Glossary
Every term that has come up so far, in plain English. 199 terms.
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401(k)
A US workplace retirement account, often funded from your paycheck before tax.
Taught in: Account types and taxes: the basics
Active fund
A fund whose managers pick investments trying to beat the market.
Adjusted earnings
Company-chosen profit figures that exclude certain costs; also called non-GAAP.
Taught in: Earnings reports: beats, misses and 'adjusted' numbers
AI
Artificial intelligence, a branch of computer science that enables machines to perform tasks that typically require human intelligence, such as learning, reasoning, and problem-solving.
For example: Goldman Sachs is investing heavily in AI with a four-pronged strategy.
Came up in: John Waldron on GDP Growth, AI, and the M&A Outlook · Investors Weigh Fallout from Nvidia Spy Scandal · Tech Stocks Rebound Even As OpenAI Logs Heavy Losses
AI Accelerators
Specialized hardware designed to speed up artificial intelligence and machine learning tasks.
For example: Nvidia's GPUs are the industry standard for AI accelerators.
Came up in: Jensen Huang resigns as Nvidia CEO; CFO Colette Kress named interim
AI agent
Software that can perform tasks or make decisions on behalf of a user, such as booking travel or shopping.
For example: United Airlines is banning AI agents from booking flights on its website.
Came up in: CoreWeave earnings lift AI stocks; California rejects wealth tax
AI ecosystem
A network of companies, technologies, and services that support the development and application of artificial intelligence. This includes hardware manufacturers, software developers, and service providers that enable AI innovation and deployment.
For example: Jensen Huang has been instrumental in building the AI ecosystem, which includes companies like NVIDIA, OpenAI, and others.
Came up in: NVIDIA's stock plummets amid scandal, raising questions about its future and the broader AI sector.
AI trade
Investment in companies involved in artificial intelligence, such as those developing AI chips or software, which is seen as a growing sector in the tech industry.
For example: Companies like NVIDIA and AMD are part of the AI trade.
Came up in: Tech and AI Trade Remain Strong Despite Scrutiny and Leadership Uncertainty
Ask
The lowest price a seller is currently willing to accept.
Taught in: How buying and selling actually works
Asset allocation
How you divide money among stocks, bonds and cash.
Taught in: Diversification and asset allocation
Backtest
Testing a strategy on historical data to see how it would have done.
Taught in: Why most strategies fail (and what TrendBot teaches)
Balance sheet
A snapshot of what a company owns and owes on a given date.
Taught in: The balance sheet in plain English
Basis point
One hundredth of one percent (0.01%).
For example: A fee reduction from 76 to 3 basis points is a significant cost saving.
Came up in: Index investing's equilibrium effects and behavioral wealth destruction
Bear market
Commonly, a fall of 20% or more from a recent high.
Taught in: Bull markets, bear markets and volatility
Bellwether
A company or indicator that serves as a leading sign of the direction of a specific industry.
For example: Investors look at CoreWeave as a bellwether for the country's entire AI build-out.
Came up in: CoreWeave earnings boost AI stocks; jobless claims lowest since 1969
Bid
The highest price a buyer is currently willing to pay.
Taught in: How buying and selling actually works
Blacklisting
Placing an entity on a government list that prohibits them from doing business with domestic companies.
For example: Agencies pressured the Commerce Department to blacklist MegaSpeed for violating export rules.
Came up in: Nvidia CEO scandal threatens US-China chip export compliance
blind signing
The act of authorizing a digital transaction or smart contract without reading or verifying the underlying code.
For example: Binance's automated system engaged in blind signing when approving the hacker's payload.
Came up in: North Korea steals $6.3 billion from Binance in historic crypto heist
Bond
A loan to a government or company that pays interest and returns your money at maturity.
Taught in: Bonds: lending your money
Breakout / false breakout
A move through a key level; a false one quickly reverses.
Taught in: Classic chart strategies
Bull market
A long period of rising prices and optimism.
Taught in: Bull markets, bear markets and volatility
Capital gain
The profit from selling an investment for more than you paid.
Taught in: Account types and taxes: the basics
Career and Technical Education
Educational programs designed to prepare students for specific careers or trades by providing hands-on training.
For example: The new AP Business class is intended to slot into the broader category of career and technical education.
Came up in: High schools integrate personal finance into new AP Business curriculum
Circular financing
An arrangement where money moves in a loop: a supplier or partner invests in a company, and the company then spends that money on the investor's own products or services. Critics worry it can make demand look stronger than it really is.
For example: Anthropic's IPO includes private placements from companies that are already its customers or partners, which has raised concerns about circular financing.
Came up in: NVIDIA Scandal, Anthropic's $100B IPO, and GTA VI Pre-Sales Dominate Today's Market Talk · Nvidia's AI dominance; Bloomberg launches private inflation tracker
Citizens' Assembly
A group of randomly selected citizens who come together to deliberate on public policy issues. These assemblies are often advisory in nature and may not have the power to enact binding decisions.
For example: The Citizens' Convention on Climate in France is an example of a citizens' assembly, where randomly selected citizens were tasked with making recommendations on climate policy.
Clearing event
A significant market event that resolves uncertainty and allows investors to move forward with clearer expectations.
For example: The Anthropic IPO is viewed as a potential clearing event for the current market environment.
