Getting A Medallion Signature Guarantee

When someone needs to authenticate the transfer or redemption of: (a) stocks; (b) bonds; (c) mutual funds, or (d) anything defined by the Securities and Exchange Commission as a “security”, most financial institutions impose a Medallion Signature Guarantee for transaction amounts above a certain threshold (usually $25,000, but this varies from institution to institution) in order to avoid any liability that could result from forgery. The medallion guarantee is to stocks and bonds what a notary is to statements and contracts. It is a form of heightened authenticity.

If you have any physical document worth tens of thousands of dollars that you are trying to cash or transfer electronically, it is a sure thing that you will need to obtain a Medallion Signature Guarantee in order to complete the transaction. It should be noted that this is a safeguard measure that the entity cashing or transferring your security establishes, so … Read the rest of this article!

Reading An Annual Report (Finding Unexpected Risks)

Benjamin Graham used to say that reading an annual report was largely a “negative art” because usually something compelling about a business would make you curious enough to read the company’s financials, and then you would “disprove your idea” over the course of reading the annual report because you would often find the reason why the purported discount in the stock price was not a discount after all. It is the instances when you are unable to disprove your idea that you actually end up making the investment.

After I started this website, I would get asked: “How do you identify a good investment?” or sometimes even specifically “What do you look for in an annual report?” The answer is that some random interaction in the outside world puts an investment idea in my head, I tie it by reading the annual report, and then I usually encounter some reason … Read the rest of this article!

Boston Beer Stock: A Long-Term Look At Intelligent Small-Cap Investing

A question from a reader:

Hi tim I know you usually write about large stock dividend investing but was wondering if you would share how to make small sized stock investments in smaller companies

The process for long-term investing with small-cap stocks is quite similar to how I would approach investing with many of the supersized dividend stocks that I typically discuss here. The rules of successful investing don’t really change depending on the size of the company. Long-term investing always boils down to this: finding a favorable relationship between the current price of a stock, the profits generated now, combined with a prediction about where profits will be 5-10 years from now multiplied by the certainty of that actually happening. Sure, there are other things to take into account, like accelerating dividend payout ratios or changes in the debt carried on the balance sheet, but that’s the basic question … Read the rest of this article!