1 Bear markets tend to erupt more rapidly than bull markets: Bulls accumulate energy at the bottom—essentially building confidence at the bottom—which requires a long time to recover. Bears, on the other hand, essentially spread panic at high levels, and panic obviously builds up more slowly than optimism—over the long term, for almost all assets, the bottom period is much longer than the top period.

2 Bear markets can accommodate more capital than bull markets: Because bears are at the top—when trading volume is at its highest—they are naturally suited to heavy trading, whereas bottom trading volumes in bull markets are very small, meaning many large funds actually can’t get in. Therefore, when bears are positioned at high levels, there is sufficient counterparty liquidity.