The Flinchum File

Thoughtful Economic Analysis and Existential Opinions
Subscribe to the Flinchum File
View Archives

Welcome to The Flinchum File

I am an Accredited Investment Fiduciary at Bay Capital Advisors, an investment firm headquartered in Virginia Beach, VA. After retiring from Truist Bank, I started this firm to work more closely with a smaller number of clients, and it has been great! Our client load is about 25% of the national average.

Writing is not for the shy or the meek. It exposes a person’s mind and character. I hope you enjoy the view.

Perception vs. Thought

Obviously, there is a difference between careful, structured thoughts, which I prefer, and mere anecdotal observations, which  I try to avoid.  Still, at a large public function last night, I was struck by the intense anger I observed over the Fiscal Cliff . . . not fear but anger! Although I yield to no one in my disgust for the elected partisans in Washington, who…

Running With One Eye Open

Factoid-of-the-Day:   Averaging $161,579 per taxpayer — the most recent IRS data shows that the top 5% of income earners enjoyed 37.4% of all “adjusted gross income” but paid 59.1% of total Federal income taxes in 2010. Political types take that as proof-positive that the highest marginal tax rates need to be reduced, and then they’re off-and-running. Economic types take that as just another interesting data-point.…

Generational Fairness ?

Despite all the coverage of America’s Fiscal Cliff, the most intransigent obstacle to America’s stock market recovery is the continuing drama in Europe.  Of the 27 member states, most realize that Greece needs help — badly.  The nation most opposed to helping is Germany (along with Finland & Denmark).  In fact, even the IMF has had harsh words for German obstructionism in the last week.…

I am thankful . . .

. . . for the gift of living in a great country, which it still is. . . . for the military, which preserves our opportunity to be great. . . . for the constitutional right of privacy, if there is any left. . . .  for freedom of religion, if not freedom from religion. . . . for the economic system of capitalism, despite its often…

Either-Or . . . or, Neither ?

Not all relationships have meaning.  For example, take a look at this chart: It shows the Dow divided by the price of gold and suggests two possibilities:  Either the stock market is too low or the price of gold is too high.  Which is it? At first blush, you might say the great uncertainty we’re experiencing is scaring investors out of the stock market and…

Risk OR Return ?

How do you know if your investment manager is doing a good job?  Large institutional investors assign their investment manager with a benchmark and then compare investment performance with the benchmark.  (The S&P 500 is the most common benchmark.) The latest study shows that four out five managers failed this test both last year and this year.  So, how do you measure your investment manager?…

But Wait !!

The uncertainty of the election is gone.  You may not like the outcome, but removing uncertainty is always a good thing for the stock market. But wait!  The markets are now obsessing over the Fiscal Cliff — with endless nuanced arguments both ways.  Again, getting it behind us is more important to the stock market than the details.  Pundits seem to think there is a…

Thank You, G.I. Joe

I have only the highest respect and appreciation for America’s combat veterans!  They truly put everything on the line, asking for so little in return. Despite technically being an all-volunteer military, many soldiers find themselves in combat involuntarily, as their units were transferred before they could get out.  Some are there because they are true patriots, trying to save Motherhood and the Flag.  Some are…

The Beauty of Sausage

I was lost in my thoughts while running yesterday, when I suddenly realized that I had stopped dead-in-my-tracks.  I found myself simply standing there, because I had just realized that the negotiations over the Fiscal Cliff have already proceeded farther than they did last year — in only three days and without Obama & Boehner even meeting face-to-face. Anybody who has ever been involved in…

Longevity Trivia

I keep thinking about my classes on longevity, and there are a few unrelated things that seem to resonate more than others. For example, life expectancy rises with both education and income.  Perhaps, the reasons are obvious, but since those people are more likely to have a financial advisor, then the average life expectancy of our clients is longer than that of the general population.…

A Fitting End

The last day of my investment conference this week was unusual — we studied the problems of longevity. When I was certified decades ago, it was considered prudent to estimate 7% annual income from a balanced portfolio of stocks and bonds.  That’s means a person with a $100 thousand portfolio can reasonably assume an income of $7,000 annually to live on.  If that was not…

A True Rock-Star

Financial advisors tend to be a cynical, hard-bitten group.  They strain to merely applaud and seem to be genetically incapable of wild adulation.  So, it was surprising yesterday when our luncheon speaker was introduced.  He was Jack Bogle, founder of the Vanguard funds.  Even after 83 years of accomplishment, even he was surprised at the loud applause and standing ovation from 200 “know-it-alls” like myself.…

Boehner, Taxes, and Egos

Yesterday, the market stopped obsessing over the election and suddenly realized the wet blanket of the Fiscal Cliff and the wet blanket of the European financial crisis were both wetter and heavier than expected.  The Dow lost over 300 points. But, there was also a hopeful development in negotiations over the Fiscal Cliff yesterday.  The Republican position has been that there is a spending problem,…

Focused on Perspectives

One of our speakers today was the biographer of Warren Buffett, and she had some interesting anecdotes; one personal and two business. On a personal note, she asked him what was the personal characteristic that made him so successful, and he responded with one word — “focus.”  She looked around his large corner office and noticed the heavy, wooden shutters were all closed.  The great…

America Loses !

A month or so ago, investment advisors were polled to see who they hoped would win the Presidential election.  As I recall, an overwhelming 85% were Romney supporters. I’m attending an investment conference this week in Baltimore, and the mood is dour indeed.  However, world stock markets are apparently not so dour. The U.S. was up strongly yesterday, just because it was almost over.  Asia…

My Election Prayer

I will be happy if Mitt Romney wins the election — IF AND ONLY IF — the Republicans also take control of the Senate. Likewise, I will be happy if Barack Obama wins the election — IF AND ONLY IF — the Democrats also take control of the House. So, how can I be happy if the country is going in the wrong direction?  Because…

Maybe, The “Ultimate Absurdity” Is Not ?

Just as Supply-side economists reflexively state that a tax cut will solve any problem anywhere at any time, existentialists reflexively describe anything they don’t like as simply “absurd,” a word of special significance to them. Indeed, they argue that the “ultimate absurdity” is death. This weekend, I visited a loved one who has just entered hospice.  Since then, I have been thinking of the great…

The Art & Science of Bull

All year long, the most widely anticipated economic report has been the “Jobs Report” which will be issued this morning at 8:30 AM.  Of course, as the last important economic report before the election, it also has great political significance. Economists are expecting about 125 thousand new jobs, with the unemployment rate virtually unchanged.  (This number should not be skewed by SuperStorm Sandy, but the…

Emotional Distance

Do you remember when the first love of your life dumped you?  Do you remember the first time you were disappointed in your child?  Do you remember the first time when you actually realized that you were beating yourself up . . . over something somebody else did?  Do you remember how disappointed you were — the first time — that your favorite politician lost…