 was one of the most painful in recent history, and yet, despite this vicious pullback, the Dow is still trading well over 200% above its 2009 lows. From a long-term perspective, the Bull And Bear market story is moot.  One’s strategy should be to determine the trend and nothing else, for the trend is your friend, and everything else is your foe.

Another myth peddled repeatedly is the issue of how long it takes a market to recoup it has lost gains. Our response is, who cares? What matters is the stocks you buy, not a particular market index. Many stocks had already tacked on gains of several hundred percentage points before the Dow traded above its 2008 highs.  The same is going to happen this time around.  Strong companies will recoup their gains 2X to 3X faster than the broader markets, so when the Dow trades past 27K, some of these stocks will show gains of over 100%.


Bull and Bear Market Myths Closing thoughts

When blood is flowing in the streets, as is the case right now during this coronavirus pandemic, one should consider nibbling at stocks if one has a long-term perspective. Do not deploy all your funds in one short but deploy them in lots this way if the stock dips lower your average entry price drops.

When we get into plays (at the Tactical investor) we don’t think in terms of days. Under normal market conditions, our minimum holding time is several months.  Under the current circumstances, our time frames lengthen as the potential for huge profits surges significantly. In the short term, it’s a bloodbath out there, but in such an environment, one finds outstanding opportunities, leading to the dawn of the next bull market.

It is easy to buy when the sun is shining, but the problem is that almost everything is being sold at a premium.  It’s when things appear gloomy that the best bargains are found.

Other stories of Interest

The Spy 200 Day Moving Average

The Spy 200 day moving average

The Spy 200 Day Moving Average: Understanding its Significance in Trading May 18, 2023  Are you an aspiring trader or ...
Read More
mob mentality

Mob Mentality: Understanding Its Power and Influence

 The Power and Influence of Mob Mentality May 17, 2023 Have you ever been sucked into a collective mentality that ...
Read More
Best investment chronicle

Market Mastery: The Best Investing Books for Your Success

Investing Intelligence: The Ultimate Guide to the Best Investing Books May17, 2023 I have frequently been asked about the top ...
Read More
Psychology of investing

Psychology of investing: Don’t Follow The Crowd

Psychology Of Investing: Follow The Trend Updated May 16, 2023 Repetition is the father of all sins, stupidity is the ...
Read More
Small Dogs Of the Dow

Unleashing the Power of Small Dogs Of the Dow

Small But Mighty: Investing in Small Dow Dogs May 15, 2023 Investing in the stock market often presents a challenging ...
Read More
Aroon oscillator

The Aroon Oscillator: Unlocking the Secrets of Market Trends

A Comprehensive Guide to Trading with Aroon Oscillator May 11, 2023 Are you looking for a powerful technical indicator that ...
Read More
market psychology books

The Ultimate Guide to Market Psychology Books

May 10, 2023 Do you want to learn how the stock market works in detail? Or do you want to ...
Read More
herd mentality

Herd Mentality: Understanding the Pros and Cons of Conformity

May 8, 2023 Herd mentality, also known as mob mentality or pack mentality, refers to the tendency of individuals to ...
Read More
market cycle psychology

Cracking Market Cycle Psychology: Navigating the Ups and Downs

Understanding the Market Cycle Psychology: Navigating Market Volatility May 4, 2023 The key concept in this text is market cycle ...
Read More
yen etf

The Yen ETF: A Screaming Buy for Long-Term Investors

Importance of Yen ETF in the financial market: May 03. 2023 This post provides an in-depth analysis of the Yen ...
Read More
What is Relative Strength in Investing

What is Relative Strength in Investing? A Beginner’s Guide

What is Relative Strength? Understanding the Basics April 30, 2023 Relative strength (RS) is a widely-used technical analysis tool essential ...
Read More
the rsi macd strategy

The RSI MACD Strategy: A Comprehensive Guide to Trading

Apr 29, 2023 Are you a trader looking for a reliable trading strategy? Do you want to increase your profitability ...
Read More
The Contrarian Outlook - Unleashing Success

The Contrarian Outlook: Unleashing Success

Apr 27, 2023 Introduction In a world where conformity and groupthink are often rewarded, having a Contrarian Outlook can be ...
Read More
MACD strategy

Mastering the MACD Strategy: A Powerful Tool for Investors

I. What, indeed, is the MACD strategy? Apr 26, 2023 Venturing into the realm of stock trading may prove challenging ...
Read More
How to Invest in ChatGPT

How to Invest in ChatGPT: A Beginner’s Guide

Intro: How to invest in ChatGPT April 25, 2023 In recent years, artificial intelligence has exploded, with the demand for ...
Read More
angry mob

Mastering the Market: Rise Above The Angry Mob Mentality: Secure Your Victory

Unveiling the Angry Mob: Dynamics of Collective Behavior Updated April 27, 2022 As described by social psychology, group or mob ...
Read More
Dow Jones Global Index: A Timeless Symphony of Global Markets

Mastering the Trading Game with the Global Dow Jones Index

Dow Jones Global Index: A Timeless Symphony of Global Markets Apr 19, 2023 The Dow Jones Global Index is an ...
Read More
Financial insights

Financial insights: The Inside Scoop

Financial Insights from the Cosmos Apr 18, 2023 Embracing Fear to Forge a Steady Path One might argue that the ...
Read More
nasdaq tqqq

Nasdaq TQQQ: Amplified Returns and Double-Edged Risks

Embracing the Nasdaq TQQQ: A Reflective Look at Risks & Rewards Apr 17, 2023 As George Orwell might have contemplated ...
Read More
The Patient Investor

The Patient Investor

The Patient Investor: Harnessing Mass Psychology for Success Apr 15, 2023 Embracing the Virtues of Patience and Discipline In the ...
Read More
Why Is Inflation Bad for the Economy?

Why Is Inflation Bad for the Economy? Demystifying the Menace

Why Is Inflation Bad for the Economy? Apr 14, 2023 Inflation is a complex economic phenomenon that is often difficult ...
Read More