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CONTENTS FEATURE: Weird investment and finance terminology — part two GRAMMAR COACH: Fielding your questions FINDER'S FEE: Recommend a friend—and earn up to $500 FEATURE: Investment and finance terminology includes some really wild jargon      Beware of crawling pegs, falling knives and zombies. Spark spreads and Rio hedges can be perilous. And barefoot pilgrims hoping for a Goldilocks economy should know that a remittance float may not be as refreshing as it sounds.      These weird terms may seem like they've been lifted from a fantasy novel, but they're part of the jargon of the financial markets (which we began discussing in the June edition of EditPros news).      The argot of finance is camouflaged by obscure references to knighthood, fairy tales, hardware store items — and offensive ethnic stereotypes. Knight sweats      Corporate executives need to be vigilant to guard against attacks by a black knight. That's a slang term for a company that mounts a hostile takeover attempt on a target company.      Once-hostile suitors sometimes are forced to back down because of inadequate resources or other reasons, and wind up pursuing a merger with the target company. That change of course labels a suitor as a yellow knight — because it has "chickened out."      A company under threat of a hostile takeover may turn to a white knight, another suitor that would agree to present more palatable financial proposal.      A black knight that encounters unanticipated resistance may enlist the aid of a gray knight, which is a second, unsolicited bidder. The gray knight bolsters and takes advantage of the black knight's assault on the target company. Name dropping      One turncoat corporate-takeover approach is known as the Lady Macbeth strategy, in which a third party poses as a white knight to gain trust before defecting to join with a hostile bidder.      An investor who refers to "the Old Lady" may not necessarily be guilty of ageism. That's a nickname for the Bank of England, an abbreviated variation of "the Old Lady of Threadneedle Street," which is a reference to the bank's location in London.      Convicted investment swindler Bernard Madoff recently became synonymous with the term Ponzi scheme, an illegal pyramid ploy under which the promoter uses money from new investors to make interest and principal payments to earlier investors. The scheme collapses when required payments exceed new investments. The U.S. Securities and Exchange Commission explains that the scheme was named for Charles Ponzi, who duped thousands of New England residents with a postage stamp investment scheme in the 1920s. In an attempt to take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons, Ponzi told speculators that they could achieve a 40 percent return on their investments with him within 90 days. "Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period," the SEC reports. "Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had purchased only about $30 worth of the international mail coupons." Defense mechanisms      A company that is the unwilling target of a takeover attempt may stun its suitor into submission by means of the Pac-Man defense. Using that technique, the target company begins buying and amassing common shares of the suitor company in an attempt to acquire and absorb it. The name "Pac-Man defense" was inspired by a 1980s video arcade game in which the player must protect the dot-swallowing Pac-Man character from other characters that threaten it.      The jocularity of the term "Pac-Man defense" is in sharp contrast with the dark humor of another moniker. A target company seeking to avert its takeover at all costs may resort to tactics of desperation — for example, shedding its most desirable assets or assuming greatly increased debt as a means of making the company undesirable to the suitor. That self-destructive tactic is known as the Jonestown defense, a reference to the bizarre mass suicide that "People's Temple" cult leader Jim Jones led in 1978 in Jonestown, Guyana. Once upon a time ...      Consider this eclectic guest list: Sleeping Beauty, Goldilocks, pilgrims, angels and rabbis all have been invited to the same party.      A sleeping beauty is a company that is vulnerable for takeover but has not yet been approached by a prospective suitor company.      An economy that is "hot" can cause inflation. You're experiencing the recessionary result of an economy that, in contrast, is too cold. But an economy that hits the sweet spot that's neither too hot nor too cold, but is just right, is called a Goldilocks economy in reference to the bowl of porridge that the fairy tale character gobbled.      Gobbling brings to mind a barefoot pilgrim, which is a slang term that refers to a novice stockholder who has lost all money invested in the stock market as a result of unwise trading.      