Your Survival Guide to the Hades of Wall Street
The Devil’s Financial Dictionary (PublicAffairs Books, Nov. 17, 2015, $19.95) skewers the plutocrats and bureaucrats who gave us exploding mortgages, freakish risks, and banks too big to fail. And it distills the complexities, absurdities, and pomposities of Wall Street into plain truths and aphorisms anyone can understand.
An indispensable survival guide to the hostile wilderness of today’s financial markets, The Devil’s Financial Dictionary delivers practical insights with a scorpion’s sting. It cuts through the fads and fakery of Wall Street and clears a safe path for investors between euphoria and despair.
Staying out of financial purgatory has never been this fun.
Note: If you have received a defective copy of the first printing, please click here. Please be advised that copies offered online by what Amazon calls “third-party sellers” may be missing the final 28 pages of text. Some booksellers have been attempting to sell such copies for at least $275 apiece, apparently in the belief that they will be worth even more someday if they become collectibles. That is a big “if.” If you pay more than the $19.95 list price, please don’t blame me if you later feel you didn’t get your money’s worth.
Inspired by Ambrose Bierce’s satirical masterpiece, The Devil’s Financial Dictionary is a glossary of all the financial terms you need to know but may never have understood.
In each definition, I’ve tried to distill everything I’ve ever learned about a topic down into the fewest number of words with the greatest educational and entertainment value.
Wall Street is, in many ways, a giant obfuscation machine, operated on the principles of making simple ideas complex, safe investments risky, and important facts incomprehensible. Alan Greenspan’s words when he was chairman of the Federal Reserve Board apply to the financial industry as well: “If I seem unduly clear to you, you must have misunderstood what I said.” That’s why every investor — if not every citizen — needs a clear translation tool to cut through the jargon of money.
If you’ve ever been lost in a foreign country without a guidebook to the local language, you know that we aren’t kidding when we call this book “a survival guide.”
The goal of The Devil’s Financial Dictionary is to make you laugh and learn at the same time. I know I’ve never had more fun writing anything in my entire career; I hope you will like it.
|The Devil’s Financial Dictionary
by Jason Zweig
PublicAffairs (October 13, 2015)
(256 pp, Hardcover $19.99)
BULL, n. A person who believes that an asset will go up in price, a belief often based exclusively on the fact that the person happens to own it.
GO-ANYWHERE FUND, n. A mutual fund, specializing in stocks or a wider range of assets, that can lose money in every imaginable way — and then some. See also UNCONSTRAINED BOND FUND.
IPO, abbr. n. “Initial public offering,” or the first sale of a company’s stock by private owners who know everything about it to public buyers who know nothing about it. Marketed to the the outside investors as an opportunity to get in on the ground floor of a growing business, the typical IPO instead presents the greatest opportunity to the insiders who are selling, because the associated hype enables them to cash out at inflated prices. IPO can thus more accurately be said to stand for “insiders’ private opportunity,” “imaginary profits only,” or “it’s probably overpriced.”
MODEL, v. To write complex mathematical formulas that capture every conceivable variable in every possible situation — except, that is, the one that is about to happen next, destroying the value of the portfolio that has been built around the model. As a noun, model can best be defined as a “weapon of math destruction.”
RESTRUCTURING, n. The process by which a company that, only a few years before, had eagerly diversified into other businesses un-diversifies even more eagerly right back out of them. ANALYSTs and investors, who had earlier hailed the expansion as essential for growth, will now applaud the contraction as essential for survival. The company’s management will earn big bonuses for adding to “SHAREHOLDER VALUE.” A few thousand employees will lose their jobs, but that strikes the other participants as a small price to pay for restoring the company to its former state of health.
