Financial Glossary – H

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H-1B Visa – a temporary work visa that the US government issues. This type of temporary work permit is only for foreigners with at least a bachelor’s degree. The applicant must have a sponsor, i.e., an employer.

Habitat – all the environmental factors that exist in a particular place. An organism’s (life form’s) habitat is where it feeds, sleeps, reproduces, and finds shelter. For example, a house is a human habitat, where we eat, sleep, and have shelter.

Habit Buying – the purchasing of a particular brand repeatedly. We also refer to it as habitual buying behavior. It is similar to brand loyalty. However, with habit buying, the consumer repeats the purchase due to a lack of dissatisfaction. With brand loyalty, buyers have compared their favorite product with others, and know why they are loyal. Habit buyers do not think much about other brands.

HACCP – stands for Hazard Analysis and Critical Control Point. It is a food management safety system which monitors food processing from beginning to end. Approximately 150 countries have adopted the HACCP system.

Hacker – 1. A person who gains access to computers by breaking password codes. They do this without authorization. 2. Somebody who cuts things roughly (who hacks things). For example, somebody who hacks through the jungle undergrowth with a machete. 3. A computer enthusiast, i.e. a computer geek.

Hague Protocol – an amendment, which occurred in 1955, to the 1929 Warsaw Convention. The treaty determined what the liability was for airlines in the case of an accident. The treaty focused specifically on air carriers that transported people, cargo, and luggage for profit.

Hague Rules – an international code that defines who is responsible for the damage or loss of cargo. The rules relate only to international shipping.

Haircut – in finance a haircut is the percentage of an asset that is used as collateral – deducted from its market value. It has the same meaning as ‘margin’ in the context of exchange traded products.

Half Life – how long it takes for the concentration of a substance to decline by fifty percent. We commonly calculate the half-life of a radioactive substance, a drug, a pesticide, etc. The half-life of an advert is how long it takes for the ad’s impact on consumers to decline by half. A mortgage’s half life is the time it take before half of the principal (initial loan amount) is paid back.

Happy Hour – a period during which drink prices are lower in bars in restaurants. Often establishments offer two drinks for the price of one. Happy Hour usually coincides with people’s commute home, i.e., early evening.

Harassment – unwelcome conduct or behavior from one person or group of people to another person. Sexual harassment is a common problem in the workplace. Harassment typically scares, humiliates, ridicules, disparages, puts down, or demeans the recipient.

Hard Brexit – a total separation from the European Union for the UK. Britain would regain complete control of its borders, i.e. how immigrants from EU member states are treated. With a hard Brexit, Britain would likely lose unfettered access to the EU market, and would also no longer have passporting rights.

Hardcore Unemployment – unemployment among long-term unemployed people. In other words, people who have not been able to or have not wanted to work for a long time. Some countries do not include this type of joblessness in their official unemployment figures.

Hard Currency – also known as a safe-haven currency or strong currency, is a currency that people trust, because they expect it to maintain its value. It can be exchanged easily and virtually everywhere for other currencies. This type of currency is used for most international transactions and is kept in the reserves of country’s central banks. Examples of hard currencies include the US dollar, euro, British pound sterling, Japanese yen and Swiss franc.

Hard Landing – the term has two meanings: 1. A clumsy or rough landing of an airplane. 2. An abrupt and severe economic slowdown following a period of GDP growth.

Hard Sell – a technique that salespeople and advertisers use to persuade consumers to buy immediately. We also call it high-pressure selling or hard selling. The salesperson applies psychological pressure to persuade the prospect to buy.

Hardware – the term has many different meanings: 1. The physical components of a computer system, such as the motherboard, mouse, monitor, etc. 2. Fasteners and fittings used by the construction industry. 3. Machinery, tools, and other durable equipment. 4. Tools and equipment for gardening and DIY. 4. Machinery that belongs to a certain sector. For example, military hardware includes, tanks, missiles, weapons, etc.

Harvard Business Review – a general management magazine that Harvard Business Publishing issues. The magazine has been in existence since 1922. As well as several themes of interest to senior management, the magazine also covers current macroeconomic topics.

Harvard Business School – one of the best business schools in the world. The graduate business school of Harvard University in Boston, MA., USA. The school offers several doctoral programs as well as a large full-time MBA program.

Harvest Strategy – a business plan for either scaling down or eliminating a product’s marketing and advertising expenditure. This usually occurs when the product, brand, or business line is reaching the end of its business cycle. We also refer to it as the harvesting strategy.

Hawala – an ancient and currently popular way to send money. Hawala, also called Hewala, leaves no paper trail, and relies completely on trust. No money is actually transferred, but the recipient gets paid. Today, Hawala is practiced mostly in North Africa, the Middle East, the Horn of Africa, and the Indian subcontinent. It is illegal in many countries and some US states, because their authorities do not like the fact that no records are kept.

