In the early mists of time, high priests could predict the future by reading the entrails of a chicken, lamb, or goat.  From a mess of goat guts, they could see the future. “Technical” analysts look at price movements of stocks to rationalize the buy-and-sell decisions of investors.  Sometimes called “chartists”, they don’t even need … Continue reading Waving at the Future

Probate has earned a bad reputation.  When a person dies with assets that become part of their “estate”, the probate court steps in, making sure the assets are distributed to the right person.  It is a necessary public service but an annoying public service.  It is slow, paper-intensive, and costly.  The good news is that … Continue reading Title Troubles

In March of 2017, I predicted Donald Trump would not serve a full term.  Long before he could be impeached and removed, I expected this most thin-skinned of men would tire of the inevitable criticism and just walk away.  Declaring victory and resigning would allow him to retain some minimal dignity after office.  However, I … Continue reading The Greatest President’s Day?

Due to the coronavirus outbreak, estimates of China’s GDP growth are dropping fast.  Starting the year at a relatively modest 6%, most forecasts are now in the 0 – 1% range.  This is a huge drop in short time. While I have great sympathy for the thousands of sick and dead, I feel a certain … Continue reading China Fog

The most common question over the last few weeks is how is the coronavirius going to impact the stock market?  The obvious answer is nobody knows, of course.  But, the history of this great country is that major problems develop, get resolved, and then we keep growing.  That history is why advisors recommend clients stay … Continue reading The Next Black Swan?

Last week, the Bureau of Labor Statistics released their monthly “jobs report.”  It showed the labor market is strong and getting stronger.  The three-month rolling average was 211 thousand jobs, compared to a 2019 average of 175 thousand jobs created each month.  The market yawned. Can you remember that from October of 2008 to March … Continue reading Ho-Hum

Walter E. Williams is a long-time economics professor at the conservative George Mason University.  His most recent article is interesting.  It is entitled “How to tell good economists from the bad,” explaining a good economist can see the obvious – obvious to his eyes, anyway.  He gives two examples.  First, who pays tariffs?  He goes … Continue reading Judgemental Economics

Early on, I recognized that Google’s motto of “Do No Evil” was a joke.  They sold personal information on their customers to anybody who can pay for it.  Then, Facebook came along and made the sale of personal information into a major industry.  Now, nobody is certain how many companies are selling your personal information. … Continue reading Innocence Lost

While I have great respect for The Office of the President, I have rather less for the current occupant.  Therefore, when he does earn some respect, he deserves credit for it! At the prodding of his daughter, the President signed an Executive Order last week establishing an office to combat human trafficking, which is a … Continue reading Thank You, Mr President

The four greatest innovations in the history of mankind are: FIRE — used to provide heat, to provide light, and to cook food THE WHEEL — used to transport people and goods more efficiently THE INTERNET — used to bring the world’s body of knowledge to every person BLOCKCHAIN — a worldwide “read-only” spreadsheet using … Continue reading True or False ?

For reasons best understood by your neighborhood nerd, yesterday’s blog dropped the most important paragraph!?!  With apologies, the corrected blog appears below: While I have been a long-time advocate for exchange-traded-funds (ETFs), I never thought they could bake bread nor cure the common cold.  Yesterday, I attended a lecture entitled “Combating Fake News:  Why Exchange-Traded-Funds … Continue reading Just Another Useful Tool – corrected

While I have been a long-time advocate for exchange-traded-funds (ETFs), I never thought they could bake bread nor cure the common cold.  Yesterday, I attended a lecture entitled “Combating Fake News:  Why Exchange-Traded-Funds Won’t Cause the Next Market Sell-off.”  I saw a great many graphs documenting that ETFs continue to grow during both bear and … Continue reading Just Another Useful Tool

In 1988, I completed my financial planning studies and proudly earned a CFP certificate.  Over all those years, I have enjoyed the prestige of being certified, even as the costs increased, the red tape mounted and the continuing education droned on.  Last summer, I was asked by Old Dominion University to teach the capstone course … Continue reading What’s The Point?

I hate long-term bond funds.  I hate annuities.  And, I really hate IPOs (initial public offerings). IPOs happen when a private company wants to sell part of its ownership on a public stock exchange, like the NYSE.  (Of course, it begs the question of why would I want to sell part of my company when … Continue reading Lukewarm IPOs is Good News

Bernice King once said “In my view, it was no accident that Nelson Mandela was chosen by God to lead the people of South Africa. There are very few people who could be imprisoned, kept away from their family and loved ones, and exit that same prison with such a powerful spirit of love and … Continue reading A Plea for Healing

Imagine you make $100 thousand a year and then imagine carrying $322 thousand in debt.  You would probably be in trouble.  Fortunately, the interest rate on your debt is artificially low.  Now, think globally, where worldwide debt has reached $257 TRILLION, which is 322% of worldwide GDP. Some people see that as proof of profligate … Continue reading Praying for Inflation

One of my favorite analysts is the affable Dr. Jeremy Siegel of Wharton.  In his last commentary, he doesn’t foresee any recession but thinks the stock market has gotten ahead of itself.  It is just going up too fast, and “trees never reach the sky.”  He recalls January of 2018 when the same thing happened, … Continue reading The Wizard of Wharton

Logic is not always the same thing as truth.  Sometimes, logic is absurd. I have voted for numerous Libertarian candidates over the years.  Recently, I was talking with a long-time Libertarian friend.  He saw nothing wrong with arming school kids.  Anybody should be able to buy as many guns as they like and take them … Continue reading The Danger of A Clever Thought

The Bank of America has an interesting forecast.  The current bull run in the stock market resulted from the relatively-sudden easing of geopolitical tensions, a decision on Brexit finally, and confidence in the November election, as well as highly supportive central banks (Fed & ECB).  The Bank believes these problems are not over, but merely … Continue reading Consistent With History?

