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

graphic-dow

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

terry-connelly

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.

Banks

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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Meet the Incoming Chair and New Members of GGU’s Board of Trustees

Randy Merk (MBA ’85), Incoming Chair of the Board of Trustees, is the retired Executive Vice President of The Charles Schwab Corporation and past President of Schwab Financial Products. He oversaw all mutual fund, investment management, insurance, and banking activities within Schwab, and from 2004 to 2007 he reported directly to the firm’s legendary founder and chairman, Charles R. Schwab.

Before joining the Schwab organization in 2002, Merk was President and Chief Investment Officer of American Century Investments, Inc., headquartered in Kansas City, Missouri. Prior to that, he was Chief Investment Officer for Fixed Income for two mutual fund companies: 20th Century Investors (Kansas City) and for Benham Capital Management (Mountain View, CA).

Merk earned a B.A. degree in Political Science from the University of California, Davis, and attended Golden Gate University where he was selected the Outstanding MBA Graduate in Finance in 1985. Today, Merk consults for financial service firms and teaches at GGU as adjunct faculty. He is known to his fellow board members for his financial acumen, his penetrating questions and his faith in the future of Golden Gate University.

New Board Members

Tracey Edwards (JD ’81, LLM ’83)

Tracey Edwards, who recently retired from Deloitte after 31 years, rejoins the Board and will be serving on the Law School Task Force. She previously served from 2000 to 2016.

 

Scot FerrellScot Ferrell (MBA ’88)

Scot Ferrell currently serves as the Chair of the Ageno School of Business Advisory Board. Managing Director at Marsh since June 2002, he is a member of the San Francisco Bay Area Red Cross Chapter Board of Directors and past President on the Board of Directors for the Fairview Fire Protection District.

Francis S. Ryu (JD ’95)

Francis S. Ryu has his own law practice in Los Angeles, leveraging trial success and dispute resolution skills to help clients prevent future threats to their companies. He has been a member of GGU’s Law Dean’s Advisory Board since March 2016. In 2013 he was voted GGU Alumni Association Volunteer of the Year.

Accounting Graduates Share Advice, Experience About Their Chosen Career Paths (Video)

If you are interested in starting a career in accounting or getting promoted to a senior position, this video features alumni of the Master of Science in Accounting program who are working in IT consulting, forensic accounting, and auditing at KPMG — one of the Big Four accounting firms. The graduates were asked:

  • Why did you pursue the career?
  • What is your job like?
  • How did GGU prepare you?
  • What advice they can you offer people considering an accounting career?

Here is some of what they said:

Dan Haigh, Senior Financials Consultant, Appirio (’16)

“I decided a Master’s-level degree at GGU would help me because, as a consultant with different clients, having many classes to choose from would put me at a different level than my peers. I applied the things I learned almost immediately.”

Justin Hibbard, Forensic Accounting, Forward Forensics (‘14)

“The great thing about GGU is that you have practitioners teaching.  So I might be learning how to assess damages with someone who is working on a case like that during the day.”

Stephanie Dodge, First-Year Associate, KPMG (’16)

“Associates to the bulk of the test work and the seniors will do organizing, planning, and review work. Promotion to a senior position takes about two years. The energy you need in the cohort program is same as when you are working and need to push through the busy season. It is challenging, but rewarding.”


Request information about GGU’s master’s degrees in accounting >>

 

President’s Report: Dr. David J. Fike Outlines GGU’s Present and Future

President David J. Fike joined Golden Gate University two years ago and has ushered in changes to keep what it offers to students fresh and responsive to rapidly changing times. He says: “Through economic booms and busts, GGU has remained impressively committed to providing a high-quality, pragmatic and professional education to working adults. That historic and ongoing commitment is our mission and our promise.”

