Professor Elam

Accounting & Investing Info for San Antonio A & M

recent posts

about

  • Professor Elam

    San Antonio Society of Women Accountants

    Tuesday Sept 20, 2011

    Monday evening I addressed the San Antonio Society of Women Accountants ASWA. August 5 along with the capable Tony Ridout and Shirley Peterson, I addressed their regional conference here in San Antonio. 

    This group is having a member ship event for their October 10 meeting. That will be a monday evening at 6:00 PM. Information about the Oct 10 meeting shown below. 

    The group presently has 41 member and is looking to expand. Yes they have student members. 

     

    Scholarship information is located here. 

    Screen shot 2011-09-22 at 3.04.33 PM
     

  • Professor Elam

    SA CPA Career Day

    Monday Sept 19 2011

    All

     

    Here is an excellent chance to network with professional CPAs and learn a good deal about the profession. I plan to be there, so should you!

     

    Please RSVP Amanda so that she knows how many to expect!

    Do not e mail a reservation unless you absolutely positively plan to be there!!!!

     

    amanda@sacpasociety.com

    Career Day 2011

  • Professor Elam

    Art Cashin on Tax Rates

    Monday Sept 19, 2011

    Art Cashin is the NYSE Floor Manager for UBS as a result of their purchase of Paine Weber. 

    He is featured on CNBC about 7 55 each morning for a comment, and those comments are posted on the the CNBC website. 

    Here is Art on the proposed tax increases.

     

    As usual, UBS' Art Cashin, who may suffer the occasional pint but never outright idiocy, cuts right to the chase. His bottom line: "According to the Tax Foundation, after the 1929 crash, Congress proceeded to raise the top marginal tax rate from 25% to 63% by the end of Hoover’s term…. As you may recall, hiking those rates may have made folks feel that rates were more equitable but it sure didn’t help the economy."

  • Professor Elam

    NFLX Backing Up!

    Monday Sept 19, 2011

    NFLX stock has collapsed-about 50% in two months. I have mentioned it as a high flyer on the markets blog. Remember this, stocks go up because there are more buyers than sellers, it is just that simple. And with the concentration of buying in hedge funds, all buying the same few stocks like NFLX, GOOG, AMZN, LULU at the same time, the results can be spectacular-both ways! The change in pricing structure turned out to be the news event that turned the 'school of fish.'

    Screen shot 2011-09-18 at 6.31.12 AM

    Now, the CEO is apologizing.  An alert TAMUSA student mentioned NFLX in the ACCT 3301 class Thursday night. I wanted to be sure to follow up with this event. It is important as a CEO to admit your mistakes but the damage, stock price wise is done. 

    My take is that a $300 price was an over estimation at the top. But we are in an overall BEAR market, so things like this are going to happen. You can locate lots of speculation as to wether NFLX is about to become the next Blockbuster or whether this will be a buying opportunity. 

    Fundamental Analysis involves using accounting and finance tools to analyze the internal results for a company. Technical analysis involves analyzing price movements representing the decisions of millions of people with all their market knowledge. 

    So I quickly eye balled the longer term weekly chart. Each bar is one week of trading for NFLX. 

    Note the long term uptrend has been broken. Now where did significant buying occur on the way up?

    Looks like 50 and then 100 to me. So the bleeding ain't over yet. 

    Screen shot 2011-09-19 at 7.24.18 AM

     

  • Professor Elam

    The UBS Response

    Monday Sept 19, 2011

    UBS has responded that there is nothing one can do to stop someone with criminal intent. 

    Please read this response posted on Business Insider.

    The comment that one should not put someone from the back office,the area that processes trades, into the front office, the area that executes trades. As noted this was true of most rogue traders. 

    And in talks before the SA Institute of Internal Auditors, I have noted the same thing about Bernie Madoff. As a Principal at the NASD he knew what the NASD auditors looked for, and what they ignored. 

    Structuring an internal control systems for a brokerage firm amid the derivative trading of today is beyond the limits of this blog post. We study internal control in financial accounting and audit. Perhaps this would make an excellent case study!  

  • Professor Elam

    Briscoe Western Art Museum

    Sunday Sept 18, 2011

    The Briscoe Western Art Museum  is still a work in progress. As a college graduate you will no doubt become involved in some non-profit activities. Don't be afraid to ask the tough questions about accounting and budgets. Here is an example of what happens when no one asks. Costs have soared from $16 M to $30 M , and it is not open yet. 

    I wrote about a smaller museum catastrophe, Museo Alameda last year, and the year before. This was an idea to promote a Latin Culture Museum. Since then the City of San Antonio has sunk hundreds of thousands of YOUR dollars into this failed project. Last year it put on one display. And recall that right on IH 37, we already have the successful Institute of Texas Cultures, why start another?

    At any rate, remember this

    It is incredibly difficult to stop a bad idea wrapped with good intentions. 

    Indeed even as the local paper bemoaned the loss of money it refereed to Alameda as a 

    'potential gem' instead of the good money after bad example it has become. 

    As a Board Member, I hope you will ask the hard questions about markets, budgets, attendance, and probability of success. Imagine the embarassment of being a Board Member of a failed project. 

