“Speaking Wall Street” by Conner W. Mays – Like any new environment, activity, sport, hobby, job, etc… learning to speak the language is one of the most important parts of really understanding what is going on around you. Every environment has its own language that the natives use and although the words are used in other places they can mean very different things.
For example, I played American Football from the time I was nine years old through my senior year in college and I can explain exactly what ‘offside” means. However, if you put me in a Soccer stadium, or at a bar watching The FIFA World Cup, I have absolutely zero chance of telling you what “offside” means (seriously, I think it is the most confusing rule in sports.) The important thing here is that I know I could understand the Soccer offside rule if I wanted to and I guarantee that you can understand financial markets if you really want to and my goal is make sure that becomes a reality.
Wall Street and financial markets as a whole might have one of the most diverse, specialized dialects of any industry. For this reason, many people think that they will never be able to understand the market, I promise you that anyone can learn the language and be on their way to truly understanding what is going on in the market. My focus here is going to be the overarching terms and lingo that you may hear on CNBC, The Wall Street Journal or Bloomberg.
This topic will be covered as a series – if you have a term or topic you have heard and want to understand let us know and we will do my best to explain it.
Speaking Wall Street
The Animal Spirits
The Bulls & The Bears
Being a Bull or “Bullish” means that you are expecting a stock, sector or the market as a whole to increase in value. Think of a Bull pushing prices up with its horns in the same way a bull may toss a person over a fence during the Running of the Bulls.
Being a “Bear” or “Bearish” means that you are expecting a stock, sector, or the market as a whole to decrease in value. Think of a Bear weighing down the market or pushing it down as it goes in for the kill.
These two terms are used most commonly to quickly tell someone how you feel about the value of something. Someone might ask me, “Hey Conner, what do you think of MobileEye (NASDAQ:MBLY)?” My response, if I think that the price is going to increase, would be “I’m Bullish on the stock!” If I think the price is going to down I could say, “Man, I’m a Bear on MBLY.” The same idea applies to someone referring to a Bull Market, the market has been in a continued upward trend, if someone says we are in a Bear Market, they simply mean prices have been going down, and they expect the downward trend to continue.
The Federal Reserve “The Fed”
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