STOCK, n.

Posted: 19 November 2015 in Uncategorized
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Stock, according to Jason Zweig’s new book, The Devil’s Financial Dictionary, is defined as

The right to own a fraction of a business, regarded by most investors as the right to play a video game.

The word “stock” is rooted in the Old Teutonic stukko, a stick, trunk, or log—an ancient metaphor largely forgotten as television and the Internet have reduced the idea of a stock to a TICKER SYMBOL and a stream of prices flickering on a screen. A tree trunk is a solid foundation for many branches bearing green foliage and grows higher unless it is trimmed back, in which case it sprouts new growth. The history of the word stock thus expresses what most investors want from a stock itself—but seldom get, because they treat it like a weed rather than like a tree.

As early as AD 862, it appeared in Old English as stocca or stocce. One of its earliest meanings, by analogy to a tree trunk that generates many smaller branches, was as the source of a line of descent. That sense is still used, as in “She comes from good stock.” In another early nuance, stocke meant a stem in which a graft, or transplanted twig, is inserted.

Early on, stokke referred to the wooden chopping blocks on which butchers and fishmongers hacked up their merchandise. In 1282, a “stokkes market” was built in the heart of the City of London; it survived until Dickens’s day. A city chronicle recorded, “This yere [1450] the stokkes was dividid bitweene fishmongers and bochers [butchers].” Because London’s securities market later sprang up in the same district, it is conceivable that the term stock market originated in this haggling, open outcry, and bloody chopping of goods into little pieces for resale.

A stoke or stocke of money appeared in English by the fifteenth century to describe a sum set aside to fund future expenses. Soon, the image of a deeply rooted core or trunk led stock to mean the total wealth of an individual or nation.

In 1729, for instance, Jonathan Swift’s “A Modest Proposal” satirically claimed that if the Irish raised babies for food, “the Nation’s Stock will be thereby encreased Fifty Thousand Pounds per annum.”

Stock was first used to describe the funds available for a company’s operations in the early seventeenth century. “Many…put in different summes, which all together made up six hundred thousand pound, the first stock upon which this Company has built its prodigious Encrease,” a historian of the East India Company wrote in 1669. Individual shares of that total were called stock as well, as were what today we call bonds.

Instead of playing with stocks as if they were blips in an electronic game, investors would be far better off planting them like trees.

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