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Educational Experience Up Front And Personal By Nancy E. Cerqueira ‘13

 

Our Mission

The Stonehill College Financial

Management Association’s

mission is to provide opportunities for

professional interaction between

and among students,

practitioners and academicians to

promote the development and understanding of basic and applied research and of sound financial

practices, and to enhance the quality

of education in finance.

 

On the morning of March 29th, I awoke to the sounds of demonstrators protesting down the street where my shared flat was located, in the section of Arguelles, Madrid. I could hear the whistles of various police officers blowing as they tried to direct the high volume of cars that were attempting to squeeze through the road. This traffic and protesting was just the beginning of the “Huelga General,” or General Strike, that was prepared by two of Spain’s main unions, the General Workers Union (UGT), a Socialist union, and the Workers Commissions (CCOO), a Communist union. Due to the latest labor reforms and austerity cuts brought about by the new Prime Minister, Mariano Rajoy, and the Popular Party, Spaniards across the nation came together that day in an effort to show public support against new reforms and budget cuts. Unfortunately, although many Spaniards did participate, this strike did not dissuade the Spanish government, nor did it stop it from cutting 27 Billion Euros from its budget for this year, just a day after the general strike.

I experienced the further ire of the people of Spain later that night in Granada, a city in Southern Spain. We traveled with friends by car later that day to the city leaving early enough to avoid the demonstrations that were scheduled for that evening. We arrived in Granada around 9pm. While enjoying the company of friends and Spanish cuisine outside of a local restaurant, we were suddenly rushed inside by the workers of the bar. As we gathered our belongings in confusion, the employees of the bar quickly brought in any glasses or dishware that was left on the outside tables. As we waited inside, the metal cages that  

 

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Nancy E. Cerqueira ‘13

Nancy Cerqueira is a senior at Stonehill majoring in International Business and minoring in Spanish. In the spring semester last year, Nancy decided to do a semester internship in Madrid, Spain in part because of here interest in Europe and in part because Nancy has family in neighboring Portugal.

While in Madrid, Nancy interned for FRIDE, a European think tank for global action, which provides innovative thinking and rigorous analysis of key debates in international relations. Prior to her departure, Nancy spent two weeks immersed in Spanish language training. “I chose to go to Europe instead of South America because of my interests in Europe and family connections in France and Portugal. It was a wonderful educational, professional and social experience.  “  

 

are used to lock up the bar were lowered, and everyone quietly waited inside. Confused and scared, I had asked my Spanish friend what was happening. He explained that the demonstrators of the general strike in Granada were passing by the bar, and the owners of the bar wanted its customers and belongings to be safe in case the demonstrators proved to be violent. We waited as the demonstrators passed by the bar, blowing their whistles and chanting the phrase, “They want to end labor and social rights and finish off everything.”

I spoke with one Spanish native who was an English teacher at the university down the street. She and her boyfriend had been considering moving to another country in the European Union that was not suffering as much as Spain. Her principle issue (shared by other Spaniards with a similar idea) was she did not have the necessary funds to move and live in another more prosperous country. As she explained, “Having the idea is one thing, but having the money is another. We want to move to a country that has better job opportunities and better pay, but we are stuck because right now there is no way we can afford to move.” She continued, “We would need secure employment in that country before we moved. In countries like Germany and Switzerland, the cost of living is very expensive. It’s all just a mess.”

Spanish natives were not the only ones to share this perspective. I have family and friends in Portugal and they have expressed the same concern. One of my friends, Liliana Filipa Sousa, who is currently attending ESTSP in Porto, Portugal, explained to me that the closer she gets to graduation, the more she is considering leaving Portugal to explore opportunities in different countries because there are no employment opportunities in Portugal. More and more Portuguese are migrating to Brazil or Portuguese-speaking territories because they are so desperate to find employment. Much like my Spanish friends, Liliana described the anger that was sweeping Portugal in regards to the government and the steps they are taking to fix the economy.

