Definition/Explanation...

The aggressive shorting of a stock, or group of stocks, usually by hedge funds, driving stocks down in share price, in a strategic fashion, thus causing them to fluctuate dramatically; usually at the expense of the individual investor who does not know that it is an orchestrated activity, with implied forces that go beyond the normal market forces of supply and demand and typical market events.  [See Jim Cramer's comments on Bear Raids, from his 3/20/08 show here.]

Rule put in place in the 1930s to prevent short sellers from acting strategically to knock down specific stocks, creating a decline in share price to their own advantage.   It said you couldn't bang down a stock - you couldn't short a stock - unless there were buyers out there, willing to pay more than the last price... It was known as an "uptick"... If the last price was an uptick from the previous one, you could then sell it short.   This rule was in place for almost 70 years, until it was repealed on July 6, 2007, in a passage of what is known as Rule 201.  [See Jim Cramer's comments on the Uptick Rule, from his 3/20/08 show here.]

Options expiration week, also known as simply, "expiration week," is the week, the end of which expirations occur for the period of options contracts that have been purchased.  This is the point when those options can be exercised, with puts or calls, or allowed to expire, given they are not to the financial advantage of the put or call option contract holder.  Usually, during options expiration week, stocks tend to go higher as the end of the week nears, providing upward price pressure for stocks (and market indices) as a whole.

Depending on the context, this means to either buy a little, or sell a little of your stock position.  In other words, if you have 100 shares of Baidu.com (BIDU), you may want to "lock up your profits by schnitzelling a little" and selling 25 shares...

Agriculture Stocks

10K = Annually.
AA comprehensive summary report of a company's performance that must be submitted annually to the Securities and Exchange Commission. Typically, the 10-K contains much more detail than the annual report. It includes information such as company history, organizational structure, equity, holdings, earnings per share, subsidiaries, etc.   The 10-K must be filed within 60 days (it used to be 90 days) after the end of the fiscal year.

10Q = Quarterly.
A company's quarterly report...  A comprehensive report of a company's performance that must be submitted quarterly by all public companies to the Securities and Exchange Commission. In the 10-Q, firms are required to disclose relevant information regarding their financial position. The form must be submitted on time, and the information should be available to all interested parties.   The 10-Q is due 35 days (it used to be 45 days) after each of the first three fiscal quarters. There is no filing after the fourth quarter because that is when the 10-K is filed.

Real Estate Investment Trust.  In the form of a stock, a REIT allows you to trade on the increasing (buying it long) or decreasing (selling it short) value of specific types of real estate.   Example:  Pennsylvania Real Estate Investment Trust (PEI), where PEI is a stock traded that is a publicly owned equity real estate investment trust. The firm manages owns, manages, develops, acquires, and leases mall and power and strip centers primarily in the Eastern United States.

A Jim Cramer original verb... implying that one company is pants-ing another, similar to beating them so badly, that they beat the pants off their competition...

Normalized Earnings Power is the true measure of the sustainable operating profit potential of a business model giving effect to successful strategy implementation in a steady-state economy.  However, current profits are usually dampened by transitory events disguising the true economic potential and earnings power of the company, as indicated by its current stock price multiple.

This is Jim Cramer's description of fancy terms that are mostly used only on Wall Street, among the brokers' community, which are stock and financial terms that are commonly used to describe the current condition of a stock, but are not used or easily understood by the general public, outside of the Wall Street environment.   Jim commonly refers to these terms as "genuine Wall Street jibberish."

Certificate of Deposit.  Where a bank promises to pay you a set percentage amount of interest, over a specific period.  The downside is that you cannot cash in the CD prior to the end of that period (i.e., without a significant penalty), and with the additional risk (in earnings potential) is that the overall interest rates and earnings potential possible through other investment vehicles may change during that same period.   Example:  Banks commonly offer certificates of deposit for optional periods of 3-month, 6-month, 1-year, and 5-year CDs, where the interest rate is significantly different for each period, based on the assumed risk (from the bank's perspective) that the interest rate trend is either going up or down.