For faithful readers, my latest quarterly column for Inside Business can be found here: https://www.pilotonline.com/inside-business/vp-ib-expert-flinchum-0113-20200106-paeou5gjtbaivmhr6y5bpmatou-story.html

I enjoyed listening to pundits talking this morning about how boring the monthly “Jobs Report” was.  Compared to expectations of 160 thousand new jobs, only 145 thousand were created last month.  Big Deal!  The unemployment rate was unchanged at 3.5% — a 50 year low.  The U-6 level of under-employment dropped to 6.7% — a … Continue reading In Praise of Ho-Hum

Bob Doll is the chief equity officer for investment giant Nuveen.  For an investment strategist, he is remarkably humble and affable.  Each year, he makes 10 predictions and has a good track record.  With my comments in parenthesis, here are his 2020 predictions: The world avoids recession in 2020 as U.S. GDP grows over 2% … Continue reading Affable Predictions

During my first year in the Army, I learned infantry tactics and saw the military world from a top-down perspective, as in brigade-battalion-company-platoon-squad.  However, on the very first day of Special Forces training, I was taught to take a bottom-up perspective and that the atomic bomb was NOT the ultimate weapon.   The ultimate weapon is … Continue reading The Ultimate Weapon

Wouldn’t it be great if you could buy a nice present for your friend and then send the bill to THEIR children?  Congress just did that and did it on a bipartisan basis! It has the pleasant name of Setting Every Community Up for Retirement Enhancement Act or SECURE.  It reduces the tax burden on … Continue reading Budget InSECURE

When I was a boy, my mother would remind me to write down my New Year’s Resolution each year and tape it to my door.  Like most kids, my resolutions were usually (1) to do ALL my homework or (2) keep my room clean or (3) feed my dog – “Pal” – before leaving for … Continue reading New Year’s Resolution

Among my holiday reading was Lifespan:  Why We Age – and Why We Don’t Have To” by Dr. David Sinclair of Harvard.  He argues convincingly that “aging is a disease, and that disease is treatable.”  It is profound book, given to me by a good friend, and it is laced with one medical discovery after … Continue reading A Treatable Disease ??

At year-end 2018, there was terrifying 17 percent drop in the stock market during the fourth quarter, then economic datapoints weakened during the first half of 2019.  To make things worse, the political atmosphere was terrible, with Brexit, Mueller/impeachment, Korea and a very real trade war.  A recession looked inevitable at that point.  An inverted … Continue reading Peeking Into 2020 ?

The Wall Street Journal runs a small cartoon in every issue, which are usually worth a chuckle or two.  One from late 2009 still hangs in my office.  It shows a sad, forlorn financial advisor looking out his window, saying “It’s hard enough accepting that I let my clients down.  It’s even worse knowing the … Continue reading Believing in Something?

The “scientific method” is the process of making decisions by identifying each hypothesis and carefully testing it before determining if something is true.  Originally developed for use in science, it is taught extensively in business education as well.  It is a way-of-thinking that has worked well. One weakness of this technique is the strict delineation … Continue reading Too Much Book Learning?

Another of my personal heroes has left us. Paul Volcker was a New Jersey boy with a tough mind.  Even without a Ph.D., he was appointed Chairman of the Federal Reserve Bank by President Jimmy Carter and subsequently by President Ronald Reagan.  Do you remember the WIN buttons for “Whip Inflation Now” of President Gerald … Continue reading R.I.P. “Tall Paul”

Genworth is a huge insurance company in Richmond that has long been a leader in long-term-care (LTC) insurance.  It is to their benefit to over-estimate the monthly expense of long term care, so they can scare more people into buying LTC policies.  With that caveat, they have recently estimated the monthly cost of care in … Continue reading Nice Thought ?

Last week, the biggest surprise was the November “jobs report” that 266 thousand jobs were created in November — way more than the 187 thousand new jobs that analysts expected.  Plus, we learned more jobs were created the two previous months than reported earlier.  The three-month rolling average is a whopping 244 thousand – very … Continue reading Too Beat-Up To Matter ??

