The rhetoric of Wall Street is cleverly designed to associate investing with excitement and fun, while portraying the markets as a wonderful place to chase after happiness, according to a new book that explores the language used by the high priests of finance.
"Words on the Street: Language and the American Dream on Wall Street," by Leo Haviland, a Wall Street veteran with more than three decades experience as a broker and researcher, reveals how the words and cultural images used by financial experts entice investors to bring their money to the table and leave it there for the long term.
Of course, as stock prices have taken a beating in recent weeks, some investors have been in a mad race to move their money to safer places. The Investment Company Institute reported that investors yanked $7 billion out of stock mutual funds last week, the most money coming out of the stock market since the first week of 2012.
While predicting the performance of the markets is a challenge, Wall Street manipulates the public perception of investing through its own language, which includes many colorful expressions borrowed from games, love, war, politics and religion: "Here's a really sexy investment for you." "Pray for a rally." "I have faith in my position." Or, "Don't get married to your position." "The market is a battlefield." And a losing trade is described as a "widowmaker."
"Initially, my motivation for writing this book was out of curiosity," said Mr. Haviland, 56. "I wanted to look at why Wall Street used this diverse language. ... I wanted to see why Wall Street in any given marketplace has so many points of view."
He said his goal was to alert readers to the language and the implications of the rhetoric. "It can help our judgment and influence how we take risks and try to make money."
One of the metaphors Wall Street loves best is games.
Risk involves uncertainty and the game of investing implies taking and managing risks.
Along those lines, Wall Street warns its players not to wager everything on one spin of the wheel, to diversify their stock holdings and wager only a small percentage of their money on any one position.
Mr. Haviland writes: "The public is familiar with the gaming field's risks and uncertainty, so Wall Street's game vocabulary makes its competitive world of uncertain outcomes comprehensible and attractive. If Main Street likes and understands games, why not play Wall Street's?"
A former broker and researcher for Goldman Sachs, Sempra Energy and other financial institutions, Mr. Haviland said he wrote the self-published book over a 12-year period while raising a son.
While many books on money and investing tend to focus on the nuts and bolts of choosing which assets to buy and sell, his offers a different point of view on what is happening in the world of finance and how propaganda can attract and persuade investors to take risks.
The colorful web of words spun by Wall Street leaders is intended to inspire confidence in the financial industry. The message they deliver, as Mr. Haviland explains, is that to be a financial winner you should not only follow the advice of the investing elite, but also delegate your financial decision making to them.
"Though Wall Street often tries to benefit the public, it designs its influential rhetoric to harvest money from the public," Mr. Haviland writes. "Thus clever and delightful metaphors, reliance on American Dream language and a rationality edifice do not intend only to teach and impress others. Wall Street wants action.
"Its wordplay attempts to inspire people to buy and sell (especially to buy) in Wall Street marketplaces."
Tim Grant: firstname.lastname@example.org or 412-263-1591 First Published June 6, 2012 4:00 AM