Professor Elam

American Realty Capital Conceals Accounting Error

Thursday Oct 30 2014

ARCP apparently changed numbers to conceal a prior period mistake.

Whoops, the stock dropped 19% after that announcement. The Chief Financial Oficer and Chief Accounting Officer both resigned. 

Check out ARCP here.

We study the rules for reporting income. Violating those rules hs real consequences. ARCP is currently losing money. The stock price drop raises the dividend to 8%. Will ARCP continue to pay the same cash dividend?  Check out the cash flow statement to analyze this question. 

Sergio Plans a Ferrari IPO

Thursday Oct 30 2014

Sergio Marchionne  CEO of Fiat Chrysler plans an IPO for Ferrari. . It could net one billion. 

We are studying equity in ACCT 3312 and in 3310. This is an excellent article which illustrates why one needs to understand equity terms. Here are some of the issues at stake. 

Luca Cordero di Montezemolo stpped down after 23 very successful years running Ferrari. He wanted to cap production at 7,000. Sergio thinks 10,000 wopuld raise gross profit to one billion. Will a 50%^ increase harm the brand?  Prices stay high with limited production.

Is it a car company or a luxury brand. Luxury brands carry higher multiples than car companies. I would say it is much more Rolex than Timex, don't you think?

Only 20% of Ferrari would be sold the other shares would be a property distribution to Fiat Chrysler shareholders. 

I don't think companies issue paper stock certificates any more. That's a shame, imagine what  Ferrari stock certificate might look like, real Financial Art I would say!

 

 

 

 

Polaris Makes a Morgan Three Wheeler

Thursday Oct 30 2014

Polaris announces a three wheel 'car' as an addition to its three wheel motorcycle.

 

Look like one could get run over by an 18 wheeler and never be noticed. 

Survey Posted for Brooks TAMUSA Students

Tuesday oct 28 2014

As a group in the Organizational Development class at Texas A&M-SA, we are conducting a survey on student satisfaction at the Brooks Campus.  This survey includes satisfaction with amenities, student services, parking, class times/days, professionalism of staff and faculty, etc.   The survey was begun due to class conversations concerning their frustration with being treated like “outcasts”.  We hope this survey will give us a clear understanding of just how many students feel dissatisfied, what they are dissatisfied with and if this dissatisfaction will prevent them from continuing with our university or prevent them from recommending our university.  The results will be compiled, suggestions for improvement will be notated and the process, results and recommendations will be presented to Dr. Hurley and executive team for considerations.  This survey is set to expire on November 14th at 11:59p.m.   A number of professors have agreed to place the link on blackboard for their classes in request that they participate.  The initial question asks if the student is receiving extra credit for participation.  The extra credit amount (if any) is up to you.  Any assistance you can give is greatly appreciated.  Thank you.

 

https://www.surveymonkey.com/s/6WZMVHX

 

Kristal Eaker

Recruiter

President

SHRM@ Texas A&M University-San Antonio

The Fight for Market Share Apple Pay versus MCX

Tuesday Oct 28, 2014

Apple has a new system named Apple Pay. As always it is simple and elegant. 

Meanwhile Wal Mart has spearheaded another approach labeled Current C.

Current C requires several steps to complete a transaction, Apple only requires one. 

But CVC and Rite Aid shut out Apple yesterday. Asked if Current C woudl succees, Wal Mart replied, who knows, just as long as it hurst Visa. 

And so WMT wants the 2% VIsa is making. 

Ruble Slide Continues at Ruble to Euro hits 15 Year low

Tuesday Oct 28, 2014

The Ruble Hit Another New Low Today.

IN response, Russia adopts a budget assuming $100 oil.

The finance minister labels this an alternate economic reality. 

Questions for thought and discussion.

One half of Russia's income is from oil taxes. What is the effect of the falling oil price on Russian?

Why if the value of trhe ruble falling?

Why is capital leaving the country?

If you were the Finance Minister what alternatives would you sauggest?

Social Mood Regulates the Popularity of Stars - The Beatles

Weekend Octover 26, 2014

My high school and college years occurred during the 1960s and early 1970s. An Eighteen Year Bull market spanned literally my first eighteen years of existence from 1948-1966. Little did I realize the next 18 would produce opposite results, from 1966-1982-84. 

My primary research interest involves how social mood creates changes in society. This occurs across the spectrum from the stock market to musical and fashion tastes to whether humans go to war or make peace. Bill Clinton was lucky to preside over  the ending years of the last bull period from 1982-2000 . While he readily takes credit for what happened in the positive sense, all politicians do, the truth is that he was the beneficiary of a period of positive mood. Clearly Bush and Obama have not had the same experience as they are now in a time of negative mood and economic stagnation. 

THis theory of social mood is termed socionomics. Its found is Bob Prechter. He wrote a most interesting article depicting the rise and fall of the Beatles along with the social mood of the time. Social mood is always on display in that crucible of millions of votes every day in the stock market. 

Read this to see how the group peaked with the Dow in 1966 and broke up as the markets turned down in 1970. 

There is simply no comparable group today to demonstrate the popularity of the Beatles or how the British invasions up pended established American groups like the Beach Boys. Yes there are groups and singers that tour and draw thousands but the Beatles were an event, not just a singing group. 

Tech Boom Teeters

Friday Oct 24 2014

Some Tech INVestors are expressing doubts about the boom.

Shades of the dot.com bust are returning. 

Airbomb at $13 billion

Uber at $17 Billion

Snapchat worth a billion valuation with no earnings.

We have been discussin the turn down in Blue Chip fortunes, the positive social mood has given rise to antoher type of dot.com fever, anything tech brings a high valuation. Is it justified?

 

Josh Wagner, TAMUSA Alum, Speaks on Campus

Thursday October 23, 2014

Josh Wagner, now an Audit Senikor with Padgett Stratemann, is a gradute of the TAMUSA College of Business. He spoke to my ACCT 3312 5 30 MW class on October 22. 

Josh made the decision to attend graduate school at College Station. He related that yes the last semester there he took the Becker CPA review class taught by one of the A & M instructors. He passed three parts prior to working for P/S. Sudents, this is the way to do it. Plan on managing your time so you have a semester to study for the exam, that is also how I passed. I returned to UT Austin, took the CPA review class and other acounting classes. I then passed the three parts I had to take that May. I followed up the Practice that November. Josh related that he failed audit the first time thru with a 73 but he was taking final exams as well.  He went on to complete the CPA exam, For some there is one part of the exam that may prove troubling, and it is always a different part for different individuals. He noted that one reason for leaving P/S was the inability to pass the CPA exam. 

This is the precise reason I recommend beginning with another exam like Certified Book Keeper when yuou are an undergraduate. This will put you in the practice of successfully passing certified exams. 

I have heard many employees of CPA firms speak. We had them in every week at Tx State Accounting Club. But this presentation was a stand out. He spoke on this college experience, taking the exam, interning at P/S, being hired there and working his way up the past two years.

I recorded this on Adobe Connect and will make it available for all our classes later today on Black board. 

Ed Sanchez, TAMUSA accounting student, visits with Josh after class. 

A Life Well Lived

Thursday OCt 23 2014

Oscar de la Renta's death this week marks the closing of a design chapter. He dressed First Ladies and Hollywood stars. He was an immigrant from the Dominican Republic.

One line in this article caught my eye, when he advised, 'know your customer.'  Apparently he cast a wide circle, even Kissinger dedicated his latest book to the designer.l