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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LIEN, n.  The right to seize property in order to secure payment of a debt. In friendship, the phrase “lean on me” expresses a sense of warm welcome. In finance, the phrase “lien on me” expresses a sense of cold dread.


LIQUIDATION, n.  The forced sale of the assets of a company or individual, illustrating another of the polyvalent meanings of the root word liquid. (Let us not forget that liquidate also means “to kill.”)

Liquidation occurs when liquidity dries up. As Joseph Conrad wrote in his great novel Victory (1915):

The world of finance is a mysterious world in which, incredible as the fact may appear, evaporation precedes liquidation. First the capital evaporates, then the company goes into liquidation. These are very unnatural physics.

Investors thus must be vigilant at all times to maximize their liquidity and to minimize their need for liquidation.


LOAD, n.  In daily life, a heavy burden, often so weighty that only donkeys could carry it. In finance, the sales commission on a mutual fund, ranging up to 5.75% of the amount invested. The meaning has thus changed, but only slightly.


LONG-TERM, adj.  In the real world, a phrase used to describe a period lasting years or decades. On Wall Street, a phrase used to describe a period that begins approximately 30 seconds from now and ends, at most, a few weeks from now.


LOSE, v.  What other investors do when their assets fall in market price. That will never happen to you.

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