What Does To Stem the Tide Mean?
Stem the tide is an expression meaning to stop or at least gain control of a situation. It usually refers to something bad that is happening on a large scale. Therefore,
In the context of an investment or a trade, to stem the tide means to find a way to stop, slow, or reverse a prevailing trend. The expression is often used when referring to one’s own trading position.
If the value of a trade or investment is losing money, closing the position would, in effect stem the tide or stop the money loss. To stop the bleeding is another phrase in the same context describing a similar circumstance.
Stem The Tide – A Closer Look
To stem the tide is to make a change. Sometimes, a situation cannot be immediately reversed or stopped. In that case, even a diminishing or progressive decline is an improvement. The desired outcome is to contain and eventually eradicating the negative situation.
In a financial or investment context, to stem the tide refers to reversing the impacts of a long-term market trend. The phrase typically pertains to macroeconomic trends. In finance, the tide often refers to long-term trends that may last months or even years. This category includes issues such as inflation, high unemployment, and high-interest rates.
Using ocean metaphors for market trends was coined by one of the market’s first technical analysts, Robert Rhea. Rhea was a proponent of Dow Theory, a form of technical analysis that he would use to call market tops and bottoms, and then profit from those calls. Tides are often referred to in the context of triple-screen trading. Using this system, a trader uses a longer-term chart, or market tide, as the basis for trading decisions. For instance, if a trader plans to trade daily they would examine the weekly moving average convergence divergence (MACD) histogram, as its slope provides an indication of the market tide. (Source: investopedia.com)
Stem the Tide – Where the Phrase Comes From
Financial language often relies on water metaphors. Investment and trading jargon routinely uses phrases like capital flows, which is the rate of transactions. Financial liquidity is the willingness of investors to participate in markets. Economists refer to equilibrium and the notion that markets should be allowed to find their level, in much the same fashion that water does. Money can be channeled into an investment. Sources of capital can dry up. There are phrases like the trickle-down effect where wealth at the top will make its way to the lower levels. Also, a rising tide raises all boats, which means when the economy is doing well, everyone benefits. By creating the illusion that money is fluid, the impression is created that resources and capital are flexible. As a result, they can be moved around easily as long as barriers are removed.
While colorful, these metaphors can sometimes be misleading. However, it is unlikely that this is done deliberately.
The general, yet incorrect, use of “stem the tide” is to deflect a serious problem, but tides can’t be deflected. A stem is an upright beam, at the fore of the ship where the hull timbers come together forming the prow. The nautical maneuver against a surging tide is the same as against an angry sea. The ship is turned to stem the onslaught. To “stem the tide” means that to overcome serious problems, you must face them head-on. (Source: english.stackexchange.com)
Stem the Tide and Long-term Economic Trends
Stem the tide is usually used to convey the concept of reversing a negative trend or prevent it from getting worse. In economics, it often refers to long-term, rather than short-term trends. These trends can include an increasing crime rate, negative public opinion, the loss of qualified workers from a given geographical area, negative demographic trends, and causes of environmental pollution.
For example, four major long-term economic trends are:
- Unemployment rate – which measures the percentage of the labor force that is not working
- Consumer confidence index – which measures consumers’ confidence or optimism (or pessimism) in the economy; and the
- Gross domestic product (GDP) – which is the value of goods and services …
- Capital outflow is an economic term describing capital flowing out of (or leaving) a particular economy. Outflowing capital can be caused by any number of economic or political reasons but can often originate from instability in either sphere. Regardless of the cause, capital outflowing is generally perceived as always undesirable and many countries create laws to restrict the movement of capital out of the nations’ borders (called capital controls). While this can aid in temporary growth, it often causes more economic problems than it helps.
“Governmental restrictions on capital flight seek to stem the tide of outflows. This is usually done to support a banking system that could collapse in numerous ways.” (Source: ibid)
Examples in Literature
- It was no longer possible to stem the tide of the parliament’s victory, and Hopton, defeated in his last stand at Torrington on the 16th of February 1646, surrendered to Fairfax.
- The latter, a zealous Roman Catholic, had vainly tried to stem the tide of the Reformation in his dominions; Henry, on the other hand, was an equally devoted Protestant.
- The Crimean War followed and in 1856 the treaty of Paris, by which the powers hoped to stem the tide of the Russian advance and establish the integrity of a reformed Ottoman state.
- Unable to stem the tide of popular passion, which was crying for the impeachment of Catargiu, Jepureanu resigned office, and Bratianu formed a new Liberal cabinet, destined to guide the country through many eventful years. (Source: yourdictionary.com)
Up Next: What Is a Business Day? Is Saturday a Business Day?
A business day typically refers to any day in which normal business operations are conducted. In Western countries, this is generally considered to be Monday through Friday from 9 a.m. to 5 p.m. local time and excludes weekends and public holidays. So, is Saturday a business day? The definition of the business day varies by region and industry. In general, Saturday is not officially a business day but it can often be a working day.
The concept of a business day has come under a certain degree of challenge in the online business world. Information-based companies with limited dependence on physical goods have less of a need to distinguish a weekend day from a weekday. In many cases, there is no difference at all. As a result, these companies consider a business day to be any day on which they provide service.
However, there is a difference between a business day and a working day. Business days are working days. Working days are not necessarily full business days.