SYNERGY, n. Often, the only thing one company gets when it buys another; as Warren Buffett put it, a term “widely used in business to explain an acquisition that otherwise makes no sense.” Because no one, including any of the executives at either the acquiring or the acquired company, knows what synergy is, it seldom turns out to have been worth paying for. That, of course, doesn’t prevent many people from invoking synergy to justify deals that might not otherwise seem compelling, as in this excerpt from a recent article on the website Finding Beta:
“There may be some analysts who think that a company building an amusement park in Kazakhstan has nothing in common with the startup that invented scratch-and-sniff websites,” said Ken Billmore, a senior strategic organizational efficiency director at the management consulting firm of Integrifyze 360, which advised both companies on the merger. “But they don’t understand how powerful these synergies are. This is going to be a win-win-win-win situation for years to come.”
Jason Zweig has long been a brilliant financial journalist. People who have listened to Jason have shielded their assets from the purveyors of costly and useless advice. In The Devil’s Financial Dictionary, Jason turns his wit and insight into arming us with an understanding of the financial terms that too many professionals use to intentionally baffle investors.
—Max H. Bazerman, Straus Professor of Business Administration, Harvard Business School; co-director of the Center for Public Leadership at the John F. Kennedy School of Government at Harvard University; author, The Power of Noticing
Jason Zweig, one of the great truth-tellers in financial journalism, is the spiritual heir to Ambrose Bierce, one of the great satirists in American letters. Both use piercing wit to reveal important truths.
—Gary Belsky, co-author, Why Smart People Make Big Money Mistakes—And How To Correct Them
Finally, in language every investor can understand, The Devil’s Financial Dictionary lays waste to the hubris of Wall Street. The definition of INDEX FUND should be read over and over again.
—Gregory Berns, distinguished professor of neuroeconomics at Emory University; author, Iconoclast and How Dogs Love Us
THE DEVIL’S FINANCIAL DICTIONARY, n. A compendium of financial jargon observed to induce in its readers nearly continuous spasms of raucous laughter. Has also been known to produce near-fatal episodes of cognitive dissonance in brokers, advisors, and money managers, who should consume its contents with care. Normal individuals, in contrast, may incur a deepening of financial wisdom, a fattening of the wallet, and an uncontrollable urge to steal entire passages for later use.
—William J. Bernstein, author, The Four Pillars of Investing and A Splendid Exchange
Someone had to write a short, punchy book on the fibs and fables of Wall Street during this second Gilded Age for the extravagantly-paid manipulators of our financial system. Happily for readers—whether wise, naïve, or victimized—journalist Jason Zweig picked up the challenge, and ran for the winning touchdown with it. Laugh, cry, and learn as you enjoy the sparkling Devil’s Financial Dictionary.
—John C. Bogle, founder, the Vanguard Group; author, Common Sense on Mutual Funds
Fun, interesting, irreverent, and well-informed, Jason Zweig scores again. You’ll laugh and cry—and send copies to your friends.
—Charles D. Ellis, founder, Greenwich Associates; author, Winning the Loser’s Game; co-author, The Elements of Investing
Both witty and wise—with just a refreshing dash of cynicism—The Devil’s Financial Dictionary should be on every desk in both Wall Street and Main Street.
—John Steele Gordon, author, An Empire of Wealth and The Business of America
Open this wonderful book to any page. Try not to laugh. I dare you.
—James Grant, editor, Grant’s Interest Rate Observer
“DAY TRADER, n. See IDIOT.” Any investor who does not read this witty, insightful and rueful reminder of Wall Street’s financial follies is an IDIOT!
—Consuelo Mack, anchor and executive producer, public television’s Consuelo Mack WealthTrack
A delightfully humorous and stunningly irreverent Ambrose Bierce for financial markets. This satirical critique of what passes for wisdom on Wall Street belongs on the bookshelf of every serious investor.
—Burton G. Malkiel, professor of finance emeritus, Princeton University; author, A Random Walk Down Wall Street
Broad experience, thorough conversance with history, unusual insight, and dashes of humor and cynicism. This is what you need to understand the world of investing, and this is what you’ll find in The Devil’s Financial Dictionary by Jason Zweig.
