Teacher, Clinician, and Writer: An Interview with Psychology Chair Dr. Tom Wooldridge

You’re a Psychologist as well as a Professor here at GGU. Can you tell us more about your professional life?

Professionally, I wear two hats. Here at Golden Gate University in San Francisco, I am an Assistant Professor and the Department Chair in the Department of Psychology.

I also have a private practice where I see patients in Berkeley. I work with a wide variety of patients using a psychoanalytic approach, and about half of my patients come in with eating disorders or some struggle with body weight and shape. I think my professional practice is really important because it gives me real-world experience that I can then fold back into my teaching in the classroom.

We have two different programs, a master’s degree in Counseling Psychology that leads to eligibility for licensure as a Marriage and Family Therapist (MFT) or Licensed Professional Clinical Counselor (LPCC). The other degree program is an MA in Industrial-Organizational Psychology, which is a field that brings the principles of psychology to bear on the workplace environment. I teach courses, meet with students, attend faculty meetings, and do other sorts of administrative tasks. When I get time, I also work on research.

I think my professional practice is really important because it gives me real-world experience that I can then fold back into my teaching in the classroom.

Can you say more about your research?

The first article I ever wrote was on anorexia nervosa in male populations, published in the journal Eating Disorders: The Journal of Treatment & Prevention. That article – which was recently chosen as the “Top 25” articles published in that journal over the past 25 years, became the basis of my first book, Understanding Anorexia Nervosa in Males: An Integrative Approach, which was published by Routledge. Since then, I’ve published a number of different articles and recently released an edited book, Psychoanalytic Treatment of Eating Disorders: When Words Fail and Bodies Speak. Now, I continue to be interested in psychoanalytic approaches to the treatment of eating disorders.

Can you give us a brief explanation of psychoanalysis?

I think it’s a great question because, of course, the term is used in many different ways. For the purposes of this book, psychoanalytic treatments are those that draw, in some way, on psychoanalytic theory — which is a diverse body of work that has been developing for more than 100 years beginning with Freud, of course, but encompassing far more than him. These forms of treatment are often referred to as psychoanalytic or psychodynamic — and can be differentiated from psychoanalysis proper, which tends to refer to a more intensive form of treatment that follows similar principles.

Probably what I enjoy most about my work here is talking with people about their professional interests and aspirations. 

Perhaps it would be useful to describe a few of the unifying themes of psychoanalytic treatments. In no particular order:

  1. Focus on affect, or emotion, over cognition.
  2. Have a developmental focus — in other words, to situate a person’s current struggles in the context of their emotional development throughout the lifespan.
  3. Emphasize the unconscious — which, for our purposes, we might think of as aspects of ourselves that we don’t know well, often because those aspects have been too anxiety-provoking or otherwise destabilizing for us to explore more fully.
  4. Recognize that we tend to avoid, or defend against, knowing certain parts of ourselves.

Any final words?

My final word would be that if you’re interested in the field of Psychology, whether that’s Counseling Psychology, Marriage and Family Therapy, or Industrial-Organizational Psychology, reach out to me to have a longer conversation. Probably what I enjoy most about my work here is talking with people about their professional interests and aspirations. I’d love to speak with anyone who’s got passion and energy to bring to these important and quickly developing fields.

Tom Wooldridge, PsyD, ABPP, CEDS is Chair in the Department of Psychology at Golden Gate University, where he teaches courses in therapeutic communication and psychoanalytic psychotherapy. Dr. Wooldridge has been interviewed for by numerous media publications including Newsweek, Slate, WebMD, and many others for his work. He is an Executive Director at the National Association for Males with Eating Disorders and has a private practice in Berkeley, CA. He is a candidate at the Psychoanalytic Institute of Northern California.

Request information about GGU’s master’s-level Psychology degrees >>

MBA Student from Vietnam Wins Scholarship from Financial Women of SF Organization


While working as a finance intern at Hong Kong’s HSBC bank, Quyen Le (pictured above, center) decided that she wanted to go to business school in San Francisco to get access to the open-minded culture and business opportunities only it can provide. It just so happened that her participation in the Financial Women of San Francisco (FWSF) organization gave her access to a valuable professional network that otherwise would have taken years to build. What’s more, Le won FWSF’s annual scholarship in 2017.

