Here are a few entries that give a taste of The Devil’s Financial Dictionary, my glossary of financial terms published by PublicAffairs in November 2015.
Inspired by Ambrose Bierce’s masterpiece The Devil’s Dictionary, which the great American satirist published sporadically between 1881 and 1911, the book is meant to make you laugh and learn at the same time.
Like Bierce’s brilliantly cynical definitions, the explanations presented here should not — quite — be taken as literally true.
AMPHIVENA
n. also AMPHISBAENA.
A mythical creature described in ancient and medieval bestiaries, the amphivena has one head at the end of a long neck and another at the end of a long tail — “as though,” in the words of the Roman naturalist Pliny, “one mouth were too little for the discharge of all its venom.” It is often described as being able to move both forward and backward, or to rock back and forth on its round stomach. Fortunately, the amphivena most often strikes out at itself. The creature is often portrayed with one head gnawing away at the other, or with neck and tail entangled in dubious battle with each other. In the modern world the amphivena is commonly referred to as either “an economist” or “a market forecaster.”
An Amphivena, at war with itself. From the bestiary in a religious text in one of the Harley manuscripts, ca. 1236-1250, in the British Library.
AUDITOR
noun
The word auditor, in Latin, means “one who hears.” In English, evidently, it means one who also obeys.
“It’s our job as auditors to do whatever we can ensure that a company’s financial statements conform with GAAP, but not to function as policemen or fraud detectors,” said Seymour Billings, a partner in the Chicago office of the accounting firm of Tinker Hyde Alter & Berry.
An accountant who all too often may approve a company’s financial statements exactly as the company’s management wishes them to be presented.
BULL
noun
A person who believes that an asset will go up in price, a belief often based exclusively on the fact that the person happens to own it.
GO-ANYWHERE FUND
noun
A mutual fund, specializing in stocks or a wider range of assets, that can lose money in every imaginable way — and then some. See also UNCONSTRAINED BOND FUND.
IPO
abbr. n.
“Initial public offering,” or the first sale of a company’s stock by private owners who know everything about it to public buyers who know nothing about it. Marketed to the the outside investors as an opportunity to get in on the ground floor of a growing business, the typical IPO instead presents the greatest opportunity to the insiders who are selling, because the associated hype enables them to cash out at inflated prices. IPO can thus more accurately be said to stand for “insiders’ private opportunity,” “imaginary profits only,” or “it’s probably overpriced.”