—Howard Marks, co-chairman, Oaktree Capital Management; author, The Most Important Thing
Jason Zweig is a journalist known for his wise investment counsel. But he also has a wicked wit, which is on full display in The Devil’s Financial Dictionary. A fun romp for those who don’t take themselves too seriously.
—Michael J. Mauboussin, head of global financial strategies, Credit Suisse; author, The Success Equation and Think Twice
Cynical and exceptionally witty, this book shines a light into the unlit corners of finance. After a lot of laughs, I walked away with a less-distorted view of reality.
—Shane Parrish, editor, Farnam Street
You’ll love this book. Zweig cuts through financial hypocrisy to expose Wall Street’s cynical core, and does it hilariously. You’ll also get some super-smart investment tips. One of my favorite devilish definitions: “BROKER…buys and sells stocks, bonds, mutual funds, and other assets for people who are under the delusion that the broker is doing something other than guesswork.” Read it and weep.
—Jane Bryant Quinn, author, Making the Most of Your Money Now
Jason Zweig’s book is absolutely marvelous. It combines wicked humor, scholarly etymology, and superb advice. If you have money invested, you must read this book; if you don’t, read it anyway for pure fun.
—William F. Sharpe, emeritus professor of finance, Stanford University; Nobel laureate in economics
This is the most amusing presentation of the principles of finance that I have ever seen.
—Robert J. Shiller, professor of finance, Yale University; Nobel laureate in economics; author, Irrational Exuberance
If finance were stand-up comedy, Jason Zweig would be its Groucho Marx – a serious man with a wild sense of humor. “DOG: A stock that obeys no command except Down!”…need I say more?
—Laurence B. Siegel, research director, CFA Institute Research Foundation
I tried to write definitions wittier than Jason Zweig’s but couldn’t. Instead, I laughed, chuckled, and chortled through the book. I bet you will too.
— Meir Statman, professor of finance, Santa Clara University; author, What Investors Really Want
“Witty” and “fun” are two adjectives that may never have been used to describe a dictionary, but they apply to this one. But it is not just jokes; I learned a lot browsing around in this clever little book.
This is a hybrid work, consisting of serious investment advice combined with nuggets of financial history in the form of a mock dictionary inspired by American journalist Ambrose Bierce’s satirical lexicon, The Devil’s Dictionary, published over a century ago. The result consistently yields pleasure and insight.
….Bierce excelled at short, stinging definitions. Zweig fires off several similarly pithy zingers: “Forecasting, n. “The attempt to predict the unknowable by measuring the irrelevant.” He jokes that IPO stands for “it’s probably overpriced.”
….Thanks to the author’s staggering command of his subject, readers of this book will shed costly misconceptions and acquire wisdom that, if accompanied by patience, could pay off richly. The serious message embedded in the book’s humor is that investors who pay attention to stock market lore and Wall Street hype are their own worst enemies in securing their financial future.
— Martin Fridson, Barron’s, Oct. 5, 2015
About Jason Zweig:
Jason Zweig is the investing and personal finance columnist for The Wall Street Journal. Previously, he was a senior writer for Money magazine and a guest columnist for Time magazine and CNN.com. Before joining Money in 1995, Zweig was the mutual funds editor at Forbes. A frequent commentator on television and radio, Zweig is also a popular public speaker who has addressed the American Association of Individual Investors, the Aspen Institute, the CFA Institute, the Morningstar Investment Conference, and university audiences at Harvard, Stanford, and Oxford. He serves on the editorial boards of Financial History magazine and the Journal of Behavioral Finance. Zweig has a BA from Columbia College, where he was awarded a John Jay National Scholarship. LEARN MORE ABOUT JASON
For more information about “The Devil’s Financial Dictionary” or Jason Zweig, write to firstname.lastname@example.org