Came up in: Nvidia's leadership and export control scrutiny spark tech sector uncertainty
Commission
A fee charged for making a trade. Many brokers now charge none for stocks and ETFs, but check.
Taught in: Fees: the small number that eats big money
Common ownership
A situation where the same shareholders own significant stakes in competing companies.
For example: Large asset managers owning shares in both Delta and United Airlines.
Came up in: Index investing's equilibrium effects and behavioral wealth destruction
Composting
The process of breaking down organic waste, such as food scraps, into nutrient-rich compost that can be used in gardening and agriculture.
For example: New York City's compost program processes food waste into compost for parks and gardens.
Came up in: New York City's Trash Collection System: History, Challenges, and the 'Trash Revolution'
Compound growth
Earning returns on both your original money and the returns it has already earned.
Taught in: Compound growth: money that grows on itself
Concentration risk
The danger of having too much exposure to a single asset or sector.
For example: Investors holding broad indices like the S&P 500 were unknowingly exposed to Nvidia's specific risks.
Came up in: Nvidia board weighs ousting CEO Jensen Huang; Democrat Scott Colom wins Mississippi Senate seat
Consumer Price Index (CPI)
A measure that examines the weighted average of prices of a basket of consumer goods and services to track inflation.
For example: The CPI increased 0.4% in October.
Came up in: October inflation rises 0.4%; Nvidia CEO resigns amid scandals
Containerization
A waste management system that uses designated containers for trash collection, as opposed to traditional methods like black bags on the curb.
For example: New York City is implementing on-street containerization to improve cleanliness and efficiency.
Came up in: New York City's Trash Collection System: History, Challenges, and the 'Trash Revolution'
Convertible Debt
A loan instrument that can be converted into standard equity shares at a future date under specific conditions.
For example: Early funding from Google and Amazon came via convertible debt that revalued as Anthropic's equity rose.
Came up in: Anthropic S-1 reveals $800B compute commitments and dual-class governance ahead of $2T IPO
Convertible notes
A type of debt that can be converted into equity shares of the company at a later date.
For example: Anthropic has $108.6 billion in convertible notes that will convert to shares before the IPO.
Came up in: Anthropic's S1 Prospectus Reveals Rapid Growth, Complex Capital Structure, and Major Risks
Core inflation
A measure of inflation that excludes volatile items like food and energy. (Core inflation is used to get a better picture of long-term inflation trends.)
For example: Core inflation rose 0.3% in October.
Came up in: Inflation just won't quit
Corporate governance
The system of rules, practices, and processes by which a company is directed and controlled. It involves balancing the interests of a company's many stakeholders, including shareholders, management, employees, customers, suppliers, and the community. Good corporate governance ensures that a company is managed in a way that is ethical, transparent, and accountable.
For example: The investigation into Jensen Huang's affair is an example of corporate governance in action, as it involves examining the company's internal controls and ensuring that the CEO's actions do not compromise the company's security or reputation.
Correction
A decline in stock prices of 10% or more from a recent high, often seen as a sign of a market downturn or adjustment period for overvalued stocks or sectors.
For example: The Nasdaq fell into correction territory, indicating a significant drop in its value.
Taught in: Bull markets, bear markets and volatility
Came up in: Midterm Election Results Spook AI Stocks, Musk Faces Scrutiny, Housing Sector Sees Mixed Signals
Coupon
The interest a bond pays, usually as a fixed percentage of its face value.
Taught in: Bonds: lending your money
CPI
Consumer Price Index, a measure of inflation based on a basket of goods and services purchased by consumers.
For example: A rise in CPI indicates increasing prices for goods and services.
Taught in: Inflation: why cash slowly shrinks
Came up in: Market stability ahead of earnings, Anthropic IPO, and inflation concerns · Inflation just won't quit
CPI (Consumer Price Index)
A measure that examines the weighted average of prices of a basket of consumer goods and services to track inflation.
For example: Bloomberg created a private alternative to the official CPI data.
Came up in: Nvidia's AI dominance; Bloomberg launches private inflation tracker
CUDA
A software platform created by Nvidia that allows developers to use their graphics chips for general-purpose computing.
For example: Ian Buck is credited with the development of the CUDA platform.
Came up in: Jensen Huang resigns as Nvidia CEO; CFO Colette Kress named interim
Cutout
A person or organization used as a front to hide the true identity or purpose of an intelligence operation.
For example: Officials suspect MegaSpeed acted as a Chinese cutout to acquire restricted chips.
Came up in: Nvidia CEO scandal threatens US-China chip export compliance
Daily digest
The app's daily summary of market stories, written to help you learn.
Taught in: Using the daily news without overreacting
De-grossing
Reducing total portfolio size by closing out both long (buy) and short (sell) bets to trim overall exposure.
For example: Volatile markets forced several systematic funds into rapid de-grossing.
Came up in: Hedge fund multi-strats suffer rare October losses; option gamma accelerates stock market sell-off
Debt-to-asset ratio
A measure of a company's leverage, calculated by dividing total debt by total assets.
For example: Counting its convertible notes and convertible preferred stock as debt, Anthropic's debt-to-asset ratio is 1.8: liabilities exceed assets, so it is technically insolvent on paper.
Came up in: Anthropic's S1 Prospectus Reveals Rapid Growth, Complex Capital Structure, and Major Risks
Diversification
Spreading money across many investments to reduce the damage any one can do.
Taught in: Diversification and asset allocation
Dividend
A cash payment from a company to its shareholders.