The award includes a tuition grant of $10,000 for graduate students, a one-year membership in FWSF, and the assignment of a high-level mentor from the organization. Le was paired with Leslie Tabor who is Managing Director of Business Consulting and Education at Charles Schwab Advisor Services. “FWSF inspires women to achieve what they want in their finance careers,” she says. “We have had the opportunity to hear women from Gilead and Salesforce talk about work/life balance and where their career opportunities came from.” Le is now focused on outreach to her peers so they can get a chance to win the scholarship next year.

New Job

Quyen works at GGU where she helps students from overseas apply for a business degree. “I act as tour guide among other things. Many international students come here alone and so GGU understands that they need help applying and adjusting in the U.S.” she says.

New Challenge

Golden Gate University also offers the Investment Research Club sponsored by club mentor and adjunct professor David Kaczorowski, CFA. Quyen has joined and will participate in this year’s CFA Institute Research Challenge. The competition requires teams to create a written report and deliver a group presentation to a panel of financial services professionals.  Last year, the GGU team won the regional CFA Institute Research Challenge, prevailing over graduate schools across Northern California.

Upon graduation, Quyen (MBA, Finance ‘19) will be seeking an entry-level position as a financial analyst. Contact Quyen Le to learn more about the FWSF scholarship experience. You must apply by March 25th.

About Financial Women of San Francisco

For over 60 years, FWSF has pursued a mission of empowering professional women in the finance industry in the Bay Area. It supports over 300 members including some of the most successful women in the local business community. FWSF puts on social, educational and charitable events throughout the year, most of which are open to the public. To learn more about the scholarship and the organization, visit financialwomensf.org. For information about the application process, contact Lisa Slater, GGU adjunct professor of accounting.

Request information about GGU’s master’s degree in Finance >>

GGU Students and Alumni Provide Free Tax Prep to the Local Community


GGU is now a registered Volunteer Income Tax Assistance (VITA) program site, and will participate in the Earn it! Keep it! $ave it! program. Operating under the umbrella of the United Way and sponsored by the IRS, this nationwide program helps limited-income families with free tax preparation. For the 2018 tax season, students and alumni of the Bruce F. Braden School of Taxation will help taxpayers take advantage of special tax credits for which they may qualify such as the Earned Income Tax Credit (EITC), California EITC, or Child Tax Credit.

The effort to get GGU involved with VITA for the first time was led by Nooshan Famili, who is currently pursuing a master’s degree in taxation (’18) and works as a tax intern in Deloitte. As a UCLA student, she was a volunteer at an Earn it! Keep it! $ave it! location in Los Angeles and won a Super Hero award for her performance. Coordinating volunteers and promoting the event are part of her responsibilities for the 2018 program.

Nooshan Famili (’18)

As an immigrant from Iran, Famili appreciates the help VITA provides to help others like her understand their special tax requirements. “People who qualify for VITA generally get a refund,” she says. “VITA activities are also an opportunity for students to build new skills, interact with their peers, and network with GGU alumni and the taxation community.”

Famili also notes the enthusiastic support of Fred Sroka, Dean of the GGU School of Accounting & Bruce F. Braden School of Taxation, in bringing the VITA Program to GGU.

If you are interested in volunteering or taking advantage of free tax preparation, please see GGU’s VITA web page.

Request information about the master’s degree in taxation >>

Reasons for Career Change are Varied and Individual

By Wendy McWilliams
Intern, GGU Office of Career Planning


mcwilliams-project-manager-womenAs I approach my final semester of graduate school, the first major step in a total career change, it is fairly common for me to hear comments like, “Soon you’ll be making back all of that money you spent on college!” or something else implying that my motivation to pursue a Counseling master’s degree in my 40s was to increase my earnings potential. Ironically, my future vocation as a career counselor promises about half the salary of my former role as a software project manager (based on national averages.) I clearly have motivations other than money!

As a budding career counselor, the idea of what determines happiness and success in our professional lives is a favorite topic of discussion and reflection. In my case, being a stay-at-home mom put me back in touch with my core beliefs and aspirations while giving me the perspective to reflect on what wasn’t working for me as a project manager. While my decision was based mostly on strengths and values realignment, below are some additional reasons for changing careers. If any of these strike a chord, it may be time for some career reevaluation.

You want to work with your strengths (or at least not with your weaknesses!)

