This is another stupid phrase that grew out of shorthand used during people-watching. Coined by Dave, it's used to quickly and discreetly point out someone who is wearing either a loud color (neon green t-shirt) or who is dressed all in one color. Both of which happen more often than you'd think.
Now at Disneyland (where this happens nearly every hour), I can just turn to Ryan and ask "what's your favorite color?"
Related Post: Best Outfit