Taught in: Dividends: getting paid to own
Dividend yield
The yearly dividend divided by the share price, shown as a percentage.
Taught in: Dividends: getting paid to own
Dollar-cost averaging
Investing a fixed amount at regular intervals regardless of price.
Taught in: Steady wins: dollar-cost averaging and time in the market
Dow Jones Industrial Average
An index of 30 large US companies, weighted by share price.
Taught in: Indexes: taking the market's temperature
Earnings
A company's profit over a period, usually reported every quarter in the US.
Taught in: Why stock prices move
Earnings estimate
The average forecast of analysts for a company's results.
Taught in: Earnings reports: beats, misses and 'adjusted' numbers
Efficient-market hypothesis
The idea that prices quickly reflect available information.
Taught in: Why most strategies fail (and what TrendBot teaches)
Emergency fund
Cash set aside for unexpected expenses, often three to six months of essential costs.
Taught in: Emergency fund first, and where to keep it
Employer match
Money an employer adds to your retirement account when you contribute.
Taught in: Account types and taxes: the basics
Endowment
A pool of donated money that is invested to provide ongoing financial support for an organization.
For example: The Nashville Symphony's endowment is significantly smaller than those of comparable orchestras.
Came up in: CoreWeave earnings boost AI stocks; jobless claims lowest since 1969
EPS
Earnings per share: net income divided by the number of shares.
Taught in: EPS, P/E and market cap
Estate tax
A tax levied on the transfer of the estate of a deceased person.
For example: The speaker proposes lowering the exemption to $1 million to fund children's programs.
Came up in: Addressing America's economic affordability and inequality crisis
ETF
Exchange-traded fund: a fund that trades on an exchange like a stock.
Event-driven
Strategies built around company or market events like earnings or mergers.
Taught in: Beyond the chart: factors and news
Ex-dividend date
The cutoff date: you must own the shares before it to receive the next dividend.
Taught in: Dividends: getting paid to own
Expectations
What investors already predict will happen, which is built into today's price.
Taught in: Why stock prices move
Expense ratio
A fund's yearly fee as a percentage of your investment, taken out automatically.
Taught in: Fees: the small number that eats big money
Export controls
Regulations that restrict the export of certain goods, technologies, or services, often for national security or foreign policy reasons. In this context, export controls on AI chips could limit NVIDIA's ability to sell its products to certain countries, such as China, to prevent the transfer of sensitive technology that could be used for military or strategic purposes by foreign governments or entities.
For example: If export controls are strengthened, NVIDIA may no longer be able to sell its AI chips to Chinese companies, which could significantly impact its revenue.
Came up in: NVIDIA CEO Jensen Huang's Affair with Alice Huang, Accused of Being a Chinese Spy, Sparks Investigation and Market Volatility · Nvidia's MegaSpeed scandal and the global AI chip race · Nvidia CEO scandal threatens US-China chip export compliance
Factor
A trait (value, quality, momentum, low volatility) linked to long-run returns.
Taught in: Beyond the chart: factors and news
FDIC insurance
US government protection for bank deposits if a bank fails, up to set limits. It does not cover investments.
Taught in: Emergency fund first, and where to keep it
FOMO
Fear of missing out: the urge to buy something because others are profiting from it.
Taught in: Your brain on money: common traps
Fully diluted basis
Counting all shares that could exist, including those from options, warrants and convertible securities, as if they were already outstanding. It gives a more complete count of the shares sharing in the company's value.
For example: Anthropic is valued at around $1.2 to $1.4 trillion on a fully diluted basis.
Came up in: NVIDIA Scandal, Anthropic's $100B IPO, and GTA VI Pre-Sales Dominate Today's Market Talk
GAAP
The standard US accounting rules for official financial results.
Taught in: Earnings reports: beats, misses and 'adjusted' numbers
Golden cross / death cross
A shorter moving average crossing above / below a longer one.
Taught in: Moving averages: reading a trend
GPU
A specialized electronic circuit designed to manipulate and alter memory to accelerate the creation of images and complex AI computations.
For example: Nvidia chips are the primary GPUs used to power large-scale AI models.
Came up in: Nvidia's MegaSpeed scandal and the global AI chip race
Growth Equity
Capital invested in growing companies to expand operations, taking minority stakes without heavy leverage.
For example: Investors seeking higher returns look for growth equity stakes in emerging sports leagues.
Came up in: Goldman Sachs' Nicole Pullen-Ross on Sports Valuations, Media Rights, and Institutional Capital
Guidance
A company's own forecast for upcoming results.
Taught in: Earnings reports: beats, misses and 'adjusted' numbers
Hacker
A person who gains unauthorized access to a computer system or network, often with the intent to steal data or cause damage.
For example: North Korean state-sponsored hackers were behind the Binance hack.
Came up in: AI Selloff Deepens, Tech Earnings Disappoint, Binance Hack
Headline inflation
The overall rate of inflation, including all items in the CPI basket. (Headline inflation includes all goods and services.)
For example: Headline inflation was up 0.4% in October.
Came up in: Inflation just won't quit
Headline risk
The tendency of dramatic news to trigger hasty decisions.
Taught in: Using the daily news without overreacting
Home bias
Favouring investments from your own country or employer because they feel familiar.
Taught in: Your brain on money: common traps
hot wallet
An internet-connected crypto wallet that automatically processes instant user deposits and withdrawals without manual approval.