Marion Weinzweig was an 18-month-old girl in Poland when World War II began.  To survive, her Jewish parents sent her to live with Catholic friends, but the Nazis soon learned there was a little Jewish girl in that home.  So, that little girl was shipped off to a Catholic convent, to live and learn as … Continue reading Lonely Survivor

I have long argued that globalization has tremendous benefits, although there are costs to be paid, such as retraining and relocation.  Years ago, Congress grabbed the benefits and wouldn’t pay the cost.  Instead, that price was paid by the people of lower-middle class America.  The most important book for the last ten years was Hillbilly … Continue reading Anger in the Hills

A common scenario is that money flows out of a falling stock market into the bond market, which drives up the price of bonds and therefore lowers interest rates.  Of course, lower interest rates usually strengthen the economy, which is good for stocks and causes money to flow back into the stock market. Faithful readers … Continue reading Stating the Obvious?

If humility was a muscle, it would be withered away and shriveled-up for most of us.  Thanksgiving is the annual workout for that weak muscle.  It is a day to be humble, a day to remember how other people have helped us.  Nobody does it alone, without the help of others.  So, go exercise your … Continue reading Giving Thanks

In 2004, I had a good job with a bank, which was acquired by another bank, which was then acquired by yet another bank.  It is disconcerting and confusing for the staff, of course.  Employees of an acquired company invariably expect a “housecleaning.” Yesterday, Schwab announced it was acquiring TD Ameritrade (TD), subject to various … Continue reading Schwabing the Deck?

Over the Summer and Fall, our economic data slowly got weaker and weaker.  For the last few months, the data has been looking a little brighter .  But the Index of Leading Economic Indicators (LEI) is still flashing bright red.  It has dropped for three straight months, primarily due to the recession in manufacturing.  The … Continue reading Leading the Way

The three great mysteries are (1) why does it take so long to build a road, (2) why are window curtains so expensive, and (3) why doesn’t everyone value their privacy? Earlier this month, Google announced that it was buying Fitbit, whose devices record exercise data on wearers.  Quickly and quietly, thousands of Fitbit users … Continue reading Who cares where I go, or what I do, or what I see?

The best book on financial planning to hit bookstores in 2007 was undoubtedly The Number by Lee Eisenberg.  For those willing to study the possibilities, it was a great resource.  While I would always encourage a person to read this excellent book, I suspect the mere title of the book has created an interesting, continuing problem. … Continue reading Paging A Mystic . . . Stat!

Dreams are born in experience and can consume the mind. My late mother’s father died young, and she was raised by her mother in a tiny white clapboard house.  It was slightly below grade and close to a relatively busy road, as busy as roads get in the boondocks.  She was sensitive to her standard … Continue reading The Tyranny of Dreams

I was a thirteen-year-old paperboy, riding my heavy-duty bicycle with a huge basket on my front handlebars, where I carried the newspapers.  One cool morning, I had delivered all the papers and was returning home, when an pickup truck slowly passed me.  The back of the truck was full of walnuts and four young blacks, … Continue reading Old Story

Normal or “retail” investors are not permitted to invest in some of the most profitable/risky opportunities.  Those opportunities are normally referred to as private placements and were limited to investors with a net worth (excluding home value) of $1 million or annual income above $200 thousand ($300K for couples).  These investors are called Accredited Investors.  … Continue reading A Crack In The Dam ?

Goldman Sachs has been a legendary investment firm since 1869. There is no firm on Wall Street that I respect more and trust less. The quality of their research definitely deserves respect! Last week, they announced that market conditions were too similar to 2007 and recommended investors rotate out of stocks.  In other words, dump … Continue reading Gold Advice

The current economy is doing great, and the stock market keeps setting new record highs.  So, why are charitable contribution by individuals down by 3.8%? The Trump Tax Cut doubled the standard deduction to $24,400 for married couples.  Unless regular itemized deductions plus charitable deductions exceed that amount, a taxpayer is better off taking the … Continue reading Penalizing Charity

How does an economist entertain himself, when his wife is travelling?  They study weird stuff, of course. I noticed the Obituary section of our local newspaper was larger than normal and deserved a little analysis.  There were 44 deaths to report.  Of those, only 31 reported their age or year of birth.  Their average age … Continue reading Advertising Death

In 1972, $98 was a lot of money to me, but I bought a handheld Texas Instruments calculator anyway.  It was amazing, because it could add, subtract, multiply and divide so much quicker than I could.  Today, a short walk through Best Buy seems like a different planet.  Not just the acceleration in technology change, … Continue reading The times, they’re a’changing . . .

The President has been arguing that China needs a trade deal more than the U.S. needs a deal.  He correctly pointed that that China’s external debt has increased dramatically from $1.3 trillion to $2.0 trillion in only three years.  That is not a “fake fact” but can be misinterpreted.  However, because most financial crises begin … Continue reading Fake Argument

All I want for Christmas . . . is an end to all this impeachment coverage on the news.  Of course, it is important, but it is not the only important news.  Whatever happened to the Kurds?  Why did the French president call NATO “brain-dead”?  Why has the Russian economy NOT collapsed?  Is there life … Continue reading Dear Santa,

Like a hot shower at the end of a long day, Friday’s monthly report on the labor market was simply refreshing.  Following the slow drain of a lingering trade war, declining GDP growth, a badly weakened manufacturing sector, a major strike at GM, falling consumer confidence, and slowing job creation, our country still produced 128 … Continue reading 109 Straight Months