An entrepreneurial company that is unable to secure a needed loan from banks or other traditional sources may be able to obtain a cash infusion from one or more angel investors, so called because they serve as a guiding benevolent force. Angels, of course, anticipate a high rate of return on their investments as compensation for the high levels of risk they assume.      Companies that are unable to fund a deferred-compensation benefit plan for employees through a qualified plan may instead establish a rabbi trust. The employer must follow strict guidelines and receives no compensation for contributions to the irrevocable trust, but does qualify for a tax deduction when employees collect funds from the trust. The trust was so named after members of a religious congregation gained Internal Revenue Service approval to establish such a program for their rabbi. How about a snack?      Carrot equity is a term for a provision in a certain securities that enables an investor to purchase additional equity in a company without paying an extra premium if it meets specific predetermined goals in earnings per share, net income or other parameters. The term is a reference to the proverbial carrot dangling from a stick that induces a horse to run.      In contrast, a security issue without any unusual features is known as a vanilla option.      The time period during which a "check is in the mail" is known as a remittance float. The term "float" refers to the lag between the date a check is written and the date when the individual's financial institution transfers funds from remitter (payer) to the recipient's account.      Some companies or syndicates choose to offer bonds in a currency other than the currency of the country or market in which it is issued. Such a bond is called a Eurobond. Issuers can originate the bonds in the country with the most favorable regulatory requirements. A Eurobond offered by a Japanese company or syndicate is known colloquially as a sushi bond.      Such ethnic stereotyping is disturbingly prevalent among nicknames for financial vehicles.      Samurai market is a slang term for the foreign-dominated stock market in Japan.      One type of foreign-currency bond issued in Japan by foreign entities is known as a shogun bond or a geisha bond.      A foreign bond issued in Spain by a non-Spanish company is labeled a matador bond.      A bond issued on the Australian market by a foreign entity is known as either a kangaroo bond or a Matilda bond, in reference to the song "Waltzing Matilda," the unofficial Australian anthem. "Matilda" is Australian slang for a bedroll or pack containing essential supplies for traveling in the Australian bush country.      A trader who is on the verge of financial or legal troubles may, as a contingency hedge plan, buy a one-way airline ticket to Rio de Janeiro or some other faraway exotic location. Such a "plan B" escape strategy is known as a Rio hedge.      Some financial terminology is whimsically descriptive.      An air-pocket stock acquires that nickname when it undergoes a sudden drop in price — the figurative equivalent of an aircraft that encounters a turbulent air pocket. Similarly, a security or company that has rapidly declined in value is known as a falling knife.      Investors who buy holdings in utility companies are interested in knowing the spark spread, the measurement of the difference between the cost of electrical production (which is largely dependent on fuel costs) and the price that electricity commands in the market.      A stock with shares that sell for less than one dollar apiece may be called a drill-bit stock, a slang term derived from the measurements of drill bits (which most commonly have diameters of 3/4 inch or less).      A company that fails to meet the criteria for listing on a stock exchange may try an end-run approach — acquiring and merging with a company already listed on the exchange. That sneaky strategy is known as a back-door listing.      Although you might expect to find a crawling peg in the storyline of a B-grade horror movie, that investment term denotes an exchange rate adjustment system in which the exchange rate of a currency is allowed to fluctuate within a designated range. The "peg" of the currency shifts in response to inflation or other market factors.      Zombies, a staple of the horror-film genre, inhabit the finance field. Financial analysts may use the term "zombies" to describe companies that remain in operation while they are insolvent or when bankruptcy is imminent. According to legend in the West Indies, a zombie is a corpse that a supernatural force has possessed and animated.      The bizarre lingo of the commodities trading field unnecessarily adds to the confusion that weary investors have felt during the past couple of years. In all, the oddly incongruous terminology that peppers conversations in the critically serious investment field is enough to give anyone the creeps. GRAMMAR COACH: Fielding your questions 1. Kate A. wrote:      "I am guessing that you have had a lot of inquiries about your use of 'deers' as plural of 'deer' [in the June 2009 edition of EditPros News]. Would you kindly explain?" The grammar coach replies:      Kate, yours is the first (and only) inquiry we received about use of 'deers' as plural of "deer" in our discussion about "deer markets." Thank you for raising the question. Both "deer" and "deers" are legitimate plural forms of the noun "deer," according to Webster's New World College Dictionary and Merriam-Webster's Online Dictionary. In the sentence "Between bulls and bears you'll find deers," however, we intended to write "deer" (as we did in plural reference two sentences later). Thanks for spotting our oversight. We expelled the wayward "s" on the Web version of the newsletter (http://www.editpros.com/news0609.html#FEATURE).      