    I have hopes for the Briscoe, a substantial local philanthropist is on board, but even now, I understand, whoops, they have don't have the art yet….

  • Professor Elam

    Trust Thyself

    Sunday Sept 18, 2011

    As one professor at Texas State observed to me, all schools want to be something they aren't. 

    Accounting gives you the tools to  consider and evaluate decisions. And so we look at a case in point, the desire for Incarnate Word to move from Division Two Athletic Status to Division One B.

    At present UIW plays Division Two in the Lone Star Conference.  The Lone Star Conference features all but one team from Texas including kingville, West Texas State and Angelo State. The point being that there are realistic intra state rivalries. By the way, the Ivy League schools like Yale and Harvard all play Division Two. 

    But, with UTSA headed for Division One A, UIW just can't stand it. Even though its per game attendance is a mere 3,000, and the Southland Conference averages 9,000, UIW thinks this is a good idea. Oh and it's expensive, lots of scholarships and a $1 M + Fee just to enter. 

    And for my money, the Southland Conference is the Lost in Space League if there ever was one. Quick  when was the last time someone got excited about playing Nicholls State or Northeastern State

    (what you never heard of them, they are in Louisiana).

    The far better idea would be to build the existing team effort and start dominating the Lone Star Conference. And that might be affordable. And frankly if you aren't dominating the Division Two League, how are you going to compete one level higher? 

    It is far better to become successful at your present station in life, football, or music than to wish for something else entirely different. 

     

  • Professor Elam

    Get Smart

    Saturday Sept 17, 2011

    From Here to Eternity won multiple Academy Awards in 1953. IThe story centers on the lives of soldiers at an Army Base on Hawaii before the Pearl Harbor attack. The Captain has a private played by Montgomery Clift transferred to this Base. Clift has shown great promise as a Boxer and the Captain wants to win the Pacific Army Boxing Championship. Burt Lancaster plays the Sergeant. Clift informs the Captain that he has quite boxing and has no interest i it again. The look on the Captain's face tells the audience all we need to know-you are going to box for this Base and you are going to win, period. 

    Outside the Sergeant asks Clift how long have you been in the Army, oh about five years comes the reply.

    'Well, when are you going to get smart about it, asks Lancaster?

    His point of course is that the easy way ahead is to read the tea leaves and prepare for your best outcome. 

    Specifically you should be using your courses to prepar you for whatever your goals are after college. 

    One young lady approached me with several constructive questions. She has picked out the company she wants to work for and was studying their financial reports. Great idea!  In fact, let's carry that to the logic al conclusion. How about writing an analysis of the company complete with stock price charts, management analysis, market strategy, growth, etc?  Then update the report each quarter until you graduate?  when you walk into the interview you will have your portfolio, a complete profile of the company. This will set you apart from all the others interviewing as an informed prepared candidate.

    Want to start your own company, fine!  Start analyzing the industry, the stand outs and start writing. You will need to establish yourself as an expert.

    One fellow did just that when I was in my MBA program.

    Preparation pays, Get Smart.  

  • Professor Elam

    Faculty Senate Convenes with President and Provost

    Saturday Sept 16, 2011

    P8150048

     

    Frankly I really like this photograph as it captures what happened –   the Provost and President listening and taking notes. 

    The meeting took place Wednesday September 14, 2011. 

    A general discussion of what the Senators deemed to be significant, as shown resulted in a most constructive exchange of communication. 

     

     

     

    P8150030 Senator and Parliamentairian Durant Frantzen and Senate President Richard Green share a moment during the discussions. Sentiment was positive!

     

     

     

     

     

     

     

     

    P8150073 

    The Senate will soon announce their schedule of meetings for the Fall, 2011. 

    The new Senate is off to a fine start with open lines of communication and candid exchanges about shared goals for Texas A & M San Antonio.

  • Professor Elam

    NetFlix – flickering?

    Friday Sept 16, 2011

    Last night in ACCT 3301 an alert TAMUSA student noted Netflix has dropped $100 in a month. What's up with that?

    Page B 1 in the WSJ this morning reports that Netflix pricing gets a thumbs down, and indeed another student made that point last evening. The pricing plan is causing the loss of one million customers. The stock price dropped, whoops, 19% in one day. 

    My remarks were that NFLX has been one of the over priced hot stocks this past year along with OPEN and Chipolte Mexican Grill and LULU (LULU helps yoga devotees avoid the stigma of low priced yoga togs, a must for sure in this recession….) NFLX still sports a 40 to one price earnings ratio, about twice what the overall market is priced. Is it worth it?

    Last evening I took the class through the Wall Street Journal, a how to course of reading it. I mentioned the Classic column, Heard on the Street. Today that column makes the point that NFLX has raised prices but other media companies and cable companies seem determined to raise them even higher. If that is the case, NFLX may just be pulling back in a correction. this is one to watch. Thanks to our alert student for noting this interesting development in streaming video. 

    More and more of you are beginning to engage in the real capstone course, following world capital markets. I am delighted to see students using their studies across multiple disciplines to ask informed questions and bring informed observations to class – keep it up!