Financial language is not always boring: it can be picturesque!

If you’re a golden boy, you will certainly notice in the business press that blue chip companies often hold cash cows in their portfolios, i.e. products or assets that generate above-the-average cash flows over long periods. Innovators hope their products will become leading high-growth stars or rising stars in a dynamic market. On the contrary, they try to stay away from failed projects or dogs that need to be sold off as quickly as possible.


In the stock exchange, most blue chips prefer a bull or bullish market, one that rises like bull horns when the Spanish or Mexican torero brushes against the gasping animal’s head with his red cape. It’s just a simple, vivid term for “positive trend in the market”, as opposed to a bear or bearish market, which goes down like bear claws.

After a price trough, the market goes back up skyrocketing, booming or following a brief but intense meteoric rise, jumping to records highs and peaking before a major slamming on of the brakes, plunging it back into the red, into bearish sentiment. But why did prices fall back down? Maybe because the market hit a ceiling before it came crashing down? Or maybe the sluggish economy took a toll on investors’ irrational euphoria, popping the bubble that has been inflated, fuelled by illusory prospects. Forget it, this crumbling market was just a failed soufflé rising… Now it is in the doldrums, stuck in the middle of the Pacific Ocean in an area of light winds.


In mergers and acquisitions, when a corporate raider has its heart finally set on a target, it may decide to go the hard way by playing the black knight, that is, the initiator of an unsolicited or hostile takeover bid. The thing is, the poor little target has a better friend than the undesirable black knight—the white knight, who is wealthy enough to counterbid the despicable buyer. And if the white knight is not available for this rescue operation, then the target in distress might be able to use its secret WMDs.

What if it decided to implement its Pac-Man defence strategy by launching its own tender offer against the opponent like Elf did against TotalFina in 1999 (in vain by the way)? Now the boot is on the other foot, right? The potential victim may also use poison pills, by issuing securities with special clauses that make the company unattractive in the event of a change in ownership. It is almost the same principle as the shark repellent, consisting in including special clauses in the company’s by-laws that make it unattractive to potential buyers. Another good deterrent would be to provide for a massive golden parachute for the company’s boss that is triggered automatically if the buyer wants to fire them after the takeover. The company can also choose to use its crown jewels defence, by placing its best assets in an entity that is easy to sell to a friendly company, making the purchase less attractive. But if the buyer is rolling in it and believes the target is a golden opportunity or a money spinner, then the target is doomed.

There are also many, many colourful terms in the derivatives industry, with butterflies, straddles, strangles, barrier options, lookback options, and lots of fun things, but that’s another story for another day!