Hawk – in a central bank, it is somebody who places controlling inflation above all else. A hawk is the opposite of a dove. In foreign affairs, hawks advise taking an aggressive approach while doves propose the opposite. A hawk is also a bird of prey.

Hawthorne Effect – an observation that showing concern for workers’ well-being is a stronger driver of productivity than working conditions. Researchers noticed this phenomenon during experiments at a light factory in Hawthorne, Illinois during the 1930s.

Hazard – a danger or undesirable or unpleasant event. The term is similar to ‘risk.’ However, risk is all about probability while hazard is the event or danger. There are many different types of hazards, for example, natural, anthropogenic, and technological hazards.

Headhunter – an agency or individual that seeks out high-flying executives to fill job vacancies in companies. Headhunters focus on top executives or highly-skilled professionals. We also call them executive search firms.

Health – the state of total physical, mental, and social well-being. Health is more than the absence of disease and infirmity. If I am healthy, it means I do not have a disease or illness. However, it can also mean that I am thriving.

Health Care – includes everything medical professionals and providers do to restore our physical, mental, and emotional well-being. There are three levels of health care: 1. Primary care. 2. Secondary care. 3. Tertiary care. We can also write the term as one word, i.e., healthcare.

Health Insurance – an insurance plan that pays for the medical expenses of a patient. Some health insurance plans are in the private sector, while others are in the public sector. More of the USA’s health insurance is in the private sector than in Canada or the UK.

Heavy Industry – the part of industry that is very capital intensive but not labor intensive. It uses large machines and has numerous and complex processes in the production of its goods.

Heavy Market – a market with too many sell orders and too few buy orders. There is investor uncertainty. Prices are either stagnant or declining.

Heavy Users – consumers who represent the majority of a product’s sales. However, they make up only about thirty-percent of total consumers. Marketing efforts should focus on heavy users. We also call them big spenders and high rollers.

Hedge Fund – an investment vehicle that can make a diverse range of investment strategies. They can be traced back to the 1940s, although most lay people would not have heard of them until the early 1990s.

Heijunka – Japanese for ‘leveling.’ It is a technique that Toyota pioneered in the 1960s for achieving a perfect supply and demand balance. It is part of an approach called Lean Manufacturing. Inventories are kept to a minimum and workloads flow as evenly as possible.

Help Desk – a service that provides support to either customers or employees in the same company. The term is common in the computer, software, and telecoms sectors. Call centers are similar but only provide support for outsiders (customers).

Herd Instinct – a tendency that we and some animals have to behave and think like the majority. It is a common trait in the business world. Bank runs and stock market fluctuations are sometimes caused by our herd instinct. It influences what we do as well as our decision-making.

Herfindahl-Hirschman Index – also called the Herfindahl Index, is a measure of market concentration – how many or few competitors there are in a market. The aim is to detect markets where consumers may be at risk of monopolistic practices. A Herfindahl-Hirschman Index score of 10,000 means there is just one company – a monopoly – while a score of 100 means there are one hundred companies. In the US, mergers and acquisitions that change the score by over 100 points in a concentrated market may raise antitrust concerns.

Heterodox Economics – economic theories that are outside of mainstream economics. Mainstream economists often refer to them as ‘fringe’ theories. Heterodox economists refer to mainstream economics as ‘orthodox’ or ‘conventional.’ Many economists say the term ‘non-orthodox’ is problematic because defining ‘orthodox’ is challenging.

Hidden Unemployment – this term refers to people who have no job but are not registered in a country’s official statistics. It also includes underemployed people. For example, part-time workers who want to work full time are underemployed. Skilled people working in low-skilled jobs are also underemployed.

Hierarchy – a ‘pecking order’ system that exists in human society, companies, and organizations. Hierarchy also exists in the animal kingdom. Each member has a neighbor who is either higher up or further down the ladder, except for the top and bottom ones.

Hire(Verb) To employ somebody for wages or borrow something in exchange for money. (Noun) An employee or the act of borrowing something for money. As a verb, it is similar to ‘rent,’ but not the same. Britons and North Americans sometimes use the word differently.

Hit(Noun) 1. Occurs when a web server sends a file to a browser. 2. A song that is extremely popular. 3. An impact or collision. 4. A hard blow. (Verb) 1. To strike with force. 2. To reach a level. 3. To suddenly come to a realization or conclusion. 4. A dose of a recreational drug.

Hockey Stick Chart – a graph that looks like a hockey stick. There is a relative long period of stability, and then a sharp upward swing. Sometimes the chart may show a steep fall. The term first appeared when somebody described a graph showing how planet Earth was beginning to warm up.

Holding Company – a company that owns enough shares in other companies to control them. Many holding companies do not manufacture anything. However, they control and influence many companies and behave like vast commercial empires.

Holiday – the word refers to time off from work or school, i.e., vacation or public holiday. In the plural – holidays – in the USA/Canada it means from the Thanksgiving to Christmas and New Year period. In the UK and other Commonwealth countries, the plural form means the same as vacations.