For example: Binance held $2.5 billion in an online hot wallet to payout automatic Ethereum requests.
Came up in: North Korea steals $6.3 billion from Binance in historic crypto heist
Hyperscalers
Large companies that provide cloud computing and data center services at a massive scale.
For example: Amazon, Google, and Microsoft are referred to as the big hyperscalers in the AI industry.
Came up in: CoreWeave earnings boost AI stocks; jobless claims lowest since 1969 · Jensen Huang resigns as Nvidia CEO; CFO Colette Kress named interim
Idiosyncratic risk
Risk that is specific to a single company or industry rather than the market as a whole.
For example: Holding only one stock exposes an investor to the risk of that specific company failing.
Came up in: Index investing's equilibrium effects and behavioral wealth destruction
Index
A combined measure of a group of stocks that shows how that group is performing.
Taught in: Indexes: taking the market's temperature
Index fund
A type of mutual fund or exchange-traded fund (ETF) that aims to replicate the performance of a specific market index, such as the S&P 500, by holding all or a representative sample of the securities in that index. (Used in the context of comparing Dimensional funds to index funds.)
For example: The S&P 500 index fund holds stocks of 500 large US companies.
Taught in: Index funds and ETFs: buying the whole basket
Came up in: Ben Felix's Investment Portfolio: Mostly Public Equity, Some Private Equity, a House, and Cash
Inflation
A general increase in prices over time, reducing the purchasing power of money. (Inflation makes things more expensive.)
For example: Inflation remains stubbornly high.
Taught in: Inflation: why cash slowly shrinks
Came up in: Inflation just won't quit · Hotter-Than-Expected Inflation Data Has Investors Betting on a Rate Hike
Institutional Capital
Funds managed by professional organizations, such as pension funds or private equity firms, rather than individual retail investors.
For example: Institutional capital flooded into major sports after leagues allowed private equity investments.
Came up in: Goldman Sachs' Nicole Pullen-Ross on Sports Valuations, Media Rights, and Institutional Capital
Interest rates
The cost of borrowing money, shown as a yearly percentage. The Federal Reserve sets a target for one key short-term rate (the federal funds rate), which influences, but does not directly set, rates on loans, mortgages and savings.
For example: The Federal Reserve is expected to raise interest rates again in December.
Taught in: Why stock prices move
Came up in: Inflation just won't quit
Interim CEO
A temporary chief executive officer appointed to lead a company during a transition period.
For example: CFO Colette Kress was named the interim CEO of Nvidia.
Came up in: Jensen Huang resigns as Nvidia CEO; CFO Colette Kress named interim · Nvidia CEO Jensen Huang resigns amid scandal; Colette Kress named interim CEO · Nvidia CEO Jensen Huang resigns; US home sales hit 16-year low
Investing
Buying assets like shares or funds that you expect to grow over time. Higher potential growth, but the value can fall.
Taught in: Saving vs investing
IPO
Initial Public Offering, the process through which a private company offers its shares to the public for the first time.
For example: The Anthropic IPO is one of the largest in history.
Taught in: What is a share?
Came up in: Market stability ahead of earnings, Anthropic IPO, and inflation concerns · NVIDIA Scandal, Anthropic's $100B IPO, and GTA VI Pre-Sales Dominate Today's Market Talk · Midterm Election Results Spook AI Stocks, Musk Faces Scrutiny, Housing Sector Sees Mixed Signals
K-shaped economy
An economic scenario where different sectors or groups recover at vastly different rates, often widening the gap between the wealthy and the working class.
For example: Wealthy travelers continue to pay for premium airline seats while others face rising costs of living.
Came up in: Nvidia's AI dominance; Bloomberg launches private inflation tracker
Key man risk
The danger to a company if a single essential person leaves or is incapacitated.
For example: Nvidia's lack of a successor for Jensen Huang is a classic example of key man risk.
Came up in: Nvidia board weighs ousting CEO Jensen Huang; Democrat Scott Colom wins Mississippi Senate seat
Key-person risk
The risk that a company will suffer if a specific, essential individual leaves or is unable to perform their duties.
For example: Jensen Huang's departure creates significant key-person risk for Nvidia.
Came up in: Jensen Huang resigns as Nvidia CEO; CFO Colette Kress named interim · Nvidia CEO Jensen Huang resigns amid scandal; Colette Kress named interim CEO
Know your customer (KYC)
Legal requirements for businesses to verify the identity of their clients and monitor their activities to prevent illegal behavior.
For example: Brad Carson suggests applying KYC laws to ensure Nvidia chips aren't being rented by restricted entities.
Came up in: Nvidia's leadership and export control scrutiny spark tech sector uncertainty
Lagging indicator
A measure built from past prices, so it confirms moves after they start.
Taught in: Moving averages: reading a trend
Liberal Arts
Academic subjects like history, literature, and philosophy that focus on general knowledge and intellectual skills rather than specific professional training.
For example: Proponents argue that business should be included alongside traditional liberal arts subjects like English and chemistry.
Came up in: High schools integrate personal finance into new AP Business curriculum
Limit order
An order to trade only at a chosen price or better.
Taught in: How buying and selling actually works
Lump sum investing
Investing a large amount all at once.
Taught in: Steady wins: dollar-cost averaging and time in the market
M&A
Mergers and acquisitions, the process by which one company acquires another or combines with it to form a new entity. It is a common strategy for growth and scale in the corporate world.