During Dr. Fike’s tenure, new educational routes and degrees have come online that are specifically designed for career advancement for working adults:

Here are some facts gleaned from the report:

About GGU

  • For the second consecutive year, Washington Monthly ranks Golden Gate University America’s #1 School for Adult Learners in its annual College Guide and Rankings.
  • EMBA faculty—more than 80% of them—are scholar-practitioners, active professionals in the real world of business.
  • The incoming Board President, Randall W. Merk,  is a GGU graduate (MBA ’85) who is retired Executive Vice President of The Charles Schwab Corporation and past President of Schwab Financial Products.

About our Students

  • 89% are over 25.
  • 44% of undergraduates are people of color and 62% of first-year law students identify as a minority.
  • 48% of undergraduates are online students.

About our Graduates

  • 68,000+ graduates and climbing
  • GGU had the highest mean earnings of adult students 10 years after graduation among four-year colleges for adult learners.

What’s Next?

Dr. Fike reports that the Framing Our Future initiative will introduce new degrees and programs, integrate degree and credentialing programs for greater student flexibility, expand its partnerships with the business community, and implement strategic priorities and capacity building for continued leadership in the future.

Read the President’s Report >>

Can you predict what 2018 has in store for business, economics, politics, and sports? Take the Emeritus Dean’s Quiz

terry-connellyAt year’s end, I write the Business Dean’s Quiz about what the new year will bring. What do you think of my answers?

 

 

1) Where will the Dow Jones average stand at year end 2018 as compared with year-end 2017:
a) 10% or more higher
b) 10% or more lower
c) within 5% either way
d) less than 1% different
e) between 5% and 10% up
f) between 5% and 10% down

2) Which of the following companies will be acquired:
a) Time Warner
b) Netflix
c) Humana
d) Qualcomm
e) CBS
f) Macy’s

3) President Trump will have the opportunity to choose a nominee for the US Supreme Court before year’s-end.
a) True
b) False

4) Which Trump Administration senior official will not be in the same office at year end 2018 (List as many of these as you like.):
a) Treasury Secretary Mnuchin
b) Attorney General Sessions
c) Secretary of State Tillerson
d) Defense Secretary Mattis
e) Education Secretary DeVos
f) CIA Head Pompeo
g) UN Ambassador Haley
h) Office of Management and Budget Mulvaney
i) None of the above

5) Pick the stock that will appreciate the most in 2018:
a) Ford
b) Bank of America
c) Con Edison
d) Google
e) Apple
f) Alibaba
g) Facebook
h) General Electric

6) Pick the stock that will depreciate the most in 2018 among the following:
a) Netflix
b) AT&T
c) Chevron
d) Goldman Sachs
e) Lockheed Martin
f) Berkshire Hathaway
g) Citigroup
h) United Technologies

7) Bitcoin’s market value at year end 2018 will be:
a) at or below $10,000
b) above $10,000
c) essentially worthless and untradeable

8) The Democrats will recapture the House of Representatives in the 2018 midterms:
a) True
b) False

9) The Republicans will hold the Senate in the 2018 midterms:
a) True
b) False

10) Sports “Comeback of the Year”:
a) Tiger Woods
b) Aaron Rogers
c) San Francisco Giants
d) San Francisco 49ers
e) Washington Redskins
f) UCLA football team
g) Lindsay Vonn
h) Rory McElroy

11) The following will announce they are NOT running for President in 2020 (List as many of these as you like.):
a) Hillary Clinton
b) Donald Trump
c) Bernie Sanders
d) Elizabeth Warren
e) Jerry Brown
f) Ben Sasse
g) Cory Booker
h) Kirsten Gillibrand
i) Bill DiBlasio

12) Which, if any, of those named in Question 11 will announce early that they WILL run for President in 2020.

13) Which, if any, will attack another country pre-emptively in 2018 (List as many of these as you like.):
a) Venezuela
b) Saudi Arabia
c) Israel
d) Pakistan
e) Russia
f) North Korea
g) Turkey
h) USA
i) None of the above.

