Bull Market & Bear Market - Explained in Hindi - YouTube

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Namashkar, my name is Mukul and welcome to Asset Yogi

Friends, if you invest in the stock market or thinking of investing in the stock market

Then you might have heard these 2 terms commonly

Bull Market and Bear Market

You might have heard investors saying that investor 'x' is being bullish in stock 'y'

Or now the market is in bear mode and bear run is going on

So what does it mean?

What should be your strategy in bear or bull market

We are going to discuss this in this video so stay tuned

First of all, let's see the definitions of bear and bull market

If the stock market is in an Uptrend, i.e heads upwards, it is called a bull market

If the Sensex or Nifty heads continuously upwards for years or months, then only we call it a bull market

And if the Sensex or Nifty heads continuously downwards for years or months, then we call it a bear market

I'll explain this with an example also

I have drawn the chart for the last 15 years taking Sensex on the y-axis and time on the x-axis

Now let's try to identify where is bull and where is a bear market

In 2003, the Sensex was around 3000

Till January 2008, it went to 22000

It was a great bull run

So we can say that this was the bull market for 5 years

After that, when the market reached 22000, there was a Sub Prime Crisis due to which there was a financial crisis all over the world

The overall sentiments turned negative

Markets crashed in September 2009 and came down to 8000

So we can clearly say that this was the bear market

After that, the market started heading upwards again and today it reached 35000

So we can clearly say that this was a bull run for the last 9 years

So we are in a bull market today

What is going to happen in the upcoming time?

Definitely, a bear market is necessary

Maybe it will fall immediately

Or maybe it will first fall a bit, rise a bit, and then fall properly

So this cannot be predicted but the facts tell us that

The market is in the bull run for the last 9 years and it has been a very long bull run

and sustaining it will be difficult

So in the upcoming 1-2 years, there can be a bear phase in the market

One more point which I want to highlight is

The Market made a peak in 2016 at 28000

and after that fell down a bit to 26000

So should I call it a bear market?

No, we cannot call it bear market

Because there is a general consensus for the bear market, however, it's not written any textbook or it is not a bible

For bear market, the market should fall at least 20% down from the peak

i.e, if the market is at 22000 at the peak, then it should fall at least 4500 points then only we can call it bear market

So here market reached down to 8000 from 22000

So it was a huge fall hence, definitely, it was a bear market

But here, the market didn't fall even 10%. So this is not a bear market

Up and down movement is the normal movement in the market

Similarly, for the bull market, the market has to go 20% up from the bottom

Then only we can call it a bull market

So we understood what are bear and bull market

Now let's understand what does it happens, how it develops, and what should be our strategy?

So its very simple

There are 2 main factors in the Sensex for going up or down

1. Fundamentals

If the fundamentals of the companies are strong, then Sensex will keep on increasing naturally

The markets will increase on a natural path and Sensex will also increase in a natural way

But, the Sensex doesn't work like this

Share prices are the sentiments

So mainly apart from fundamentals, the second factor is Sentiments

If the positive segment is there and a bull run is going on

Then maybe actually the market should be at 25000 but it is at 35000

The gain of extra 10000 points are because of sentiments

Let me give an example and try to draw an analogy

Politics is a very good example of this

PM Modi definitely worked well in Gujarat as a Chief Minister, however, I don't know about the exact numbers

But because the sentiment was very positive towards him, he became the Prime Minister

Now if the sentiments turn negative suddenly, he may not be the PM anymore in 2019

Mr Kejriwal had positive sentiments of corruption-free government, so people voted him in mass and he became the Chief Minister of Delhi

Now if the sentiments turn negative, he may not be the CM of Delhi after 5 years

And if it remains positive in both the cases, maybe Mr Arvind Kejriwal remains the CM of Delhi and

And Mr Modi remain the PM of the nation

So sentiments of the whole nation plays a huge role in the government

Similarly, sentiments play a huge role in the stock market as well

In a bull market, we have a positive sentiment

Let me explain this with an example

Let's say there is a bull run going on in the Sensex and you doubled your money

Now since it is a strong bull run, may the money will get doubled in the next 1-1.5 years

You'll tell this to your friends and family

Now since they got fascinated, they'll also try to double their money

So during the bull run, many new investors enter the stock market

So since shares are limited, the demand increases and if the demand increases

if the shares are limited, their price increase

Then no one thinks about fundamentals, PE ratio, PEG ratio, Balance sheets, and no one look at the fundamentals of a company

People think I bought a share at Rs.25, now I'll sell it at 35% and I will gain this much % of returns

This is the mentality at that time

Now if we talk about a bearish market, it's just opposite

People become completely negative

If someone sold the shares in the loss of Rs.50,000 or 1, 2, even Rs. 50 lakhs

Do you think that person will ever advise any of his family members to enter the stock market?

He won't

During a bear market, many investors leave the stock market for a lifetime

In fact, there are many opportunities during the bearish market

In this case also, people don't look at the company fundamentals

Many companies are downgoing at that time and there may be many companies with poor fundamentals

because the overall fundamentals of the economy are poor because of its negative sentiments

But there are many gems which people miss out

There are many companies with good earnings, good growth, good future

But due to negative sentiments, they also face a fall in their share prices

So you have great opportunities during such a time

So what should you do?

What you should have done if you knew that this is the bull or bear market

In a bull market, you should sell the stocks

If you think that for a long time, the Sensex is only rising and how much more will it go

So maybe it goes from 35000 to 40000-45000

But once it comes in a bearish phase, it's possible that the stock market could not recover for 2-3 years and you may face huge losses

It reminds me of a famous quote said by Warren Buffet

"It is wise to be fearful when others are greedy, and be greedy when others are fearful"

So when everybody is greedy in the bull market, you should be fearful and think that the market could fall

And if everybody is talking that the stock market is rubbish and no one should enter

So you should understand that it is the right time to enter the stock market

This is the major rule

Understand this and if you will be able to identify the low then you can sell at high

What you have to do is buy the dip and sell at the peak and that is how the profit is made

However, it's not that easy to identify that where the market will stop

But wherever it goes, it cannot become 0

So you should know that if the market is already fallen much, then it's the right time to buy

And if the market is at the peak, focus on the fundamentals, check the P/E ratio of the company, P/E ratio of the overall Sensex

I have made videos on many ratios so you can watch them

If your fundamentals are strong, you'll be definitely able to make money in the stock market

So I think you might have got information from this video that

What are bull/bear markets and what all strategies can you apply in these

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Till then keep learning, keep earning, and stay happy as always.