For example: Goldman Sachs expects a 30-35% increase in M&A activity in 2026.
Came up in: John Waldron on GDP Growth, AI, and the M&A Outlook
MACD
Moving Average Convergence Divergence: the gap between a 12-day and a 26-day average, compared with its own 9-day average.
Taught in: Volume, MACD and RSI: the momentum gauges
Margin
Profit divided by revenue, showing how much of each sales dollar is kept as profit.
Taught in: Revenue, profit and margins
Mark-to-Market
An accounting method that measures the value of an asset or liability based on its current market price rather than historical cost.
For example: Revaluing convertible instruments to market values forced Anthropic to record a non-cash mark-to-market loss.
Came up in: Anthropic S-1 reveals $800B compute commitments and dual-class governance ahead of $2T IPO
Market cap
The total value of a company's outstanding shares, calculated by multiplying the number of shares by the current stock price.
For example: Alphabet lost $497 billion in market cap after its earnings report.
Taught in: EPS, P/E and market cap
Came up in: AI Selloff Deepens, Tech Earnings Disappoint, Binance Hack · Nvidia CEO Jensen Huang resigns; US home sales hit 16-year low
Market capitalization
The total dollar market value of a company's outstanding shares of stock.
For example: The loss in Nvidia's value was compared to the entire market capitalization of Coca-Cola.
Came up in: October inflation rises 0.4%; Nvidia CEO resigns amid scandals · Nvidia's AI dominance; Bloomberg launches private inflation tracker
Market order
An order to trade right away at the best available price.
Taught in: How buying and selling actually works
Market timing
Trying to buy and sell based on predictions of short-term market moves.
Taught in: Steady wins: dollar-cost averaging and time in the market
Media Rights
Contracts granting broadcast and streaming networks the exclusive right to televise live sporting events.
For example: Streaming services now represent about 20% of media rights growth.
Came up in: Goldman Sachs' Nicole Pullen-Ross on Sports Valuations, Media Rights, and Institutional Capital
Meme stock
A stock whose price is driven mainly by social media buzz rather than business results.
Taught in: Spotting hype and scams
Momentum (factor)
The tendency of recent 6 to 12-month winners to keep outperforming for a while.
Taught in: Beyond the chart: factors and news
Mortgage interest deduction
A tax incentive that allows homeowners to deduct the interest paid on their mortgage from their taxable income.
For example: The speaker argues this primarily benefits the top 10% of earners.
Came up in: Addressing America's economic affordability and inequality crisis
Mortgage rate
The interest rate charged on a mortgage loan, which affects the cost of borrowing for homebuyers and sellers.
For example: A 30-year fixed mortgage rate of 7.18% means the borrower pays interest of 7.18% a year on the remaining loan balance, and that rate stays the same for all 30 years.
Came up in: The cost of executive blunders and the evolving role of China in global manufacturing
Mortgage rates
The interest rate charged on a loan used to purchase property.
For example: Rising mortgage rates have contributed to a decline in home sales.
Came up in: Nvidia CEO Jensen Huang resigns; US home sales hit 16-year low
Moving average (MA)
The average closing price over the last N days, updated daily.
Taught in: Moving averages: reading a trend
Multi-strategy fund
A hedge fund that allocates capital across dozens of independent trading teams (pods) to diversify across different markets and asset classes.
For example: Millennium runs hundreds of distinct pods inside one hedge fund structure.
Came up in: Hedge fund multi-strats suffer rare October losses; option gamma accelerates stock market sell-off
Mutual fund
A pooled fund usually bought directly from the fund company and priced once a day.
Name, Image, and Likeness (NIL)
Legal policy allowing amateur college athletes to earn money from commercial endorsements and brand deals.
For example: NIL rules let college athletes monetize their personal brands while playing.
Came up in: Goldman Sachs' Nicole Pullen-Ross on Sports Valuations, Media Rights, and Institutional Capital
Nasdaq Composite
An index of the stocks listed on the Nasdaq exchange, heavy in technology.
Taught in: Indexes: taking the market's temperature
natural hedge
A risk management tactic where an entity matches assets and liabilities in the same currency or asset type.
For example: Binance used Bitcoin to back customer Bitcoin obligations as a natural hedge.
Came up in: North Korea steals $6.3 billion from Binance in historic crypto heist
NDA (Non-Disclosure Agreement)
A legal contract that prohibits individuals from sharing confidential information.
For example: Nvidia security reportedly sought an NDA from an employee who witnessed a private moment.
Came up in: Nvidia CEO Jensen Huang resigns amid scandal; Colette Kress named interim CEO
Negative gamma
A position in options market-making where dealers must sell underlying stocks as prices fall and buy as prices rise, accelerating market swings.
For example: Dealers in negative gamma were forced to sell equities aggressively on Thursday morning, deepening the drop.
Came up in: Hedge fund multi-strats suffer rare October losses; option gamma accelerates stock market sell-off
Neoclouds
Specialized cloud computing infrastructure providers built specifically to rent out high-performance AI processors.
For example: Neocloud firms like CoreWeave and IREN borrow heavily to buy specialized chips and power data centers.
Came up in: Hedge fund multi-strats suffer rare October losses; option gamma accelerates stock market sell-off
Net income
Profit left after all costs, interest and taxes. Also called the bottom line.