I know other families from Portugal that have successfully migrated to different countries in the European Union, mainly France, Germany, and Luxembourg. In the case of my family, my parents, as well as my father’s side of the family were lucky enough to migrate to the United States. My mother’s side of the family had all migrated to France. The villages of my grandparents have slowly become less and less populated as more and more families are forced to migrate to different countries in search of employment. As my grandmother said to me once, Os tempos ‘tão maus, or, “times are bad.” She couldn’t be more right.

 

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Stonehill  FMA  Honored  With  2012  Superior  Chapter  Award   Repeat…Repeat! By Danielle Rellas ‘13

It was a chapter goal for 2011-12. But it was an important goal. It required cooperation and effort from many members of the Chapter. So when we heard that we received the Super Chapter Award earlier this year, we were thrilled. The Superior Chapter designation is the highest honor for an FMA Student Chapter or Honor Society. And according to the FMA International, only about 5% of active chapters receive the honor each year. Stonehill shared the honor this year with such prestigious universities as American, Arizona State, Auburn, Georgetown, James Madison, Loyola, Portland State, Temple, and Maryland to name a few.

Are we going for a repeat? You bet. We have been extremely active this semester with a series of guest presentations, events and activities including a field trip to Waters Corp. already behind us.

 Stonehill  Welcomed  into  CFA  Institute  University  Recognition  Program   By Danielle Rellas ‘13

Stonehill has become one of the first colleges to be welcomed into the Chartered Financial Analyst Institute University Recognition Program. Admission to the program means Stonehill's Finance Major has been acknowledged for incorporating into its curriculum at least 70 percent of the CFA Program Candidate Body of Knowledge (CBOK) and emphasizing the CFA Institute's Code of Ethics and Standards of Practice. The program positions students well to obtain the Chartered Financial Analyst® designation, which has become the most respected and recognized investment credential in the world. Entry into the CFA Institute University Recognition Program signals to potential students, employers, and the marketplace that the Stonehill curriculum is closely tied to professional practice and is well suited in preparing students to sit for the first of three levels of CFA examinations. Students in the programs will gain access to CFA Institute textbooks, journals, webcasts, and other educational resources.

 

 

 

Stonehill College Financial Management Association

2012-13 Chapter Officers

Danielle Rellas – President

Tyler Draper – VP Marketing

Dan O’Malley – VP Fundraising

Christopher DeNapoli – VP Finance

Christina Simoes – VP Social Media

Kevin McCann – VP External Communications

Greg Syrek – VP Investment Research

Joseph Chiappone – VP Investment Research

Amanda Le Blanc – VP Fundraising

Newsletter Committee and Contributors

Kevin McCann (Editor-in-chief), Greg Syrek, Joseph Chiappone, Nancy

Cerqueira, TJ Horrego, Dan O’Malley & Danielle Rellas

Michael G. Mullen – Faculty Advisor

Special thanks to the FMA Chapter at Zhongnan University of Economics

and Law

ON THE MOVE IN 2012  

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 Developing a dialog with the students of the

FMA Chapter at Zhongnan University, China is a natural extension of Stonehill’s global business curriculum. We are obviously a world apart in so many ways but are excited about the prospects of sharing experiences and building on our common brotherhood fostered by the FMA International.

Founded in 1948, Zhongnan University of Economics and Law (ZUEL) is located in Wuhan, a metropolis of Central China. The university is composed of schools in humanities, economics, law, foreign studies, journalism, business, public administration, accountancy, mathematics and education. Its full time teaching and administrative staff is as large as the Stonehill student body. ZUEL is the only university in China that is a part of the FMA.

We were curious about what a typical day might look like for an FMA member in ZUEL and the chapter was kind enough to contribute two essays for this publication. It was a great opportunity for them to practice their English writing skills and for us to get some different perspectives on Chinese economics and finance.

Kevin McCann ‘13, an International Business Major at Stonehill College spent the fall 2011 semester at the University of International Business and Economics in Beijing, China. Kevin has been our lead student representative in working with the students of the FMA Chapter at Zhongnan University, China.

