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 Real Gold Standard

Readers know my description of bitcoin has always been  that it is an elegant solution to a non-existent problem.  One of the supposed benefits of bitcoin is that it was a store-of-value during a crisis.  Well, during this crisis, the price of bitcoin has fluctuated over a wide range between $13,208 and $6,320 during the first quarter of this crisis.  On the other hand, gold…

The French Front

Greg and Joan Wright are longtime friends, who retired in Virginia Beach, before fulfilling their dream to live France.  I miss them!  From time-to-time, Greg updates his friends on life in France.  As a retired lawyer, he writes well, with a distinctive wry style.  They are experiencing the pandemic in ways both similar and different to our American experience, and I hope you enjoy reading…

The Trauma of War

President Trump rightly said that he is waging a war against an invisible enemy.  Estimates of fatalities from this war range from a high of 2 million Americans to a low of only 80 thousand over six months — truly horrific!  While all deaths are tragic, some comparison with “normal” wars against a visible enemy is instructive. Total deaths in Korean War were 54,246 over…

In Praise of Math

Dr. Jeremy Siegel is a celebrated professor at Wharton and author of “Stocks for the Long Run.”  He is also my longtime favorite investment thinker.  I’ve read his books and listen to him whenever possible.  Yesterday, I listened to him again and realized that there is a disconnection that has been bothering me.  He argued that stocks remain the best investment and that the default…

A Thank-You Note

My father was a fireman.  He was always a little embarrassed that he was “just” a blue-collar worker.  As a boy, I imagined him running into burning buildings and thought he was a genuine hero.  Even after the firemen of New York proved their heroism during the 9-11 tragedies, when America lauded its firemen and other first responders, he still remained embarrassed, which I still…

AOC Wins . . . and Dick Cheney too!

In 2002, Republican Vice President Dick Cheney said “Reagan proved deficits don’t matter.”  Unfortunately, his comment unleashed a serious question – do deficits really matter at all?  Modern Monetary Theory (MMT) emerged from that discussion and has since been popularized by Democratic Representative Alexandria Ocasio-Cortez (AOC). Under MMT, the U.S. Treasury can spend ANY amount of money and pay for that spending by selling bonds,…

Quarantine Chore #3

If you are one of the millions under a Stay-At-Home order, if you are one of the millions “working-from-home”, if you are retired and worried, the first thing you should do is turnoff the television.  You can do nothing about it, and it ruins your day.  How about using your time more wisely . . . financial planning, for example? What if there was a…

A better perspective . . . ?

Every profession has its own professional association, and every professional association has conferences, where some professionals gather in the bar during the evenings.  Gray-headed professionals often snicker at the innocence of younger professionals, especially if they are not there. When gray-headed investment strategists gather in the bar, the classic “put-down” used for absent younger strategists is . . . “yeah, and I’ll bet he thinks…

NOT. . . A Bunch of Monkeys

The difference between a barbarian and an intellectual is more than just a change of clothes. All my life, I’ve heard the evil government is going to take my guns and my property.  That is simply irrational.  Maybe, some people have a need for paranoia?  Nonetheless, gun sales are already up 17% this year, with 300% sales increases in some stores.  With 380 million guns…

Odd Thanks

Barely a decade ago, the nation was sliding into a recession, one that became known as the Great Recession for good reason.  Like the Great Depression, the financial sector was at the heart of those economic problems.  In 2010, Congress required banks of all types to increase capital, as a buffer to absorb future losses, and to increase bank regulation to preclude “risky” lending.  The…

Coronanomics 101

This recession is very different than any before.  It started as a biologic crisis and is rapidly morphing into an economic crisis.  There are some hints that it MAY continue morphing into a financial crisis, but there is almost no sign of a credit crisis yet. The descent into this particular recession is not particularly unusual, except in one key respect — speed.  In January,…

Quarantine Chore #2

For those retired workers and for those newly stay-at-home workers — that insist on watching their portfolio shrink daily — let’s talk about something you will soon need . . . a Will. A Will is a legal document that specifies what happens to a person’s assets upon death.  Like a court-appointed lawyer, if you need a Will and don’t have one at your death,…

On October 19, 1987, my boss was winging across the Atlantic on the company plane to honeymoon with his new wife.  Telecommunications in 1987 were relatively primitive by today’s standards, so he was relatively late receiving the news that the Dow just dropped a terrifying 22.6%, almost entirely in the last two hours of trading.  He debated turning the plane around but wisely decided the…

The Long Arc ?

