• Professor Elam

    Weekend Nov 19 2016

    Where is the Artist of America?

    Rush refers to Middle America as ‘fly over country.’ Liberals might spot it from 35,000 feet while jetting from Martha’s Vineyard to Tiburon. But it was ‘folks’ (one of Obama’s favorite expressions) in fly over country that brought down Hillary’s ‘Blue Wall’ of expected voters. But this is, thank goodness, yes you are welcome, not another look back on the election.   San Francisco’s favorite politician, Nancy Pelosi, is even facing a challenge as Minority Leader from, egads, a fellow in Ohio. So with the re-discovery of every day American individuals, we ask, what happened to real American art for real Americans?

    And what do I mean by real American art? By that I mean an artist who depicted real Americans doing everyday American things like voting, sitting out side the assistant principal’s office, or preparing to leave the summer beach house. Yes, I ponder, where is the heir apparent to Norman Rockwell? The McNay Museum here in San Antonio featured an exhibit and explanation of ‘how he did it’ a couple of years back.

    Rockwell’s paintings were a staple for the cover of the Saturday Evening Post magazine. His lengthy career began at Boys’ Life, the magazine of Scouting, in 1913. His stay at the Post was from 1916 to 1963. For most of his career he was not taken seriously as an artist. But later as he drew more serious works such as depicting a black female child being escorted to an integrated school, he gained greater acceptance among the critics. Screen Shot 2016-11-20 at 8.25.00 AM

    But my point here is not his lack of acceptance by the critics but his embrace by the public.   Rockwell originally began using professional models for his depiction of every day American Life. He quickly realized professional models were not what he was trying to draw. And so he began using ‘real people’ with all the physical foibles of the rest of us.

    His paintings were notable for their extreme accuracy of both the people and the scenes featured in them. One might respond that an artist of this caliber has simply not come along since 1963. But Rockwell employed a method that aided considerably in his accurate depiction of life.

    He had a photographer take multiple pictures of the posed scene. Then he used a type of opaque projector to display the image on canvass. He then ‘drew in’ the photograph to just what he envisioned as the American Scene.   One might say Rockwell was the original ‘paint by number’ sort of artist.

    Another famous artist copied this same formula. Remember Andy Warhol and his famous Campbell Soup Can? Yep, Warhol used the same technique. He too filled in photographs of what he was painting.   Warhol seems to me to have been more of a marketing genius than a serious artist, but hey, it worked for him.

    And while we are into contemporary art, or the lack of it, another name springs to mind.   LeRoy Neiman, born LeRoy Runquist in 1921, kicked off his career about 1954 as Rockwell entered his last decade. Like Rockwell, he was also displayed in a magazine, Playboy.

    Before dismissing Hefner’s creation as a unworthy of serious discussion, appreciate that the magazine in the 1970s featured interviews with the political, writing, and artistic elite of the era the Playboy Jazz Poll, and fiction by the notable writers of the day.  Neiman’s contribution for fifteen years was termed Man at his Leisure featuring illustrations of exotic locations he visited. From that standpoint, one might consider Neiman the artistic equivalent of Ian Fleming who created the James Bond series, also replete with exotic locations.

    Screen Shot 2016-11-20 at 8.27.20 AMBut Neiman is perhaps most famous for his expressionistic paintings of athletes, musicians, and sporting events. And, what could be more American than that? Today, serigraphs of his original works still sell for $3,000 to $6,000.

    These two artists depicted American Life as they saw it, and found a huge audience who appreciated just that. It is said that a college major in art is not likely to produce economic success.

    To that assertion we can only ask, where is today’s Rockwell or Neiman drawing America as he or she sees it?

  • Professor Elam

    Weekend Nov 19

    Elon Musk, like Santa Claus is everywhere.  He is shooting rockets into space, merging Tesla with Solar City, and promising an affordable 35K electric car in a couple of years.

    But Tesla has yet to produce any cash flow to support itself. It has existed on government subsidy, and issuing stock and debt.

    hTesla will likely need more cash in the future.

    We are studying potential dilution in ACCT 3304. An expansion of shares by 50% would cut E/S in half, if Tesla had any earnings. This is the very reason for calculating potential dilution.

    Tesla continues to remind me of another visionary, John DeLorean/ Delorean also relied on government subsidy and continued promises of future performance.

