COMMENT
Stock Market Animals

With terms like bulls and bears, it's little wonder that some investors reckon the financial markets are a jungle in more ways than one. Truth is the financial markets have always had a soft spot for animals, and here are a few more creatures that lurk in the financial forest!

Kicking off with stags, these are, in essence, short-term speculators. They like to apply for shares in new issues in the hope of selling them soon after trading begins. In general, stags don't really mind what shares they buy, just as long as they go up. However, they may especially stalk gazelles, which are fast-growing businesses.

On the other hand, they will be keen to avoid turkeys, which are start-up companies that may subsequently go bust, although vulture funds are always on the lookout to gobble up any slackers. Elephants are funds too, typically ultra-large institutions such pension funds and insurance companies that can move a market significantly when they buy and sell shares.

Meanwhile, a large company that overshadows an industry is known as a gorilla. Classic gorillas are Microsoft (Nasdaq: MSFT) and Vodafone (LSE: VOD), which dominate the software and telecom industries respectively. At the other end of the scale, dogs are companies that have a small market share in a mature industry. The term was first coined by Boston Consulting Group.

Dogs are also used to describe companies that have badly underperformed the market. For instance, Dogs of the Dow is an investing strategy that relies on buying a handful of Dow Jones Industrial shares with the highest yield at the beginning of the year. The theory is that some of these may turn out to be the best performers next time around.

Turning to cats, an often heard phrase in the stock market is a dead-cat bounce. It refers to a temporary rise in share prices following a severe fall. The origin of the term is somewhat gruesome, and it may be best to leave it to your own imagination!

Kangaroo is a slang term for Australian shares. More specifically, they will be Australian companies with an emphasis on mining, tobacco or property. Elsewhere, Bulldog Bonds are bonds issued in sterling by a foreign company or government, and Bunny Bonds allow investors the option of reinvesting interest payments into more bonds so they can multiply and grow!

Insects feature strongly in the financial markets too. For example, spiders are exchange traded funds that track the performance of the US S&P Index, and a butterfly spread refers to a complex options trading strategy. Meanwhile, the cockroach theory states that if you see one cockroach, then there are probably a whole lot more around. In other words, if one piece of bad news leaks out then there is a high probability that more bad news could be just around the corner.