Professor Elam

Friday May 27, 2011

Be sure to read the socionomic analysis on our companion site

http://www.themarketpersepctive.com

 

 

IRS Snooping Around

Thursday May 26, 2011

IRS is demanding entire years of data from small business.

Meta data is information contained in on line digital data banks. Amazon knows what you buy from them.

Now the IRS wants to take al of a firm's data and snoop through it to their satisfaction. This of course will reveal all the firm's customers and their purchases. 

Now critical thinking dept, why does the IRS want this, as part of the audit of the small business?  I doubt that. It is more likely that the IRS wants to compare purchases with income reported by those very customers. Example, your business buys $50,000 worth of items and services from an oil field supply firm. But your business reports a loss to the IRS, I can imagine the IRS suspecting you have failed to report all your income. 

This snooping will never end as long as we have a complex tax system allowing Big Brother endless snooping privileges. And it is only going to get worse with the $14 T budget deficit we have. 

Martha Stewart For Sale?

Thursday May 26, 2011

Martha Stewart Omnimedia has hired Blackstone to shop around for well, read the article and you tell me At age 69, Martha has done much better with MSO than her investors. From the get go analysts wondered if you could build a public company around one person. That has proven difficult. But with the market topping out and Linked In doubling in a day, clearly Martha realizes the time is now to do something. Otherwise this starts to look like another one man show that comes to mind, Playboy. Playboy recently took itself private 

The top panel is the Chakin Money Flow Indicator, clearly money has been flowing out of this stock. 

Oprah left network tv this week, and is clearly the number one television success story of all time. Analysts attribute this to a visible interest in her viewers. Do you think that Martha Stewart displays a visible interest in her viewers?  Just wondered. 

 

Interview Skills

Thursday May 26, 2011

Here is a good column on interview skills.  As he says don't wear flip flops to the interview. He also mentions that a job is a privilege not an entitlement. Note the author has a website with additional advice. 

The move to more and more online courses and communication means less face to face interaction. This is probably part of The New Relaxed attitudes about dress, attitude, and entitlement. Do you think?

Nook Takes Hold with Women

Wed May 25 2011

 

Here are 

five reasons why the Nook Color E Reader took off with women.

Social Media, Anything New Here?

Tuesday May 24, 2011

There is always a fad going round, clothing fads, food fads, and yes technology fads. Tech communications developments well let's see starting about 1840

telegraph

newsprint in 1850 makes newspapers a reality

telephone (initially rejected by Western Union by the way)

radio

television

media, cylinder used by Edison, phonograph record, reel to reel, eight track, casette, digital tape, VCR,  CD, Mp3, downloads, USB

Internet, and yes, the dot.coms

Now is social media a new deal. This article says no. Nothing has changed this is just a new medium

Hmm, we might ask as I posted yesterday, Mr. Murdoch how is that MySpace deal working out?

Such fads come and go, yes it is another way of communicating but that is all it is, what's the message, what's the product, what's the value?

 

What It Takes to be a Great Investor

Barry Ritholtz has a great column on what it takes to be a great investor.

My thoughts on his suggestions.

1. Historian - absolutely but looking at the numbers alone will not prepare you for the emotional involvement of what is happening. Reading about history is one thing, experiencing it is something else.  I proposed a business history course at another college but no one seemed interested. Too bad I have engaged in quite a bit of that self education since the melt down in 2008. 

2. Psychiatrist - This is where socionomics comes in. Understanding that changes in social mood bring changes in the markets is paramount, period. 

3. Trial Lawyer - for that one I would substitute External Auditor, a healthy does of professional skepticism is an absolute. As he says every CEO wants you to buy his stock. But is he or she doing so, that is not the case right now at CRM or OPEN, both hot stocks. What does that tell you, the insiders are selling, if the CEO is not buying  neither should you. NO matter how much you learn about the company you will not know as much as he does.

4. Math ad Statistics - You need math through Algebra I and Calculus. While most people recoil at the mention of calculus it has a couple of interesting features. One is the concept of a limit. 1/x never gets to the axis, it just gets closer. Another concept is a derivative function, the rate of change tells you what is happening internally in a market. Oh, and from algebra, a parabola or hyperbola is often experienced at market tops or bottoms. And don't overlook arithmetic, you know that percentage stuff. a

Most of the stat you will need is in the Dummies book on statistics. You need mean median mode slope regression and normal distribution and small distribution studies 

5. Accountant - Yes particularly Intermediate II on equity, e/s/ p/e and the 

income

balance sheet

cash flow

statement of owner equity

Without accounting there is no chance of reading the notes to statements and understanding them. 

 

 

Linked In

May 23, 2011, Monday

An alert Tx A & M SA Student e mailed me suggesting LNKD was overpriced. 

Indeed, the MySpace experience suggests that investing in social media can be much harder than it appears. 

Gee what happened to Netscape, Lotus, WordPerfect, hmm all near gone or Atari from decades back. Investing in any high tech idea is risky at best. And with everyone now paying up, that suggests expectations are over the top in terms of what might be actually achieved 

 

 

 

The Science of Prediction

Monday May 23, 2011

 

I have not seen the WSJ online delivered to a iPad, perhaps it is different from reading the paper on line. Reading the paper on line as it is one is deprived of the advertisements and some of the articles.And ads do reflect social mood, see the market blog today for example. 

But there is an interesting article in the print version but not on line about ideas that never happened, most from past Popular Science covers and articles. In 1919 circular runways atop buildings, then flying buses, monorails which are finally happening but not here, automatic highways and such. Well here is a short list of other things that were predicted that never happened. 

Swine Flu 1977

Y2K

Need for the SuperSonic Airliner - the Concord is now retired

the US will go to the Metric System, yeah right

Viet Nam will fall to the Communists, true but now the US manufactures goods there

A perfect example is the current mania for electric cars, trust me this will not happen!

and so it goes. Our point is that such predictions are nearly always wrong. But real disasters are never widely anticipated which of course is why they are disasters. 

Financial disasters like 1929, 1920, 1937, 1958, 1987, 2000, 2008, were all met with who could have known. And of course the people mouthing those words are always the high paid officials in govt and industry that are lauded as experts, but speechless when the unexpected happens. 

Oddly I am not aware of any college programs that focus on what it takes to accomplish successful predictions. INdeed most programs are backward looking relying on trend lines, regression lines, and the assumption that the trend never ends. 

Socionomics is the first example I have seen of a social science attempting to change that paradigm. 

Learn more here

http://www.socionomics.net/index.aspx

A Lost Generation?

Sat May 21, 2011

Grads are having a hard time finding jobs.  I am writing a paper on on the Student Debt Problem and I see more and more of this type of article. What caught my eye was that the architect student, with lots of internships to her credit, is now making furniture. Hmm I hope she took ACCT 3314 on break even and target profit. For some reason the embedded hyperlink function is not working so the link is below. 

Perhaps more amazing is that the students do not seem to be learning from their experience, to wit, a gal with degrees in French and English, now working in a video store, wants to...

She's looking at going back to graduate school to get a masters in English, hoping that when she completes the program she'll find a better job market waiting for her.

This is why I emphasize the importance of obtaining a certification in your field independent of the college degree. 

http://finance.yahoo.com/career-work/article/112754/recession-lost-generation-cnnmoney;_ylt=AlUNySLr6IA8giBT3jp9TNBO7sMF;_ylu=X3oDMTE5M3N2a3FmBHBvcwMyBHNlYwN3ZWVrZW5kRWRpdGlvbgRzbGsDdGhlcmVjZXNzaW9u