Securities and Exchange Commission.  The branch of the U.S. government that oversees the development and administration of rules, and the enforcement of those rules, that govern the U.S. equities (e.g., stocks and bonds, etc.) and commodities markets.

An article appeared today in The Wall Street Journal about (stock)...  Or, if a analyst firm, like Merrill Lynch or Sanford Bernstein "puts out a piece" about a stock, this indicates that they have done extensive research about a stock, and have published their summary findings in a research report or article about that stock.

If the debt-to-capitalization ratio is 15%, this means that the company's total debt is 15% of its total market capitalization.

In the "House of Pain" with a stock... Very simply, your stock is doing poorly, causing you pain.   Usage:  "I am really in the house of pain in that stock."

In the "House of Pleasure" with a stock... Very simply, your stock is doing poorly, causing you pleasure.   Usage:  "I am really in the house of pleasure in that stock."

It means that, in 2009, 2010, 2011, 2012... you're very confident that the numbers are going to get better than they are now, because a company may already have contracts signed that exceed its manufacturing capacity, taking them into the out years and, therefore, allowing you to have great confidence that they can meet/exceed their earnings estimates in the future.  Usage:  "That company has great visibility."

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A call is a contract that gives the holder the right to purchase a given stock at a specific price within a designated period of time. It is the opposite of a put, which is a contract that allows the holder to sell a given stock at a specific price within a designated period of time. Puts and calls are both types of privileges, or options, that add flexibility to the securities market. In return for a put or call, the investor pays a fee to the potential buyer or seller of the stock (the maker), who, in turn, pays a commission to the broker who brought the two parties together. Calls are generally used by investors who want to profit from a rise in stock prices but, at the same time, want to avoid sharp losses. Thus, an investor holding a call chooses one of two options. If the market advances he can buy the designated security at the lower price quoted in the call, and then sell the stock at a profit. If the market declines, he can simply exercise his option not to buy the stock, thereby avoiding a major loss, the only expense being the cost of the option. A put is used by investors seeking to profit from a fall in stock prices. For example, an investor holding a put for a stock that declines in price is able to sell the stock at the higher price quoted in the put, thereby profiting by the amount the stock declines from the put price; if the stock price rises the investor can lose only the money used to purchase the put option. Puts and calls are generally written for 1, 2, 3, or 6 months, although any period over 21 days is accepted by the New York Stock Exchange. A straddle and a spread are combinations of puts and calls occasionally used by sophisticated investors. In a more generalized sense, the term call may refer to any demand for payment.

Buy a stock in steps, or legs, where you do not buy your total position all at once, but buy the stock incrementally, over a period of time.   An example would be to have the goal of buying 100 shares, and buying the stock 20 shares at a time, for a total of five transactions, or legs, of buying that stock.    An example, taken from the 3/20/08 Lightning Round, which refers to AGU, where Jim Cramer said:  Agrium (AGU)...  you buy a little...  That's my advice... buy some at $62, and then wait until $57... use a 5-point scale...  to be able to buy some AGU... not more aggressive than that...   In this example, Jim is recommending that, for AGU, he suggests buying that stock by legging into it, at $5 increments in its share price... at $62, near the current price, and then waiting to see if it goes back down $5, to $57, and then buying the next leg of your goal amount for your total position...  

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See Puts and Calls.

Individual stock traders/investors who watch Mad Money, and need to know stock symbols and other more basic information about a stock, to be able to do your own homework; beyond what the pros may take for granted.   Usage:  "For all you homegamers, that stock symbol is G-O-O-G for Google (GOOG)"

This is said by Jim Cramer before starting the Sudden Death stock picking round. Refers to the nickname given to the rabbit that lures greyhound dogs to race around the track,
named, "Swifty"... The announcer for dog races would say at the start of a dog race, "There goes Swifty!"...

(Pig Latin usage)...Nix...   Usage:   "I like (one stock), but ix-nay on (that stock)..."