 

 

 

ZHONGNAN UNIVERSITY, CHINA

BEYOND THE STONEHILL GATES

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Life Is Never Dull At University In China By Berry Wang (王艺伦 )

Freshmen Days At ZUEL – Not a day goes by without wonderful opportunities and activities outside of the classroom for students at ZUEL. Such activities are especially welcomed by freshman as the memory of the demands and monotony associated with preparing for the National Entrance Examination required to attend universities in China lingers. You cannot help but share a passion for any or all of the various extracurricular activities that enrich your life while attending university. At ZUEL, activities are generally broken down into three types: (1) Academic societies like the FMA, the Drucker Management Association, the Financial Investment Association, to name a few; (2) Recreational societies such as dancing club, magic trick club and the glee club; (3) career development societies including Blue Print Career Club, the International Accounting Salon etc. Anyone who is interested in any club or student society is free to sign up for it. Also, he or she is able to join several clubs at the same time. Thus, apart from classes, freshmen have a large amount of time to take part in various activities. Although while it is challenging to strike a balance between activities and studies, those who manage to do it will definitely stand out from the crowd, often winning scholarships and gaining other opportunities.

Notes From Sophomores And Juniors – Days for sophomores and junior students are a bit different than freshman. Most students have a clearer view of their future after about a year or two at university. Students who plan to study further for masters or doctorial degrees will spend most of their days in the library or self-studying rooms. Reading English in the early morning, reviewing lectures and readings the rest of day. For students who prepare to climb the career ladder when they graduate, they will engage more in building leadership and communication skills required when hunting for jobs. As such, you might see these students taking leadership positions in management boards, such as the student union, in clubs, or in taking active part in competitions such as business-case study competitions. Moreover, most students will begin to seek internships for the summer, as this is the perfect opportunity to pave the way for a first job.

Senior Students At ZUEL – Here, I will introduce to you the lives of the seniors who are job-hunters. Most of them finish their graduation requirements by their junior year, making it convenient for them to spend more time searching for jobs. CVs are carefully prepared and students do a great deal of research about the companies they might like to join. Throughout most of the academic year, many companies come to campus to recruit, such as banks, accounting firms (KPMG, PWC) etc. In cases where companies do not go to recruit at the ZUEL campus (like P&G), interested seniors will often travel to other universities where recruiting takes place.

As a student experiencing life at ZUEL, it is fair to say that it is wonderful, fruitful and colorful. We warmly welcome you to come here to experience a widely divergent life at ZUEL！

 

 

 

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Opportunity  and  Challenges  of  Doing  Business  In  China By Cindy Zhao (赵信)

Following the global financial crisis of 2008, the world economy has been slowing. And recently, it has been further hampered by the sovereign-debt crisis in Europe and export weakness in Asia. It seems the global economy is in need for something to give it a boost. As a result of all this, investors have chased after growth around the world and in particular, focusing on the emerging markets, including China.

China’s large population, fast GDP growth, and huge opportunity to start businesses are very attractive to potential investors. However, not everybody can or will succeed in China. Even well capitalized enterprises such as the “Big 4” accounting firms have had issues. So what does it take to be successful in China? Here are some suggestions as a student of business at Zhongnan University of Economics and Law (ZUEL).

Needless to say, there are many common things in doing business in both China and the U.S., such as the pursuit of effective management. Still, there are some important differences to note and getting familiar with the policy of China is very important. Take for example, the economic system. In China, there are two sectors: the public sector and the non-public sector. In the public sector, state-owned enterprises play an important role in economic development. However, after the economic reformation in 1984, the government began to put more emphasis on the non-public sector, from foreign capital to local private companies. Nowadays, China continues to allow increased international ownership but will

maintain influence over foreign capital to some degree or another. Knowing which industries are easier to enter and which are not is a fundamental point to consider before starting business in China. Otherwise, the exposure to all kinds of risk may end up costing your operation a great deal of time and money.

Second, the cultural differences are something that you can’t miss. It is well known that China has a large population, roughly 1.4 billion people. If the power of consumption is relative to its population, China should offer a great environment to set up business. At issue is whether this potential demand can translate into a large demand for your product. Sometimes it does and sometimes it does not. Many years ago, when Chinese productivity was not able to meet the demand of people, Chinese consumers were delighted to buy imported products. But that is not necessarily the case today. More and more consumer products are produced in China and are increasing in popularity among domestic consumers. If you want to succeed in selling to the Chinese consumer, you have to know the Chinese better than Chinese know themselves.