     

    What does share dilution mean?

    Why do we compute both simple and diluted earnings per share?

    What does it mean for dilution of a firm, like Tesla, has no earnings?

    What potential dilution has Tesla incurred since 2010?

    Should this be of concern to Tesla shareholders, why or why not?

     

    We have two chapters to complete, 16 & 17.  

  • Professor Elam

    Thursday Nov 17, 2016

    Bad news just keeps coming for WFC, now a not unexpected collapse in new accounts.

    New account openings at Wells Fargo (WFC)plummeted 44% in October compared with last year, the bank said on Thursday. Things also worsened since September, when the number of accounts opened by customers fell by 27%.

     

    Wells Fargo said October applications for credit cards plunged 50% last month, worse than the 35% drop in September.

    It was the first full month after Wells Fargo's shocking September 8 settlement with regulators over the creation of as many as 2 million unauthorized accounts.

    The real irony is that the CEO Stumpf and Tolstedt who was responsible have walked away with millions in the bank from stock options while their replacements now struggle with the bitter fruit

    of their reign.

  • Professor Elam

  • Professor Elam

    Wed Nov 16, 2016

    A lead article in today's WSJ describes how China is discovering the price of global power. Or as the Fish Rag put it during the Viet Nam War

    https://video.search.yahoo.com/yhs/search?fr=yhs-adk-adk_sbnt&hsimp=yhs-adk_sbnt&hspart=adk&p=the+fish+rag#id=0&vid=4fcc663a9e2273e2413d74fd8da4704c&action=click

    Which is to say people die in war.

    The article details a Chinese soldier with a UN Force in Africa. His vehicle was hit with an RPG and he died two hours later.

    Ironically it may have been a Chinese made weapon, the result of the China export policy.

    Years ago I had my cost managerial classes a Jim Rogers book Adventure Capitalist.  In either that book or the earlier Investment Biker, he observed that China was not likely Screen Shot 2016-11-16 at 6.09.01 AM

    to start a war. His reasoning was the the one child policy meant that if a family lost their only child, it was wiped out, there would be no future generations. The reality of that is now hitting China, The soldier who died was a one child offspring who had already lost his Father.

    Learn more about Adventure Capitalist

  • Professor Elam

     

    Tuesday Nov 15, 2016

    We are studying stock option compensation in ACCT 3304. Here is an article about indexing stock options. As the author notes, it may be that a bull market carries a company's stock price higher, even though it is not outperforming its rivals. The author suggests indexing the option award to an index of the company's competitors.

    The option award only kicks in if he outperforms his peer companies.  Otherwise he can buy options like anyone else if he thinks he is doing a great job.

    This makes lots of sense but probably won't be popular with CEOs.

     

  • Professor Elam

    Tuesday Nov 15, 2016

    We are studying stock option compensation in ACCT 3304. Here is an article about indexing stock options. As the author notes, it may be that a bull market carries a company's stock price higher, even though it is not outperforming its rivals. The author suggests indexing the option award to an index of the company's competitors.

    The option award only kicks in if he outperforms his peer companies.  Otherwise he can buy options like anyone else if he thinks he is doing a great job.

    This makes lots of sense but probably won't be popular with CEOs.

  • Professor Elam

    Monday Nov 14, 2016

    Toyota was hit with a weaker market as well as currency losses in the latest quarter.

    Currency gains and losses are a component of Other Comprehensive Income or OCI. This is part of the shareholder equity statements.

    Spiceland refers to OCI as non owner income reflectin

    unrealized investments gains and losses

    Pensions

    Currency

    Derivatives.

    As the above link shows, this is serious stuff!

  • Professor Elam

    Thursday Nov 10, 2016

    THE biggest loser in all this are all donors to the Clinton Foundation who will soon learn all about the No Refund Policy. What is your estimate of what the Clinton Foundation will receive in 2017 donations, a fraction of 2015-16 if any I would guess as the Foundation Phone goes unanswered by Chelsea.
    Can we finally say good-bye to both the Bushes and the Clintons?

  • Professor Elam

    Thursday Nov 10, 2016

    Turmp's financial team looks solid and experienced.

    And notice,  no matter who is in the White House, Goldman Sachs always has their man on the scene…