14) Special Counsel Mueller’s conclusion will be:
a) The Trump campaign was “extremely careless” in its dealings with Russian person, the Trump transition team acted in technical violation of the Logan act, and President Trump attempted to obstruct justice by firing Comey – BUT no “reasonable prosecutor” would seek to indict the President.
b) Trump did nothing wrong; no collusion was proven
c) Trump is indicted for obstruction of justice
d) same as (a) above but all matters should be referred to Congress for any action.

15) Whatever tax change bill passes the Congress and is signed by the President into law, a major unintended consequence will be discovered during the year which will require a fix before the 2018 midterm election:
a) True
b) False

16) The price of oil at year-end 2018 will be higher than the price of oil at year-end 2017:
a) True
b) False

17) The British will fail to successfully conclude “Brexit” arrangement with the European Union before the end of 2018, calling to serious question whether there will be in place by the March 2019 official deadline for an agreement:
a) True
b) False

18) The US Congress will pass and the president will sign significant new legislation regarding the following before the end of 2018, regardless of whether before or after the midterm elections:
a) reinstating “net neutrality”
b) abolishing the Consumer Finance Protection Bureau
c) providing permanent legal status to so-called DACA or “dreamer” immigrants
d) changing Medicare to a form of voucher program for new enrollees
e) repealing the remnants of Obamacare and shifting funds and full responsibility for health insurance regulation entirely to the states
f) killing the Iran nuclear agreement
g) establishing a federal/state/private enterprise partnership for infrastructure construction
i) none of the above

19) The MVP of the 2018 Super Bowl will be:
a) Jared Goff of the Rams
b) Aaron Rogers of the Packers
c) Tom Brady of the Patriots
d) Antonio Brown or Ben Rothlisberger of the Steelers
e) Mark Ingram or Drew Brees of the Saints
f) Russell Wilson of the Seahawks
g) Cam Newton or Christian McCaffrey of the Panthers
h) Case Keenum of the Vikings
i) none of the above

20) American financial firms will begin significantly to relocate their operation from London to:
a) Paris
b) Frankfurt
c) Amsterdam
d) Dublin
e) Luxembourg
f) all of the above
g) none of the above – won’t happen


Answers: 1 c; 2 c and d; 3 b; 4 c and f; 5 a;  6 g; 7 a; 8 a; 9 b; 10 d; 11 a, e and i; 12 b and g; 13 i; 14 a; 15 a; 16 a; 17 a; 18 a; 18 c; 19 d; 20 f.


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.


Request information about GGU’s advanced degrees in business >>

GGU’s Women in Leadership Series and Why It Matters


By Marianne Koch, PhD
Associate Dean, Ageno School of Business

We believe that GGU’s annual Women in Leadership event is valuable for women in the San Francisco Bay area at the start of careers in business, law, or entrepreneurship. Open both to the GGU community and the public, this event gives attendees the chance to learn directly from real-world experiences of highly successful and entrepreneurial women.

Marianne Koch

Held in the evening, the Women in Leadership event includes Q&A with panelists, networking with old friends and new acquaintances, and food and drink.  Since its launch five years ago, panelists and moderators – most of whom are GGU alumnae – have included executive-level women from Franklin Templeton Investments, Sequoia Capital, Salesforce, and Yahoo!; entrepreneurs from Lamano Law and Strategy Squad Insurance Services; and public servants from the SF Employees’ Retirement System, SF Child Support Services, and the State Board of Equalization.

This Year’s Event: Sharing Life and Career Experience

Last month, I moderated the fifth iteration of this event, which featured (pictured, left to right) Helen Fanucci, Global Windows Sales Leader, Microsoft Corporation; Nicole Middleton (MS, Financial Planning ’17), CEO of Strategy Squad Insurance Services, and Hazel Blackhart (JD ’08), Group Product Manager, Hematology at Genentech.

To get us started, I asked the panelists to tell us about some decisions they had made – both good and bad in terms of results – and what they learned from them. Their candid responses addressed the fallout from poorly timed decisions, finding the courage to take on assignments that they believed they weren’t quite ready for, and finding a trustworthy mentor who lit the path for them. From my place at the podium, I observed smiles, heads nodding in approval, and outbursts of applause of support from all.