Taken from a sailing term... The form hand over fist, instead of the original hand over hand, is an obvious and natural variant (close your hand around a rope and you do, indeed, make a fist), to 'speedily; increasingly', the sense in "making money hand over fist"...   Usage:  That company is making money hand over fist...

Definition/Explanation...

When you hit one pin, you find out what other pins are going to do, or you can predict that other stocks in the same industry or sector might benefit (or suffer) from the news that affected that original stock.   Usage:  "Let's look at the possible pin action there might be in other internet stocks from the potential takeover of Yahoo! Inc. (YHOO) by Microsoft (MSFT)"...  or...  Since Verizon (VZ*) is an enormous behemoth of a company, there's got to be some pin action!  There's got to be some pin action here. If VZ's doing well, then so are a lot of other ancillary companies that supply VZ.

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Comparisons.   When comparing this year's overall numbers or, as used in retail, a company's "comp store numbers", it refers to the comparison to this year's performance versus the same period, one year ago.

As in,   Usage:  Buying that stock would be like trying to catch a falling knife.   It would cut you if you try to catch it, as it's going down...

Usage:  We recommended that stock 50 points ago (i.e., when it was $50 lower in price)

The same or similar type of industry or business or stock type.   Usage:  That stock (i.e., Deere (DE) is in the same cohort as other agricultural giants.

Compound Annual Growth Rate (see it in annual reports)...

The Virtuous Circle of debt reduction, where companies use the cash they get in to pay down debt, especially as interest rates go down, which gives them more cash in the future, because there's less interest to pay, which they use to pay down even more debt, and so on...    Usage:  As the stock goes higher, they will print more stock, and pay debt holders - that's right, bond people - the stock, fixing their balance sheet, which then drives the stock higher, which then allows them to issue more stock and reduce their debt even further.  That's the virtuous circle.

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Determine the growth rate, and then look at the price-to-earnings (P/E) multiple... We're willing to pay twice the growth rate...   Usage:  UBS says First Solar, Inc. (FSLR) can earn $10 a share in 2010... Now that's okay... At this point in the year, when we're about to switch the calendar to 2008, it's okay to look two years out... Do you know, in 2010, this company's trailing only 24x earnings?... with a 56% long-term growth rate... The multiple is chump change... Remember how we look at it on Mad Money... We look at the growth rate, and then we look at the price-to-earnings (P/E) multiple... We're willing to pay twice the growth rate... We should be willing to pay over 110 times earnings for FSLR...

Actually derived from the term, "Nine ways from Sunday" (also used in several other ways, "Seven ways from Sunday", "Five ways from Sunday", etc. which simply means "completely."  So, to sell a stock "nine ways to Sunday" is to sell it completely.   Usage:  I want you to sell that stock nine ways to Sunday!

This is Jim's famous mantra, that Accounting irregularities equals 'sell'...   In other words, if a stock is doing well and then announces that it has found, or is restating its earnings, due to accounting irregularities, then you should sell that stock.

Prior to an Initial Public Offering occurring, the word on the Street regarding what the initial price range for the IPO may be.   Usage:  The Price Talk is that the new Visa Inc. (V) IPO pricing will be from $37 to $42...

A company that supplies other companies as a vendor of equipment or services that support multiple companies in a growing industry or sector.   Usage:  ADC Telecommunications Inc. (ADCT) is an arms dealer, okay?... between telecom and cable... they supply both sides. So, as long as the big boys are fighting over share, ADCT wins...

Definition/Explanation...

To get to the stock price, you have to figure out what the earnings will be... and then multiply them by something... the multiple...  Price (P) = Earnings per share (E) x Multiple (M)    So the stock price should be = Earnings x Multiple.... (M)ultiple x (E)arnings = (P)rice of the stock that you pay... So, if the earnings go higher, then the stock price goes higher...   Example:    So, the issue is solving for M, right... and the M is a subjective blend of consistency, execution, visibility and, ultimately, the growth of both the company and the business. That's how you arrive at a price. And what I'm saying is that the M, the multiple, for Dominos Pizza Inc. (DPZ) can't be as good as the multiple for Papa John's International Inc. (PZZA), because DPZ is a complainer about the environment and didn't deliver, with the exact same ingredients, and PZZA executed and delivered.

