Frogs, dogs and elephants – the zoology of business talk

Unsplash/Nam Anh

I was listening to a podcast this last week when one of the pundits was asked to explain why oil prices had so far failed to react to the rising geopolitical tensions in the Middle East.

“It’s like putting a frog into a pot of water and turning on the gas. Each new ‘crisis’ in the Middle East is like a few more degrees of heat, but the frogs don’t really notice – until they do. Then they really start to notice and want desperately to get out of the pot,” he said.

It was the perfect analogy for regional energy markets.

Hamas’ October 7 attack on Israel, Israel’s subsequent invasion of Gaza, Houthi attacks on Red Sea commerce and western reprisals, Iran-Pakistan hostilities – each is a notch up in temperature but, so far, the oil price has not really noticed the heat.

• Escalation risk in the Red Sea and GCC economies
• Gulf investors expected to bet big on bitcoin ETFs
• Houthi strikes have little impact in a world awash with oil

Maybe it will only really respond when and if tensions reach boiling point in the Arabian Gulf, threatening the Strait of Hormuz, the expert pondered.

The pundit’s metaphor of the frogs in boiling water was perfect, and it occurred to me how often the business world reaches for a comparison from the zoological world to illustrate a complicated point. Sometimes, only animal analogies will do.

Take the proverbial “elephant in the room”. This is becoming increasingly used to describe a phenomenon so material, yet so sensitive, that it cannot be mentioned outright and specifically in a business discussion.

At the “Davos in the Desert” run by Saudi Arabia’s Future Investment Initiative in Riyadh last October, the events happening a couple of hundred kilometres away in Gaza were that elephant.

Everybody was talking about the situation in hushed tones on the sidelines of the forum, but there was no mention from the podium beyond euphemistic references to “geopolitical risk” – until Jared Kushner, son-in-law of former US president Donald Trump, blew the whole subject open from the podium, prompting much outrage.

Maybe animal behaviour is the only way to understand complex things like financial markets and economic phenomena.

A situation where demand for a financial instrument outweighs the supply of that product, which responds with upward price elasticity, is all rather confusing. But everybody knows what you mean when you say a “bull” market.

Likewise, when equities are highly valued and other instruments like fixed-interest bonds, commodities and real estate are more attractive, it is easier by far to refer simply to a “bear” market.

Chickens figure prominently in the business lexicology too

Whatever happened to the “stags”, by the way? In the heyday of privatisation in the 1980s, the stags were the people who aimed to make a quick buck on a stock market flotation (what we now call an IPO) through buying a share allocation and selling it as quickly as possible, thereby guaranteeing a decent aftermarket and liquidity. The stags don’t seem to be with us any more.

Maybe they went the way of the “unicorns”. These mythical beasts were the start-ups that hit a valuation of $1 billion dollars, guaranteeing spectacular returns for early stage investors. The unicorns mostly became extinct when the Fed began raising interest rates to counter inflation. Will they ever roam our markets again?

Chickens figure prominently in the business lexicology too. Either of the “coming home to roost” variety when, for example, an entrepreneur-founder over-borrows to fund an extravagant corporate lifestyle, as in: “Arif Naqvi’s chickens came home to roost when investors began to scrutinise the Abraaj book in detail.”

Or alternatively fowl of the “headless” kind when creditors and shareholders realise the damage that said entrepreneur has done to their capital. As in: “Shareholders were running round like headless chickens when the short-seller investor published his in-depth analysis of the company’s serious failings.”

Meanwhile, man’s best friend, our canine companions, have a mixed reputation in the business world.

A stock that is never going to show capital appreciation is commonly a “dog”, while Gordon Gekko, the seductive anti-hero of the seminal finance movie Wall Street, famously described a stock recommended to him as a “dog with fleas”.

On the other hand, traders of a certain socio-economic class in London use the term “the dogs” to describe a stock with serious upside potential, for reasons I will not elaborate here.

Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He also acts as a consultant to the Ministry of Energy of Saudi Arabia