Bulls and bears

Q From Thomas B Jones, South Africa: In Stock Exchange parlance, bull and bear relate to being “long” or “short” of a particular security. I have heard that the term has its origins in two old English family stockbroking or banking businesses — the Bulteels and the Barings — the latter bank failing only relatively recently. The Bulteels tended toward a more aggressively positive or bullish view on stocks and shares while the Barings tended to be more cautious. I should be grateful for your comments.

A Your explanation of the two terms makes perfect sense to somebody in the business, but it lacks a bit for the rest of us. To keep it simple (this being a ritual incantation to prevent my being nibbled to death by pedants), a bear sells shares, sometimes shares that he doesn’t own (in the jargon, he is short of the necessary shares), hoping to buy them back at a lower price in order to make a profit, so he is hoping for a fall in the market price and he may be considered a pessimist; a bull buys shares hoping to sell them at a higher price later, so is essentially an optimist about the way the market is moving (by analogy, he is said to be long because he has some shares on hand).

The story about the two famous banking families is widespread, and believed by a lot of people, but there’s no truth in it. Barings was a well-known bank, whose spectacular demise in 1995 rendered it even more famous than it was in life. The only bank containing the name Bulteel that I can find traded as Harris, Bulteel and Co; it was the first bank in Plymouth, established there in 1773-4 under another name, but it was never well enough known to become the focus for an expression.

In any case, bull predates that bank’s foundation by more than half a century, being first recorded in 1714. Bear is slightly older still:

A noble gentleman of this city, who has the honour of serving his country as major in the Train-bands, being at that general mart of stock jobbers called Jonathon’s, endeavouring to raise himself (as all men of honour ought) to the degree of colonel at least; it happened that he bought the Bear of another officer.

The Tatler, 7 July 1709. This tongue-in-cheek tale is saying that the major, wanting to buy a promotion, speculated by selling some stock short. When the transaction went wrong, the story goes on, the major described his fellow officer as a bear-skin man, among other epithets, and called him out, satisfaction being achieved through a fist-fight, neither man being keen on firearms.

A jobber was a middleman or wholesaler who bought and sold shares. A train-band was properly a trained band, a company of citizen soldiery, a militia. Many stock transactions at this period took place in coffee houses, which were convenient meeting places; Jonathon’s, in Change Alley in the City of London, was the precursor of the London Stock Exchange, much as Lloyd’s coffee house later became formalised as Lloyd’s of London, the insurance market.

Other early examples described such traders as bear-skin jobbers. This expanded form of bear gives us the clue we need. There was at the time a proverb, probably borrowed from French ne vendez pas la peau de l’ours avant de l’avoir tué, “don’t sell the bear’s skin before you’ve killed him”, though the English equivalent refers to catching rather than killing the bear. It had the same sense as “don’t count your chickens before they’re hatched” — don’t assume your success is assured until it actually happens, don’t be over-optimistic. A bear-skin jobber or bear sold shares he didn’t own, in the hope that their price would fall and that he would be able to “catch his bear” by buying them more cheaply in the market before he had to deliver them.

The suggestion is that bull was invented as an alliterative animal analogy to bear, perhaps with a subconscious image of charging forward fearlessly.