Another round of obscure and funny financial terms. None of these are as good as “Dead Cat Bounce,” which was in my first post on these terms. You can check those out HERE.
Bagel Land: A slang term that represents a stock or other security that is approaching $0 in price. Arriving in bagel land is usually the result of one or more major business problems that may not be resolvable.
Goldilocks Economy: A Goldilocks Economy is when the economy’s growth isn’t too hot, causing inflation, nor too cold, creating a recession. It’s an ideal growth rate of between 2-3%, with the idea being to create enough demand to keep the economy humming at a healthy pace but not too much so that it overheats and enters into an inflationary period.
Garbatrage: A surge in price and trading volume in a sector following a high-profile takeover in that sector as market players expect more takeovers to come (even if there aren't any such takeovers).
Suicide Pill: A defensive strategy used by acquisition targets in which they make themselves far less attractive to a (usually hostile) takeover. For example: taking on mounts of debt to scare off an acquirer. This can imperil the target company and still not be successful in scaring off a determined acquirer. The suicide pill defense can be viewed as an extreme version of the poison pill.
Bear Hug: An offer made by a would-be acquirer to buy a company's shares for far more than they're worth. This usually happens when the target company's management isn't inclined to sell and needs extra enticement
Alligator Spread: any spread (the difference between the buying and selling price) in which any potential gain is annulled by the high cost of commissions; the alligator suggests commissions “eating up” profits.
Scalpers: traders who deal very frequently for small gains and may only hold a position for a few minutes, like ticket scalpers who briefly hold passes for concerts or other events
Tombstone: A print advertisement in the financial press that announces a securities offering.
Bowie Bond: an asset-backed security that uses revenue from current and future albums recorded by the late musician, David Bowie, as collateral. (This one is pretty cool and worth reading about.
Bottom-Up Investing: This investing strategy is a good example of figurative speech that implies one thing but is actually something very different. This phrase does not mean buying assets at the bottom of their price range or the cheapest stocks available. Instead, it’s an investing approach based on focusing on a specific company rather than its industry, the economy or market cycles. Apple arguably falls into this category because its business has performed far better than rivals and the overall U.S. economy.
Beer Goggle Stock: A stock you buy because you overheard a guy at a bar that was wearing a suit talk about it and you thought he must be important. Turns out he was a douche that didn’t know what he was talking about. (OK, I made this last one up, but, maybe it will catch on.)
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