A slimy practice done by some mutual fund money managers, where they actually pay more for a stock to bid it up - or mark it up - in price at the end of a quarter or year-end, so that they can report the final (higher) stock price in their portfolio, which will then reflect better overall performance in that particular stock.  This is one of those slimy practices that a lot of people like to pretend doesn't exist... but it's not technically... Well, the SEC (i.e., U.S. Securities and
Exchange Commission) will prosecute for it... It moves stocks, and a lot of fund managers do it...  See a complete reference to this practice - and how Jim Cramer said you may be able to make money off of it - in this segment of MadMoneyRecap.com from 12/21/07, here...

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Holding a stock as a longer-term investment, or have already held a stock and continue to hold it.

The practice of taking advantage of a price differential between two or more markets (or between the current share price of a stock, and the proposed buyout or acquisition price per share of a stock): a combination of matching deals are struck that capitalize upon the imbalance, the profit being the difference between those market prices.   When one company buys another, the arbitragers short the acquirer, and go long the company that's being bought.  That puts pressure on the acquirer - the buyer - and sends its stock lower.

A stock that has pent up pressure to go up - or spring up, as if a spring that is compressed - due to pending positive news, or given that it has been unfairly sold down and, therefore, has significant upward pressure to go higher soon.

Incoming revenues that are expected at a company, based on signed contracts and/or orders.  Usage:   They have a great book of business that provides great future visibility, all of which make it a great stock where we should not see any earnings disappointments.

This originates in the Louisiana bayou area.  It is an expression of excitement and positive greeting from natives from that southern area.  Jim Cramer adopted this expression when a caller from New Orleans, Louisiana yelled out, "Boo-yah Cramer!"  Jim liked it so much, he adopted it into the Mad Money program.  (and, yes, Jim does give full credit to this caller)

When a company provides guidance that is likely much lower than what they can achieve.  Therefore, if their guidance is that the company will make 14 cents a share, and they can actually make 22 cents a share, they are "sandbagging" their numbers, so that it will be easy to exceed the next quarter's number, and then make the stock price go up.  Usage:   I think the guidance was sandbagged... I think the stock has got a floor here. I want to buy Riverbed Technology, Inc. (RVBD). I like their technology... (from the 2/7/08 Mad Money show)

Yield is commonly used to describe the dividend yield of a stock.  This is calculated by determining a stock's stated dividend amount per share, and then taking the current share price, and dividing that price by the stated dividend, therefore determining the resulting percentage amount that the dividend represents - as a percentage of the current share price - or, the current "dividend yield."   As the share price fluctuates, so does the calculated dividend yield, because it is always in direct relation (i.e., relative to) that share price.    Therefore, there is an inverse relationship of share price to dividend yield.  As the share price goes up, the dividend yield (i.e., percentage) will always go down, and vice-versa.    Example:   If the stock,  Weyerhaeuser Co. (WY) has a current dividend of $2.40 per share, and its current share price is $62.43, then its resulting dividend yield is 3.84%.  If the share price were to shoot up to $100, and the dividend amount of $2.40 stayed the same, then that dividend yield would go down to just 2.40%.

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Relating to the United States government, and relates to how the Bush administration would do almost anything to be pro-business, and support the corporation, such as approving the merger of two very similar companies, such as Exxon and Mobil, without anti-trust objections.

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Refers to Microsoft (MSFT)

What Jim Cramer refers to as "Chinese Communists"... as the government that Chinese-based companies cannot completely operate autonomously from...

Definition/Explanation...

This is Jim's assessment that, given the market conditions surrounding/circa March 2008, that these four stocks cannot be allowed to fail, as they are perilously similar in problems to Bear Stearns (BSC), before it was bailed out - albeit via a fire sale at $2 a share (initially) - by JPMorgan Chase & Co (JPM).   They include:  UBS (UBS), Merrill Lynch (MER), Citigroup (C), and Washington Mutual (WM).