Audience members took turns asking questions and sharing their perspectives on a host of topics related to women at work. Many questions were personal (“I’ve just been promoted to management and I have no role models; what do I do?”), or bold (“How do you deal with men coming on to you inappropriately at work?”). Audience comments were tremendously helpful and resources were shared as well. As in earlier years, the support and interest made for a useful and warm experience.

Women in Leadership organizers (left to right): Amina Kasumov (Enrollment Manager, GGU), Kendra Calvert (Director, Admissions, and Recruitment, GGU) and Marianne Koch.

Although growth in the number of women in leadership positions in the U.S. is extremely slow, events like these serve as a catalyst for that to change – and we are proud to be part of it.

Photo Credit: Jenny LeMaster


About Dr. Marianne Koch

Dr. Marianne Koch is an educator, human resources manager and consultant with experience in designing and delivering educational programs, and managing and consulting in the fields of human resource management and labor relations. She has worked in a variety of venues to help managers improve how they manage people at work, help organizations understand, clarify and improve practices for the management of people at work, and research and write about such issues as collaboration, work / family practices, and the relationship of human resource management practices to productivity. Dr. Koch is the Associate Dean of the Ageno School of Business, HR Program Director and also a Professor of Management.

Upcoming Seminars Cover Leadership, Analytics, Cybersecurity, Cannabis Policy, Ethics, and More

The Ageno School of Business is offering a series of seminars community at large covering timely, interdisciplinary, and applied topics.

  • Leadership models and personal development
  • Macroeconomics and the expansion of the economy
  • Business ethics
  • Cybersecurity
  • Analytics applied to fraud detection and sports
  • Cannabis law and policy in California

All currently registered Ageno Schoool of Business graduate students are required to register for and participate in one of these seminars. These graduate students have priority for registrations, but space is limited for each seminar. The sessions are open to GGU undergraduates and alumni as well.

Know Your Brain, Boost Your Effectiveness

Marcia Ruben, PhD

Monday, December 11, 2017

4:00 PM – 6:40 PM
(In-person only)
REGISTER >>

6:50 PM – 9:30 PM
(In-person only)
REGISTER >>

Analytics for Fraud Detection: Car Injury Fraud and AML Predictive Analytics

Prof. Sia Zadeh

Monday, December 11, 2017
5:00 PM to 6:40 PM
Room 5224 and online*
REGISTER >>

The Mindful Executive – Becoming the COO of Your Mind

Lori Granger, LMFT

Tuesday, December 12, 2017
4:00 PM – 5:30 PM
In-person sold out, online registration open*
REGISTER >>

The “Gig Economy” – What Is It? And What Does It Mean for You?

Tom Cushing, JD, MBA

Tuesday, December 12, 2017
6:50 PM to 9:30 PM
Room 3208 and online*
REGISTER >>

Applying Analytics to Win in Sports and Business

Dr. Gordon Swartz, Dean of GGU’s Edward S. Ageno School of Business

Wednesday, December 13, 2017
6:50 PM to 9:30 PM
Room 3214
(In-person only)
REGISTER>>

Cyber-Security Update – Interdisciplinary IT and Accounting

Ric Jazaie, CPA, Director of MS in Accounting (pictured) and Ross Millerick, Director of MS in IT Management

Wednesday, December 13, 2017
5:00 PM to 6:40 PM
Room 6208 and online*
REGISTER >>

Commercial and Social Justice Opportunities in California’s Cannabis Marketplace

Dominic Ripoli (JD ’15) and expert panel

(Interdisciplinary: Law and Business)
Wednesday, December 13, 2017
6:50 PM – 9:30 PM
Room 3208 and online*
REGISTER >>

Global Macroeconomics Trends: Catalysts and Implications

Mohsin Hafeez, MBA, CFP® (pictured) & David Kaczorowski, MBA, CFA®, Moderators

Thursday, December 14, 2017
4:00 PM  – 6:40 PM
Room 5221 and online*
REGISTER >>

 

 

 

Selling Your Company: Making the Most of a Once-in-a-Lifetime Opportunity

Todd Ganos, JD, LLM, DBA

Thursday, December 14, 2017
5:30 PM – 8:00 PM
Room 3214 and Online*
REGISTER >>

 



*In-person and online attendance for students
: If you are registered for on-campus courses, you should participate in an on-campus seminar unless the venue is sold out. Ageno graduate students have priority for in-person registrations, but space is limited. If all of your classes are online through GGU’s eLearning campus, you may participate in a seminar via Zoom conference.

