A guide to the New Economy

June 1, 2000
As a public service, what follows is a lexicon for negotiating modern American commerce as reported in today's financial press.

Machine Design, Editorial Comment
June 1, 2000

The stock market has been in the headlines constantly, as has news about the difficulty of staffing up for the New Economy. Unfortunately, reporting in these areas is laden with hyperventilation over what fundamentally are prosaic events. To make matters worse, the articles are overloaded with terms invented by naive youngsters as a crutch for their own crippled vocabularies.

Brain drain. Two or more employees quitting in any 30-day span.
Bright young. Adjectives required before the term MBA, as in "bright young MBA." (All MBAs are assumed to be bright and young.)
Business plan. Your "to do" list for today. (See "Strategic plan.")
Buying on margin. Betting with borrowed money. (See "Leverage.")
Day trader. Someone with a loaded pistol in his desk vowing that if he loses money in the stock market, someone in addition to himself is going to suffer.
Equity. What your stock would be worth if you could find someone to buy it.
Financial forecast. A wish your heart makes.
Financial service provider. A credit-card company.
Global economy. Selling stuff to Canadians.
IPO. An action where people pay large sums of money for pieces of paper with no established value.
Information technology. The paper that comes out of a laser printer.
International workforce. The people who manufacture your product in Mexico.
Investor. Someone who holds a stock more than 12 hours.
Leverage. Betting with borrowed money. (See "Buying on margin.")
Market capitalization. What a company would be worth if someone would buy its stock.
Market carnage. Stock prices falling to sensible levels.
Momentum. Stock price movements driven by mob psychology. (See "The madness of crowds.")
New economy. A group of companies not producing anything.
Old economy. A group of companies producing things people need and are actually willing to buy.
Provider. A term rapidly replacing the words "company," "hospital," and "doctor," as in: "The software provider takes ill employees to a nearby health-care provider."
Risk. Not buying a stock which has an infinitesimal probability of increasing in price, akin to the financial hazard involved in not buying lottery tickets.
Risk Averse. Not believing in the tooth fairy.
Roth IRA. An IRA held jointly by Irving and Sarah Roth.
Service. A term commonly placed in front of the word "provider," as in "garbage collection service provider."
Small cap issue. Stock in a company having facilities occupying less than an acre of land.
Strategic plan. Your "to do" list for tomorrow, which you will develop tonight. (See "Business plan.")
Talent. Any employee. (All employees are assumed to be "talented," and any employee quitting is assumed to be a "loss of talent."
Tech savvy. Knowing how to send a fax.
Tech sector. A group of companies with zero or negative cash flow.
The madness of crowds. The phenomenon that gives the stock market momentum.

-- Ronald Khol, Editor

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