In my previous career, many of my natural strengths were utilized. I’m a planner who’s good at keeping the end goal in view. I’m skilled at building consensus, and I learned how to get up to speed quickly and be adept at changing direction. But, one of my core strengths, empathy, was left sitting on the shelf. I tended to be the one who knew if a layoff was coming or if somebody was about to quit or even if they’d had a bad weekend. While an interesting perspective, that quality did not help me do my job better. I am also methodical by nature preferring to take my time before committing to a direction. Yet, working in tech companies required me to constantly operate in a fast-paced manner. While we all can learn to work and even thrive in environments which are not optimal for us, not exercising your best traits, or being forced to lean on your weaker ones, can feel like using your left hand all the time when you are actually right-handed.

You want to work at a job or company that reflects your values.

According to the Barrett Values Centre, “values are the energetic drivers of our aspirations and intentions.” Values are our compass. If you spend the majority of your waking hours working in conflict with your values, it can feel as if you’re being pulled in different directions. For instance, you may be a staunch advocate of recycling and reuse but your job as a corporate event planner results in massive amounts of material waste. You try to take home all of the water bottles, pads of paper and drop off the leftover lanyards to your local reuse center, but it simply is too much.

While it can be frightening to consider making a change, this is the only life you have.

You are looking for a better salary or more advancement opportunities.

In some careers, there is only so far you can grow or advance before you have tapped out. Being bored at work can make the days go by like a snail crossing a gravel road every day (slow and painful). Or, possibly you need/want to increase your earnings potential. While big salaries are tempting, be wary of making compromises in other important areas, such as strengths or values, which may create job dissatisfaction later. A good fit is always important.

Your personal life circumstances change.

You’ve been laid off. You’re newly divorced and can move anywhere you want. Your kids have graduated from college and you no longer have to pay tuition. Your student loan is finally paid off. You survived a major accident or illness and your outlook on life has changed radically. Life is dynamic, ever-changing, but has your career kept up with your life? Maybe life has just handed you the opportunity you need to make a major change. Think about it…

You’re burned out.

You have been a television producer for a major news network for 25 years. You are at the top of your game. Your salary is great, your assignments are great, but the thought of working in the same job for another 15 years makes you want to pull the blankets over your head and hide. For many people, there is a point where we need something different no matter how good or successful we are at our current job. Sometimes it can be a readjustment of your current circumstances like a new location or a new company. And sometimes a major overhaul is needed.

Being a stay-at-home mom put me back in touch with my core beliefs and aspirations while giving me the perspective to reflect on what wasn’t working for me as a project manager.

You’ve changed your mind.

So, you’ve been an accountant for five years and it has been fine. You’re doing well, but you’ve never forgotten that job offer from your college roommate when she started her own company. Now her start-up has received a second round of funding and is going strong. You know the offer is still out there. Maybe you could try something else. You can always go back to accounting. Or your volunteer job leading backpacking trips is starting to become more real. Could you do it for a living? Maybe. Go find out. There is never any harm in exploring possibilities, and you can always decide to stay where you are. Remember. If you’re questioning your career now, you probably will do so in the future. Many of us think we are “stuck” without any chance of changing. While it can be frightening to consider making a change, this is the only life you have. Take control of it and help yourself out. You might be surprised what you come up with.

Having the benefit of a professional career advisor can help the process feel less overwhelming. GGU offers free career advising for students and alumni, so take advantage and make an appointment on GGUCareers.

Wendy McWilliams is completing her Master’s in Counseling with a Career focus at Saint Mary’s College of California. She worked as a software project manager for 15 years for a variety of Bay Area companies, was a stay-at-home mom for 10 years, and is looking forward to embarking on a new adventure as a Career Counselor. Email Wendy >> 

Learning with Accomplished Peers: The MBA Cohort Experience (Video)

Katharine Grimmer earned her MBA (’12) as part of a cohort: a group of students who journey through a degree program together. In this short video, Grimmer describes her cohort as “a group of smart, driven individuals..from different backgrounds and career areas.” Grimmer sites collaborating with peers outside her chosen field of biotech — and small class sizes — as instrumental in her education. Cohort-style learning also helped inform and inspire the launch of her entrepreneurial product, Lotus Rx Hair Solution.

