When one talks about himself to a second party as being better than the rest of the population. While it is said to someone else, it is really just intended for the person to hear out loud how "awesome" they are. May be done out of deep-seated insecurity.
Matt: "I am going to be the most awesome lawyer. I am just a really compelling speaker blah blah blah"
Other people later: "Goddamn Matt was verbally masterbating so much there might be chafing."
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v. The act where one masterbates through speech, taking great personal pleasure by listening to one's self drone on endlessly.
I can't stand listening to that geek's verbal masterbation; will someone please stuff a log in the fucker's mouth!
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