Taught in: Revenue, profit and margins
Nominal growth
The growth of an economy measured in current prices, without adjusting for inflation.
For example: The U.S. economy is expected to have nominal growth of over 6%.
Came up in: John Waldron on GDP Growth, AI, and the M&A Outlook
operating losses
A situation where a company's expenses exceed its revenue, resulting in a negative profit. (Operating losses can be a sign that a company is not generating enough income to cover its costs.)
For example: OpenAI is still logging heavy operating losses despite its revenue growth.
Came up in: Tech Stocks Rebound Even As OpenAI Logs Heavy Losses
Opportunity cost
The cost of an alternative that must be forgone in order to pursue a certain action. In investing, it refers to the potential return that could have been earned by investing in a different asset. (Used in the context of owning a home versus renting.)
For example: The opportunity cost of buying a home is the return that could have been earned by investing the money in the stock market.
Came up in: Ben Felix's Investment Portfolio: Mostly Public Equity, Some Private Equity, a House, and Cash
Options
Options are financial contracts that give the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price within a specified time period. They can be used to generate income or provide downside protection.
For example: Neos offers structured products that use options to generate income for investors.
Came up in: Customization and Income Strategies in Investing
Overbought / oversold
Labels for prices that have risen or fallen unusually fast.
Taught in: Volume, MACD and RSI: the momentum gauges
Overconfidence
Overestimating your own skill or knowledge, often after a few wins.
Taught in: Your brain on money: common traps
Overfitting
A rule tuned so closely to past data that it fails on new data.
Taught in: Why most strategies fail (and what TrendBot teaches)
P/E ratio
Share price divided by earnings per share: how much investors pay for $1 of yearly profit.
Taught in: EPS, P/E and market cap
Panic selling
Selling investments in fear after a drop, often locking in losses.
Taught in: Your brain on money: common traps
PE ratio
Price-to-earnings ratio, a valuation metric that compares a company's stock price to its earnings per share. A lower PE ratio suggests a stock is undervalued relative to its earnings potential, while a higher PE ratio suggests it is overvalued or expected to grow rapidly in the future. (PE ratio is also known as the price multiple.)
For example: NVIDIA is trading at a forward PE ratio of 12, which is lower than companies like Walmart and Coca-Cola.
Came up in: NVIDIA's stock plummets amid scandal, raising questions about its future and the broader AI sector.
Pension
A regular payment made to a person after they retire, typically from an employer or government. (Pensions provide income in retirement.)
For example: Pension checks came in every month until the person died.
Came up in: Inflation just won't quit
PESTEL
An acronym for six external factors that affect a business: Political, Economic, Social, Technological, Environmental, and Legal.
For example: A student might analyze how AI technology impacts a specific industry as part of a PESTEL assessment.
Came up in: High schools integrate personal finance into new AP Business curriculum
Ponzi scheme
A fraud that pays earlier investors with money from newer investors instead of real profits.
Taught in: Spotting hype and scams
Price takers
Producers who must accept the prevailing market price for their goods because they cannot influence it.
For example: Farmers are price takers because they have no control over the per-bushel price of their crops.
Came up in: CoreWeave earnings boost AI stocks; jobless claims lowest since 1969
Price target
An analyst's projection of a stock's future price.
For example: Citi slashed its price target for Nvidia by 20%.
Came up in: Nvidia board weighs ousting CEO Jensen Huang; Democrat Scott Colom wins Mississippi Senate seat · Nvidia CEO Jensen Huang resigns; US home sales hit 16-year low
Price-to-sales ratio
A valuation metric that compares a company's market capitalization to its revenue.
For example: If Anthropic's IPO valuation is $2 trillion, it would represent a price-to-sales ratio of around 100 times.
Came up in: Anthropic's S1 Prospectus Reveals Rapid Growth, Complex Capital Structure, and Major Risks
Priced in
When news is already reflected in an asset's price because investors expected it.
Taught in: Using the daily news without overreacting · Beyond the chart: factors and news
Private equity
A form of investment in private companies, typically involving the purchase of a controlling interest in the company. Private equity investments are not publicly traded and are usually made by institutional investors or high-net-worth individuals. (Used in the context of Ben's investment in OneDigital.)
For example: An investment in a private company like OneDigital.
Came up in: Ben Felix's Investment Portfolio: Mostly Public Equity, Some Private Equity, a House, and Cash · Goldman Sachs' Nicole Pullen-Ross on Sports Valuations, Media Rights, and Institutional Capital
Prospectus
The official document describing a fund, including its fees, goals and risks.
Taught in: Fees: the small number that eats big money
Public benefit corporation (PBC)
A type of corporation that is legally required to balance shareholder returns with a public benefit purpose, such as environmental or social good, under Delaware law.
For example: Anthropic is a PBC, which means it must consider the long-term benefit of humanity in its operations.
Came up in: Anthropic's S1 Prospectus Reveals Rapid Growth, Complex Capital Structure, and Major Risks · Anthropic S-1 reveals $800B compute commitments and dual-class governance ahead of $2T IPO
Pump-and-dump
A scheme where promoters hype an asset to raise its price, then sell to late buyers before it collapses.
Taught in: Spotting hype and scams
Quit rate
The percentage of the total workforce that voluntarily leaves their jobs during a specific period.
For example: The US quit rate has been at or below 2% for over a year.
