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.

The opinions expressed in The Flinchum File are those of the writer, Jim Flinchum, and do not necessarily reflect those of Bay Capital Advisors, LLC

What, Me Worry?

The increase in consumer confidence during May surprised me.  It rose a healthy 5.1 points to 118.3, the highest since last September.  The consumers were polled following the lousy jobs report earlier this month, leading me to expect a lousy report on consumer confidence, as is normal.  (Of course, the polling took place prior to the Brexit vote, which badly frightened stock markets worldwide.)  Subsequently,…

Miscellaneous BREXIT Thoughts

First, polling in the U.K. has never been as scientific as it-used-to-be in this country.  With the tsunami of cell phones and the now-stylish disdain for anything remotely “establishment,” the percentage of the population actually surveyed has been dropping steadily for years in both countries.  In the U.K., it was thought that the betting odds were a more reliable indicator of the pending BREXIT vote…

Intellectual Scapegoating

The last chapter is almost every textbook on introductory economics discusses international economics.  Unfortunately, many courses don’t get to the end of the textbook, and the students miss the most interesting area of economic study.  One subject in that last chapter is always the Law of Comparative Advantage. A full discussion is beyond the scope of this brief blog, but that law demonstrates that nations…

Brexit Questions

Q.  Will the Brexit vote lead to a depression?A.  Of course, anything is possible but is not likely: Q.  Why did the stock market react so strongly about the vote?A.  Wall Street likes to worry but hates surprises. Q.  Did the British voters make a mistake?A.  The mistake was not going far enough in creating the European Union originally.  It has control over monetary policy…

The Morning After . . .

During election night in 1968 between Nixon and Humphrey, I was so fascinated by the role of demographics in elections that I stayed up all night, watching the returns.  The next day, I felt so lousy that I swore to never do that again. Last night, I stayed up all night watching the Brexit election returns in the U.K., because I could see the reaction…

Binary Betting

Remember:  the only guarantee about stock market behavior is that it WILL overreact!  Judging from the number of questions I’ve received about today’s BREXIT vote in the U.K., I expect a very volatile stock market in the short term.  This is a good opportunity to ask yourself whether you are an investor or a trader.  Warren Buffett is an investor.  Traders seldom live enough to…

R-Rated Fiduciary Explanation

The National Association of Personal Financial Advisors (NAPFA) has long been opposed to “hidden fees” being charged to clients.  One example is the sales commissions paid to stockbrokers when clients buy into mutual funds.  Another is the mysterious “12b-1” fee paid each year to stockbrokers.  Another is the value of exotic vacations for stockbrokers and their spouses for putting client money into the favored funds.…

Lemonade

There is one thing that older Republican men, older Democratic men, and older moderate men can all agree on — those increasingly frequent “sleep interruptions” are really annoying!  However, serendipity can sometimes make lemonade out of that lemon. In the wee-time of 0230 hours, I stood at our window overlooking the entrance to the Chesapeake Bay from the Atlantic.  In the darkness was a huge…

Que Sera Sera

Making no decision is an actual decision!  It is a decision to let whatever will be . . . just be . . . without any guidance or effort to change the inevitable. Some may think you cannot make a mistake if you do not make a decision, but they are wrong, because that is a decision to accept whatever will be. In a rapidly…

Millions . . . down the drain

As a strapping young economics student in the last century, we studied how prices allocate resources.  If a product has a high price, more people will want to sell it.  Eventually, the new suppliers of that product will provide more than consumers want and will have to start discounting the price in order to sell their inventory.  As profits decrease, the number of people wanting…

Leaderless ??

The war began in 2008.  Our armies arrayed themselves on the battlefield and waited for their generals.  Alas, only one general showed up, and that was only a lesser general.  The other generals stayed in the barracks and pointed fingers at each other.  The armies had no choice but to follow the one general who had the courage to lead.  Yesterday, that general was badly…

Shocked and Saddened

As someone who sees the world economy as a fascinating and almost living organism, it is rare that I can take my eye of it.  But, I have been shocked and saddened by the senseless massacre in Orlando.  The heavy fog of sorrow has fallen over Orlando, just like it did over DC and New York after 9-11.  While the body count may be less,…

5.79 Million Useless People

It is important to remember that recessions and bear markets are different.  Recessions happen in the economy, while bear markets happen on Wall Street.  There is a relationship but not a tight one.  We like to think that, since the average IQ on Wall Street is higher than the average IQ on Main Street, bear markets precede recessions by six months or so, because investors…

Coffin Fights?

One of my closest relatives is retired from law enforcement.  I am quite proud of him!  He has handled investigations from “routine, run-of-the-mill” murders to real headline-making mass murder.  Now in retirement but as a courtesy to a long-time friend in the funeral home business, he will occasionally get a request to attend funerals — to break up fist fights among the grieving family. What…

Investors Think the Darndest Things

Earlier this year, I had to take a 22-hour course on behavioral finance, which is about peoples’ attitudes and misconceptions about money and investing.  After all, there is considerable ongoing research in this field.  Frankly, it reminded me of Art Linkletter’s 1957 classic book, Kids Say the Darndest Things!However, one important point in that course was “garbage-in, garbage-out.”  If a person doesn’t see reality clearly…

Jobs, Interest Rates, and Libertarians

On average, there are about 160 economic reports each month.  Those are just the reports from the Federal government, various state governments, agencies, and trade associations.  That doesn’t include reports from the many banks, brokerages, and other commercial companies.  I would guess the combined total approaches a thousand reports per month. Can the average person process that many reports?  Of course not!  Pick your favorite…