Referring to a bull's horns, pulling in my horns is a reference to hearing news or events that cause one to become less bullish about a particular stock or sector.

Growing in size by the external addition of a second company that is being acquired by the first company. Often used to refer to an acquisition which is expected to increase earnings per share.  Does not dilute the value of the stock of the first company or reduce its earnings per share.   Note:  The opposite of an accretive deal is a dilutive deal.

A passively-managed mutual fund that is structured - with its individual stock holdings - to mirror the performance of a specific index, such as the Dow Jones Industrial Average (i.e., the Dow), the S&P 500, or the Nasdaq.

As in bombed with bombshells....   Usage:  We are seeing a major selloff in retail. We're seeing a major selloff in the banks. We've got a bunch of downgrades there... I don't know if I want to buy the banks, until we get the Ambac (ABK) plan hammered out, or something like that, although I think the banks are going to bounce back. But retail shouldn't be shelled nearly as hard as it's being shelled right now... (2/4/08)Growing in size by external addition. Often used to refer to an acquisition which is expected to increase earnings per share.

Shares outstanding.   Usage:  And, now that the bad news seems to be in the past for Black & Decker (BDK*), it's stock is benefiting from the huge reduction in shares that BDK's mammoth buyback has made, and made happen over the last four years...  They've basically almost cut the float by a third!... There's just not that much supply out there. So, when everyone's trying to buy this one, it just shoots up!... (From the 2/1/08 Mad Money show)

That bad news has already been taken into consideration, and the share price is down already because of it.   Usage:  The stock got more attractive, because the decline in earnings became what we call "baked in" to the share price.

This is a snapshot assessment of a stock, evaluating what the estimated risk of a stock going down, versus the possible reward of a stock going up, given the current environment for that stock.   Usage:  I believe that stock has a risk/reward of 3 down, and 10 up... indicating that it may have a risk of going down $3 per share, but a reward of potentially going up $10 per share.  Therefore, the risk/reward level for that stock is quite good. 

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The CEO Wall of Shame, where Jim Cramer has identified what he believes are the most worst, most incompetent, most clueless CEOs, who actually hurt their stock share price, simply by remaining as their company's CEO.  See the latest Wall of Shame list of CEOs here.

Literal translation from Spanish, meaning "on fire"... indicates that a stock is really doing well, really hot right now.   Usage:  That stock has been en fuego!  It's been up 8 straight points in the last two weeks.

Dollars.  This is a bit of an outdated stock market term, which is how stock performance was measured by going up or down a certain amount of points.   Usage:  That stock has been up 8 straight points the last two weeks.  (i.e., the stock has gone up $8 a share in the last two weeks).

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Return On Investment.

Where the price of a stock is currently at a level where perfection is expected.  Therefore, if an upcoming earnings report shows any surprises, or disappointments of any kind, it would then be expected to react sharply, by going down.   Usage:   I had been worried that it was priced to perfection... If Benioff didn't deliver a blowout of blowouts, Salesforce.com (CRM) would crater... as momentum investors, and weak hands, desperately sold the stock down... (from the 3/7/08 Mad Money show)

In finance, the yield spread is the difference between the quoted rates of return on two different investments, usually of different credit quality.   The "yield spread of X over Y" is simply the percentage return on investment from financial instrument X minus the percentage ROI from financial instrument Y (per year). The yield spread is a way of comparing any two financial products. In simple terms, it is an indication of the risk premium for investing in one investment product over another.   Usage:   I recommended NLY*, even though that's exactly what it does... it borrows from banks and brokers at a low rate. It was 4% the last time the company reported... and then takes that money and buys bonds issued by Fannie Mae (FNM) that pay about 5%... It's called "spread"... not much of a spread, a 1% difference... (from the 3/7/08 Mad Money show) 

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Go down.   Letting a stock come in, refers to the prediction that a stock will decline, so you should be patient and let a stock come down before buying it.    Usage:  It's interesting, Nordstrom Inc. (JWN) got upgraded... I don't want to buy that. You've got to let that come in...
(from the 2/4/08 Mad Money show)

Definition/Explanation...

