Animals in the Indian stock market

Posted On Wednesday, Oct 15, 2014


Dalal Street is a marketplace of animals and birds. Bulls and bears are the most common ones, but there are others too. If you wandered Dalal Steet for some time you would come across the chickens, the hogs, the stags, the ostriches, and if you stayed long enough maybe even a wolf or two!

All of us investors might identify with one of these animals or birds. Sometimes our behaviour could change from one animal to another depending on the market climate. Being aware of your own preference and orientation may help us be more rational and manage our investments better.


The bull depicts those investors who are highly optimistic about future prospects. They are willing to take risks and can be speculative. Such investors are prepared to learn from mistakes. There are also permabulls in the market – those investors who have perpetual optimism.

In a “bull market” you’d find that majority of the market participants, not just the permabulls, are optimistic and consequently the markets are rising upwards. This usually occurs when the economy is doing well, GDP is rising, and employment opportunities are high.

The origin of the usage bull for optimistic investors is disputed. Some suggest it has got to do with the fighting style of a bull – because it drives upward with its horns.

The bulls typically would have good exposure to equity markets and they might also supplement that with exposure to the debt markets.


On the other hand the bear represents that set of investors who do not have an optimistic view of the markets. They believe the market is headed for a fall. Like permabulls there are permabears in the market – they have a permanently pessimistic market outlook.

A “bear market” is the market scene when most of the market players, not just the permabears, are anticipating a market turndown. This phenomenon usually occurs when the economy is in bad shape, jobs are hard to find and a recession is looming.

The usage of the term bear is popularly assumed to come from the way a bear attacks; it swipes down with its paws. But others believe the actual origin is from the “bear skin jobbers”. The bear skin jobbers sold bear skins they did not own; that is, before the bear was caught. Later those traders who did short selling, came to be called as bears. Short selling is a technique, where traders sell shares they don’t actually own for a certain fixed price. They anticipate the market to fall and when it does they buy shares for a lower price and deliver them, making a profit in the process. So, those who anticipate a fall in markets are the bears.


Those investors for whom the fear of losing keeps all market related securities permanently outside their portfolio are compared to chickens. Generally chickens are ultra conservative and would rather play it safe with their savings. They’d have very less or nil exposure to equities, bond funds and would be pro FDs or such “safe” investments.

While it is important to stick to investments that let you sleep peacefully, boycotting a particular asset class is not wise or healthy.


The hogs or pigs represent those kinds of investors who are prepared to take very high risks (sometimes without even being aware of it) hoping for quick bumper gains. They are greedy and impatient. They would jump at the latest hot tip suggested by a broker or picked up from a website. Such investors do not spend time and effort in gaining the knowledge required for such investments. Needless to say the hogs get slaughtered easily.


This term is used to refer to the investors to tend to behave like ostriches when the markets are miserable. It is said an ostrich, when faced with danger, slumps to the ground faking death instead of trying to escape or retaliate. They’re said to “bury their head in the sand”. But this technique rarely fools its predator.

Sometimes investors do not take remedial action or caution when they receive warning signals about market risks. They prefer to remain status quo, or shut themselves altogether to avoid hearing any bad news. Many times equity investors can trim their losses by reducing exposure before the worst leg of a market wide fall.

Of course, this does not mean investors should take action at every signal; long term investors in diversified funds or passive index funds may be better off not touching their investments. In such cases it’d be better to bury your head in the sand and be bird-brained!

However the ostrich behaviour can cost dear for investors who have exposure to highly risky securities like individual shares or sectors funds.


Stag is the colloquial name for those stock market traders who buy shares in an IPO (initial public offer) where a company issues shares for the first time, with the intent of selling them away immediately as trading in those shares begins and grab quick, small profits. This is sometimes called stagging. Stag does not apply to common investors.


Finally the investing world also has seen the ravenous wolves – powerful individual traders who created scams that jolted the markets when they came to light. Again wolves are not common investors, they are extremely sophisticated traders.

Wolves exist not only in the investing world but in other areas of the financial world as well. There is little we can do to avoid them except hope that the regulatory systems are vigilant enough to nip them in the bud.

We may not all be permanently bullish or bearish. We may display with the ostrich behaviour at times although we are predominantly bullish. But understanding your preferences may help you mould your investment life better.

The labels used in the article are generic and are broadly used in investment circles. They are not used in a derogatory sense. Do consult an advisor for your investment related queries.

Disclaimer, Statutory Details & Risk Factors:
The views expressed here in this article are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. Please visit – to read scheme specific risk factors.

Above article is authored by Quantum.

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