Lessons for stock market investors: 13 Things to Understand about Bears
1. There are lots of signs in Grand Teton and Yellowstone National Park that read “Be Bear Aware.”
- Lesson for Investors: Even when things look great, bear markets come with the territory.
2. Every local has bear stories to share.
- Lesson for investors: If you invest long enough, you will see more than one bear.
3. Hikers are reminded to carry bear spray – which is proven to be “90% effective”- but 100%
effective in producing sales.
- Lesson for Investors: Hold some cash, buy some insurance, and realize there is always someone selling protection from bears, but nothing is 100% effective. Per my river guide, statistically you are more likely to be killed by avalanche and moose than bear. l still bought the bear spray and I am glad I did. It was a small price to pay.
4. Bears prefer higher elevations and are lazy. As a result, they prefer to run downhill.
- Lesson for Investors: High valuations and high multiples make bear markets more likely.
5. Bear attacks are most common in the months of July, August, and September.
- Lesson for Investors: During these months, bears come out of the winter hibernation looking for food and the number of outdoor recreationalist increases making encounters more likely.
6. Bears are largely solitary animals.
- Lesson for Investors: Listen to the independent, solitary bear.
7. Hiking in groups and making noise to reduce the chances of being attacked.
- Lesson for Investors: When there are many people making noise about bears, there is a lower likelihood of being attacked. Worry when it is too quiet.
8. Older bears tend to be heavily scared.
- Lesson for Investors: It is hard living as a bear, but those that survive are some of the most dominant creatures of the forest.
9. Bears are curious and have a keen sense of smell.
- Lesson for Investors: Bears and short sellers are naturally curious and are easily attracted by unprotected food.
10. Bears are fast and charges and attacks happen quickly.
- Lesson for Investors: Mentally rehearse what you are going to do before you go hiking or invest because chances are you will not have much time to react when bears attack.
11. If attacked. DON’T RUN! Bears instinctively chase running prey and run 35 miles per hour.
- Lesson for Investors: Stay invested despite your fear. It’s not easy. I admit to being intimidated by the grizzly I saw 20 yards away given his size, despite being in my rented Toyota Prius. I had the bear spray ready, having seen Youtube videos of them climbing on cars.
12. If your bear spray fails. Get face down on the ground, protect your neck, and wait as most bear attacks are short.
- Lesson for Investors: You are statistically better off submitting than fighting, though in rare circumstances you may have to fight. The key is to protect your most vital parts like your neck, ideally with your backpack, and wait before moving to insure the bear has left the area. For investors, this means you may need to sell down a few positions to protect your best positions and don’t rush into a bear raid, wait until the bear has left the area.
13. Finally, most people do the wrong things when they encounter a bear.
- Lesson for Investors: When I saw the grizzly bear, others were stopping, getting out of their cars and approaching for better pictures, which is exactly what the ranger information said not to do. Instead, Be a Bear Aware Investor.
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