If World War II made the Greatest Generation see life in more absolute terms of black or white, good or evil . . . If Vietnam made the Baby Boomers more distrustful of both leaders and institutions . . . If the 9-11 attack on America made Gen-Xer’s more patriotic . . . If the Great Recession made Millennials value things less and experiences more…

Quarantine Chore #1

For those working from home and finding a little less work to do, this is the first in a series about using that gift of time. The most common misconception in financial planning is that the title of something doesn’t matter.  WRONG!  It is very important.  Most people think “Oh, I’ve got a Will that covers everything.”  Yes, that’s true and a probate court exists…

Leadership ?

When the Titanic hit the iceberg, the captain didn’t say “I don’t take responsibility at all.”  No, he manned-up and went down with the ship.  He didn’t blame his crew or his predecessor.  He was a real man and . . . a real leader. Typically, that was the actual quote from our current President, as he denied responsibility for the failure of CDC to…

. . . for a while . . .

While studying at three different universities, I enjoyed many courses in finance and economics.  But, I only had one course in biology and none in epidemiology, which is actually the most important – for a while. Sometimes, the rules of investing get suspended – for a while.  For example, diversification is a good thing.  That is because price movements in different assets normally go different…

The “Q” Word

There is a quarantine in your future.  Staying inside your own home is not the worst thing that can happen, assuming you actually like the other people in your household.  In addition to stocking the pantry for a minimum of 14 days, just plan for a “staycation.”  Make sure you have that book you’ve been wanting to read, as well as books or magazines for…

V or U or L ?

It was less than ten years ago, May 6th, 2010 at 2:36 PM, that the stock market quickly dropped a thousand points.  Thirty-six minutes later, the market had regained the thousand points.  This became known as the “Flash Crash.”  Because the bottom resembled the letter “V”, analysts still speculate whether downturns will be V-shaped, U-shaped, or L-shaped. There does seem to be some relationship between…

Kudos 4 Jim ?

It was 12 months ago that I predicted a recession this year.  Brownie points for me!  But, I expected it might be caused by a financial crisis, instead of a biological crisis.  No brownie points for me!  If I had thought about the problem of Russia’s struggle to dominate OPEC, this current oil crisis would have been more predictable.  Negative brownie points for me. Okay,…

Good = Bad ?

For most families, the monthly mortgage payment is their biggest expense, which is largely determined by the interest rate.  The lower the rate, the more affordable the mortgage.  Over the last year, millions of Americans have refinanced their mortgages at lower interest rates, improving their monthly cash flow.  That’s great, isn’t it?? Investors know the supply and demand for stocks determines the value of the…

The 1 – 2 – 3 – 4 Punch

A month ago, the sky was blue, birds were singing, and the stock market was at a record high.  Then, things started to change.  First, there was rumbling about some virus outbreak in China, but President Xi assured us they had it well contained.  Move along, he said, nothing to see here. Second, Wall Street became surprisingly nervous by the increased probability of a democratic…

Pandemics Matter

The first outbreak of bubonic plague was in the 6th century and killed 25-50 million people, estimated at half of the world’s population. The next outbreak of bubonic plague was called “The Black Death” in 1347 and killed another 25 million people.  It took 200 years for the world’s population to regain that population level. Smallpox came to America with Columbus in 1492 and killed…

8:30 AM ET, First Friday of Each Month

For many years, that has been the most interesting time of the month, because that’s when the Bureau of Labor Statistics releases their monthly “jobs report,” which normally moves the stock market, either up or down.  This month, economists expected 175 thousand jobs were created last month.   Instead, we learned that a whopping 273 thousand were produced.  It was a great report in all…

Daddy, Are We There Yet?

Anybody who has ever traveled by car with a child remembers the repetitive question of “are we there yet?”  Over and over again!  That is the current perspective of investors traveling through this major correction in the stock market – “is it over yet?” Remember:  The stock market HATES uncertainty.  When uncertainty rises, the stock market runs away and investors lose — temporarily.  Right now,…

Old Habits Die Hard

The Pentagon has often been accused, unfairly,  of always preparing to fight the last war.  During the initial build-up in Vietnam, they sent two Armor battalions, one into the Mekong Delta and the other into the highlands.  Unfortunately, tanks don’t do well in swampy jungles nor with long supply lines without roads.  Right objective, wrong tools!  Old habits die hard. The current objective on Wall…

Rolling Recessions

I have long preached that an economic recession is different than a financial recession, which is far worse.  (Think 2009)  A financial recession always triggers an economic recession, but an economic recession does not always trigger a financial recession. Personally, I believe that I can smell a financial crisis coming on.  I look for sudden changes, such as a surprise bank failure or an unexplained…