Open Book: How to Decipher Wall Street's Secret Code

Editor's note: The following column was written by author and former Wall Street analyst Stephen McClellan.

After toiling for more than three decades as a Wall Street stock analyst , I walked away at the age of 60 and immediately took off for the ski slopes of Utah. On the plane, within minutes, no sooner had I finally started to distance myself from the securities industry than some nettlesome business-class airline passenger was inundating me with naive stock-market queries.

During my professional career, I had dealt exclusively with mutual fund portfolio managers and similarly sophisticated insiders. Now, though, I was suddenly confronted with an unversed innocent, a chap who was oblivious to confounding brokerage firm tactics that invariably lead ordinary investors astray. With a combination of exasperation and sympathy, I realized that my traveling companion actually took Wall Street research directives literally (a mistake that no pro would ever make). Then a jarring thought struck me. There is a whole world of such individuals out there.

Wall Street's best advice is intended to benefit its best clients: large institutions like banks, insurance companies, and hedge funds. This community of full-time equity investors has developed and perfected its own nuanced patois, which can be nearly incomprehensible to outsiders. (The same thing happens in every specialized field, whether it be football coaching or copper mining or higher mathematics.) The "anointed" understand one another and respond effectively. Outsiders, however, might be left grasping at straws -- misinterpreting messages, taking deceptive code words at face value or otherwise "wandering off the reservation." ...