Home Business – a business that people operate from their home. Also called home-based businesses, home startups have a better chance of succeeding than other startups. However, working from home is not ideal for everybody.

Home Equity Loan – a loan that can be taken out using a house as collateral. Most lay people refer to it as a ‘second mortgage’.

Homo Economicus – also known as ‘Economic Man’, is an economic term used in most economists’ models. It describes humans as self-interested and rational beings who are capable of making judgments towards subjectively-defined ends, such as the accumulation of wealth and resources. Homo Economicus avoids unnecessary work. These assumptions regarding human consumers are challenged by many economists, sociologists and psychologists, who say we are also motivated by altruism, spite and charity.

Horizontal Integration – when a company expands within the stage of the supply chain where it operates by merging with another company, acquiring another firm, or investing in the project internally. For example, if a supermarket chain acquires another supermarket chain, this is an example of horizontal integration – they are both in the retail stage of the supply chain. It is also called lateral integration, and contrasts with vertical integration, when the business expands into another phase in the supply chain, for example, from retail into distribution, manufacturing or commodities (raw materials).

Hostile Takeover – the acquisition of a company by another commercial enterprise; however, the target company does not want to be acquired. The target company’s board of directors are against the transaction. It is the opposite of a friendly takeover.

Hot Money – funds that are held in one currency but are liable to be suddenly and unexpectedly moved to another currency. The term is also used for investments – money that might suddenly be moved to another investment. The aim is speculation – to move money to places where it will get the best possible yield. Some people say ‘speculative money’ with the same meaning. Hot money also means stolen cash that is easy to trace, money earned from illegal activity, and money that has not yet been laundered.

Household – a social unit consisting of a group of people who live under one roof. There are many types of households, including the traditional nuclear family, single people living alone, adults sharing the rent, etc. We commonly use the term in economics.

Household Goods – products that we purchase and use within our homes. Real estate, vehicles, and boats are not household goods, but clothing is. Household goods are products that are permanent in nature. Therefore, even though we buy food to consume inside the home, it is not in this category. Food is not permanent in nature. After we consume good, it has gone.

HTML – stands for HyperText Markup Language. It is the major markup language we use to display web pages on the Internet. Web pages display text, images, and other resources through a Web browser that understands HTML. The Web browser interprets the HTML and presents the web page to us with the texts, images, etc. nicely laid out.

HTTP – the letters stand for HyperText Transfer Protocol. It is the underlying protocol that the Web uses. It defines how we format and transmit messages. HTTP determines what actions Web browsers and servers should take when they receive requests.

Hub – 1. The central part of a wheel where the spokes meet. 2. A center of activity such as a major financial center. 3. An extremely busy airport or other type of busy transport facility. 4. An electronic device that connects computers, printers, smartphones and other devices to a network. 5. A steel punch from which we make a coin or medal.

Human Capital – investments we make in human beings in order to make people more productive. Examples include education & training, experience, skills, talent, judgment, etc.

Human Resource Development (HRD) – a part of human resource management. HRD specifically deals with the training and development of workers.

Human Resources – the department of an organization that administers, hires, and trains its workforce. The term may also refer to human beings as a valuable asset. The singular form – human resource – refers to a single worker.

Hydrocarbon – any molecule or compound that contains just carbon and hydrogen. There are many different hydrocarbons. They occur naturally in, for example, crude oil, natural gas, and coal.

Hydropower – or hydro energy, involves capturing the energy in falling or flowing water and converting it into electricity. Humans used to use hydropower to grind grain and to operate textile mills, ore mills, and dock cranes. We also used hydropower for irrigation. When we generate electricity from hydropower, we call it hydroelectricity.

Hyperinflation – inflation of at least fifty per cent per month. When a country experiences hyperinflation, its currency declines dramatically in value and people’s purchasing power falls drastically. The main causes are economic recession while the government prints more money, or war.

Hyperlink – a link that takes the online visitor from an image, button, or hypertext to another part of the same web page or another web page. The visitor either clicks on the hyperlink or hovers over it. He or she then automatically jumps to the link’s destination.

Hypothecation – the granting of a hypothetic (collateral) to a lender by a borrower. In the terms of a secured loan, the lender – usually a bank – can take possession of a borrower’s asset, such as a house or car, if he or she is unable to keep up with the repayments. The borrower retains ownership of the asset and enjoys its benefits as long as he or she complies with the terms of the loan. In a mortgage, the hypothetic is the house that is being purchased, in auto financing the collateral (hypothetic) is the car. Hypothecated tax is earmarked tax – the Government pledges to spend a specific proportion of its expenditure or a specified amount on something, such as health or eduction.

Hysteresis – the lag in time between cause and effect. The term can be used in science and economics. For example, when there is a recession, unemployment rises. However, unemployment does not immediately fall when the recovery starts. There is usually a lag – this is known as the hysteresis effect.