Lastly, innovation is still the most important factor in appealing to the marketplace in China. As said earlier, Chinese productivity is growing fiercely. However, homogeneity is a problem that has existed for a long time, especially in manufacturing business. At present, the Telecommunication and Internet industry play a big part in driving growth. Take for example, Alibaba, a

 

 

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successful E-business company. Alibaba was founded in 1999. It created an online trading platform for Chinese Internet users for B2B (business to business), C2C (customer to customer) to B2C. The publically traded market value of the company grew to $35 billion in 13 years. Although many E-business companies appeared later, Alibaba still remains the industry leader. The reason is that in addition to the construction of the platform, it also devotes itself to a payment system, logistics system and so on, making it a big business system that cannot be easily replaced. Besides, it continues to develop new products and create new platforms to meet the demand of potential new markets. So when competition is fierce, it’s necessary to think how to be more advanced than others.

There are many common ways to do business all over the world. The basics shared above should be given special attention to if we want to succeed in doing business in China. As with any market opportunity, the more you know about it, the greater chance of success. Business has gone global. So come on!

Certification Gives You An Edge

Certified Bloomberg training is available free to all Stonehill College students. Bloomberg terminals are located in the Stanger Tech Center and instructions can be found on the web at:

www.stonehill.edu/x24264.xml

Training could improve your grades and / or boost your chances of landing that prized internship or post-grad job opportunity.  

 

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Steps From The “Fiscal Cliff” By Greg Syrek ‘13

As the 2012 calendar year is coming to an end the “fiscal cliff” is becoming the most talked about topic. For those who are unaware of what this is exactly, it is simply a combination of tax increases and budget cuts to address the massive deficits in Congressional spending. That may sound good, but without proper due diligence, it could lead to serious economic consequences. If U.S. legislators cannot successfully come to a bipartisan agreement by the end of the year on how to change policy measures, it would greatly increase the risk of the economy falling into another recession during 2013 and could potentially impact our nation’s financial health in the long-run.

The first aspect of the fiscal cliff response involves tax rates and policies. In 2001 and 2003 the Bush administration passed a series of bills that reduced income tax rates across all tax brackets, made tax concessions on capital gains and relaxed policies for retirement funds. President Obama ultimately extended most of these provisions in 2010 in an effort to stimulate economic growth trade for increases in entitlement programs and federal aid. The agreement was temporary and set to expire on January 1st, 2013.

Next, the U.S. Government will be forced to make spending cuts across the line, affecting the majority of government programs and federal agencies, with the defense department taking much of the impact. Highlighted in the Budget Control Act of 2011, there would be automatic “sequestration” (triggered budget cuts) of defense and non-defense spending totaling

$110 billion per year for 10 years if Congress and the President cannot come to an agreement by January 1st, 2013. As a result, all of these measures are aimed to drastically cut the federal deficit, but the adverse effects this will have on short-term economic growth will be enormous. An automatic increase in taxes and spending, coupled with a sudden decrease in the deficit all at once will send the United States directly into another recession.

In the United States Congress, Democratic and Republican agendas and interests are at odds, hindering any progress towards a palatable solution. Many have suggested that the focus should involve reducing spending rather than increasing tax revenue, in addition to possible cuts in entitlement programs such as Medicaid and Social Security.

Arguments between the Republicans and Democrats have not paved way for much progress, even after the conclusion of the 2012 elections. Concern for what will be done before January 1st and what will happen after the deadline is growing rapidly. Professor Ewell of the Political Science Department at Stonehill College believes that the likelihood of any major decision being reached will happen beyond the deadline, thus Congress and the President will ultimately "kick the can down the road." What will most likely happen, according to Professor Ewell, is that tax cuts for households below the $250k tax bracket will be extended, and any major decision regarding budget cuts and deficit measures will take place after the fact. He also mentioned that the biggest problem now is not for Congress to find a solution that will not only benefit short term economic growth, but that will also protect our nation’s long- term capabilities to control our budget and handle our growing debt problem.

