What’s the Saying “Pigs Get Slaughtered” Mean? The saying “pigs get slaughtered” highlights the dangers of being too greedy. Within the context of investing, it means that anyone so greedy that they take on – or ignore – excessive risk will eventually lose everything they have.
This is actually part of a longer saying, “Bulls make money, bears make money, pigs get slaughtered.” As you almost certainly know already, a bull market is one trending upward. A bear market is one trending downward. In either case, investors have opportunities to earn money as long as they take take strategic approaches. A pig, however, doesn’t care much about the potential risks. While the others survive, the pig gets butchered.
Who Said, “Pigs Get Slaughtered”?
The saying “pigs get slaughtered” has been around long enough that no one seems certain of who said it first. Jim Cramer uses it as his number one rule of investing. He did not coin the phrase, though.
In 2002, Anthony Gallea, an executive at Salomon Smith Barney, published a book of Wall Street Truisms. “Bulls make money, bears make money, pigs get slaughtered” is such a popular phrase that he used it as the book’s title.
How Bulls Make Money In The Stock Market
Bulls make money by investing in a rising market when confidence and optimism is high that prices will go up further.
During a bull market, unemployment is generally low or declining, consumer spending is high, and stock prices are going up. Bulls make money by continuing to pour their money into the market with the expectation of continued growth.
Bulls are optimistic, but they know the market will not trend upward forever. They pay close attention to fluctuations so they can stop investing and potentially sell when the market slows.
Additionally, they invest in assets that tend to hold their value. This adds balance to their investment portfolios and hedges against risk. While these assets probably will probably not grow rapidly, it’s unlikely that they will lose much of their value, either.
How To Make Money In A Bearish Market
Bears have a pessimistic view of the economy. Even during an upward trend, they often focus on indicators that suggest a market correction.
Bears sell stocks (sometimes taking short stock positions), which can cause company shares to lose value. It’s difficult to make money during a bear market, but it isn’t impossible as long as investors find assets with growing values or bet intelligently against declining stocks through put options, inverse ETFs, or short stocks. Even if other stocks fall, the portfolios of bears can retain their value or become more valuable.
Bears don’t usually bet long on high-risk stocks. That doesn’t mean they never do it, though. Instead they will focus on weaker stocks and look for opportunities to take bearish bets on them.
How Pigs Get Slaughtered
Pigs get slaughtered because they don’t think about anything except trying to grab as much as they can. They rarely consider how risk will affect them.
Many of them care mostly about making quick profits from high-risk, high-reward stocks. Their portfolios don’t usually have balance or diversity, which leaves them open to considerable, sudden losses.
Pigs also get slaughtered because they usually think about short-term gains. They don’t invest with long-term goals in mind. This adds even more risk to their portfolios and has the potential to disrupt the market by creating artificial bubbles that can burst at any moment.
Another Quote: “Pigs Get Fed, Hogs Get Slaughtered” Meaning
Some investors see a difference between “pigs” and “hogs.” To them, a pig focuses on making as much money as possible as quickly as possible. That doesn’t mean taking ridiculous risks without relying on any assets to balance a portfolio, though. Hogs, however, will feed on anything that looks even remotely appealing, and they will rarely think about the possibility that they could suffer in the future.
When viewed from this perspective, there’s a considerable difference between pigs and hogs. It’s fine to be a pig! There’s nothing wrong with using greed as motivation to make more money.
Hogs, however, take it much too far. They’re more than greedy. They’re somewhat oblivious to risk and the potential damage they can cause. A hog will consume something even if doing so will likely have negative affects in the future. They will do this because they never think about the future. If it isn’t right in front of them, it might as well not exist.
Who Coined the Phrase “Hogs Get Slaughtered”?
Several people have been linked to the phrase “hogs get slaughtered.” It seems likely that the credit goes to Mark Cuban, the American entrepreneur worth more than $4.3 billion. This makes sense because Cuban built his wealth independently instead of relying on family finances and connections. He understands that it takes risk to make money. He also knows that too much risk can undermine all of the hard work one puts into life.
Then again, Cuban might have picked up the phrase from anywhere along his wide-ranging career. One of Cuban’s Dallas-based companies even did business with Perot Systems, an information technology company owned by the late Ross Perot. Maybe Cuban heard it from Perot? Really, though, this is all conjecture. The phrase could have come from anyone defending the importance of greed as a motivator for investing with risk in mind.
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