When a company acquires another company with its own common stock and, therefore, issues more stock in a secondary offering, and does it over and over again, as it makes more acquisitions.

After the initial public offering of stock to investors.   Also called just a "secondary." 

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The initial public offering (i.e., IPO) of stock is the set number of shares of stock and the price that is fixed as the IPO price for that initial offering, on their IPO date.   For example - especially incredible given its performance to date -  Google (GOOG)'s IPO was set at $85 per share in April of 2004.   Google now trades at this price.

The number of recommendations that Jim Cramer provides to a single caller, into his Lightning Round segment on his Mad Money show.  Two-fer, three-fer, and sometimes he mentions a four-fer and a five-fer... depending on how many combined recommendations he might make to buy or sell.

Negative implications or take-aways which can be applied to a company's quarterly earnings report.   When a company reports a quarter that's full of great looking numbers, but
the quarter isn't clean... it's full of one-time gains, or it's not sustainable...   Usage:    That company's earnings report had way too much hair on it.    I am telling you that Exxon Mobil (XOM) had hair on it, meaning not everything was perfect... XOM is a great example of what a quarter with too much hair looks like... (from the 2/4/08 Mad Money show)

Conclusions that you can come to, or take away from, a report from or about a company.  Usage:  The take-aways from that quarterly report is that they have poor visibility, and that we shouldn't trust that they can make their future numbers.

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Estimated earnings per share.   Usage:  They will find it very difficult to make their numbers for the fourth quarter.

An estimated bottom point for a company's share price.   Usage:    I think the guidance was sandbagged... I think the stock has got a floor here. I want to buy Riverbed Technology, Inc. (RVBD). I like their technology... (from the 2/7/08 Mad Money show).  The opposite is a projected "ceiling" for a stock - the estimated "top" point for a company's share price.

To Back up the truck - indicated by Jim, when he says the stock is so good, that he would do a 'mon-back' on the stock... In other words, this is the sound someone would say to a truck driver, "Come on back... " as he is "backing up the truck" to load up on his cargo. Translation for buying stocks: This recommendation by Jim indicates that, after you do your own homework on the stock, you should feel comfortable loading up on it, as it is in a good position to be bought at this point.

To do a 'mon-back - indicated by Jim, when he says the stock is so good, that he would do a 'mon-back' on the stock... In other words, this is the sound someone would say to a truck driver, "Come on back... " as he is "backing up the truck" to load up on his cargo. Translation for buying stocks: This recommendation by Jim indicates that, after you do your own homework on the stock, you should feel comfortable loading up on it, as it is in a good position to be bought at this point. 

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Definition/Explanation...

To sell part or all of a stock position.   Usage:   After making that much profit, you have to take some off the table.   Jim Cramer's specific recommendation is to follow the practice of taking all or most of your profit off the table, and letting the rest run, thereby playing with the house's money...

Your position in a stock is how many shares you own, or are shorting of a stock... or how many shares of stock you would like to own, in total, of a given stock.    Usage:   I would not be in a short position in that stock, because I expect it to go up with this news.

Jim Cramer uses this phrase frequently on his Mad Money show, when he refers to "taking profits off the table, and letting the rest run."  This indicates that, after selling stock to lock in your profits, you then hold onto the remaining stock, and let it work for you. 

Taken from a casino term, this is the money remaining over and above your initial investment (or bet), or your base.   

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To sell a stock that you do not yet own, as some brokerages will allow you to do, once you have been credit approved. Betting against a stock, hoping that it will go down in price.  Actually "selling" a stock you don't own, by borrowing the stock (usually from your brokerage, who owns it), and then buying it once it goes down, for a gain of the difference in price.  This is done by both individual investors and large money managers, predicting that a stock will go down from the price that you shorted it.   If a stock is "sold short" at a higher price, and then bought after it has fallen, the difference in price is the profit gained from that shorting activity.    Usage:  I shorted stock in Mattel Inc. (MAT) last month, at $26.50, when I heard that their Chinese toy supplier was cited for lead paint usage, causing them to recall many toys.  I then bought it yesterday at $20.50 to cover my short position, making $6 a share in profit.