The solution is not simple, nor is the process of getting there. If our hope is to get to a viable solution then there must be cooperation between Congress and the President. The President must be less divisive in his policy and Congress has to act rationally not to bankrupt the nation.

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Will  Pandora  Find  A  Home? By T.J. Horrego ‘13

Look around the MacPhaidin Library or Stanger Tech Center some evening and one thing will be obvious, most everybody is tuning into his or her own personal music space. It might be on their iPods or iPhones or maybe through Pandora but it seems they are always tuning into something that helps deal with the toll of study. Technology has made music very personal and very portable. With the flush of new products by the major manufacturers in recent months, it will be interesting to see how things change going forward.

Since the inception of iTunes and the iPod,

Apple Computer has been the catalyst of change in the music industry. Its MP3-like devices and iTunes platform has emerged as the platforms of choice for consumers. In recent years, it has enhanced its market position with product innovation in the iPhone and iPad; allowing for multiple devices to connect to the Apple ecosystem. No other platform has rivaled iTunes’ ability to connect the listening, purchasing, storage, and transferring of music to devices in such a fluid and easy way. A closed ecosystem creates a scenario in which consumers are bound to device and the platform because of the inability to mix MP-3 purchases and devices. Consumers still have a choice but the Apple system just makes it far too easy to want to reach outside of the system for the same product Apple offers at a competitive price. As a result, no

true competitor to Apple and iTunes has been able to emerge. And as long as Apple stays out in front of the competition with novel technology innovations, it will be hard to see any company unseating its role as market leader. In fact, Apple just recently announced plans to implement a Pandora radio-type service in its ecosystem and make it standard on the mobile device.

As a result, entertainment company, Pandora, saw its stock price plummet on the news. The share price came off its September high of $12.57 and closed December 3, at $8.96. Heavy rumors suggest Apple will launch the product in early 2013. Pandora must adapt quickly, otherwise its prospects will quickly dim. There are multiple strategies going forward for Pandora to stay in the game. The idea and presentation of Pandora is genius in itself. Pandora allows users to listen to a shuffle stream of music that is dependent on user preference. Users choose an artist(s), genre, or composer and the application chooses songs in the same genre. Pandora offers users a “thumbs up or down” option; this allows the system to customize the mix of music to the customers liking. The application is free but users must listen to a short advertisement every so often.

Survival for Pandora may depend on its

ability to be integrated into another ecosystem. College-age consumers listen to Pandora religiously. Pandora is synonymous with studying at the library, pulling all-nighters and even the occasional power hour; it’s great for any time of day, no matter your activity. To stay relevant, Pandora must capitalize on its brand value, content, and user base assets. Pandora should market itself to potential buyers or investors as an asset in the battle for market power. Viable buyers include Amazon, and Microsoft.

Currently, Amazon offers an MP-3 store and

tablet device called the Kindle Fire. Creating an iTunes type platform will create competition in the space and benefit consumers. Amazon could offer Pandora in a package with the Prime Membership or the Kindle device. In the package would be a Spotify-type service allowing for renting of songs through Amazon’s store and the Pandora Radio service. The tablet market is young in its cycle and has tremendous room to grow. Amazon will need to differentiate itself going forward and Pandora could help in that strategic move.

The tablet and smart phone products are early in their life cycle and gaining market share is

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extremely vital now. Gaining loyal customers as they begin to form their preferences is the key to long-term, sustained growth. Amazon already owns a cloud service and this could be used for storage of MP-3s while also allowing access from multiple devices. The recent trend in the market has been for customers to prefer renting to owning. Examples include, Netflix, Red box, Game Fly, Spotify etc

. Microsoft recently released the Surface tablet

device and announced plans to create its own mobile device either with a partner or alone. With piles of cash and a stagnant stock, Microsoft needs to stay current and to assert itself into the device market. It appears to have taken the Burger King approach in that they have used Apple’s store location research to establish retail locations of its own. Microsoft must assert itself as a viable competitor to Apple and in order to gain customer confidence; product differentiation is a key. Providing a Spotify-type service for individual songs and the Pandora radio would rival Apple’s new strategy for its iPhone. This will create more competition and ultimately benefit the consumer.

