Conversations about finance and business can be painfully dull and complicated at times. I can forgive you if your eyelids feel droopy after an hour-long presentation filled with profit margins, projected income, and other related topics.
This longstanding industry is filled with lively jargon and phrases that are used to describe trends and practices. Here are just some of them:
1. COCKROACH THEORY
Nope! I am not talking about the disgusting pest that my sister hates. The Cockroach Theory occurs when a company reports ill news to the public and covers up more behind the scenes.
2. PUKE POINT
The “Puke Point” refers to a time when an investor can no longer tolerate his or her losses and decides to sell the asset instead. The investor does so regardless of the asset’s steeply falling price.
3. BIG UGLIES
Companies in the industrial sector like mining or steel are informally termed as “Big Uglies”. Although investing in these companies can bring one steady returns, some investors ignore them in favor for trendier stocks.
4. FREAKY FRIDAY
Freaky Friday occurs on the third Friday of December, March, June, and September. This phenomenon is also called Triple Witching. At this time, the stock market index options and futures expire in one day. This leads to great volumes of trading as investors try to offset their options and futures before the time is up.
The Woody may sound like a friendly cartoon character, but it is not one. It is a slang that describes the market’s fast and strong upward movement. Have you seen this happen lately?
6. RAZOR-BLADE MODEL
When businesses sell two goods that depend on each other for different prices, they employ the Razor-blade Model. One part is sold cheaply and the other is sold for a higher price.
Apple’s iPhone immediately came into my mind when I heard about this model. iPhone’s accessories are sold separately. Furthermore, its charger is not the most durable in the market. People are urged to buy a new hefty charger once their old ones have broken down. The cost adds up.