Because Grimmer was working full time while pursuing an MBA, she chose to blend in-person cohort learning with online classes. GGU is nationally recognized as the #1 college for adult learners because it offers students like her the flexibility they need.

Request information about GGU’s MBA & cohort style learning >>

“What do the new corporate tax rates mean to my business?” Or “To C or not to C . . . that is the question!”

By Fred Sroka, Dean of the GGU School of Accounting & Bruce F. Braden School of Taxation

The tax rates for corporations have dramatically changed in 2018. The Tax Cuts and Jobs Act (TCJA) has reduced federal corporate tax rates from 35% to 21%. With this reduction, many flow-through businesses are asking whether they should convert to C corporations. Let’s explore the opportunity, and factors that may influence your decision.

The vast majority of U.S. businesses are organized as partnerships, limited liability companies (LLCs), or S corporations. These entities pay a single layer of tax on their income, while traditional corporations (called “C corporations”) pay two layers of tax, first at the corporate level (up to 35% federal) and second when the profits are distributed to the corporate owners (at up to 20% federal).

Choice of Entity in 2018: Three Key Questions

1. Can we convert to a C corporation for tax purposes?

Let’s begin with the simplest step, electing corporate status. Happily, the IRS has made this incredibly easy. Any LLC or partnership can convert to corporate status by filing form 8832. If the form is filed with IRS by March 15, the election can be effective retroactive to January 1, 2018! If your company is currently taxed as an S corporation, then you need to file a statement with IRS under Regs. §1.1362-6(a)(3) to terminate the S status and become a C corporation.

2. Will our taxes be lower as a C corporation?

It certainly sounds better to pay tax at the new 21% corporate tax rate than the 37% individual tax rate, even if your shareholders need to pay a second tax on any distributed profits. However, the decision is not that simple:

Cost Recovery: Incorporating will only save taxes if the business generates profits. TCJA allows very liberal deductions for purchases of business property. You may be able to reduce or eliminate your company’s 2018 income by simply buying new business assets.

Character: While many kinds of ordinary income is taxed to individuals at 37%, TCJA has dropped the tax rate on most business income to roughly 30% under new §199A. More importantly, capital gains are taxed to individuals at a 20% rate. If your business has substantial value in its trade name, goodwill and other capital assets, the decision to be taxed as a C corporation can lock current and future appreciation into double tax.

State Tax: The double tax on corporations also applies to state taxes. If the owners plan on distributing profits from the business, they should be sure to consider the state taxes imposed on both the corporation and the shareholders.

Basis: Tax basis is used to make sure that, at the end of the day, your cumulative taxable income or loss equals your cumulative economic gain or loss. If your tax basis in the business is less than total debt, the decision to incorporate can trigger immediate tax under §357(c). More importantly, corporations don’t allow owners to get basis in the entity’s debt. This prevents most businesses with substantial real estate (and related mortgages) from using corporate structures. Corporations also prevent the changes in basis due to transfers by owners from increasing the basis of company assets. In short, worry about incorporating any business that has a lot of debt or expects a lot of owner transfers.

3. Making the Decision to Incorporate

If your flow-through business is profitable, doesn’t have a lot of debt, doesn’t face a lot of state tax, and doesn’t expect many transfers, you may save substantial taxes by electing to be taxed as a C corporation. The benefits of incorporating are much higher if you plan to leave the profits in the business, since dividends from C corporations cause a second layer of federal and state tax. However, once you incorporate all current and future appreciation is locked into double tax, debt and transfers may cause increased tax burdens, and you can expect your state taxes to increase.

The vast majority of LLCs and S corporations will likely decide to retain their entity choice, benefiting from the newly reduced tax rates on flow-through business income. However, every business should consult with their tax adviser to see whether their tax structure fits the new environment of TCJA.

How to Learn More

The new tax law creates both challenges and opportunities for our alumni. If you advise clients, expect that planning for 2018 will add to the long hours already committed to the coming compliance busy season. If you’d like more resources, please feel free to email me. To build your skills, please also consider coming back for another course or two at GGU. We offer substantial tuition discounts to our alumni!

Request information about taxation degrees and courses >>

Bank of the West VP and Adjunct Faculty Member Shares Management Insights

Bank of the West is rapidly modernizing its services for our mobile, need-it-now world. But its business is all about people: serving diverse customers with different ideas about their money. As a VP, Branch Manager at the company, Victor Shin leads consumer bankers and operations staff — a diverse group of that come from different ethnic backgrounds and with varying personalities. A Senior Adjunct Professor at GGU, Shin leverages his high-level experience to teach undergraduates who will become the next generation of managers and executives.

