Quick, what is the definition of “stock market?” According to Jason Zweig’s new book, The Devil’s Financial Dictionary, it is:
“A chaotic hive of millions of people who overpay for hope and underpay for value.”
Jason Zweig is investing and personal finance columnist at The Wall Street Journal. His lexicon, inspired by American satirist Ambrose Bierce’s The Devil’s Dictionary, fairly well skewers the full range of our human foolishness and pretensions as we invest.
The book won’t be released until mid-October, but here’s a preview of some choice entries:
BULL MARKET, n. A period of rising prices that leads many investors to believe that their IQ has risen at least as much as the market value of their portfolios. After the inevitable fall in prices, they will learn that both increases were temporary. See BEAR MARKET.
BEAR MARKET, n. A phase of falling prices when you can no longer bear to think about what a fool you were for not selling your investments – which is generally a sign that you should think instead about buying more . . .
HIGH-NET-WORTH INVESTOR, n. A very big target.
INDIVIDUAL INVESTOR, n. Someone who, without wise advice, is likely to ruin a small portfolio, generally $1 million or less. See INSTITUTIONAL INVESTOR.
INSTITUTIONAL INVESTOR, n. Someone who, without wise advice is likely to ruin a large portfolio, generally $10 million or more. See INDIVIDUAL INVESTOR.
IRRATIONAL, adj. A word you use to describe any investor other than yourself.
CONTRARIAN, n. A sheep masquerading as a lone wolf.
DAY-TRADER, n. See IDIOT.
IDIOT, n., See DAY-TRADER.
OUTLOOK, n. A guess.
ALPHA, n. Luck.