What Is A Bear Market?

David Leonhardt wrote Thursday that we've entered "the third great bear market of the last century." Others have used the same ursine terminology.

What does it mean?

A "bear market" describes a market where prices are falling, driven largely by pessimism. (A "bull market," likewise, describes a market characterized by investor optimism and rising prices.) The term probably comes from an old cautionary proverb about bearskin sellers who injudiciously sold bearskins before they'd actually caught and killed any bears. (Sort of like "don't count your chickens before they've hatched," but with Yogi instead of Foghorn Leghorn.) This expression likely morphed into a term for someone who sells something in anticipation of a price decline.

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