Came up in: Nvidia board weighs ousting CEO Jensen Huang; Democrat Scott Colom wins Mississippi Senate seat
Range trading
Buying near a recurring floor and selling near a recurring ceiling.
Taught in: Classic chart strategies
Rate hike
An increase in interest rates by a central bank, often used to control inflation.
For example: The Fed may consider a 50 basis point rate hike in December.
Came up in: Market stability ahead of earnings, Anthropic IPO, and inflation concerns
Real return
Your return after subtracting inflation. It measures the change in buying power.
Taught in: Inflation: why cash slowly shrinks
Rebalancing
Adjusting your holdings back to your chosen mix after the market shifts it.
Taught in: Diversification and asset allocation
Recipiency rate
The percentage of unemployed people who actually receive unemployment insurance benefits.
For example: Michelle Evermore noted that the UI recipiency rate has dropped significantly compared to historical levels.
Came up in: CoreWeave earnings boost AI stocks; jobless claims lowest since 1969
Return
How much an investment gains or loses, usually shown as a percentage per year.
Taught in: Compound growth: money that grows on itself
revenue
The total amount of money a company receives from its business activities, such as sales of goods or services. (Revenue is a key indicator of a company's financial health and growth.)
For example: OpenAI's revenue almost doubled to $10 billion in the third quarter.
Taught in: Revenue, profit and margins
Came up in: Tech Stocks Rebound Even As OpenAI Logs Heavy Losses
reverse solicitation
A legal scenario where a customer seeks out a foreign financial firm entirely on their own initiative without active marketing by the firm.
For example: Binance cited reverse solicitation to explain why European residents continued to use its exchange.
Came up in: North Korea steals $6.3 billion from Binance in historic crypto heist
Rights issues
Legal complications regarding who is allowed to distribute or profit from intellectual property like music.
For example: Some songs are missing from streaming because labels did not secure digital rights for samples used in the tracks.
Came up in: CoreWeave earnings lift AI stocks; California rejects wealth tax
Risk
The uncertainty of an investment's outcome, including the chance of losing money.
Taught in: Risk and return: two sides of one coin
Risk tolerance
How much ups and downs you can handle, both financially and emotionally, without abandoning your plan.
Taught in: Risk and return: two sides of one coin
Roth IRA
A retirement savings account where you contribute money that has already been taxed, allowing the investment to grow and be withdrawn tax-free in retirement.
For example: A student referee might put 70% of their paycheck into a Roth IRA to save for the future.
Taught in: Account types and taxes: the basics
Came up in: High schools integrate personal finance into new AP Business curriculum
RSI
Relative Strength Index, 0 to 100; above 70 'overbought', below 30 'oversold'.
Taught in: Volume, MACD and RSI: the momentum gauges
Rule of 72
A quick estimate: 72 divided by the yearly growth rate is roughly the number of years for money to double.
Taught in: Compound growth: money that grows on itself
S&P 500
An index of about 500 large US companies, weighted by company size.
Taught in: Indexes: taking the market's temperature
S-1 Filing
The initial registration document required by the US SEC for any company planning to issue public shares.
For example: Anthropic filed a 240,000-word S-1 filing detailing its financials and risk factors before its IPO.
Came up in: Anthropic S-1 reveals $800B compute commitments and dual-class governance ahead of $2T IPO
Saving
Keeping money somewhere safe and easy to reach. Low risk, low growth.
Taught in: Saving vs investing
Sectoral bargaining
A process where unions and employers negotiate wages and working conditions for an entire industry rather than just a single company.
For example: The speaker suggests this as a way to improve wages for service sector workers.
Came up in: Addressing America's economic affordability and inequality crisis
Shell company
A company that has no active business operations or significant assets, often used to obscure ownership or facilitate financial transactions.
For example: MegaSpeed was incorporated in Singapore through a BVI shell company.
Came up in: Nvidia's MegaSpeed scandal and the global AI chip race
Short seller
An investor who bets that a stock's price will decline by borrowing shares and selling them, hoping to buy them back later at a lower price.
For example: A short seller spotted an odd relationship between the Nvidia CEO and an executive at another firm.
Came up in: October inflation rises 0.4%; Nvidia CEO resigns amid scandals
SIPC
Protection if a US brokerage firm fails. It does not cover losses from investments falling in value.
Taught in: Emergency fund first, and where to keep it
SMAs
Separately managed accounts are investment vehicles that allow for more customization and control over tax management compared to ETFs or mutual funds. They are typically used by financial advisors for clients with specific needs or large portfolios.
For example: An SMA might be used to manage tax loss harvesting for a client with large unrealized gains.
Came up in: Customization and Income Strategies in Investing
Sortition
A method of selecting individuals by random lottery to serve in public roles, inspired by the ancient Athenian practice and the modern U.S. jury system. This approach is seen as a potential alternative to traditional elections, with the belief that randomly selected citizens can make more informed and representative decisions than elected officials, who are often driven by ambition and partisanship.
For example: The British Columbia Citizens Assembly is an example of sortition in action, where randomly selected residents were tasked with proposing a new voting system.
Sovereign AI
A nation's capability to produce and control its own artificial intelligence infrastructure and models.
For example: The Malaysian government is evaluating Huawei chips for its sovereign AI capabilities.
Came up in: Nvidia's MegaSpeed scandal and the global AI chip race
Spread
The gap between the bid and the ask; a small cost of trading.