“In the past, management practices were more top-down in attitude,” he says. “In the new generation of management, you have to come in as a ‘people-relater.’ People are different–and they are not you. The technical disciplines of management such as marketing, accounting, and finance are important but dealing with people is the nitty gritty stuff.”

Shin says that he got to an executive-level position in banking because he is naturally competitive and has the willingness to learn. His EMBA from GGU (’04) was part of his learning journey. “The degree is geared toward C-Level thinking. I was exposed to other senior managers in the classroom,” he says. “The GGU faculty are practitioners of their fields and deal with fortune 100 companies all the time. They were able to tell us what those companies are looking for in leadership. I try to bring the same approach to my undergraduate classroom.”

10 Management Insights from Victor Shin

1. As much as we want people to see what managers see, sometimes they don’t; so, you have to provide direction on how to do something in their own way.

2. Dealing with difficult situations is necessary; nobody likes conflict, but it is going to happen.

3. Managers have realized that they are not mind readers. They need to ask what people are thinking.

4. Likewise, if you don’t express your philosophy to your staff, they won’t know it.

5. People want core values established so they can achieve a goal as a group.

6. You have to be human and transparent because people are motivated by people they can trust.

7. Both new-school “organic” and more authority-based management approaches have value.

8. Management by objectives (MBO) is effective because it gives you a way to document and track quantitative goals, and refocus people if they get off track.

9. You need acumen in the three basic disciplines of business, but you must execute in a way that’s going to translate into success. The disciplines are Technical Skill (knowing what you are doing), Soft Skills (many of them related to Emotional Intelligence) and Self Determination / Motivation. Eventually, we all have to be accountable for our own actions and path in life. That is what people will see and hopefully emulate when you do it correctly. Communicating what you do along the way will help immensely. But at the end of the day, it is up to you.

10. When hiring, fit with the overall team is important. I like people that are open to trying all the wonderful kinds of foods that we have in the Bay Area. It shows they are open to new cultures and experiences.

More about Victor Shin, MBA

Victor Shin has over 20 years of experience in the financial industry in the San Francisco Bay Area, along with being a Senior Adjunct Professor at GGU since 2013. He has held various senior positions at major institutions such as Washington Mutual, Wells Fargo, Comerica Bank, and First Republic Bank. Shin also serves on the board of the Asian Business League of San Francisco and The Presidio Dance Academy. He earned a BA in Management and Accounting from Sonoma State University (’96).


Financial Planning Luminary Outlines GGU’s Degree Programs

This webinar recording provides information on both masters-level financial planning programs at GGU: Financial Planning and Advanced Financial Planning. The presentation is led by Dr. Dave Yeske, CFP® who is Director of the GGU’s Financial Planning programs and Distinguished Adjunct Professor. The Financial Planning Association® (FPA) has recognized Dr. Yeske as one of the profession’s leading minds by awarding him their highest honor—The P. Kemp Fain Jr. Award (2017).

Catch the Latest Webinar
January 23rd at 12 – 1pm (Pacific Time)

If you want to ask questions about the degrees in financial planning we invite you to the next webinar hosted by Dr. YeskeAn Enrollment Counselor will also be on hand to answer application-related questions. Participants will receive a waiver code to apply to one of our programs at no charge (up to $110 in value).

Register Now >>

Questions about the event? Contact Amina Kasumov.

Risks to the US Stock Market Rally in 2018 – “What Could Possibly Go Wrong?”


By Terry Connelly, Dean Emeritus of the Ageno School of Business 


It was hard NOT to make money in the American stock market because almost everything went right in 2017, with each of the DOW the NASDAQ and the S&P 500 indices up between 20% on up to 28%. Yet some Wall Street traders managed to fail against those benchmarks or even lose a lot of money, largely by shorting high-growth technology, going long energy or otherwise trying to live without the moderate to high price day-to-day price volatility that is the mother’s milk for trading profits. Investors who simply invested in those indexes did very well indeed: $1000 spent buying the S&P 500 index, for example, yielded a total of $200+ in profits by the last day of trading in 2017.

