9/20/2011
By Brian Sozzi, Research Analyst

I am thoroughly obsessed with the markets and trying to help average people understand them from the standpoint of profiting, avoiding big-time losses, and discussing nuances at bedtime with confidence.  Both jobs, understanding minute data streams and obscure market messages, and then conveying them to groups of people have admittedly become rather difficult for this brainiac since 2004.  Everyday there seems to be 55 developments that have to be dissected in order to draw one conclusion that unlocks 55 additional developments, not to mention the financial jargon contained in those 110 developments.  Finance peeps in the know don't make it easy as they are trapped inside their own world of arcane terms, which I understand 100%.
Take for example the concept of Operation Twist.  Does a college grad with a non-Ivy league Bachelors degree in finance surfing a financial news website have any clue what Operation Twist means?  Or how about a typical trader on the floor of the NYSE?  No way that one month ago, when Operation Twist began to enter the mainstream financial vocabulary, that said floor trader ever heard of Operation Twist.  It's almost as if these terms are made up by a secretive arm of the SEC that is housed underground.

I welcome all to the Average Joe Investing Handbook, which I will try and update frequently with finance words that make zero sense initially, but can be made so if identified with real life things.  For instance, let's look at Operation Twist, a program devised by the Federal Reserve in the 1960s to creatively ease monetary policy through the purchase of long-dated notes.  To understand this, the average investor has to draw a visual with something found in real life experiences.  So, in my world, Operation Twist is now Operation Pooh Bear, named after that lovable friendly bear in Winnie the Pooh.

In all honesty, Operation Twist is so outdated name wise that it should be revised for 2011.  Operation Pooh Bear works great; the Fed is essentially dipping back into its honey pot (deeply) for additional accommodation, hoping to extract a last drop of sweetness. 

Brian Sozzi
Wall Street Strategies

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