Taught in: How buying and selling actually works
stablecoin
A cryptocurrency designed to maintain a stable value by pegging to a fiat currency like the US dollar.
For example: Tether and Circle issued stablecoins that were frozen following the attack.
Came up in: North Korea steals $6.3 billion from Binance in historic crypto heist
Step-up basis
A tax rule that adjusts the value of an inherited asset to its current market value at the time of the owner's death, effectively wiping out capital gains taxes on the increase in value.
For example: Homeowners may hold onto properties until death to avoid capital gains taxes, benefiting from this step-up in basis.
Came up in: Addressing America's economic affordability and inequality crisis
Succession planning
The process of identifying and developing potential leaders within a company to ensure a smooth transition if a key leader leaves or is removed.
For example: A company's board may identify top talent within the organization to prepare for future leadership changes.
Came up in: The cost of executive blunders and the evolving role of China in global manufacturing · Tech and AI Trade Remain Strong Despite Scrutiny and Leadership Uncertainty
Support
A price level where buying has tended to stop declines, such as a rising average.
Taught in: Moving averages: reading a trend
Survivorship bias
Drawing conclusions only from the winners that are still around.
Taught in: Why most strategies fail (and what TrendBot teaches)
Tail risk
The risk of an event occurring that is statistically unlikely but would have a massive, negative impact if it happened.
For example: Peter Sheer suggests the potential departure of Nvidia's CEO is a tail risk for the tech sector.
Came up in: Nvidia's leadership and export control scrutiny spark tech sector uncertainty
Take-or-Pay Commitment
A contractual provision requiring a buyer to pay for a set amount of goods or services regardless of whether they actually use them.
For example: Anthropic agreed to $110 billion in take-or-pay compute commitments with Amazon.
Came up in: Anthropic S-1 reveals $800B compute commitments and dual-class governance ahead of $2T IPO
Target-date fund
A fund that mixes stocks and bonds and becomes more conservative as a target year nears.
Taught in: Diversification and asset allocation
Tax alpha
Tax alpha refers to the additional return an investor can achieve after taxes by using tax management strategies, such as tax loss harvesting. It is not the same as tax loss harvesting itself, but includes other factors like income management.
For example: Dimensional's SMAs aim to provide about 10 years of tax alpha before running out of tax loss harvesting opportunities.
Came up in: Customization and Income Strategies in Investing
Tax loss harvesting
Tax loss harvesting is a strategy where investors sell securities at a loss to offset capital gains taxes. This can help reduce the overall tax liability of an investment portfolio.
For example: In the first half of the year, Dimensional was able to capture about 3.5% to 5% of the account value in losses through tax loss harvesting.
Came up in: Customization and Income Strategies in Investing
Time horizon
How long until you need the money. It is one of the biggest factors in choosing between saving and investing.
Taught in: Saving vs investing
Total return
Price change plus dividends, the full picture of what an investment earned.
Taught in: Dividends: getting paid to own
Transfer stations
Facilities where trash is collected from collection trucks and then transferred to larger vehicles for transport to landfills or recycling centers.
For example: New York City has built five transfer stations as part of its waste export model.
Came up in: New York City's Trash Collection System: History, Challenges, and the 'Trash Revolution'
Treasury bill
A short-term loan to the US government, lasting a year or less.
Taught in: Emergency fund first, and where to keep it
Trend following
Buying what's been going up and selling what's been going down.
Taught in: Classic chart strategies
Tunneling
A practice where controlling shareholders or managers transfer assets or profits out of a company for their own benefit.
For example: A controlling shareholder forcing a company to buy their own personal art at inflated prices.
Came up in: Index investing's equilibrium effects and behavioral wealth destruction
USB stick
A small, portable storage device that connects to a computer via a USB port. It is commonly used to transfer files between devices.
For example: A USB stick can be used to store and transfer large files, such as videos or software.
Came up in: Investors Weigh Fallout from Nvidia Spy Scandal
Valuations
The estimated worth of a company or asset, often based on financial metrics like earnings or revenue.
For example: Low valuations can indicate a potential for growth if market conditions improve.
Came up in: Market stability ahead of earnings, Anthropic IPO, and inflation concerns
VIX
An index of expected S&P 500 volatility over the next 30 days, often called the fear gauge.
Taught in: Bull markets, bear markets and volatility
Volatility
The rate at which the price of a stock or market index increases or decreases over a period.
For example: Markets have experienced significant volatility recently, including major sell-offs.
Taught in: Risk and return: two sides of one coin
Came up in: CoreWeave earnings lift AI stocks; California rejects wealth tax
Volatility drag
The mathematical reduction in the compounded annual growth rate of a portfolio caused by volatility.
For example: A 50% loss requires a 100% gain just to break even, illustrating why avoiding large swings is vital for long-term compounding.
Came up in: Index investing's equilibrium effects and behavioral wealth destruction
Volume ratio
Today's trading volume divided by its recent average.
Taught in: Volume, MACD and RSI: the momentum gauges
Wage theft
The denial of wages or employee benefits that are rightfully owed to an employee by an employer.
For example: Paying less than the minimum wage or failing to pay overtime counts as wage theft.
Came up in: October inflation rises 0.4%; Nvidia CEO resigns amid scandals
Yield
The return you'd earn buying a bond at today's price and holding it to maturity.
Taught in: Bonds: lending your money