Global Macroeconomic Trends Seminar Attracts Finance Luminaries to GGU’s San Francisco Campus

Experts from PIMCO, JP Morgan, Wells Capital, and Merk Investments Bring Real-World Experience to Audience

The longevity of the current recovery in the U.S.—the second-longest in its history—is creating uncertainty among some members of the financial community. Adjunct Finance Professor Mohsin Hafeez, MBA, CFP®, has invited a distinguished panel to a GGU seminar in December to discuss the complexities of the worldwide macroeconomic environment and their possible impact on the recovery’s duration.

Mohsin Hafeez

Mohsin explains: “Economic recoveries don’t necessarily die of old age; someone, or something, kills them. They respond to worldwide macroeconomic trends, central bank policies, geopolitical vagaries such as Brexit, wasteful excesses, a potential NOKO disaster, an overriding wave of uncalled for nationalism and populism, and financial snafus such as the dot-com burst or the mortgage-driven crash in 2008.” Join us for this special event to hear more insights from Mohsin and those of his fellow luminaries.

A Perspective on Global Macroeconomic Trends: Catalysts and Implications [RSVP] will include a panel discussion with:

Joachim Fels
Global Economic Advisor, Managing Director
PIMCO

 

 

Joshua Feuerman, CFA®
Managing Director
JP Morgan Asset Management

 

 

Gary Schlossberg
Senior Economist
Wells Capital Management Inc.

 

 

Axel Merk
President & CIO
Merk Investments

 

 

 
Mohsin, with several years of global experience in banking, is currently a Financial Planning professional at a large international financial services firm, and a founder of a corporate executive education venture, Global Minerva Alliance (www.globalminervaalliance.com). He will kick off the event with an overview of the global macroeconomic trends and the perceived catalysts and implications. Dave Kaczorowski, MBA, CFA®, Adjunct Professor and endowment investor, will co-moderate the panel with Mohsin.

The panelists will, taking a cue from Mark Twain, next discuss the question: “Are the reports of the death of the economic recovery an exaggeration? Or is there some veracity in them?” We invite the attendees to ask questions and join the discussion when we open the Q&A session. The free seminar will be of interest to all GGU students, faculty, staff, alumni, and the public.

RSVP Now

Global Macroeconomic Trends: Catalysts and Implications
Thursday, December 14, 2017, 4:00 pm to 6:40 pm
Location: GGU Campus, Room 5221
Free and open to GGU students, faculty, staff, alumni, and the public.
Click Here >>


Request information about GGU’s advanced business degrees >>

To Create a New Amazon Village, It Takes a Graduate Degree (or Two, or Three…)


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

Amazon made headlines with its stupendous 1300% “earnings beat” for its most recent quarter that moved the company’s stock up over 10% in just one day! But before that, the folks from Seattle made perhaps even more consequential news by opening a competition to American cities for selection to host the second Amazon headquarters (“HQ2”), with the prospect of 50,000 new jobs coming to their immediate region and total investment of upwards of $5 billion, which has provoked a bidding war among metropolitan areas across the U.S. and even Canada.

Just what kind of expertise and insight is involved in this exciting business venture that could create a local enterprise supporting a family population the size of a Bay Area city such as Santa Clara or Hayward?

Big Decisions, Big Data, Big Money

First, let’s consider the highest-level executive judgment involved, integrating all the various dimensions of Amazon’s long-term business strategy, growth plans, political interests, financial capacity, artificial intelligence involvement, staffing innovations, and logistical structures. Add to that current experiments with brick-and-mortar stores, drone and in-home package delivery, and wholesale pharmacy licenses, just to name a few.

