Professor Elam

Whataburger Awards $90 Min Employee Bonus

Thursday April 1 2021

hWhataburger will award its 46,000 employees an average off $2,000 bonus for a job well donen during the pandemic

 

Nice to see a this happening right here in SA

Short Squeeze in Silver

thursday January 28 2021

 

First GME and AMC now Silver and silver miners.

What, AOC and Ted Cruz agree in an issue, huh?

The markets and government are voting for the hedge funds not the little guy who ran up  GME via options.

This is an authoritarian government, ruling by Exec Order rather than going through Congress.

Do you  do you recall business history, when was another time a crisis was generated by a private group challenging an exchange?

It was the Hunt Brothers in 1979-1980.

Read the link and see how then is now,  the exchanges and government do not like being embarassed.

 

Zoom Revenue Zooms

Tuesday Sept 1 2020

Zooom revenue jumped 355% to $663.5 M beating estimaes of $5400M.

  Articles from the WSJ

Companies cut back on MBA Job offers. This is in line with articles detailing schools cutting back MBA programs.

Take away for students, My contention that certificate exams now displace graduate degrees.

JC Penny  not long for this world, talks break down, who wants to assume $5 B in debt for a brick and mortar retailer?

Bill McGurn likens Biden to Huber Humphrey in  1968. Humphrey was running as a former vice President. He too was unable to accomodate the party's left wing. Nixon won on a law and order platform. Trump goes to Kenosha today.

Argentina goes bust again.  buyers of heir three year old 100 year b ond will get half what is due them.

India's GDP shrinks 23.9% in one quarter due to virus.

First commercial flight from Israel to UAE completes.

MCD dispute with former CEO Easterbrook eheats up, Easterbrook attempts to dismis MCD lawsuit against him.

lAmerican, Delta drop change fees.   The airline battle will likely be a lasts man standing affair.

 

JCP Talks Failing Chpter 7 Awaits

Moday August31 2020

The attorney for JCP says the rescue is in the wings but then he is still billing for his services.

As the talks stall and Kohls and Target appear to be doing at least okay, it is hard to see who would want to assume the $ 5 B in debt that JCP owes.

Ditto Sears. I suspect there is a lot more news like this ahead.

 

SMU Grad Founds Lone River Ranch Water, in Midland, TX

Monday Aug 24 2020

Katie Beal Brown created her own vbrand of hard seltzer - Ranch Water. A mash up of agave, lime juice, and flavoring to make a drink

that tastes like Tequila.

The website now lists three varieties.

She was working in mareting in NYC but the family had roots in West Texas. This is an interesting start up story during a pandemic. the product has taken offand is selling well.

I have not seen anything about what source of water she is using, The hard water prevalent in West Texas would not seem to be a good base but apparently that has not been a problem.

Dollar Surge Threatens Commodity Prices

Friday Feb 7 2020

Dollar Surge Threatens Even Modest Energy Recovery

Friday Feb 7, 2020 6 52 AM CST

Liquefied natural gas is at the lowest price on record in Asia at $3 per million British thermal units BTUs. That is down from $20 six years ago.

WSJ Friday Morning 2/7/20

Legendary Investor Jim Rogers observed that commodity markets have to fall below the cost of production to finally make a bottom. This wipes out the bull market excesses off those who borrowed too much money. Their debt load forces them out of the game, bankruptcy or merger, as the ‘strong hands’ take over. This column has warned that low LNG prices might/would threaten the billion dollar LNG export terminals being constructed in Corpus Christi and elsewhere along the Gulf Coast. Sure enough, Cheniere symbol LNG (how is that for irony?) dropped 3.4% Thursday to a new recent low of $57.65.   Debt ridden Chesapeake CHK is trading at 54 cents.

The entire energy complex (crude ,heat, gasoline, natgas) registered lows this past Tuesday. Taking those lows out will suggest any hope of a mild temporary recovery has been erased, which we suggested last week. The low Tuesday for natural gas was $1.80. Over production and lack of transport to markets has overwhelmed demand and price continues to fall.

As we have so often observed, to make matters worse, the US Dollar has surged to a new high. Asian contagion flu has investors running away from all things China and embracing the US Dollar, up 1.2% Thursday. The last high was 99 on the dollar index. I expect that be taken out this next week. Commodities like gold, silver, and energy are priced in US Dollars. A stronger dollar means commodity prices fall and still maintain their relative values.