This description is best made by taking an excerpt out of Jim Cramer's show on 3/11/08 (opening segment)...

In this market, you want to trade around a core position... I talk about this in every single one of my books...  It's not that complicated...

Pay attention.  Very important... Say you own 100 shares of Potash (POT)... a Cramer fave.  It's up big today, so you sell 25 shares here, up huge...  Up $10...  It should be up more in about 5 trading days... and you say, why don't I hold it all... because I don't know... I'm no seer...  but that's how oversold rallies have worked.  That's the pattern.  They tend to be higher a week from the day they start.  So, in 5 days, you sell another 25 shares of POT... And then, if it comes down, because of some miserable selloff, caused by some Fed governor who says that I don't believe that the real problem is recession, it's inflation...  Then, if the price drops below where you sell it today, you buy back 25 shares.  It's just buying low, and selling high...  Only you never buy or sell more than a small fraction of your core position (i.e., trading around your core position)...   That's my recommendation for how you stay ahead in the market.

When a stock has little or no coverage by the analyst community.  For example, no analysts cover the stock, and there are no buy, sell, or hold ratings on it.

A takeover of one company by another, but for lower than the last closing price of the company that is being acquired.  Where usually a takeover of a company will result in its stock price going up - because the takeover bid is higher than the recent stock share trading price - a takeover that is for less than the going share trading price is known as a "takeunder."   Example:   The 3/17/08 announcement that JPMorgan Chase & Co (JPM) was going to acquire Bear Stearns (BSC) for the negotiated deal of just $2 per share of stock outstanding.  Whereas, the previous trading day's closing share price for Bear Stearns was significantly higher, at $30.00 per share (i.e., on 3/14/08). 

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Of the same type of stock or in the same industry or sector

Original investment, or the average share price of several stock purchases, sometimes referred to the "average basis."   Usage:  My cost basis in that stock is $42,000, but I am up $10,000 as of today, because the quoted value is $52,000 at current prices.

This is a common phrase used by Jim Cramer on his Mad Money show, referring to the investing state of mind that you must maintain...  After you do your own homework, you can be a bull on a stock and make money, a bear on a stock and make money or, if you blindly hold onto a stock that has increased significantly, and created a lot of profit for you, you can "get slaughtered" from being too greedy.   If you make money in a stock, Jim Cramer recommends that you reduce your position either entirely, or partially, by taking some off the table.    Usage:  Here's my take on Mastercard (MA)... If you own it, you can continue to own it, but you should have sold some... you should have locked in the gain. We first started recommending it from $60, down to $40... If you haven't taken any off the table, bulls make money, bears make money, and hogs get slaughtered... (from the 2/8/08 Mad Money show)

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Mergers and Acquisitions.

Definition/Explanation...

Multiple contraction means the market will start paying a lot less for a stock, for the same amount of earnings. In other words, the market has decided that, even though the earnings estimates aren’t coming down, they are just going to pay less for them.  Usage:  On Jim Cramer's 3/6/08 Mad Money show, he gave an example of multiple contraction, among defense stocks, where their prices actually went up since July of 2007 to March of 2008, because their stock prices had actually gone down, but had not kept pace with the relative rise in their earnings... "here's a great situation, where the multiples have gotten undeservedly smaller, while their earnings are going up..." 

(M)ultiple = (P)rice divided by (E)arnings or the price-to-earnings ratio that is shown on so many stock reports as their P/E's.   Usage:  The multiple, or P/E, of Google (GOOG) is roughly half that of its biggest competitor, Yahoo! Inc. (YHOO)...  therefore, it could be considered a much greater value as an investment.  

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Raised in Queens, New York City, Icahn developed a reputation as a great corporate raider after his hostile takeover of TWA in 1985.[2]

Speaking before the Senate Judiciary Committee on Airline Consolidation on February 7, 2001, Representative Gregory W. Meeks spoke of, “… an [airline] industry that once-upon-a-time, not too long ago, was represented by two individuals whom I believe have the lowest of character and no integrity. Two individuals who intentionally bankrupted successful companies for their own personal gain. As many of you know, I am speaking of Carl Icahn and Frank Lorenzo.”

