Pig

What Is "Pig" in Investing?

"Pig" is an old shoptalk term for a considered greedy, investor, having failed to remember their original investment strategy to zero in on getting ridiculous future gains. In the wake of encountering a gain, these investors frequently have extremely high expectations about what's in store possibilities of the investment and, subsequently, don't sell their position to understand the gain.

Figuring out "Pig"

Like a pig in the barnyard that revels in feed, this type of investor will hold on to an investment even after a substantial movement in the hope that the investment will give even greater gains.

While pig might be viewed as a derogatory term, some might notice to John Maynard Keynes' idea of "Animal Spirits" Animal spirit is a term utilized by the popular British business analyst to depict how individuals show up at financial choices, including buying and selling securities, in times of economic stress or vulnerability.

In Keynes' 1936 publication, The General Theory of Employment, Interest, and Money, he talks about animal spirits as the human feelings that influence consumer confidence. Today, animal spirits portray the mental and emotional factors that drive investors to make a move when confronted with high levels of volatility in the capital markets. The term comes from the Latin spiritus animalis, which means "the breath that stirs the human psyche."

One of the emotional charges that Keynes distinguished was greed (the other primary driver being fear). A pig is an investor overwhelmed by greed and prompts ravenous and speculative market behavior that may at last bring about disaster.

Illustration of a Pig

For instance, assume Joe puts resources into XYZ Corp. since the stock is undervalued. After the stock doubles its price in two months, Joe holds on to the whole investment, trusting that it will double again in the next two months, rather than selling a portion of the investment to understand a gain. Joe is a piggish investor since his greed for enormous gains supplants his original value investment strategy.

Highlights

• While "pig" might be viewed as a derogatory term, some might notice to John Maynard Keynes' thought of "Animal Spirits".
• "Pig" is shoptalk for a greedy, investor, having failed to remember their original investment strategy to zero in on getting ridiculous future gains.
• A pig is an investor overwhelmed by greed and prompts voracious and speculative market behavior that may eventually bring about disaster.