The market for personal music devices is in a

very important stage where companies need to showcase their value as customers begin to decide on their favorite tablet and smart phone products. These are expensive but important products to own in today’s world. Customers spend a lot of time deciding on the purchase of this product and will most likely continue to purchase new versions if they are

satisfied. Upending Apple’s established brand will be difficult but Microsoft and Amazon may have a great opportunity if Pandora’s technology can find a home as part of their ecosystems. For those avid listeners of Pandora, we can only hope so.

Heard  of  “Cloud  Computing”?    If  Not,  Take  Your  Head  Out  Of  The  Clouds. By Dan O'Mal ley ‘14

Cloud computing has become one of the most efficient and vastly popular concepts in recent years. Through its development, businesses have the ability to subscribe to applications that allow their employees to access customized accounts while utilizing a secure and reliable network of information. This concept has transformed the technology industry and directly influences how businesses operate.

Inevitably, businesses have one purpose: to earn profits. In order for companies to generate revenue and operate properly, there are a vast number of variables required. Businesses have operating systems and applications to store and access information. These business applications cost money, and are typically very expensive. The ways in which this information is stored has progressed in recent years, from filing cabinets of paper records to colossal servers containing electronic files. These electronic

 

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files are essentially Cloud Infrastructure and prove extremely complex. However, the intricacy of this technology will reduce costs pertaining to company maintenance, as well as significantly increase efficiency.

The basic concept behind cloud infrastructure is to provide variability and availability. There are three types of cloud computing: Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). It is apparent that cloud computing is essentially a service for businesses and users. However, each of these three segments provides different demands for the end users. Individual users or businesses have unique requests and expectations. Cloud computing meets these demands and provides customizable applications to meet the users’ satisfaction. Microsoft is a great example of a company who offers all three of these services to their consumers.

Application use on the cloud provides clients with many technical advantages and results in significant savings overtime, opposed to using applications on locally managed servers. The largest cost reduction is a result of the lack of physical hardware that exists to manage a server. On average, servers cost more than $6,000, and this does not include maintenance, failure expenses, insurance cost, technology training, back up process, and most significantly, electricity expenses. Additionally, most

companies are not using one server, they are using multiple, if not many. Cloud Infrastructure eliminates the need for hardware and physical software investments, reduces time and effort for users, and eliminates the requirement for upgrades and physical maintenance.

Cloud computing also develops a collaborative relationship with both clients and business. Improved communication leads to both efficiency and profit maximization. The adoption of cloud computing in a company proves to have a significant impact on the cost benefit through improved efficiency, well-developed collaboration amongst the business and clients, as well as a more vast availability of resources.

Adopting the cloud will reduce costs, eliminate the time required to back up data, and will provide a substantial increase in the amount of data that can be stored. Once data in any form is stored on the cloud, it enters into the most advanced data centers in the world. There is no threat of mechanical failure resulting in the permanent loss of the data. It is apparent through studies and research that the transition to cloud is the future. Physical backup servers and storage centers will no longer exist. All information will be easily accessible, widely familiar throughout industries, and will be a reliable source for data storage.

 

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FMA STOCK MARKET SIMULATION GAME UPDATE

This year’s stock simulation for the 2012 fall semester was both exciting and competitive. We had a great turnout, 15 participators in total. The game started on October 10, 2012 and ended December 4, 2012. Our top three performers were Matthew Andrien ‘15, Kevin McCann ‘13, and Jimmy Gaughan ‘15. The three candidates realized returns of 12.23%, 5.15% and 2.07% respectively. All of these returns beat the market during this time period, with the S&P 500 posting a return of (-1.78%) and the Dow Jones Industrial Average at (-2.95). Over the past two months there has been a lot of volatility within the stock market simulation game. This year has been one of the most competitive yet with the Top 10 list in constant change. The officers of the Stonehill FMA congratulate the winners and alert the membership to be prepared for the next stock simulation game in the spring 2013.

Stonehill College Financial Management Association

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Stonehill College - Depart of Business Administration - Easton, MA 01770