interactive.wsj.com
November 14, 2000
It May Not Be Wise to Take
Wall Street at Its Own Words
Wall Streeters talk a good game. The real challenge,
however, is figuring out what they are saying.
Below are 33 phrases often heard on Wall
Street -- and how you might interpret them.
The list was compiled with help from
investment advisers William Bernstein,
Eleanor Blayney, Harold Evensky, Deena
Katz, Ross Levin, Gerald Perritt and Larry Swedroe. I also got a hand from
Journal colleagues Greg Ip and William Power.
But my biggest debts are to
Kevin Bernzott, an investment
adviser in Camarillo, Calif., and
John Rekenthaler, research
director at Chicago's
Morningstar Inc., both of whom
shipped me e-mails filled with
hilarious examples.
"It's a dead-cat
bounce": Believe me,
there is no justification for
this rally.
"The market is in a
narrow trading range":
Prices aren't jumping
around as much as usual, and nobody can figure out why.
"Bonds retreated on bearish comments from the Fed": Once
again, nobody understood what Alan Greenspan said. But why else
could bonds have fallen?
"We're near-term cautious but long-term optimistic": Don't
blame us if the market tanks.
"The stock market was down on technical factors": We have no
idea why shares fell.
"The market fell on heavy selling by mutual funds": We still
have no idea why the market fell. But everybody knows small
investors are stupid, right?
"The trend is your friend": Stocks have been going up.
"Trees don't grow to the sky": Stocks stopped going up.
"The market is looking a little extended": We're dumping
everything.
"Don't miss this compelling opportunity": I need the commission.
"The market climbs a wall of worry": Sure, it is tough to be blasé
about rising oil prices, climbing interest rates and Middle East
tensions. But I really, really need the commission.
"It isn't a loss until you sell it": You took a bath in the stock, but
let's ignore it, and maybe it will go away.
"Focus on total return": Please, please, please don't notice the
fund's outrageously high expenses.
"It's cheap on a relative basis": It is pretty darn expensive, but
other folks own stuff that is even more ridiculously priced.
"It's fairly valued": If the stock climbs a few more bucks, we're
unloading this puppy.
"We've got some great values in our portfolio": Our stocks have
been massacred.
"We buy growth at a reasonable price": We're holding our noses
and paying up for some pretty expensive stocks.
"We're long-term investors": The stock tanked, but we are
hanging on, hoping to break even.
"We think the stock is a potential buyout candidate": I sure
hope some corporate raider is reading this.
"The stock's oversold": We never imagined the shares could fall
this far.
"Nobody ever went broke taking profits": We bought the stock
at $16, sold it at $32, and two weeks later it hit $114.
"The company's quarterly earnings beat expectations": The
chief financial officer sandbagged analysts.
"We've researched this company thoroughly": Here's what we
heard from the company's vice president of investor relations.
"We're fundamental investors": We listen to the chief executive's
sales pitch.
"We're technical investors": We skip the sales pitch and pull out
the Ouija board.
"We buy companies, not pieces of paper": I majored in
philosophy.
"Our strength is evaluating corporate management": We play a
lot of golf.
"The company has solid fundamentals": It is a shame the shares
are so absurdly overvalued.
"It's a New Economy stock": Don't even bother asking about
earnings.
"We rate the stock a strong buy": We need the company's
investment-banking business.
"We consider the stock attractive long-term": The next year is
going to be rough.
"We rate the stock a hold": For goodness sake, dump your shares.
"We rate it a sell": I'm hoping to get the early-retirement package.
Write to Jonathan Clements at jonathan.clements@wsj.com
KJC |
