Bull and bear fights were all the rage in 19th century California. Spanish settlers brought it to the New World. It was the “big game” of the day. If you think football brings out rabid fans, a bull and bear fight was even wilder. Just imagine late 1800s, hot dry weather, tumble weeds rolling by, Sunday morning fire and brimstone church service, followed up by a bull and bear contest. Here’s a quote from Hubert Howe Bancroft circa 1888, “A bull and bear fight after the Sabbath services in church was indeed a happy occasion. It was a soul-refreshing sight to see the growling beasts of blood tied with a long reata by one of its hind feet, so as to leave it free to use its claws and teeth.”

The animals fought in circular pits, with walls eight to 10 feet in height, with amphitheater seating around the pit. The grizzly was first towed into the ring. The bull, after having his nose sliced so that the blood would trickle into his mouth and nostrils, would be led into the pit afterward. The smell and taste of blood would drive the bull wild. He would roar furiously as he was escorted to the ring. The battle was on. This savage sport is obviously long gone. But, the symbolism of the battle stuck to our financial markets.

Why were these crazy battles tied to our markets? The use of “bull” and “bear” to describe markets comes from the way the animals attack their opponents. A bull thrusts its horns up into the air, while a bear swipes its paws downward. If the trend is up, it’s a bull market. If it’s going the other way, it’s a bear market.

Fur trading further strengthened these allegorical names. Fur-trading brokers would pre-sell bearskins before they had their inventory. Therefore, they had to gamble on the future prices of the bearskins that they bought from trappers. They obviously wanted to buy the skins from the trappers for a lot less than what they had pre-sold them for. These original brokers or middlemen were known as “bears,” and the term stuck for describing a downturn in the market.

If the NFL could be compared to the capital markets, the New England Patriots are experiencing the longest bull market in the team’s history. Sadly, I vividly remember the Patriots’ bear markets. Soon after I graduated from college in 1989 I started my career in financial services. On the Tuesday after Labor Day that year, the Dow was at 2,744 and Tom Brady was only 12 years old. The story at the time was Michael Milken, Ivan Boesky, Drexel Burnham Lambert and insider trading scandals. Milken’s compensation exceeded $1 billion a year. The public along with the financial press couldn’t believe the market could ever get any higher. But, it did.

That same year, the Patriots finished with a record of five wins and 11 losses, and finished fourth in the AFC East Division. After the season, Head Coach Raymond Berry was fired. Some of the Patriots’ stats still stand today as the worst in NFL history, and in 1990 it got even worse. The team went 1-15. Those were the “great depression bear market” years for the Patriots.

A bear market is when securities prices fall and widespread pessimism causes a downward spiral. On Feb. 16, 1885, Dow Jones Industrial Average closed on its first day of trading at 62.76 (during the height of bull and bear fighting). Five years after its first birthday, the index experienced the first bear market (1890-1896). The Dow plunged over 63 percent over the next six years, to set an all-time low at 28.48.

Another notable bear market kicked off with the stock market crash of 1929. It led to the Great Depression and a 20-year bear market. During that bear market; the Dow erased 33 years of gains in just less than three years. The index needed another 22 years to regain its previous highs.

In 2007, another bear market came out of its cave. It set multiple volatility records and brought the index a total loss of 54 percent in 17 months.

On the contrary, bull markets are periods in which the stock market index is continually reaching all-time highs with only brief periods of corrections. On average, they last about 97 months. Some have run for as long as 15 years. We are in one now. It began in 2009. On January 25, 2017, the Dow burst through a symbolic level of 20,000. Just like five Super Bowl victories, that milestone seems surreal.

Obviously, this is not our first bull market. In the roaring ’20s, the Dow increased nearly 500 percent. After World War II (1949–1966), the Dow again grew well over 500 percent. During the Reagan Revolution, the Dow experiences its most spectacular rise in history. From a meager 777 on Aug. 12, 1982, the index grew more than 1,500 percent to close at 11,722.98 by Jan. 14, 2000, without any major reversals except for a brief but severe downturn in 1987.

No one can fathom the impact of the prosperity and pride this Patriots’ bull market has brought to our region. Enjoy both bull markets while they last. Defenses win Super Bowls. They also protect personal fortunes. Beware of the bear; it will not hibernate forever.

This article originally appeared in the Old Colony Memorial.

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