By the way, one rule of thumb holds that the irregular plural "deer" is appropriate when referring to any number of game animals in a hunting context (e.g., "he killed three deer this season") but that the conventional plural form (with the addition of "s") can be used in zoological or other contexts (e.g., "during our picnic, three deers wandered into the meadow"). Even so, we'll probably adhere to "deer" as plural in all references, unless "deers" begins to take greater hold as a legitimate plural form. 2. Don F. wrote:      "In your article on the Shaleses in the June 2009 newsletter, you refer the reader to the April 2005 issue. In that issue, I see that you have used a period outside the quotation marks the following way: "s". I realize that the quotation marks are not actually for a quotation in this sense, but they are still quotation marks. Would the period not go inside, following the standard rule that periods and commas always go inside quotation marks?" The grammar coach replies:      You're very observant, Don. And you're also correct that traditional rules dictate placing sentence-ending periods before closing quotation marks. In our discussion about plural and plural possessive forms of names ending in "s" in the April 2005 edition of EditPros News, however, we intentionally violated that convention for the sake of clarity.      As you indicated, we were using quotation marks not to identify spoken quotations, but rather to demarcate individual words and, in some cases, single letters. Normally, italic type is preferred to highlight such examples, but use of quotation marks is also acceptable, according to The Chicago Manual of Style. We did initially set our examples in italics — but in our view that didn't sufficiently highlight the single-letter example s (as this sentence illustrates). Surrounding the letter "s" with quotation marks was preferable (as in this sentence).      Because the discussion pertained to punctuation marks, we didn't want any intervening punctuation marks (including commas and periods) to cloud understanding. We consequently transposed the quotation mark and period in sentence-ending examples. We probably should have revised those sentences to avoid ending with an example demarcated by quotation marks.      We also must take into consideration the limitations of e-mail formatting. Display of e-mail messages is dependent upon the settings in recipients' e-mail applications. Some people have their e-mail applications set to show HTML or "rich text" formatting, but others limit e-mail display to plain text in an effort to limit susceptibility to viruses. Application of formatting attributes such as bold or italic type, therefore, is a bit risky because characters may not necessarily appear on recipients' monitors as intended. We use some character formatting in EditPros News to create emphasis or where it's necessary for stylistic reasons, but do so with a bit of trepidation.      Are you perplexed by some aspect of grammar or word usage? Don't be shy! Ask the "grammar coach" at EditPros and we'll try to help—at no charge, just for the sport of it. FINDER'S FEE: Recommend a friend—and earn a finder's fee of up to $500      Do you know of a friend or colleague whose office can benefit from EditPros' services? If you do, EditPros may reward you with a "finder's fee" of up to $500.      EditPros LLC, established in 1993, performs writing, editing, proofreading and publication management services for newsletters, brochures, Web sites, annual reports, research studies, business proposals, and other informational and marketing materials. Our office is in Davis, Calif., between Sacramento and San Francisco; however, our clients include educational institutions, private corporations, health-care organizations, trade associations, scientific research institutions, Web site developers and government agencies from throughout the United States. We have worked with some of them for more than 10 years.      If you recommend our services to a friend or business colleague, and that introduction leads to an assignment for EditPros, we will award you a "finder's fee" equaling 10 percent of the amount we earn on the first assignment for the new client, up to a maximum finder's fee of $500. Naturally, the finder's fee is applicable only to client organizations for which we have not worked previously.      This offer will remain in effect until further notice. 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