Monday, March 02, 2009

Coming Soon To A Conference Room Near You

Looking for the latest and greatest business buzzword for use in tough times? According to today's WSJ, the word du jour is "decremental" (sub req):

Every era on Wall Street has its buzzwords, terms that capture a prevailing mood or business theme. In today's era of economic decline, that term is "decremental."

It is showing up these days in analysts' research reports for companies ranging from Caterpillar and Baker Hughes, to Genuine Parts and Emerson Electric. In a recent report on Watts Water Technologies, J.P. Morgan Chase analyst Stephen Tusa noted that his 2009 estimates for the maker of water-control products reflects "a roughly 20% decremental margin in North America and Europe."

"I don't even know if it's a real word, because it's always underlined in red in my Word documents," Mr. Tusa says. "I've been writing [research reports] since 2004, and this is my first time using it. I think it might be a made-up word. But it fits, and it's in almost every report these days."

Decremental is a real word; it's a negative increment, or the linguistic inverse of incremental. And it has long been part of Wall Street's financial lexicon.

I've yet to hear the word employed in my daily corporate grind, but expect to come across it soon enough. Lord knows the number of times that the word "incremental" has been voiced over the years.

Usually in connection to marketing projections about the expected returns from investing a particular new design: "We won't make much on this particular order, but we expect significant incremental sales to result from it." Incremental in this case meaning almost impossible to quantify, measure, or verify.

Unfortunately, with the economy continuing to drift downward, the word decremental is sure to be become increasingly oft heard.

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