Professor Elam

Thursday Sept 25 2014

When I worked for Ross Perot we were immersed in a six month training program. The idea was to produce a securities broker who did not depend on the stock market for success. We would be licensed across several markets, insurance, annuities, muni bonds, you name it. 

And the fellow running the school used to say, and quite often

The formula for success is totally known. 

Likewise I have laid out the formula for becoming a successful accounting student. It is

• laid out in the syllabus
• across the nine pages of Accounting Resources for TAMUSA Students. 
• plain to see in the many links on Helpful Websites

con·text

 noun \ˈkän-ˌtekst\

One of the recommendations is to read for context. There are several links to financial sites on the left hand side of this blog. One of the recurrent ideas is to read the Wall Street Journal We are studying bonds in ACCT 3312. Here are three articles that ape-pared over the last two days in the WSJ about the bond market

Wed 9/24/2014

SEC is Examining Pricing at Pimco – Regulators are Probing WEhther Returns awere Artificially Inflated for an Exchange Traded Fund

If you read out textbook it sounds  as though there is only one right price for a bond, discounted at the appropriate rate. But this article suggests there are other methods, yeah, no kidding! Nothing is quite as creative as bond pricing among bond dealers. Understanding this will helpyou understand that bond prices are constantly changing. 

by the way, how is PIMCO, how is Bill Gross, who is El Erian, why should you care?

Bill Yield Tips into Negatie Territory

We are studying Cash in Acct 3311. T Bills are a form of cash or short term investments. This article notes that T Bills maturing Oct 2 actually dipped into a negative yield for a short time. IN short, investors got back less than they purchased in the safest investment around. 

Why is this happening? Inqiring minds want to know

 

Thursday 9/25/14

Junk Investors See Warning – Some High Yield Bondholders Pare Risk as they Gird for Long Rally to Falter

The five year rally in junk bonds is coming to an end. Fund Managers are getting more selective about what they buy. 

What is a junk bond?  Why is the rally ending? Why did it start five years ago?  Why are fund managers becoming cautious?

Understanding the answers to these questions will move you from being the average out of touch what is going on attendee in class to the front of the pack able to grasp the concept, Master of the Universe bond trader. 

Bonfire of the Vanities – Tom Wolfe – it was made into a movie with Tom Hanks Bruce Willis and Melanie Griffith for those that find the book length too daunting

After Tom Wolfe defined the '60s in The Electric Kool-Aid Acid Test and Radical Chic and Mau-Mauing the Flak Catchers and the cultural U-turn at the turn of the '80s in The Right Stuff, nobody thought he could ever top himself again. In 1987, when The Bonfire of the Vanities arrived, the literati called Wolfe an "aging enfant terrible."

He wasn't aging; he was growing up. Bonfire's pyrotechnic satire of 1980s New York wasn't just Wolfe's best book, it was the best bestselling fiction debut of the decade, a miraculously realistic study of an unbelievably status-mad society, from the fiery combatants of the South Bronx to the bubbling scum at the top of Wall Street. Sherman McCoy, a farcically arrogant investment banker (dubbed a "Master of the Universe," Wolfe's brilliant metaphorical co-opting of a then-important toy for boys), hits a black guy in the Bronx with his Mercedes and runs–right into a nightmare peopled by vicious mistresses, thin wives like "social x-rays," slime-bag politicos, tabloid hacks, and Dantesque denizens of the "justice" system. If the Coen and Marx brothers together dramatized The Great Gatsby, Wolfe's Bonfire would probably be funnier. Many think his second novel, A Man in Full, is deeper, but Bonfire will never die down.