Professor Elam

Accounting & Investing Info for San Antonio A & M

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  • Professor Elam

    A Real Look at a Sociopath

    Tuesday January 15 2013

    Lance Armstrong seems to be going over the Edge.   In this article which has appeared around the world he declares that only one source holds the key to his redemption – himself. 

    Webster defines sociopath as 

    [count] : someone who behaves in a dangerous or violent way towards other people and does not feel guilty about such behavior

    The danger here has been to his sponsors, his ex wife and various girl friends, to the integrity of the sport itself, and finally the revelation that he just does not get it, there is something inherently wrong with cheating by doping denying it, and then declaring that redemption is possible. 

    Fraud has its basis in three traits

    the ability to create a fraud

    the emcpiragement from the organization to create some sort of out sized performance

    the ability to rationalize the event

    It is the third category where Lance appears to be going off the rails. it is important as an auditor to observe behavior and ask yourself, could this person be perpetuating a fraud?  In this case the answer was yes.

  • Professor Elam

    Dell Goes Private?

    Monday January 14 2012

     About twelve years ago Mike Dell suggested that Apple should just collapse the company and distribute what cash it had. 

    Now Dell considers going private himself.

    The problem is that is also expensive. One would have to buy off all the sharehodlers and where would that money come from. Twelve years ago Dell could do no wrong. Today he has been leap frogged by the inter dependent proucts of Apple and the shoftware expertise of HP and IBM. As the analyst says, going private would not solve anything. 

    The computer business is ever so, Dell was struggling, then it created the we will make it your way model, actually owned by Burger King in my opinion, and now Dell is back in Wal Mart, oh well. Any one ever heard of Wang or DEC?

  • Professor Elam

    Enrollment In ACCT 3311 TR at 2 PM

    Wednesday January 9 2013

    I don't ususally address such issues on this blog but this seems the best way to get the word out. 

    Last semester those in the day time 3310 class indicated a need for an additional day time section of 3311 for the spring semester. We heard you and created the section. I have even scheduled  a noon time speaker anticipating a number of students in this class. 

    Yet a week before school begins we have a mere 5 people enrolled. That is not enough to make a class, we need at least 12. What happened?

    If you intend to register for this section, 2 PM Tuesday Thursday, please do so ASAP, if not it is quite possible it will be eliminated as we are short instructors in accounting anyway.

  • Professor Elam

    Howard Davidowitz on JCP

    Tuesday January 8 2012

    Howard Davidowitz is a retail specialist, with a definite flair for the dramatic. He was negative on Ron Johnson coming from Apple to JCP a year ago, and has been proved right. Accounting helps us understand the numerous terms used in analysis like this. 

    Another analyst predicts  Eddie lampert, now installed as the Sears CEO, will eventually sell all the Sears brands. Other than Craftsman I doubt that brands like Kenmore really would command much of a price. But what do I know? Lampert was given a lot of credit for shrewd when he bought K Mart in bankrutptcy for the real estate alone. Then he bought Sears, the two have proved that synergy does not always happen. Have you been in a Sears store lately?

    I suspect both JCP and Sears are toast in less than five years. Davidowitz believes we still have twice as much brick and mortar retail space as needed in America. Lopping off Sears and JCP will take a chunk of that.  

  • Professor Elam

    Too Many Attorneys

    Thursday January 3 2012

    Take a look at the pass rate on the Texas Bar Exam.

    Now read that there are 21,800 attorney positions, but 44,000 aspiring attorneys.

    Here is an article on the national surplus of entering attorneys.

    Here are the numbers of attorneys by state.

    I was surprised. I expected over 100,000 attorneys and I suspect since 2010 the number has gone higher.  in 2010 there were 77,000 practicing attorneys in Texas. My understanding is that there are about 60,000 CPAs in Texas. And of course there are many that are now certified in internal audit and other fields. 

    But you are not reading articles about the surplus of CPAs. One reason is the lower pass rate on the CPA exam.

    The growing number of regulations and need to streamline business continues to create positions for CPAs. We are ramping up our intermediate accounting program to better prepare our students for the challenge of passing such exams. 

  • Professor Elam

    One Resolution for the New Year

    Wed Jan 2 2013

    Once again Kirk Tuck gets it right. if you are not going to click on the hyperlink, here is what Kirk has to say. 

    My take on the whole internet thing is this: The more information I accrue the less I know. Reading about something is not the same as understanding through doing. Reading someone else's description of eating a great meal is never as satisfying as sitting down and experiencing that meal on your own. For the same reason I never waste time watching sports on TV (or in person). Why would you want to do that when you can go out and play the sport yourself?

