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

Squid Slime ?

Here are the latest thoughts from the highly-self-respected Wall Street investment bank, Goldman Sachs: 1.  Global economic recovery will broaden this year – not just the US.2.  GDP growth in the US will be above 3% this year and next year.3.  No inflation on the horizon.4.  “MLPs remain ideally positioned to the energy opportunity.”5.  Japan & Europe may have bottomed out.6.  Strong demand for “junk”…

Making The Sale

Years ago, a seminary student joked with me that the way to spell religion was p-a-r-a-n-o-i-a.  I suggested the correct spelling should be f-e-a-r, as in fear of going to Hell.  No, he explained, just like consumer goods are sold with sex appeal, some religions are sold with fear.  While they may “make the sale” by scaring people, it is paranoia that binds the followers…

Je Suis Charlie

There are hundreds of millions of Christians in the world.  Certainly, in a number that large, there are some crackpots.  Remember the crackpot from Topeka, Kansas, who felt God wanted him to picket the funerals of our soldiers who died in war?  Such extremism is a cancer that can grow and destroy a great religion.  Fortunately, one of the great strengths of Christianity is that…

The Sweet Smell of Black Gold

The heart-stopper du jour for the stock market has been the merciless, unexpected collapse in oil prices.  It was so severe and so sudden that the industry was totally unprepared.  But, maybe it has fallen more than is justified.  Take a look at this graph: The dramatic drop in the price of oil matches that of the Global Financial Crisis, which we are NOT experiencing right…

You Say Tomato And I Say . . .

There is much discussion currently about deflation, especially since Europe has now demonstrated some minimal lower year-over-year consumer prices.  This is not good! Everybody knows inflation means rising prices.  It is something we have experienced in our own lifetimes.  Deflation actually sounds pretty good.  After all, who doesn’t like a lower cost-of-living? Here is the problem:  we know how to stop inflation, by raising interest…

Not Your Parents Old 1-2

No, it is not a left jab to the face, followed by right roundhouse to the ear. Instead, it is two pieces of bad information, both of which raise uncertainty, something which stock markets just hate.  First, over the weekend, Germany called the bluff of Greece by saying the European Union would be just fine if Greece exited, the so-called “Grexit.”  Did Germany mean that?…

Pet Peeve #847

Full Disclosure:  I have been a loyal, enthusiastic fan of the Dallas Cowboys since 1977.  When they lose, I become sad and despondent for days.  They matter to me!  But, I don’t understand why professional sports, including the Cowboys, use superlatives continually.  Superlatives also matter. My dictionary defines “hero” as “a man of distinguished courage or ability, admired for his brave deeds and noble qualities.”…

Quantifying Risk

So, the Dow was up 7.5% in 2014 — is that good? From a historical viewpoint, that is almost average.  What is unusual is that this is the sixth straight year of a bull market, which tells us more about the severity of the Great Recession than it does about the Dow. From a technical viewpoint, analysts wonder if the Dow was still improving as…

Long Live 2015

As we are ruled, collectively and individually, by time, it is appropriate to mark the end of each year.  Since 1422 when French king Charles VI died and was replaced by Charles VII, the expression of “the king is dead, long live the king” has been used to assure us that the throne is never empty.  We remain ruled by time — 2014 is dead,…

Paying The Piper

The current president of Turkey is Recep Tayyip Erdogan.  He once said the “democracy is like a streetcar.  When you get to your stop, you get off.”  I’ve wondered about this for a long time. That quote came to mind when reading about the snap election just called in Greece.  The Greeks were arguably the most pampered people on the planet, with universal health care…

Lessons Not Learned From TV

Other than business shows and news shows, there is little I watch on television.  However, in 2007, I became fascinated by a show on CNBC called American Greed.  It described true stories about how innocent people got cheated, usually by a financial advisor running a Ponzi scheme.  At first, I was amazed that investors didn’t realize how essential a custodian is, to independently hold the…

HO HO HO . . . NOT

Congressmen should never be allowed to decorate a Christmas tree, as they would hang or hide the most ugly and most dangerous ornaments both on and under the poor tree! As a minor example, the latest budget bill repealed limits on the number of hours a commercial trucker could work.  As someone who spends way too much time on interstate highways, I am not happy…

Your Homework Assignment

Some have described the U.S. economy as the only clean shirt in the dirty clothes hamper, meaning the rest of the world is in worse shape than we are.   True!  While I wish nothing bad on the people of Russia, their current economic woes do give me some unseemly degree of satisfaction.  And,while I wish nothing bad for the people of Venezuela, I have…

Human Capital

In survey after survey, we see that the concentration of wealth in fewer people continues to increase.  The latest Pew Research study shows the net worth of the top 20% of Americans doubled from $318,000 in 1983 to $639,400 last year, while it actually dropped for the bottom 20% of Americans from $11,400 in 1983 to only $9,300 last year.  In a rare moment of…

