The Devil’s Financial Dictionary. Jason Zweig, Public Affairs, RRP £12.99
Jason Zweig, the popular public speaker and personal finance columnist for The Wall Street Journal wrote Your Money and Your Brain (Simon & Schuster, 2007), one of the first books to explore the neuroscience of investing. Now he’s back, publishing The Devil’s Financial Dictionary, Your survival guide to the Hades of Wall Street.
It started in 2012, when supposed financial experts lent money to a borrower. That borrower was Greece, which Zweig helpfully defines as:
“GREECE, n. A nation in southern Europe famous for philosophy, mathematics, architecture and shortchanging its creditors.”
Greece’s credit history consisted of being in default or behind on their debt in 51 percent of the years between 1826 and 2008, and lending to it was something that “the average seven year old would have advised against”. It is off the back of this exasperation that Zweig has compiled a glossary of all the terms and catchphrases you should and would need to know to navigate the treacherous and muddied waters of the financial world.
This is not a book for the faint-hearted. Entries such as “IDIOT, n. See DAY TRADER” provide readers with a Monty Python-esque ruthlessly cutting commentary on the absurdities of financial agents, transactions and the markets in which they occur. Inspired by Ambrose Bierce’s work The Devil’s Dictionary (published over a hundred years previously, and containing nearly every word in the then current dictionary, with cynical, deliberately humorous and sometimes totally false definitions), this is a modern financial version intended to provide relief to those looking for a translator in the language of money.
Whilst Zweig doesn’t quite match Bierce on his inclusion of stanzas of rhyming couplets, this omission makes for a much more enjoyable experience, and leaves poetic space for entries such as ‘hedge fund’ which unfold across three or four pages of prose rich in historical knowledge.
Other notable definitions include:
“ASSET GATHERING, n. How brokers, financial advisers and portfolio managers describe what they do when no one else is listening. In plain English it means ‘grabbing all the money we can with both hands from as many customers as possible so we can earn more fess for less work’.”
“IRRATIONAL, adj. A word you use to describe any investor other than yourself.”
Despite its humour, The Devil’s Financial Dictionary might still be of use to someone who skipped over the word “devil” the title when buying it. Zweig does deliver practical insights and words of advice in the likes of:
“IS, v. Has been. When an investor or analyst says “I know that this stock is going up”, what he or she means is “I know this stock has been going up”. That is a fact; what the stock is going to do next is conjecture.”
Zweig also provides clarity on several polysyllabic, offensive-sounding words often thrown about by those in the financial world with no understanding themselves but with the sole intention of intimidating others. Fiduciary duty, for example, the requirement that financial advice should be at least as good for the person receiving it as for the person providing it, is shown to be not so complex a concept. Equally, EBITDA is explained as simply an acronym for “earnings before interest, tax, depreciation and amortization”, or, if you still don’t understand: “bullsh*t earnings”.
Zweig is clear that, in his opinion, “the folks who brought the world to the brink of financial collapse need a good prodding with a hot pitchfork”. However, putting aside the relentless sarcasm, cynicism and gentle mockery, there lies clear affection for the financial world. Zweig offers himself an escape route: “The thousands of people I have met over the years in banking, investment, and finance are predominantly honest, hardworking, decent, generous, and intelligent. And, fortunately for them if they read this book, they can laugh at themselves.”
So fear not, you Wall Street folks, Zweig has given you a flattering escape route. And if you have managed to learn as much as you laugh through this book, he may be on the most successful one-man mission ever conceived to prevent scenes from 2008 from being repeated in your investing lifetime.