When History Majors Invest

I'm no financial expert. I'm an erstwhile history major hoping to be able to retire in relative comfort. My academic advisor in college wholeheartedly supported my choice of a history major, saying it would make me interesting at cocktail parties.

Like many people without investing experience, I knew little about the stock market. Working as a Motley Fool copy editor, I encounter a language barrier, where beta has nothing to do with fish, and hedge funds aren't what everyone uses to hedge their investing bets.

In the spirit of learning, here are two terms I'm dying to work into my cocktail-party chitchat:

Secular: No, it's not a lack of religious fervor about the stock market. For investors, secular means long-term. A secular shift in market forces could give investors clues as to what sectors might be bearish or bullish into the future.

Commodity: Is it possible to discuss Yamana Gold (NYSE: AUY  ) or ExxonMobil (NYSE: XOM  ) without using the word "commodity"? It would be easier to blog about reality television without using the phrase: "Are you kidding me?"

But why is oil a commodity and not, say, laundry detergent? Here's the thing: While you might argue whether Tide or Gain is the best detergent, commodities are basic goods that are essentially interchangeable regardless of where they come from. For instance, pork bellies, which are used to make bacon, trade in 20-ton lots on the futures exchanges. You'll never find 40,000 pounds of pork in the grocery aisle.

As for me, I'm going to stick with rubbing puppy bellies and serving bacon cheese puffs at my parties. But knowing even that much about commodities puts me in a better position to think about companies like Smithfield Foods (NYSE: SFD  ) and Zhongpin (Nasdaq: HOGS  ) .

Even if you're not an investing expert, you can always learn something. The more you find out, the better it all fits together in your head. At least that's what my cocktail-party friends tell me.

Class is always in here at the Fool. Take a 30-day free trial of any of our investing newsletters for A+ lessons on how to win in the market.

Kris Eddy does not own shares in any company mentioned in this article. The Fool has a disclosure policy.


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