But even with such performance, the US market was surpassed by the returns of its global peers, as measured by the MSCI ACWI non-US Index that tracks non-US companies across other developed and emerging markets. According to CNN Money, Hong Kong’s Index was up 36%, India’s 28% and markets in countries coming out of the shadows of economic downturns like Argentina (77%) and Nigeria (42%) were also up substantially more than the US market.

Last Days of 2017

Indeed, the synchronized global recovery in 2017 – including Europe (with or without the UK), plus India, Japan and many developing markets (but excluding China) – was fueled by maintenance of relatively low interest rates and bond buying by major central banks including the US Federal Reserve and the European and Japanese Central Banks. This had a lot to do with the US stock rally – perhaps even more than the self-described hero of equities President Donald Trump. In fairness, his election obviously had a positive impact on stock values – investors quickly and accurately saw him and his Administration’s agenda as very favorable to American business interests. As a “discounting mechanism” for future economic value, the stock market anticipated his tax cut agenda increasingly as it became finally clear that it would pass in the late fourth quarter and rose 25% for the year.

Investors generally know about the risks of a North Korean nuclear conflagration and the Mueller investigation of possible Trump campaign ties with Russia…But there are other less-noted risks that merit attention.

Nothing in fact of substance to the equity market has changed between December 29, 2017 and the first week of January 2018 so many analysts have predicted a continuing positive run for stocks in the New Year. Yes, there was a 100+ point drop in the Dow the last minutes of trading that coincided with a last-minute headline on Reuters that Russian ships were secretly transferring oil on the high seas — in violation of UN sanctions — to North Korean vessels. But Russia denied any “State” involvement (just as China had done days before in response to a similar charge).

Diplomatic Relations in 2018

Denials aside, however, US relations with Russia, China, North Korea (and even oil) pose risks to the US stock rally that investors need to take into consideration as they count especially their unrealized winnings – as they also contemplate their moves under the new tax regime, which has lowered individual rates such that the 24% personal rate kicks in only when couples’ taxable incomes reach $315,000 while long-term capital gains rates for such folks still come in at 23.8%. This marginal effect is a whole new wrinkle in a tax code change that otherwise is far more favorable to capital than salaried income! The tax changes themselves also include some surprising potential pitfalls for investors as the year begins, as we shall see below.

New Market Risks that Merit Attention

Knowing “when to hold ’em and when to fold ‘em” is a skill often in demand and frequently in short supply. Investors generally know about the risks of a North Korean nuclear conflagration and the Mueller investigation of possible Trump campaign ties with Russia that could threaten impeachment and political turmoil. Thus far markets have not reacted adversely to these threats, nor to China’s relative economic slowdown in the wake of financial reforms and capital controls.

But there are other less-noted risks that merit attention. Let’s uncover some of those:

Trade War

A trade war with China has often been threatened by Trump, but no trigger has been pulled as yet — although there have been media reports that an Administration squeeze on China trade is coming as early as January. We know from the Depression onward that markets hate trade wars, especially right when the world economy, driven by trade, is just starting to come around.

Interest Rates

The price of oil has been recovering from a multi-year slump and closed the year above $60, along with the increasing price of other commodities in part due to the 7.5% decrease in the value of the US dollar in 2017. Such inflationary pressure could lead the US Fed to raise interest rates more quickly than anticipated now by the market. That outcome could be negative for US equities even if US GDP picks up to near 4% as Trump predicts.

[The] tax code change … is far more favorable to capital than salaried income! The tax changes themselves also include some surprising potential pitfalls for investors as the year begins…

Government Shutdown

Likewise, the Federal government’s unfinished budget business (which took second place to passage of the Trump tax bill) is now leading to a January 19 shutdown deadline that could also play havoc with equity values short-term — especially if both Trump and the Democrats conclude that a shutdown fight over “principles” is in their 2018 midterm election interest. Remember that politicians take credit for rising stock values, but blame “market forces” for corrections and crashes.

Corporate Tax Rates

Under the new tax “repatriation” provisions, US corporations holding cash profits at least technically offshore to income tax liability here are deemed to have repatriated that cash effective in the 2018 tax year and owe theirs in addition to the new special tax of 15% on those proceeds. Although they can spread the payment that tax amount over 8 years, many will follow the lead of Goldman Sachs and take a charge for that liability in their last quarter of 2017, creating a sharp decline or even negative result for quarterly profits – quite the opposite of the strong and steady increase in such profits investors had come to appreciate and value in 2017!

