Three words in one sentence that tell me it's bullshit
I used to love throwing buzzwords around:
"At today's PSS we need to discuss how to leverage our core competencies to scale value-add and ensure client buy-in," and suddenly you look like you know something others don't.
It wasn't intelligence. It was insecurity dressed up as expertise.
When you actually understand something, you don't need jargon to explain it. You can explain it to a child. When you don't, you hide behind vocabulary. Words become a smoke screen — they protect you and stop your audience from asking inconvenient follow-ups.
There's a famous Feynman story. Someone asked him to explain why spin-1/2 particles obey Fermi-Dirac statistics. He said: "I'll prepare a freshman lecture on it." A few days later he came back: "I couldn't do it. I can't reduce it to freshman level, which means we don't actually understand it ourselves."
A Nobel laureate, openly admitting: if you can't explain it simply, you don't understand it deeply.
Finance is the industry most perfectly engineered around the opposite principle. Jargon there is status currency. The more opaque you sound, the more credible you appear. Convexity, delta-neutral, LBO, carry trade, WACC, each word pronounced with the air of a decade of accumulated wisdom.
Try digging in.
"Why WACC at 12%?" It's standard.
"Where does the 3% terminal growth come from?" Industry convention.
"Why this multiple?" That's how the market prices it.
Charlie Munger managed hundreds of billions and put it directly: "Every time you see the word EBITDA, replace it with 'bullshit earnings.'"
His investment framework had 4 criteria:
Do we understand this business? Does it have a durable competitive advantage? Is management honest? Is the price reasonable?
No 147-tab Excel models. No Monte Carlo simulations. Just deep understanding of what actually creates value.
Here's a simple test.
If someone drops three buzzwords in a single sentence, start digging. Ask them to explain it like you're five.
"Where exactly does the synergy come from? Give me an example."
"What specifically does 'optimize the value chain' mean?"
"Why this discount rate in the DCF?"
Two things happen. They pile on more jargon (bad), or they actually explain it and you both get smarter (good).
Deep understanding of fundamentals beats shallow knowledge of complexity. Complex ideas without foundations are bubbles: impressive until the first real question.