Professor Elam

I have written extensively about the sub prime crisis and the housing bubble in this blog.  The reality of all that is now coming home.  A couple of you breezily suggested earlier this week in a post that, somehow in the short space of one week, everything was now AOK at CITI.  A glance at the close of yesterday’s trading in the graph at left should dispell such naivety.  Now I suspect that we are at such an oversold point that CITI could rally a bit here as could the rest of the bank stocks. Why?  Well the sellers have overwhelmed the buyers. Many have gone short selling the stock betting on lower prices. Now that it has fallen over 20 bucks, many shorts will take profits. If you are short that can only be done by re purchasing the stock. These re purchases will drive the price higher, short term.  Look for CITI to move back up to the blue line, its 50 day moving average. This provides an excellent opportunity to learn more about how the stock market and its participants actually work.

The comments posted this week by students have been far short of what I have in mind. I am looking for analysis, that you haver read the articles posted, or better yet, you read the websites of the companies being discussed. Are their actions in sub prime reflective of their stated vision and mission, probably not.  Rene did make an inciteful observation about how conventional wisdom has quickly changed.

Most of you are looking at the requirement to post on the blog as just that, a requirement, What you should be doing in sharpening your analytic skills. Suppose for example you had been hired by a bank, brokerage firm, accounting firm, etc.  You are now in a three week training class.  Your classmates are from other state schools like UT Austin, Trinity, and Texas Tech, others are from out of state like Vanderbilt (you know where Vanderbilt is right?) or Univ of Ark.  Everyone is trying to look their best and be recognized as a TOP GUN coming out of the training program. It is here that the cream will rise to the top and ‘fast track’ individuals will be recognized. Now with that in mind, what would you post, a breezy comment that reflects little or no research or something in depth with hyper links and some real analysis?  This is the time to practice on such analysis, trust me, this is what top students do at top schools.