Author's Note

What Do We Mean by Bull and Bear Markets?

The Little Book of Bull Moves in Bear Markets is a book for stock investors; its focus is on preserving and enhancing invested wealth at a time when a collapsing American economy threatens to destroy it. The current economic backdrop requires a fresh approach to investing, and before getting too deeply into the discussion, I want to say a word about what I mean by the terms bull and bear markets.

Except in hindsight, nobody knows when bull, bear, or sideways markets begin and end, and there is no universal agreement on the magnitude or duration of the market moves that define them. But precise definitions are not terribly important as long as you know bull means up, bear means down, and sideways means flat, and you have the relative knowledge to distinguish market trends from reverse market movements and fluctuations that are merely short-term in nature.

Unless otherwise specified, bull, bear, and sideways refer in this book to the stock market, but the terms are commonly applied to markets in other asset classes and in stock market sectors, such as commodities; subsectors, such as gold; or stock classifications, such as small capitalization and large capitalization. Price movements are tracked by indexes and averages that measure changes using various weighting methodologies.

It is important, particularly when making period-to-period comparisons, to be consistent in the use of indexes. A broad market comparison using the price-weighted, ...

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