Waiting At The Altar

Free Enterprise is the happy marriage between the economic system of capitalism and the political system of democracy.  They are a cute couple and look like they belong together, but apparently not everybody agrees. For those of us who worship at the altar of Free Enterprise, we were excited with the introduction of capitalism into Russia and China, confident that it cannot exist in the…

Santa Cheats

Gifted and/or cursed with the “early to bed, early to rise makes a man healthy, wealthy, and wise” and/or sleepy metabolism, I get to watch the European stock markets open most every morning.  It is like watching the sun come up, where one witnesses renewal of the physical universe, only that I witness renewal of the commercial universe.  It is a living, breathing phenomenon.  (On…

Crashes Are Transitory?

Back in 1980, I was doing graduate study in international finance at the University of Dallas when I took a course in the economics of energy (which is not surprising in Texas, I guess).  I learned that oil is the most competitive commodity in the world, as well as the most regulated.  Most of all, I learned that oil is the most important commodity in…

The Squid’s 2015 Outlook

Self-esteemed investment bank Goldman Sachs has released their outlook for next year.  In no particular order, they expect: 1.  The S&P will rise to 2,100 over the next three months and stay there for the rest of the year.2.  The European stock markets will rise 12.3% by 2015 year-end.3.  Interest rates will start moving up quite soon, with ten-year Treasuries going from 2.1% to 2.5%…

“Considerable Period”

The friendly wagering on Wall Street last week was whether the phrase “considerable period” would be removed from the language describing the remaining time the Fed will keep interest rates at historic lows.  It is an important distinction. The Street is expecting it to be removed, at the Federal Open Market Committee (FOMC) this week.  This reflects the market’s expectation that the Fed will initially…

An Individual Duty

Senator John McCain is right.  We should renounce all forms of torture and should abide by the Geneva Convention . . . as a nation.  If we are to ever become the “shiny city on the hill” that President Reagan wanted us to be, we must renounce torture and once again embrace.the Geneva Convention . . as a nation. However, in the wildly unrealistic situation…

Short-Term Pain

You are really, really old if you can remember the TV show entitled The Millionaire.  It ran from 1955 to 1960 and illustrated possible effects on normal, unsuspecting people when they were suddenly given a million dollars, which was an unimaginably huge amount of money at the time.  Some people quit their jobs and therefore lost their identity.  Some people watched their family spin apart…

What’s Wrong With This?

Quoting from the front page of the December 5th issue of The Kiplinger Tax Letter: The final bill (new tax law) will contain a significant new break for disabled individuals.  Tax-free ABLE saving accounts, similar to 529 college savings plans.  Starting in 2015, states can set up ABLE programs so families can set aside funds to help the long-term disabled maintain their health, independence, and…

Austrian Pantsuit

My late mother always told me that name-calling is bad.  She was right, of course, but she was looking at it from an etiquette standpoint.  I think she was also right from an economics standpoint.  If you are going to invest precious resources, like time and effort, into another person, relationship, or situation, then name-calling is a risk to your investment.  I avoid calling anybody…

Sunday Thoughts

Construction is a pro-cyclical industry.  That means it makes the business cycle more pronounced.  It makes good times better and bad times worse.  Right now, commercial construction is doing well.  Residential construction is limping along.  But, one area of construction is a drag on the economy. Construction of churches has fallen to the lowest level since 1957.  It is down 80% from its peak construction…

Too Good ?

The December “Jobs Report” was better than expected, with 321 thousand jobs being created.  That brings the three-month average up to 278 thousand, which is certainly respectable.  This will likely be the most jobs produced in any one year since 1999.  (Average weekly earnings, reflecting slight higher earnings per hour and a few more hours, are also up a relatively modest 2.1% over last year.)…

Bulls And Bears Are Different

Every time we have a bull market, there is another study that confirms what a similar study during the last bull market showed, i.e., index-investing out-performs active-investing.  A new study by Lipper shows that 85% of large-cap mutual funds failed to beat the S&P.  A confirming fact is that 2014 saw a record number of hedge funds, who are always active investors, closing and sending…

Ameri-pean?

One normally thinks of Europe as a hotbed of left-leaning governments, more concerned with over-work than their budgets.  So, it seems odd to thank them for protecting an old-fashioned American value. For generations, privacy was expected in the U.S.  We had the right to control most information about ourselves and our families.  Then, Google came along, and privacy was no longer important to anyone.  Or,…

Golden Memories Are The Constants

As individuals in the constantly changing world of relationships, we look for a constant – a relationship with someone which does not change over time.  That person usually becomes a spouse but often becomes our ex-spouse.  There really aren’t constants in relationships, because people change as they age, and either the relationship adjusts or it doesn’t.  Either way, people are not constants.  Neither are relationships.…