The Flinchum File

Thoughtful Economic Analysis and Existential Opinions
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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.

When One Is An Ugly Number


For many decades now, Modern Portfolio Theory (MPT) has been the “gold standard” for investment management.  Basically, it shows that an investor can achieve above-average returns with below-average risks by spreading his risks or allocating his portfolio across many “asset classes,” i.e. large company stocks, small company stocks, international stocks, bonds, real estate, cash, etc. … Continue reading When One Is An Ugly Number

Thank You, Wells Fargo


Each month, the Bureau of Labor Statistics publishes the “jobs report,” which the media and the markets watch closely . . . too closely.  It is a flawed measure for several reasons.  One is that people get discouraged and quit looking for jobs, which decreases the available pool of labor and therefore makes the unemployment … Continue reading Thank You, Wells Fargo

Down-Shifting Social Expectations


Republicans tend to believe that marginal income rates will not be raised if we experience strong economic growth.  Democrats tend to believe entitlements can be increased if we experience strong economic growth.  While they disagree on the methods to achieve it, they agree that the solution to all our problems is strong economic growth.  What … Continue reading Down-Shifting Social Expectations

Giving the Devil His/Her Due


The latest forecasts from investment banking giant Goldman Sachs predict the following: 1.  GDP growth this year will average only 1.6%, reflecting damage of the government shutdown, but will jump to 2.9% for next year and unemployment will be “only” 6.6% by the end of 2014.2.  Inflation remains tame at 1.8% at the core level … Continue reading Giving the Devil His/Her Due

One Cost of Uncertainty


Due to the government shutdown, the all-important Jobs Report was delayed from October 4th to October 22nd.  While the delayed report showed the unemployment rate dropped from 7.3% to 7.2% and average hourly earnings up a bit, the other numbers were disappointing. Private sector jobs grew 161 thousand in August and were expected to grow … Continue reading One Cost of Uncertainty

Just Another 56-Year-Old Movie


I should have watched the film classic by the famous Ingmar Bergman called The Seventh Seal many years ago.  It plotted the emotional trail for so many combat veterans. In the mid-fourteen century, a priest convinces a young Swedish knight to leave his wife and castle to serve in the bloody Crusades.  Seeing death up close, … Continue reading Just Another 56-Year-Old Movie

The Joy of Unintended Consequences


Many laws have unintended consequences, whether at the national, state or local level.  Republicans believe that is proof the government never understands what it is doing.  Democrats believe that unintended consequences are a normal part of legislating.  Existentialists find unintended consequences to be absurdly amusing. Over the last few years, there have many changes in … Continue reading The Joy of Unintended Consequences

Rationalized Irrationality


Novice investors either expect the stock market to be efficient, according to Efficient Market Theory where all information is known by all investors, or they expect to invest based on hunches or even inside information.  However, experienced investors know to study the specialized analysts, and make rational decisions supported by careful analysis, but always expect … Continue reading Rationalized Irrationality

The Morning After


Congress finally did their job last night to prevent America from defaulting.  Yes, the international community had to get involved, with a host of “shame on you, America” comments and China asking the world to be de-Americanized.  The debacle in Washington was certainly not the best promotional piece for democracy. But, that is minor.  Take … Continue reading The Morning After

Falling Into Place ?


The pieces are already falling into place for the worst-case scenario to the current debt debacle in Washington. On Friday, mutual fund giant Fidelity announced they had sold all short-term Treasury notes and bonds, expecting they would be hammered if Congress cannot agree to raise the debt ceiling. Yesterday, a small auction of Treasuries was … Continue reading Falling Into Place ?

A Refreshing Change of Pace


During the national embarrassments that Congress creates ever more frequently, it is nice to read a little good news, such as three Americans winning this year’s Nobel Prize for Economics.  They were Eugene Fama and Lars Peter Hansen of the University of Chicago and Robert Shiller of Yale University.  Congratulations to each of them! Although … Continue reading A Refreshing Change of Pace

Ceiling Uncertainty?


As someone who tries very hard to keep political opinions out of his writing, I’ve always respected The Kiplinger Letter for keeping their political opinions private.  However, their newest letter said “For now, Republicans favor ideological purity over winning . . .”  I’m trying to judge whether their political opinion is showing or whether that is … Continue reading Ceiling Uncertainty?

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