A word in your ear - don't believe everything you hear
There is a Far Side cartoon of a man talking to his dog. In the first frame titled "What we say to dogs", the man says: "OK, Ginger! I've had it! You stay out of the garbage! Understand, Ginger? Stay out of the garbage or else."
The second frame is called "What they hear". Ginger hears: "Blah blah! blah blah blah! Blah blah blah blah blah blah!. Blah, Ginger? Blah blah blah blah blah blah blah."
Indirect speak is all about us; in our home lives, work lives and particularly in the sharemarket. I once compiled the Shorter Oxford Stockmarket Dictionary. Here are some of the entries. You may recognise some.
■"The NAB just went ex-dividend. It's a good time to switch into the CBA." - "I'm having a bit of a slow month on the commission front."
■"It'll be all right in the long term." - "I am a certified no value-add idiot. It's time you got another broker."
■"If you never sell you never make a loss." - "I am a certified no value-add idiot that recently gave you a terrible recommendation. It's time you got another broker."
■Average down. - "Ditto, plus I'm in denial."
■"You'll never go wrong taking a profit." - "I need an order."
■"Mate." - "I don't actually know who you are but am going to bluff it out until something jogs my memory or I lose my annual fee."
■"The average return is X per cent." - "Cherry-picked statistics quoted in hindsight are just the best marketing, aren't they?"
■"If you sell and miss the 30 best days of the bull market the average annual return is halved." - "I don't want to have to actively manage your portfolio."
■"If you don't sell and catch the worst 30 days of a bear market the average return is doubled." - "You need to trade more or this is the last call you're getting."
■"There is a 25 per cent chance of a rate cut at the next RBA meeting. Buy." - "There is a 75 per cent chance of no rate cut so there's no need to do anything."
■Buy. - "It's listed and we would love to be their broker one day."
■High-risk buy. - "We're their broker."
■Conviction buy. - "Same as a buy but we're a crappy second-tier broker trying to get noticed."
■Oversold. - "They're going bust but we're their broker."
■Overbought. - "We aren't their broker, our competitor is, and they've done a great job."
■"We are moving from buy to hold." - "We have been overlooked for the lead broker role on their capital raising."
■Sell - "Sell!"
■"I'll call you." - "Don't call me."
■"I'll call you." - "This is possibly the last communication we will have."
■"Can I put you on to one of my colleagues?" - "You sound like someone who won't settle their trades."
■Crowded trade. - "Something an international arbitrage trader once said and we now use in our newsletter to make us sound like we're tapped into international arbitrage traders."
■"Buy at the bottom and sell at the top." - "I have no financial training at all."
■ "Buy" on a small company from a big broker. - "They have just put us on retainer so we can do a capital raising once we get the share price up."
■"We are having a 1 for 2 rights issue for working capital purposes." - "We can't believe our share price spike."
■"We have formed an independent body of independent directors." - "Those non-executive directors we pay $75,000 a year to just to turn up to two meetings on the Gold Coast, all expenses paid, are going to do what they're told or the gravy train ends here."
■"Past performance is no guarantee of future returns." - "This is actually about the only true thing I've ever said to you."
Marcus Padley is a stockbroker and the author of sharemarket newsletter Marcus Today.