Even if crude manages a short-term rally from its oversold condition here at $50.95, the wave patterns suggest lower prices over the next month. As posted last week, if the $50 level falls, $40 looks likely.

Narrowing breadth is a feature of a topping stock market. Just five stocks, MSFT, AAPL, FB, GOOGL, and AMZN account for 18% of the S & P 500. And it is their continued rise and weighting that is powering the averages to new highs. This reminds one of the top in 2000 when dot.coms, GE, and MSFT dominated. Speaking of which, TESLA is now worth well more than the BIG three automakers in the US. $55 billion of TESLA was traded on Tuesday more than the next ten most traded stocks including several of the FANGS.

TESLA is now valued at 183 times its $4.10 earnings. This looks awfully frothy to me, especially as social mood deteriorates further at the end of the State of the Union Message.

dennislelam@gmail.com

Social Mood Suggests Forthcoming Low in Energy markets

Weekend Oct 19 2019

Energy Prices Headed for November Low

 

Excerpts from Energy Shares Decline Faster than Oil Prices

WSJ Today

 

Horrific, terrible, abysmal, the worst

 

Growing consensus that the exploration and production business model just won’t ever work for investor in a $50-$5 a barrel world

 

“I expect there will be a number of insolvent companies looking for help in six months”

 

“It’s under siege, almost, it’s tough to go in with conviction.”

 

For months we have warned that weakness particularly in the energy service arena, XES, was warning of just this type of situation. Now it appears that things are bad enough to set off a final climatic sell-off.

 

Several things characterize significant market lows. A rapid mark-down in price, shares falling to below book value, and finally doom and gloom articles such as the above usually days or weeks prior to a bottom. , We can now check all those early warning boxes. Expect more doom and gloom articles right up to the moment of a market low. Recall that maximum negative mood occurs at the end of just such a move.

 

Natural gas prices may have to fall to $2.00 before a bottom is made.

 

This is because changes in mood are unremembered; all assume the linear trend will continue forever. It won’t and rarely does.

 

RIG has risen from $4 to $4.80.   Energy service XES is dead in the water. Ditto for Halliburton and Schlumberger.

 

I have been positive on refiners. That is the preferred area for fund managers.   In the last two months that buying has pushed Valero VLO from $72 to $90.

 

West Texas Intermediate has managed to stay above support at $51 but expect that level to fall in a last ‘we give up’ dismay of negative market mood.

 

Meanwhile social mood in Washington DC continues to trend negative. Just yesterday Trump informed Speaker Pelosi she was a ‘third rate politician.’ Impeachment is having difficulty moving forward and not House vote is scheduled.

 

But investors have pushed the Transports higher which is a positive for the Industrials.   This may well mark the seasonal low in stocks. But the low in Washington DC mood will surely be much lower

The Tariff War is not Working

Friday August 23, 2019

The Tariff War is not Working

 

When President Trump casually announced that tariff trade wars were easy to win, we warned that would not be the case. After a stunning two year rally, the markets are now mired in verbal insults , mostly from our side. This morning China threatens to make good on its promise to retaliate for higher tariffs imposed by the United States. Not surprisingly the DJIA is down about 250 points.

 

After bragging about his stock market success, lately the President has been using what one observer calls the Trump put. A put is a hedge on a move down in a security. When we have had days like this, a sudden drop in equity prices, Trump has followed up by relaxing the latest tariff threat. And so far the markets have accommodated this ‘talking up the trade deal.’ But as it becomes more and more obvious that China will wait Trump out until the election, surely lower prices are in store.

 

Gold and silver are rallying which is not a particularly good sign for the US Dollar or equity markets. But that is in line with our current predictions.

 

Trading at 26,008, the DJIA has not been able to surmount 26,400. At this point a move back tot eh late May low of 24,800 looks like a reality.

 

And speaking of lower prices, crude oil dropped 2.89% this morning on the China trade threat. Clearly the markets see trade threats as eventually slowing the world economy, as if the rest of the world were not slow enough already. That one-day drop is a good example of just how dangerous this kind of brinksmanship can be. Do not be fooled by those citing lower gasoline prices. Lower oil prices are signaling a much slower economy.

 

Halliburton sags to $18.25 and Apache looks like it is headed below $20, now trading at $21.15.

 

Social mood world-wide and in the US is particularly negative.   Inflation estimates for Venezuela are now in the million percent category. The Chicago Teachers Union just visited that economic train wreck.   The Union noted Maduro had not closed any schools, never mind there is nothing to eat. Protests continue in Moscow and Hong Kong.   Italy had another government collapse but what else is new in Rome?