    That quote pretty well sums up what I am trying to do with our Intermediate Accounting Program this semester. How can photography be compared to accounting?  Well Kirk's point is that you learn by doing, you learn photography by taking photos and then critically examining how well you did. Learning any profession is the same I think. We are going to transition from listenting to Professor Elam to taking an active part in the learning and teaching process ourselves. My goal is to totally immerse the student in accounting, jump into the pool, get wet, read, learn, 

    yes, experience the meal on your own. 

    We will have accounting professionals to speak to you this semester, and more things to do than you can keep up with, and professionals from out of the accounting field to speak, that may be the most fun, stand by, more to follow. 

  • Professor Elam

    College Textbook Pricing

    Thursday Dec 27 2012

    Screen Shot 2012-12-27 at 5.43.43 AM

    A professor tracks textbook price increases.   Actually I suspect the book prices are merely tracking the increase in overall college tuition plus fee increases. The blue line has taken on a parabolic like increase which means there is a top coming. At TAMUSA a fixed fee per class has been negotiated. 

  • Professor Elam

    Off to the Big Easy

    Wednesday Dec 26 2012

    I am off to visit with an old friend, we meet in New Orleans tomorrow evening. So we will not be posting the next few days, I return this next sunday Dec. 30. 

  • Professor Elam

    It’s Over in the Innovation Department

    Weekend Dec 23 2012

    Robert Gordon argues we are up against the limits of innovation.

    This is a topic of fascination to me and I am frankly surprised has taken this long for someone to write about it. Gordon's next book is Beyond the  Rainbow, the American Standard of Living Since the Civil War. 

    I have often wondered how it is that mankind wandered the world in pretty much the same vein from the ancient Greeks to George Washington's time. Yes printing did was invented and that certainly spread education.  But if you wanted to go somewhere, it was by foot or horse. Gordon notes that the years of 1875 to 1900 produced the light bulb and the power generation station and  then Benz's internal combustion engine. Certainly the steam engine decades before had a similar effect of making the railroad possible. 

    I find it amazing that so little progress was made from the Greeks to the founding of America. My Grandfathers read about the Rough Riders as teenagers. They were young adults reading about  as well  Orville and Wilbur's first flight in 1930. Just forty years later Howard Hughes took Orville on a flight in one of his new planes. Orville remarked that the wingspan of the what would be come the Constellation was longer than his original flight. Now that is amazing. 

    But as Gordon says, only once could speed be increased from  the horse at 6 mph to the 707 at 550 mph. Now we are up against simple laws of physics the SST was a flop, too expensive. Space travel, well not outside this galaxy, too slow. 

    Computers mated with technology and phones have increased communication and simplified calculating.  And likle myself he this Northwestern Professor observes that

    American educational attainment continues to slide ever downward in the international league tables, due to inflation at universities, a one trillion dollar debt in student loans, abysmal test scores and large numbers of high school dropouts. 

    And so we had a burst of innovation taht propelled America for 100 years, the Atlantic and Pacific handily isolating us from Eropean wars. But now we vote for out own entitelements, borrowing heavily to do so. Those that question the wisdom of this course are criticized in the press;. Do newspaper editors not have grand children who will inherit this debt I wonde?

     

  • Professor Elam

    Do Universities Have A Fiduciary Responsibility to Their Students?

    Sunday December 23 2012

    I have stated on these pages on several occasions that I believe the Student Debt Bomb of over one trillion dollars will explode causing another financial meltdown. 

    Take a look at this story about a Galveston resident amassing a $60,000 debt and still no degree.

    For reasons not stated Angelica entered uber expensive Private Emory University in Atlanta. She should have gone up the Gulf Freeway to San Jacinto Community College but that is another story.  Angelica was obviously depending on assurances from Emory about her future. 

    A fiduciary responsibility means according to Webster

    Definition of FIDUCIARY

    : of, relating to, or involving a confidence or trust: asa : held or founded in trust or confidenceb : holding in trustc : depending on public confidence for value or currency

    Was Angelica, the public in this case, depending on the value of Emory's advice in taking out these loans that this would be a workable proposition for her, it seems to me she was. Did Emory have her trust or confidence, you bet it did. and what was the result?  Emory got the money and as the country song goes, Angleica got the shaft. 

    it then hit me that there is a clear parallel here. And that parallel is the cigarette manufacturers and the tobacco lawsuits. For years the manufacturers successfully claimed that smokers knew what they were getting into. But finally one plaintiff won a case, and then the dam burst and it was all over for denying responsibility. 

    I suspect it is only a  matter of time before the Angelicas begin suing on a fiduciary basis, claiming that the schools were only looking out for them selves, and not the students. Once one student wins a case, the school will either have to refund the money or make good on the degree for no more money,just my guess. 

    This bears watching.