Will shareholders look past this one-time hit to the fact that the new tax regime severely limits taxation of foreign profits of US companies going forward with a new “territorial” based-regime more akin to the rest of developed world? That risk question starts coming up right now. Goldman’s stock closed 1% down after its decision was announced on the last day of US trading, in a reversal of a recent uptrend that had broken above long-term “resistance” levels.


We will also need to see what other banks do with write-offs of tax-loss carry-overs from the bad days of the financial meltdown beginning in 2007, which are now worth much less on their balance sheets than they were before the new tax law substantially cut their effective tax rates from the mid-thirties to nearly the teens. A knee-jerk “run” on bank stocks could also upset the equity market’s equilibrium early in the first quarter as last quarter charges hit.

Technology Stocks

Another sector that has been responsible for much of the equity indices march higher has been technology, especially the “FANG” stocks – Facebook, Apple (and/or Amazon), Netflix and Google (now officially “Alphabet). The risks here to investors are even more substantial and longer term.

Senator Mark Warner and others in Congress have targeted Facebook’s and other Silicon Valley giants’ failures to control Russian use of its platforms to spread fake news intended to interfere with US elections.

Apple ended the year with an apology for remotely and secretly controlling the internet access speed of older iPhones to save battery life. This is a worthy goal, for sure, but an unworthy process that ironically mocks the very same “net neutrality” policies – now overturned by the Trump’s appointed leader of the FCC – which other FANGS and, lately, Apple have so vigorously has advocated.

In addition, Amazon is in Trump’s sights most recently for its “cheap” delivery deal with the US Post Office. Netflix has its own problems with new direct competition from Disney and its combination with Fox Entertainment – not to mention its ongoing streaming rivalry with Amazon. And Google is under threat from the European Union for billions in fines and more for favoring its own brands on its search function.

Collectively, the FANG stocks spell more risks for investors even than individually, because their rising stock prices have along with other “tech” companies has elevated their percentage presence of that sector in “market-cap-weighted” indices like the S&P 500. If the market turns sour on a set of such tech stocks, it would bring down the value of the whole index accordingly. Thus the 20% profit enjoyed by S&P index investors in 2017 could quickly turn the other way if the FANGS collectively fail to deal effectively with their current challenges.

The Dow and Its Most Expensive Stocks

The Dow Industrial average, by contrast, is not market-cap-weighted but stock-price weighted – so that that it is the higher per-share price stocks like Goldman Sachs (and, Boeing, IBM, and Apple) can have outsized impact day to day. As noted, some of these companies have their own special risks going into 2018 and can bring down the Dow index if they are not handled well.

The best speech I ever heard on Wall Street, given to assembled investment bankers in the midst of a trading recession, was the simple “environ­mental” reminder that “trees don’t grow to the sky.” Even as the science of climate change undergoes severe challenge from the “fake news” crowd, 2018 investors would do well to remember that basic lesson of ecology.

About Terry Connelly

Terry Connelly is an economic expert and Dean Emeritus of the Ageno School of Business at Golden Gate University. With more than 30 years experience in investment banking, law and corporate strategy on Wall Street and abroad, Terry analyses the impact of government politics and policies on local, national and international economies, examining the interaction of global financial markets, the U.S. banking industry (and all of its regulatory agencies), the Federal Reserve, domestic employment levels and consumer reactions to the changing economic tides. Terry holds a law degree from NYU School of Law and his professional history includes positions with Ernst & Young Australia, the Queensland University of Technology Graduate School of Business, New York law firm Cravath, Swaine & Moore (corporate, securities and litigation practice in New York and London), global chief of staff at Salomon Brothers investment banking firm and Cowen & Company’s investments, where he served as CEO. In conjunction with Golden Gate University President Dan Angel, Terry co-authored Riptide: The New Normal In Higher Education (2011). Riptidedeconstructs the changing landscape of higher education in the face of the for-profit debacle, graduation gridlock, and staggering student debt, and asserts a new, sustainable model for progress. Terry is a board member of the Public Religion Research Institute, a Washington, DC think tank and polling organization, and the Cardiac Therapy Foundation in Palo Alto, California. Terry lives in Palo Alto with his wife.

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