How 'The Devil's Financial Dictionary' defines 12 Wall Street words

Wall Street analysts and economists speak their own language.

Words like “research” and “analysis” mean one thing to regular folks, but something totally different to the folks with a financial interest in how they are perceived.

To address this, Wall Street Journal columnist Jason Zweig is out with a new book, “The Devil’s Financial Dictionary,” which features satirical, yet insightful definitions that decode the meaning of everyday financial jargon.

Just in time for the holidays, this compendium of Zweig’s wit is the perfect stocking stuffer for anyone remotely interested in finance.

We picked 12 terms from 200+ page text and shared them below.


Forecasting (n.)


The attempt to predict the unknowable by measuring the irrelevant; a task that, in one way or another, employs most people on Wall Street.

Source: The Devil's Financial Dictionary

Regulator (n.)


A bureaucrat who attempts to stop rampaging elephants by bradishing feather-dusters at them. Also, a future employee of a bank, hedge fund, brokerage, investment-management firm, or financial lobbying organisation.

Source: The Devil's Financial Dictionary

Technical analysis (n.)

Hussman Funds

A method by predicting the future prices of a financial asset by looking at its past prices, which is about as reliable as attempting to forecast tomorrow's weather by studying yesterday's. (...)

Because the prices of securities move in an almost infinite range of patterns, no endeavour in the financial world is more encrusted with arcane jargon than technical analysis, including the Hindenburg Omen, Fibonnaci retracements, Ichimoku clouds, vortex indicators, stochastic oscilators, triple exponential moving averages, guppy multiple moving averages, saucers, stick sandwiches, double tops, triple bottoms, tweezer bottoms, head and shoulders, the long-legged Doji, bearish catapults, bullish abandoned babies, the death cross, and the 'upside gap two crows' pattern.

It is a good general rule on Wall Street that the more impenetrable the jargon is, the less likely the thing described by it is to be profitable.

Source: The Devil's Financial Dictionary

Stock market (n.)

Photo: Getty Images

A chaotic hive of millions of people who overpay for hope and underpay for value.

Source: The Devil's Financial Dictionary

Clearly (adv.)

Nostradamus. Picture: Wikimedia


Analysts and pundits using the word 'clearly' are either (1) pretending, without any valid evidence, that they know what is going to happen, or (2) describing what has already happened and declaring, after the fact, that they knew it would happen when at the time they had no idea.

Source: The Devil's Financial Dictionary

Thrift (n.)

Gustave Doré's illustrations of Dante's fourth circle of Hell, featuring greed. Picture: Wikimedia

The obsolete practice of spending less money than you earn; once believed to be a virtue, now regarded as a disturbing form of deviant behaviour.

Source: The Devil's Financial Dictionary

Central bank (n.)

Picture: Getty Images

A group of economists who believe that their current forecasts will turn out to be accurate even though their past forecasts have been unreliable, that their present policies will succeed even though their past policies have failed, that they can prevent inflation from occurring next time even though they didn't prevent it last time, that they can foster lower unemployment in the future even though their practices worsened it in the past, and so forth.

You should be able to answer this riddle: What's the difference between a central banker and a weather vane? They both turn in the wind, but only the central banker thinks he or she determines which way the wind blows.

Source: The Devil's Financial Dictionary

Hindsight bias (n.)


Only perhaps a half-dozen market pundits saw the financial crisis coming before 2008, but you can't swing an Hermès necktie on Wall Street without hitting someone who claims to have predicted it.

Source: The Devil's Financial Dictionary

Research (n.)

AP Images

The art of making financial guesswork seem like a science -- at a cost to investors of approximately 1% of their total assets annually.

'Fundamental research' consists of pretending to study the underlying forces of supply and demand that should determine the long-term futility profitability of an asset while, instead, spending most of your time fixating on short-term fluctuations in market price. 'Technical research' consists of looking at squiggly lines all day long.

Source: The Devil's Financial Dictionary

Economist (n.)

Adam Smith. Picture: Wikimedia

A professor who studies the real world from a perch in the ivory tower and concludes that the chaotic interactions of people, goods, and money conform to his or her theories.

Source: The Devil's Financial Dictionary

Hindenburg Omen (n.)

Picture: Getty Images

An indicator in technical analysis that has predicted approximately 548 of the past three market crashes.
Source: The Devil's Financial Dictionary

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