If you follow stock market punditry, you'll quickly notice something: a handful of analysts speak English. But the vast majority don't. Rather, they speak a language unique to the investment business. It consists of phrases that sound intelligent but don't mean anything. If you want to sound smart about investing without really saying anything, read on..
01. 'The easy money has been made'
When to use it: Any time a market or stock has already gone up a lot.
Why it's smart-sounding: It implies you bought or recommended the stock a long time ago, before the easy money was made. It suggests that there might be further upside, but that there might be future downside, because the stock is 'due for a correction'.
Why it's meaningless: It's a statement about the obvious. Also, it's not true.
02. 'I'm cautiously optimistic'
When to use it: Pretty much anytime.
Why it's smart-sounding: It implies wise, prudent caution, but also a sunny outlook, which most people like. (Nobody likes a bear, especially in a bull market.) It protects the speaker against all possible outcomes.
Why it's meaningless: It's too general.
03. 'It's a market of stocks'
When to use it: Any time.
Why it's smart-sounding: It suggests the speaker understands the market in a way that the average schmo doesn't. It suggests that the speaker, who gets that the stock market is a 'market of stocks,' will coin money while the average schmo loses his or her shirt.
Why it's meaningless: Again, it's a statement of the obvious.
04. 'It’s a stockpicker's market'
When to use it: Especially useful in bear markets or flat markets.
Why it's smart-sounding: It suggests that the current market environment is different from other market environments and therefore requires special skill to navigate. It implies that the speaker has this skill.
Why it's meaningless: In all markets, traders are trying to buy winners and sell dogs, and in all markets only half of these traders succeed.
05. 'We’re constructive on the market'
When to use it: Any time.
Why it's smart-sounding: It sounds generally optimistic.
Why it's meaningless: Because being generally optimistic about the market over some unspecified time period is no different than being generally optimistic about life over some unspecified time period.
06. 'More buyers than sellers'
When to use it: Any time you are asked to explain why the market (or a stock) is going up.
Why it's smart-sounding: It sounds like you know what's really going on, which makes you sound smart and sophisticated.
Why it's meaningless: In every trade — every one — there is exactly one buyer and exactly one seller. To say that the market or a stock is going up because there are 'more buyers than sellers,' therefore, is not just meaningless, it's wrong. There are simply different price levels at which a buyer and a seller are willing to trade.
07. 'Stocks are down on 'profit-taking'
When to use it: Any time you are asked to explain why the market (or a stock) is down after a strong run.
Why it's smart-sounding: It sounds like you know what professional traders are doing, which makes you sound smart and plugged in.
Why it's meaningless: Traders buy and sell stocks for dozens of reasons. And for every seller, at any time, there is a buyer on the other side of the trade. Any trade, at any time, in any market can be described as 'taking a profit' or 'cutting a loss' or 'bargain hunting' or 'filling out a position,' and so on.
08. 'Take a wait-and-see approach'
When to use it: Any time you don't know.
Why it's smart-sounding: It sounds appropriately sceptical. It plays to the viewer's sense that, somehow, things are more uncertain now than they usually are. (Absurd — the future is always uncertain.)
Why it's meaningless: Why will the future be any less uncertain tomorrow, or next week, or next year, or whenever it is you're planning to 'wait and see' until? What are you waiting for?
09. 'The trend is your friend'
When to use it: Any time.
Why it's smart-sounding: It sounds calm and confident.
Why it's meaningless: Alas, knowing what stocks have done — the trend — tells you almost nothing about what stocks will do.
10. 'Buy on weakness'
When to use it: Any time you don't actually have the guts to say 'buy' but want to be able to say later that you told everyone to buy if the stock should happen to go up.
Why it's smart-sounding: It sounds highly informed. It allows you to take credit for predicting any bullish move in the stock while also being able to say 'I said buy on weakness' if it crashes. It hedges all outcomes.
Why it's meaningless: It's too vague to be interesting or helpful.
11. 'Overbought'
When to use it: Any time you want to sound bullish while implying that the stock might be 'due for a correction'.
Why it's smart-sounding: It sounds highly informed.
Why it's meaningless: Does it mean that traders paid too high prices? OK, maybe it's that. But does that mean the stock is going to go down soon? Why? In short, it's a fancy way of saying nothing.
12. 'We're in a bottoming process'
When to use it: Any time you don't know what a stock will do.
Why it's smart-sounding: It sounds reassuring, without being too precise. Sure, the stock might drop some more, you seem to be saying, but it's generally settling in here — and then it will eventually go up.
Why it's meaningless: Because it describes a price pattern that has happened but does not tell you anything about what will happen.
13. 'There’s lots of cash on sidelines'
When to use it: If you need to justify a bullish outlook.
Why it's smart-sounding: It sounds like common sense: Wimpy investors are hoarding cash instead of 'putting it into the market.' When these investors finally put their cash 'into' the market, the market will go up.
Why it's meaningless: In every trade, a seller sells stock for cash. After the trade, seller now has cash and buyer now has the stock— and the overall amount of neither cash nor stock has changed. So, in a literal sense, the cash is always 'on the sidelines.'
14. 'It’s a show-me stock'
When to use it: Any time you don't know what a banged-up stock will do next.
Why it's smart-sounding: You want to make management show you that they can deliver, before you entrust them with your clients' hard-earned money.
Why it's meaningless: All stocks are 'show me' stocks. If management 'shows you' that they have delivered results that beat the market's expectations, the stock usually goes up. If management 'shows you' that they have blown the quarter, the stock tanks.
