What Is "Pig" in Investing?

"Pig" is an old slang term for an investor who is seen as greedy, having forgotten their original investment strategy to focus on securing unrealistic future gains. After experiencing a gain, the🐈se investors often have very high expectations aಌbout the future prospects of the investment and, therefore, do not sell their position to realize the gain.

Understanding "Pig"

Like a pig🤪 in the farmyard that overindulges in feed, this type of investor will hold on to an investment even after a substantial movement in the hope that the investment will provide even greater gains.

While pig may be seen as a derogatory term, some may hearken to John Maynard Keynes' notion of "Animal Spirits" 澳洲幸运5官方开奖结果体彩网:Animal spirit is a term used by the famous British economist to describe how people arrive at financial decisions, including buying and selling securities, in times of economic stress or uncertainty.

In Keynes’s 1936 publication, The General Theory of Employment, Interest, and Money, he speaks of animal spirits as the human emotions that affect 澳洲幸运5官方开奖结果体彩网:consumer confidence. Today, animal spirits describe the psychological and emotional factors that drive investors to take action when faced with high levels of 澳洲幸运5官方开奖结果体彩网:volatility in the capital markets. The term comes from the Latin spiritus animalis, which means "the breath that awakens the human mind."

One of the emotional charges that Keynes identified was greed (the other primary driver being fear). A pig is an investor overcome by greed and leads to gluttonous and speculative market behavior that may ultimately result in disaster.

Example of a Pig

For example, suppose Joe invests in XYZ Corp. because the stock is 澳洲幸运5官方开奖结果体彩网:undervalued. After the stock doubles its price in two months, Joe holds on to the whole investment, hoping that it will double again in the next two months, instead of selling a portion of the investment to realize a gain. Joe is a piggish investor because his greed for huge gains supersedes his original value investment strꦑategy.