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New Stock Market Terms

bettiwettiwoo (239665) writes | more than 5 years ago

The Almighty Buck 3

Would probably be more amusing if not so close to the bone.

Would probably be more amusing if not so close to the bone.

  • CEO --Chief Embezzlement Officer.
  • CFO -- Corporate Fraud Officer.
  • Bull Market -- A random market movement causing an investor to mistake himself for a financial genius.
  • Bear Market -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.
  • Value investment -- The art of buying low and selling lower.
  • P/E Ration -- The percentage of investors wetting their pants as the market keeps crashing.
  • Broker -- What my broker has made me.
  • Standard&Poor -- Your life in a nutshell.
  • Stock Analyst -- Idiot who just downgraded your stock.
  • Stock Split -- When your ex-wife and her lawyer split your assets equally between themselves.
  • Financial Planner -- A guy whose phone has been disconnected.
  • Market Correction -- The day after you buy stocks.
  • Cash Flow-- The movement your money makes as it disappears down the toilet.
  • Yahoo! -- What you yell after selling it to some poor sucker for $240 per share.
  • Windows -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.
  • Institutional Investor -- Past year investor who's now locked up in a nuthouse.
  • Profit -- An archaic word no longer in use.

(From some forwarded email currently making the rounds.)


Here's one (1)

tomhudson (43916) | more than 5 years ago | (#25295789)

Dickhead Churning Account - where a broker milks clients with poor math skills for more commissions by conning them into buying yet more of a turkey as it trends lower, because "this lowers your average cost", without pointing out that it also increases their total loss. Officially goes by the name of "Dollar Cost Averaging". See "Wishful Thinking."

Re:Here's one (1)

bettiwettiwoo (239665) | more than 5 years ago | (#25310127)

Mmm, not bad. (Although, perhaps a bit rambling ...?)

Re:Here's one (1)

tomhudson (43916) | more than 5 years ago | (#25312137)

I figured that some people might not recognize the term Dollar Cost Averaging. You'd be surprised at how many people get sucked into the "logic". The smart thing to do, if you bought too high, isn't to buy more as it trends down so you lower your average loss - it's to cut your loss by selling to an idiot who believes in DCA. You'll be able to buy it back at the bottom.

Example - you bought a share at $!00.00. It trends down to $50. On the way down to $50, you bought some at $90, some at $80, some at $70, some at $60, and some at $50. You now own 6 shares, for a total cost of $450.00. You've "Averaged your cost to $75.00. So, if you have to liquidate, your $100 share "only really" cost you $75.00. Yeah, right ....

In reality, if you had sold at even $60, taken your loss of $40.00, then waited for the bottom at $50, and bought 6 shares at $60 on the way back up, you'd be a lot beter off. You'd have lost $40 on the original purchase, but have the same 6 shares @ $360.00. Add back in the $40 that you lost, your total cost is $400.00. Your per-share "reaal cost", including the pillyou swallowed on your original investment, is $66.67.

If the stock trends down to $10, the Dollar Cost Averager will lose a LOT. The person who cut their losses never buys back in, and only takes the original $40 hit. Dollar Cost Averaging is for dummies who don't understand the myth of sunk costs.

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