Source: http://economictimes.indiatimes.com/
01. 'The easy money has been made'
When to use it: Any time a market or stock has already gone up a lot.
Why it's smart-sounding: It implies you bought or recommended the stock a long time ago, before the easy money was made. It suggests that there might be further upside, but that there might be future downside, because the stock is 'due for a correction'.
Why it's meaningless: It's a statement about the obvious. Also, it's not true.
02. 'I'm cautiously optimistic'
When to use it: Pretty much anytime.
Why it's smart-sounding: It implies wise, prudent caution, but also a sunny outlook, which most people like. (Nobody likes a bear, especially in a bull market.) It protects the speaker against all possible outcomes.
Why it's meaningless: It's too general.
03. 'It's a market of stocks'
When to use it: Any time.
Why it's smart-sounding: It suggests the speaker understands the market in a way that the average schmo doesn't. It suggests that the speaker, who gets that the stock market is a 'market of stocks,' will coin money while the average schmo loses his or her shirt.
Why it's meaningless: Again, it's a statement of the obvious.
04. 'It’s a stockpicker's market'
When to use it: Especially useful in bear markets or flat markets.
Why it's smart-sounding: It suggests that the current market environment is different from other market environments and therefore requires special skill to navigate. It implies that the speaker has this skill.
Why it's meaningless: In all markets, traders are trying to buy winners and sell dogs, and in all markets only half of these traders succeed.
05. 'We’re constructive on the market'
When to use it: Any time.
Why it's smart-sounding: It sounds generally optimistic.
Why it's meaningless: Because being generally optimistic about the market over some unspecified time period is no different than being generally optimistic about life over some unspecified time period.
06. 'More buyers than sellers'
When to use it: Any time you are asked to explain why the market (or a stock) is going up.
Why it's smart-sounding: It sounds like you know what's really going on, which makes you sound smart and sophisticated.
Why it's meaningless: In every trade — every one — there is exactly one buyer and exactly one seller. To say that the market or a stock is going up because there are 'more buyers than sellers,' therefore, is not just meaningless, it's wrong. There are simply different price levels at which a buyer and a seller are willing to trade.
07. 'Stocks are down on 'profit-taking'
When to use it: Any time you are asked to explain why the market (or a stock) is down after a strong run.
Why it's smart-sounding: It sounds like you know what professional traders are doing, which makes you sound smart and plugged in.
Why it's meaningless: Traders buy and sell stocks for dozens of reasons. And for every seller, at any time, there is a buyer on the other side of the trade. Any trade, at any time, in any market can be described as 'taking a profit' or 'cutting a loss' or 'bargain hunting' or 'filling out a position,' and so on.
08. 'Take a wait-and-see approach'
When to use it: Any time you don't know.
Why it's smart-sounding: It sounds appropriately sceptical. It plays to the viewer's sense that, somehow, things are more uncertain now than they usually are. (Absurd — the future is always uncertain.)
Why it's meaningless: Why will the future be any less uncertain tomorrow, or next week, or next year, or whenever it is you're planning to 'wait and see' until? What are you waiting for?
09. 'The trend is your friend'
When to use it: Any time.
Why it's smart-sounding: It sounds calm and confident.
Why it's meaningless: Alas, knowing what stocks have done — the trend — tells you almost nothing about what stocks will do.
10. 'Buy on weakness'
When to use it: Any time you don't actually have the guts to say 'buy' but want to be able to say later that you told everyone to buy if the stock should happen to go up.
Why it's smart-sounding: It sounds highly informed. It allows you to take credit for predicting any bullish move in the stock while also being able to say 'I said buy on weakness' if it crashes. It hedges all outcomes.
Why it's meaningless: It's too vague to be interesting or helpful.
11. 'Overbought'
When to use it: Any time you want to sound bullish while implying that the stock might be 'due for a correction'.
Why it's smart-sounding: It sounds highly informed.
Why it's meaningless: Does it mean that traders paid too high prices? OK, maybe it's that. But does that mean the stock is going to go down soon? Why? In short, it's a fancy way of saying nothing.
12. 'We're in a bottoming process'
When to use it: Any time you don't know what a stock will do.
Why it's smart-sounding: It sounds reassuring, without being too precise. Sure, the stock might drop some more, you seem to be saying, but it's generally settling in here — and then it will eventually go up.
Why it's meaningless: Because it describes a price pattern that has happened but does not tell you anything about what will happen.
13. 'There’s lots of cash on sidelines'
When to use it: If you need to justify a bullish outlook.
Why it's smart-sounding: It sounds like common sense: Wimpy investors are hoarding cash instead of 'putting it into the market.' When these investors finally put their cash 'into' the market, the market will go up.
Why it's meaningless: In every trade, a seller sells stock for cash. After the trade, seller now has cash and buyer now has the stock— and the overall amount of neither cash nor stock has changed. So, in a literal sense, the cash is always 'on the sidelines.'
14. 'It’s a show-me stock'
When to use it: Any time you don't know what a banged-up stock will do next.
Why it's smart-sounding: You want to make management show you that they can deliver, before you entrust them with your clients' hard-earned money.
Why it's meaningless: All stocks are 'show me' stocks. If management 'shows you' that they have delivered results that beat the market's expectations, the stock usually goes up. If management 'shows you' that they have blown the quarter, the stock tanks.
Source: http://economictimes.indiatimes.com/
