FAQ/Glossary

Due to my belief in best practices, I wanted to give special attention to my style of writing and some of the taxonomy that I will be using, so below are some Frequently Asked Questions (FAQ) that I am hoping to not frequently answer (use the search bar on the top right when on the blog or Ctrl+f on this page to easily find something you’re looking for):

What does XXXXX mean?

I frequently use acronyms and abbreviations since I think they are a very efficient means of conveying something. XXXXX can stand for the ticker of any Stock, ETF, CEF, MF, etc.. I will often times use it to refer to the actually security, but I will also use it as a shorthand to refer to a specific company. Obviously, if that company does not have any public securities, I will refer to them by their full or shortened name. Because of my references to a business by their ticker, it’s easy for you as a reader (and hopefully an investor) to look up information on that company. I will usually link the first instance of such a ticker to a financial research page for more information if you seek it. I will also always pair its first instance with it’s full name to avoid confusion issues.

For example:

The Vanguard FTSE-All World-ex US ETF (VEU) allows investors with not a lot of money to invest in every country in the world excluding the US. VEU has a very low expense ratio of 0.25%. To complement this, one can use the Vanguard Total Stock Market Index MF (VTSMX), but the Vanguard Total Stock Market ETF (VTI) has both a lower expense ratio and the flexibility of a stock in that you can buy VTI anytime during the day while you would have to get VTSMX at the end of the day’s price. An alternative to this ETF is Berkshire Hathaway (BRK.B) stock which has had a phenomenal 20 years. BRKB is led by Executive Chairman and legendary investor Warren Buffett.

Wait… so what are ETFs, MFs, CEFs, HFs, SMAs, SPs, and blah blah blah then?

When referenced without any links, it’s most likely some sort of security. Here’s a quick rundown of some popular abbreviations:

ETF - Exchange-Traded Fund
MF - Mutual Fund
CEF - Closed-End Fund
HF - Hedge Fund
SMA/SAM/SA - Separately Managed Account/ Separate Account Manager/ Separate Account
SP - Structured Product

Some exceptions (yes already!):

PM - Portfolio Manager
PV - Present Value
FV - Future Value
DCF - Discounted Cash Flow
WACC - Weighted-average Cost of Capital
LFCF - Levered Free Cash Flow
NPV - Net Present Value

Other miscellaneous abbreviations of Financial statement information.

No matter what it is, unless I’ve used it many times, I will probably at least give the full name or a link the first time I use an acronym.

What does 2008USD$45Bn mean?

“USD” is the global standard currency code used to describe the United States (US) Dollar. The 2008 in front, making it 2008USD, means that it is in 2008 dollars; so 2000USD would be a dollar’s worth in the year 2000 versus the value of the dollar now in 2008. This allows for some relativity to inflation. “$” denotes currency or money. “45″ is the amount. “Bn” or “B” stands for Billion; Million would be “Mn” or “M”.

What is the difference between Domestic, International, and Global?

This usually varies from person to person, but I think the easiest way to think about is this:

Domestic - the author’s place of residence or most likely the area they are talking about currently

International - Everywhere else, excluding the Domestic country

Global - Everywhere, thus Domestic + International

Chances are that you are in the US and domestic will probably be the US too. Sometimes when people talk about International, they really mean the Developed countries outside the US. I will try to talk in Global terms, so that would include basically every country on Earth.

What are Developed, Developing, Emerging, and Frontier Markets?

I don’t really like this terminology since it is always changing, but:

Developed - the countries that are well-developed, e.g., US, UK, France, Germany, Australia, Japan, and others.

Developing - countries not fully developed but well into the process

Emerging - a subset of Developing countries, but are even less developed

Frontier - a new term, that is meant to encapsulate the remaining countries that no one has paid a lot of attention to in the past that are even less developed than Emerging countries, e.g., Central and Eastern Europe, Africa, Middle East, Vietnam, and others.

What does CC-BY-NC-SA mean?

This refers to Creative Commons and their many licenses.

CC - Creative Commons
BY - Attribution
NC - Non-commercial use
SA - Share-alike

My blog and posts in general are CC-BY-NC-SA, while most of the images I use are CC-BY-SA or CC-BY. This is done so that hopefully my educational goals can be spread to the multiverse freely and not for any money. The art I use should be able to be distributed across anything (they are Wikimedia Commons compliant) as long as the terms of the license are followed.