Such integrative thinking calls for at least a first-rate Master of Business Administration program taught by real-world veterans of both the commercial and academic arenas. An Executive MBA program might well be even more apt, especially if it involves hands-on experience with current business problems involving entrepreneurial challenges faced by world-scale as well as start-up enterprises.

Amazon’s leadership team for this exciting project would need to involve also expertise in Business Analytics to frame the entire scenario for planning an executing such a complex and multi-faceted undertaking, involving detailed assessment of multiple locations and logistical considerations, evaluating over 200 proposals from municipalities against a defined set of financial and other criteria that set Amazon’s objectives in advance with precision and confidence.

Financial considerations would, of course, be front-and-center for AMZN given a $5 billion project far more complex than building a multi-million-dollar sports stadium or even a Disney theme park. A master’s degree in Finance would be necessary to make the team tasked to determine exactly how this project would be funded and the rate-of-return benchmarks to be used not only in scoping the project physically and evaluating the various forms of incentives to AMZN offered by the competing communities to determine which are in the long-term interests of the company.

People Power

Speaking of employees, a master’s degree in Human Resources would be extremely helpful in defining the criteria for the type of community where Amazon would like to locate its large workforce, ranging from top-level world-class senior management to the newest entry-level trainee. The company was explicit in the kind of social environment that it wants for this large-scale operation. The community’s engagement in sophisticated workforce development programs such as those that exist in Silicon Valley – supported by many established businesses in the area as well as educational and public service institutions – would be a prime consideration for the company’s senior HR professionals. Similarly, Amazon’s commitment to racial and gender diversity in hiring and advancement would be relevant in evaluating which location is most likely to advance the company’s goals in this area.

At the employee level, a Financial Planning graduate degree would come in handy eventually for assessing the cost-of-living considerations relevant to the tens of thousands of employees that Amazon’s HR department will need to attract a retain with compensation and benefits structures appropriate to the location – and, in the same vein, assess the same metrics in choosing the location most likely to attract the best and brightest employees!

Getting It Done

The design, planning, construction and operation of the new headquarters is a massive undertaking that would require the most sophisticated Project Management knowledge and skills that a master’s degree in that field would provide. The project leadership would have to involved from well before the word “go” in designing criteria to evaluate the optimal-location considerations in terms of design talent, land availability and cost, municipal services quality and availability, labor capacity and supply access to materials, weather patterns, and all other issues relevant to the company’s timetable.

Once designed, the project would have to be executed with attention to the desired timetable; contractor management; compliance with building codes and ordinances, labor standards, and clean-energy objectives and other resource-consumption considerations; local and regional transportation polices and interests; as well as community focus on traffic and public transport routing and planning — for necessary employee housing and related facilities such as schools. In these connections, professionals with a master’s degree in Public Administration would be very helpful in negotiating the nuances of local political and governmental authorities as well as federal and state agencies with stakeholder interest in the headquarters project design and execution.

Nuts and Bolts

A master’s-level education in IT Management would also be critical in terms of specifications for the fiber-optic network and related technology infrastructure required to meet Amazon’s standards and assure seamless and efficient communications between HQ2 and HQ1 — as well as a vast array of warehouses, logistical network, customers, suppliers.

Finally, but crucially, linking all of these complex operations, a master’s degree level of expertise in Supply Chain Management would be essential to get the most value out of the new headquarters in terms of Amazon’s multifaceted connections to its suppliers, merchants, and customers. By the time the new headquarters is fully operational, Amazon might well be operating its own cargo airline delivering food and pharmaceuticals as well as merchandise the company offers now.

What an exciting opportunity for anyone who could in the next year begin pursuing any range of graduate degrees that are so integral to the success of Amazon’s headquarters project. You might even call it a “Prime” opportunity!


About Terry Connelly

terry-connellyTerry 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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