 

With the elections a long fourteen months away, look for more ‘sudden surprises. ‘

 

VACO Acqauires Aventine Hill

Tuesday Feb 19, 2019

 

Vaco Acquires Aventine Hill Partners - San Antonio’s Premier Advisory, Consulting and Executive Search Firm     NASHVILLE, TN, Monday February 18, 2019 – Vaco, a global talent & solutions firm, announces the acquisition of Aventine Hill Partners (AHP), San Antonio’s premier advisory, consulting and executive search firm. The acquisition formally extends AHP’s reach into Texas and significantly expands both companies’ talent and solutions offerings. Now, more than 10,000 clients across a diverse set of industries will have the solutions their businesses need to succeed.    Vaco has a long-standing commitment to Texas, entering the Dallas market in July 2006. Since that time Vaco’s Texas reach has been steadily expanding. Today the 16-year-old Nashville-based company has a strong Texas presence with offices in Dallas, Houston, Austin and now, San Antonio. The addition of Aventine Hill furthers Vaco’s ability to serve more than 40 markets across the globe.   In 2009 Aventine Hill was founded with an unwavering commitment to helping clients succeed by improving business operations and profitability while simultaneously advancing the careers of their people. Helping people to succeed helps companies to succeed. As San Antonio’s largest regional professional services firm, AHP is poised to add hundreds of clients to Vaco’s already established client portfolio.     “One of the foundations of our success is a commitment to discovering and retaining high-quality talent,” said Beth Hair, Founder, and President of AHP. “We will continue to deliver an exceptional client experience but with Vaco’s greatly expanded network of experts, solutions, and service offerings. San Antonio and all our Texas markets will benefit.”    No AHP leadership or executive changes are expected as a result of this acquisition. Beth Hair continues as President of AHP and will work closely with Leslie Hector, Executive Partner for Vaco’s Texas operations.    “We are on a passionate pursuit to find and partner with firms who share Vaco’s hunger for helping clients, candidates, and consultants,” said Jerry Bostelman, Vaco Co-Founder, and CEO.  “The moment we met Beth and her team we knew we found something special. Our cultural and strategic alignment is in lock-step, and I believe together we will be an unstoppable force.”     “For several years now, we have been impressed with the entrepreneurial spirit and technological expertise Vaco brings to the table,” said Hair. “Without a doubt, our combined services will benefit clients for years to come and advance the careers of our talented team members. Most importantly, together with Vaco, we will accomplish our growth strategies while staying grounded in our servent-leadership values and the long-term success of our clients and consultants.”      Vaco also acquired MEBC Global, a Pennsylvania-based consulting firm specializing in supply chain processes, earlier this month. As a testament to Vaco’s aggressive growth strategy, the purchases of MEBC Global and AHP not only expand Vaco’s reach geographically but also increases its 2019 projected revenue to $650 million.  About Vaco  Vaco provides boutique-level service with global reach in the areas of executive search, consulting, permanent placement and strategic staffing. Vaco has become a premier talent & solutions firm by attracting, developing and retaining the strongest players in the industry for their entire careers, so they are available to serve clients, candidates and consultants for the duration of theirs. Since its founding in 2002, Vaco has grown to serve more than 40 markets across the globe, 800+ employees, 4,300 consultants and $500M in revenue. Vaco has been named to Inc. magazine’s list of the fastest-growing private companies for the past 12 years and was recently named to Forbes’ 2018 List of America’s Best Recruiting Firms. To learn more, visit vaco.com   About Aventine Hill Partners   Aventine Hill Partners, Inc. (www.aventinehillinc.com) is a Texas-based professional services firm serving Austin, Dallas, Houston, and San Antonio. We provide our clients C-Level Advisory; Consulting; Interim & Project Solutions; and Executive Search in the areas of Accounting & Finance; Business & Technology; and Risk & Compliance. We are a leader because we approach serving clients, consultants, and candidates in a way that achieves the highest quality outcomes without compromise. Our commitment to people we interact with, coupled with our methodology of uncompromising quality, is our differentiator in achieving results for our clients.

Cartoon of the Week, if no Year

Wednesday August 29, 2018

Tom Perez, Chair of the Democrat National Party, has declared that "socialism is the future of our Party!"

This cartoon on the topic says it all.  This blog is all about business, not the political science Dept.