The Devil's Financial Dictionary

This glossary of financial terms is inspired by Ambrose Bierce’s masterpiece The Devil’s Dictionary, which the great American satirist published sporadically between 1881 and 1906. (View free versions of Bierce’s text here or here.) Like Bierce’s brilliantly cynical definitions, the explanations presented here should not — quite — be taken as literally true. Some of these entries are adapted from articles published previously in Financial History, Money, and The Wall Street Journal.


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U

 

UNCONSTRAINED BOND FUND, n. A mutual fund, specializing in bonds, that places no limits on the number of ways in which it can provide disappointing results to its investors. (See GO-ANYWHERE FUND.)

 

UNIVERSE, n.  The set of opportunities from which an analyst or portfolio manager can choose, inspired by the term that astrophysicists and cosmologists use to describe the total of all energy and matter in the continuum of space and time.  An investing universe, however, is much more limited — typically by the brainpower and imagination of the investor, as well as by the reluctance of professional money managers to deviate from the holdings of the market index (see CLOSET INDEXING).  The use of the grandiose term “universe” is evidently intended to cloak the fact that, for all too many professional investors, it includes an embarrassingly narrow frame of reference and a cramped selection of potential purchases.

 

 


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