Icahn was educated at Princeton University (A.B., Philosophy, 1957) and New York University School of Medicine, where he dropped out before graduation.

Icahn began his career on Wall Street in 1961. In 1968, he formed Icahn & Co., a securities firm that focused on risk arbitrage and options trading. In 1978, he began taking control positions in individual companies. He has taken substantial or controlling positions in various corporations including: RJR Nabisco, TWA, Texaco, Phillips Petroleum, Western Union, Gulf & Western, Viacom, Uniroyal, Dan River, Marshall Field, E-II (Culligan and Samsonite), American Can, USX, Marvel Comics, Revlon, Imclone, Federal-Mogul, Fairmont Hotels, Kerr-McGee, and Time Warner... and most-recently, Motorola and Blockbuster.

Icahn made extensive use of financier Michael Milken's junk bonds. After the junk bond and overall market bust in the early 1990s, Icahn played a lower-profile role in the business world, preferring to be less public in his dealings.

In recent years, he has become much more of a public shareholder advocate, pushing boards of trustees to improve the value of their stocks, by buying large quantities of a stock, such that he would have a significant enough stake in the company to be able to force action by the management and boards of several companies.

 Read more about Carl Icahn >>

Definition/Explanation...

See sandbagged.

A stock that depends heavily on the economy.   Usage:   Some of you are probably interested in a great, steady story...  that seems to have very little cyclicality... although, at times, there was some cyclicality... meaning, it's depending on the economy...

$100 a share.    Usage:  That stock is headed for par.

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See Par.    Usage:  That stock is headed for one-hundo.

When a company borrows money.

When a company is paying down debt, or making efforts to pay off its debt.

The opposite of baked in.   News or an upcoming event that the current share price of a company does not yet reflect.    Usage:    The strong flu season is what I call, "not in the
numbers"... meaning no one's estimating it - from Wall Street - no one's estimating it will be this good... or bad, depending on your perspective... The phrase that's important here about Quidel Corp. (QDEL) is that the flu season is "not in the numbers"... That's the power of "not in the numbers" information...  (from the 2/8/08 Mad Money show)

Sell your stock.     Usage:   I think you should ring the register (sell), and take some of that off. You have a nice gain. Don't give it back!...

Market capitalization minus cash, plus debt.

Buy some stock.      Usage:   Before the conference call, and before the earnings report comes out, I think you want to put some on.

This is Jim's term for all economies and markets in the rest of the world, other than the United States which, therefore, makes them less vulnerable and sensitive to a weaker U.S. economy.

A stock rally, where stocks go up generally, because the market has been oversold in many sectors, therefore, causing a "bounce" effect, because the stocks are thought to have sold off much more than they should have, and are bouncing back up in the form of a rally, given that they were oversold to much lower prices than were justified by the bad news either in the economy or marketplace in general, or for that stock specifically.

Trading refers to buying (or selling short) a stock for anticipated short-term profits.   Investing is a term used to refer to the longer term hold of a stock position, anticipating consistent growth (and increase in share price) of a stock, because of strength in fundamentals and/or because of a supportive dividend in that stock.  

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Established by a public company, this is a special quarterly distribution of cash back to shareholders for each share of stock that they own.  This can also be announced and distributed to shareholders as a special one-time "special dividend" set at a usually higher flat amount per share.   Usage:   Although it had a quarterly dividend set at less than 10 cents per share, TD AMERITRADE (AMTD) announced that it would award a special dividend of $6.00 per share owned, on 1/25/06.

Treasury bonds.  U.S. government-backed bonds - usually purchased as a 10-year bond, or a 30-year bond.  Also called a long bond. 

Definition/Explanation...

Try to guess what to say, or recommend, with comments off the cuff...  

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Earnings before interest, taxes, depreciation and amortization.

Five stocks related to agriculture... We call them the Fab Five