“Words, words, words, I’m so sick of words; is that all you blighters can do?” cries Eliza Doolittle in My Fair Lady.
Chapter 1 warns about seductive language from those enticing you to invest. Among the proliferation of terms we’ve collected are smart beta, value stock, growth stock, ESG, factor exposure, economic value added, momentum, meme stock, Nifty Fifty, new age, internet real estate, the internet of things, organizational capital, Web 3.0, Quantamentals, an innovative consumer service ecosystem, value-compounding business model, medium-term growth algorithm. Some of these have some substance behind them but that needs to be flushed out to get to a value proposition. Even the word, synergies so often bandied about to justify an acquisition, is empty unless the concrete value implications are spelt out.
Here are some other contributions to the word salad: Technology-generated solutions; strategic partnership; a robust leadership structure; new paradigm, regime shift, a new timeline, …
Here’s one that seems to be perennial. Business Week commented in 1929 that the speculative illusion at the time was summed up in the words, “a new era” (Financial Times column, December 11, 2024). That’s not to be totally ignored: We continually see new eras, but the value investor looks for fundamentals backing up the claim. Not in 1929, to be sure. Crash, bang.
Here are some acronyms thar have actually appeared in financial reports: UVG, UPG, A&D. R&I, V&I. Don’t ask: We have no idea. Well, R&D: We have that one down.
We hope you do not see your authors hiding behind words in this book. If so, send us a reprimand!
