An abnormal return describes the unusual profits generated by given securities or portfolios over a specified period. The performance is different from the expected, or anticipated, rate of return (RoR) for the investment. The anticipated rate of return is the estimated return based on an asset pricing model, using a long run historical average or multiple valuations.
The Municipal Securities Rulemaking Board, (MSRB), is a regulating body which creates rules and policies for investment firms and banks in the issuing and sale of municipal bonds, notes, and other municipal securities. States, cities and counties issue municipal securities for a variety of reasons.
Range refers to the difference between the low and high prices for a security or index over a specific time period. Range defines the difference between the highest and lowest prices traded for a defined period, such as a day, month, or year. The range is marked on charts, for a single trading period, as the high and low points on a candlestick or bar.
A graduated lease is an agreement under which a tenant and landlord agree to a periodic adjustment of monthly payments. For example, the agreement may reflect an increase in the tenant’s payments due to market conditions or an increase in the value of the leased property.
A green card is a colloquial name for the identification card issued by U.S. Citizenship and Immigration Services to permanent residents, who are legally allowed to live and work in the U.S. indefinitely. Green cards got their nickname because they were green in color from 1946 to 1964. In 2010 they became green again, but the nickname persisted during the intervening decades of blue, pink and yellow green cards.
Margin of safety is a principle of investing in which an investor only purchases securities when their market price is significantly below their intrinsic value. In other words, when the market price of a security is significantly below your estimation of its intrinsic value, the difference is the margin of safety. Because investors may set a margin of safety in accordance with their own risk preferences, buying securities when this difference is present allows an investment to be made with minimal downside risk.
A developed economy is typically characteristic of a developed country with a relatively high level of economic growth and security. Standard criteria for evaluating a country’s level of development are income per capita or per capita gross domestic product, the level of industrialization, the general standard of living, and the amount of technological infrastructure.
A tender offer is a type of public takeover bid constituting an offer to purchase some or all of shareholders’ shares in a corporation. Tender offers are typically made publicly and invite shareholders to sell their shares for a specified price and within a particular window of time. The price offered is usually at a premium to the market price and is often contingent upon a minimum or a maximum number of shares sold. To tender is to invite bids for a project or accept a formal offer such as a takeover bid. An exchange offer is a specialized type of tender offer in which securities or other non-cash alternatives are offered in exchange for shares.
A deposition is testimony made under oath and taken down in writing by an authorized officer of the court, typically in an out-of-court setting and before trial. Deposition is an integral part of the discovery process, which enables both sides involved in a legal case to learn all the pertinent facts and discover the other side’s view of the case, so as to map out an effective legal strategy. Depositions are usually taken from key witnesses, but can also involve the plaintiff or defendant, and often take place in an attorney’s office rather than the courtroom.
William J. O’Neil is a noted investor, stockbroker and author. He is known for being one of the first investors to incorporate computers into his research and investment decision-making process. O’Neil also founded the influential investment publication Investor’s Business Daily. O’Neal has published the highly acclaimed books How to Make Money in Stocks and 24 Essential Lessons for Investment Success.