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Bulls make money, Bears make money

 
Old 03-23-2006, 10:01 AM
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Default Bulls make money, Bears make money

I heard the quote "Bulls make money, Bears Make money." in investing. Could someone explain to me how bears make money in trading?
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Old 03-23-2006, 11:09 AM
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Default Re: Bulls make money, Bears make money (skiptomylou)

thats rediculous, Bears can't use a computer!!
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Old 03-23-2006, 12:02 PM
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Default Re: Bulls make money, Bears make money (skiptomylou)

Bears make money by hedging against the market for instance shorting stocks and holding cash
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Old 03-23-2006, 03:02 PM
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Yea, I figured as much. Are there any other ways they can make money besides shorting stocks and hold cash?
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Old 03-23-2006, 03:05 PM
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Default Re: Bulls make money, Bears make money (Mad Money)

Bears make money by shorting stocks. They borrow your shares, and sell them to someone. Theyre banking that the stock tanks. When it tanks, they buy it back and give it back to the broker and pocket the difference.

For example you bought 100 shares of goog at 10 bucks.

A bear will borrow your 100 shares and sell them to some shmo at market value, say 10 bucks. Then over the course of a week, the stock falls to 5 bucks. The bear will then BUY THE 100 shares back her borrowed or "COVER". The 100 shares go back to the brokerage to resupply your initail 100 shares BUT THE BEAR KEEPS THE 5 bucks he made on every share.

THERE ARE HUGE RISKS WITH SHORTING. The main one being using the scenario above, lets say he shorts 100 shares at 10 bucks, but the stock goes to 20 over the next week. The bear now must cover at 20 instead of 10, so he made no money, and probably covered at the high value of the stock.

Bulls make money, bears make money, and pigs get slaughtered.
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Old 03-23-2006, 03:34 PM
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Default Re: Bulls make money, Bears make money (pollofrito21)

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by pollofrito21 &raquo;</TD></TR><TR><TD CLASS="quote">Bears make money by shorting stocks. They borrow your shares, and sell them to someone. Theyre banking that the stock tanks. When it tanks, they buy it back and give it back to the broker and pocket the difference.

For example you bought 100 shares of goog at 10 bucks.

A bear will borrow your 100 shares and sell them to some shmo at market value, say 10 bucks. Then over the course of a week, the stock falls to 5 bucks. The bear will then BUY THE 100 shares back her borrowed or "COVER". The 100 shares go back to the brokerage to resupply your initail 100 shares BUT THE BEAR KEEPS THE 5 bucks he made on every share.

THERE ARE HUGE RISKS WITH SHORTING. The main one being using the scenario above, lets say he shorts 100 shares at 10 bucks, but the stock goes to 20 over the next week. The bear now must cover at 20 instead of 10, so he made no money, and probably covered at the high value of the stock.

Bulls make money, bears make money, and pigs get slaughtered.</TD></TR></TABLE>


Its actually Hogs get slaughtered. Pigs are smarter than Hogs.
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