Professor Elam

Accounting & Investing Info for San Antonio A & M

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  • Professor Elam

    Internal Audit Derivative Checklist

    Monday May 14, 2012

    Today's WSJ is an absolute must read,I will keep it, for students of derivatives and internal auditing. 

    Here is a short checklist for the need for further substantive procedures with a nod to Jeff Foxworthy's You Might be a Redneck

    You might need more substantive procedures in the trading department if

    You have a trader with the first name 'Bruno'

    You have a trader whose 'bets' are so large he has earned the nickname 'Whale'

    Your top Execs are lobbying for loophole exclusions to current regulations (note, Jon Corzine did the same)

    Your Board is meeting every day to 'monitor' risks

    Your trading department attempts to take the other side of the trade after establishing an hedge

    Your CEO and Chairman of the Board are the same person

    After losing $2 B, you lose another $150 M in one day

     

    All this applies to JP Morgan

     

  • Professor Elam

    Panama

    Monday May 14, 2012

    Panama  may be a min Rio as a real estate speculative bubble about to burst. Dark Towers at night suggest a lack of tenants. While TAMUSA is going to Brazil and Spain this year, I  suspect the better stop would be right there in the Canal Zone. 

  • Professor Elam

    JPM Lobbies for Loopholes, $2 B down the Drain

    Monday May 14, 2012

    Jesse has some great observations and links on how Jamie Dimon loobied for a loophole that allowed JPM to engage the the 'hedges' that promptly lost the bank $2 B. Like Jim Rogers, I frankly wonder if Jamie Dimon and  Blythe Masters really know what they are doing. Certainly not this time. 

    This is why student should learn more about derivatives and hedging. This is literally the most important topic of the day. 

  • Professor Elam

    Quality Counts

    Sunday May 12, 2012

    Bret Stephens writes on the class of 2012. He explains why a female grad from West Point outperforms a high GPA Ivy League type. 

    Chrysler is still fighting its reputation for lousy quality.

    Here is a site whose chief message is quality.  Note that the actual price is never mentioned, you can call hte sales department at the end of the message. As the saying goes, if you have to ask, you probably can't afford it. 

    Are you familiar with Hasselblad cameras?  One accompanied the astronauts to the moon, assuming we actually went to the moon…

    I was stunned to learn that McIntosh still makes a tube amplifier, do our younger student know what a vacuum tube is?

    The Italians are famous for color and style, and no one has that better than Ferrari.

    For a taste of the good life, check out the Ralph Lauren magazine.   This is more glamour than quality but an intresting company.  Do not do this attired in a hoodie or t shirt, your monitor will automatically shut down….

     

    Do you know Etymotic?

     

     

  • Professor Elam

    No Money in Preventive Healthcare

    Friday May 11, 2012

    Decades ago I recall a West Texas doctor make the observation that 'there's no money in preventive health care.'

    Indeed as Charles Hugh Smith observes the money is in treating end of life heart attacks and such .How oftern do we hear entire hospitals advertising they are The Heart Hospital. 

    There are some interesting charts comparing the US with the rest of the world on health care costs. 

  • Professor Elam

    JPM Drops $2 B

    Friday May 11, 2012

    JP Morgan has reported a $ 2 Billion Loss in its Derivative Trading program. The stock is down 6%. This has a feel of that Bear Stearns moment in 2008. This is not on that scale of course, JPM can stand it but, is there more to come?

    Recall that Charles and Nikhal did their case in the graduate ethics class on derivatives. Citi is traing for only $3 on a pre split basis. Are we headed to another 2008 type difficulty?

    Jesse's Cafe Americain has some good links on this strory. In April JPM CEO  Jamie Dimon was complainingthat regulations curbed JPM's profitability.  JPM's Blythe Masters claims to own the derivatives market, apparently not. As Jesse says, the rest of the market may be scaared of them but for their ability to blow up rather than record profits. 

    A proper derivative 'hedge' has puts or calls in place to protect from an unexpected move. A 'bookie' never bets on one horse or football team. Rather the bookie collects bets on both sides so that he is covered no matter who wins. Clearly Blythe Masters did not understand that concept.

  • Professor Elam

    Long Shots – MSFT

    Wed May 9, 2012

    For sure, Steve Ballmer is not Warren Buffet. Here is a look at MSFT acquisitions, a pretty ragged track record. 

    This helps explain why MSFT stock has been stuck in a narrow trading range for years.

  • Professor Elam

    Steve Wynn, Consumate CEO

    Wed May 9, 2012

    While the annual meeting of BRK and Buffet's comments are famous, here is another CEO that has a razor sharp focus

    Check out this interview with Steve Wynn

  • Professor Elam

    Robin Wong Makes a Difference

    Sunday May 6, 2012

    Robin Wong is making a case for change in Malaysia. Surf around his weblog to see what I mean. 

    With social media bursting out all over, how many students are writing blogs, creating websites, posting photos, to some real end. Or are you just sharing experiences on facebook, just wondering.

    I constantly preach the importance of obtaining certifications in the field of accounting. 

    Here is another valuable approach. Start a blog, reflect on your college experience, reflect on what you want to do, find other links about your goals, show a potential employer or partner that in fact you have something to contribute. 

    If  we gave you two minutes to construct a slide show or presentation about yourself, what would you have to say?  

    If that sounds familiar it is called an interview, and that is about how long you have to make an impression. 

    Robin Wong makes and impression. 

  • Professor Elam

    Resume Ethics

    Saturday May 5, 2012

    Seems the Yahoo CEO has some resume difficulties. He claimed a computer science degree, it turns out to be an accounting degree, computer sciece degrees were not granted at his alma mater at that time. 

    Meanwhile Elizabeth Warren is in hot water over her earlier claims of being Native American, a point Harvard made in its news release about her. 

    In 2006 the Radio Shack CEO was forced out after claiming a degree he never earned.

    It is much easier to be who you are than someone you are not.