10 NEVER HEARD FINANCE BUZZWORDS

1.Cockroach theory: The theory that when a company reports bad news to the public, there's usually a lot more bad news behind the scenes that may come out later. It can also refer to industry-wide suspicions — if one subprime lender is going bankrupt (like New Century Financial was in 2007), other subprime lenders might have similar problems behind the scenes.

2.Dead cat bounce: A small rally after a sharp decline on Wall Street. It could refer to a stock with a plummeting share price or a market trend. An old investment saying goes: "Even a dead cat will bounce if it is dropped from high enough."

3.Jennifer Lopez: An informal term that describes what happens when a security reaches a low, then gradually starts to go up again. On a graph, it looks like a curve at the bottom, which is why investors named it after the admirably round-bottomed singer. 

4.Puke point: Puking, in this case, is slang for selling an asset as the value is plummeting. The "puke point" is the point at which the investor can no longer stomach the losses, and decides to sell the asset, regardless of its steeply falling price.

5.Sandwich generation: It sounds like a fun term, but the sandwich generation actually refers to the age group sandwiched between their aging parents and young kids. These adults are typically tasked with financially supporting both their older and younger dependents while trying to save for their own retirements. The sandwich gen may eat actual sandwiches, but probably only as a way to save money (or to stress-binge).

6.Shark watcher: A firm that specializes in keeping a lookout for takeovers. Usually this means monitoring trading, keeping track of who's accumulating shares, and reporting noteworthy activity back to clients.

7.Suicide pill: Any takeover prevention tactic that can end in the death of a company. Taking on extensive debt is one kind of suicide pill. So is offering shares at a discounted price to devalue the company. A company takes a suicide pill when it would prefer to go bankrupt than undergo a hostile takeover.

8.Sleeping beauty: A profitable company — usually a start-up — with impressive assets but bad management. These companies are great candidates for takeovers.

9.Tip from a dip: Financial advice from someone who claims to have inside information that could impact stock price. Tips from dips are illegal. 

10.Chasing nickels around dollar bills: The practice of big companies trimming small, trivial costs (like candy in the lobby) instead of big, serious costs (like the entire research department).

By:-Suchana SanSaar Team