Last Halloween, an old Army buddy killed himself. Even though we hadn’t talked in almost thirty years, he was still a “buddy.” Indeed, that expression – “old Army buddy” – is so loaded with meaning. There is a certain bond between “old Army buddies,” not merely a bond between men but also a human bond between memories, emotional memories, and sometimes painful memories. He was…
For the first two quarters of this year, our economy was growing at a solid 6% annual rate. However, it slowed to a mere 2% rate in the third quarter. The drop from 6.7% in Q2 to only 2% in Q3 is a dramatic drop in demand. Economists blamed the emergence of the Delta variant, the supply chain crisis, and attention-fatigue with the political circus. …
I think the first time in my life that I ever felt small and weak was in 2010, while in Beijing on a tour with the Chamber of Commerce. Among other things, we learned about the Chinese law that all data is property of the government. One afternoon, I skipped the tour for an un-escorted walk around the city. By accident, I stumbled across the…
Do good stocks make a good portfolio? Not necessarily! One of the more difficult concepts for investors is that good stock selection is different than good portfolio management. Just because a good company has a good stock, that does not mean it should be bought. For example, a good pharmaceutical stock should not be bought in a portfolio that is already too heavily weighted in…
My dog is not classy. In fact, he has no class. After all, he’s just a dog. But zero class is still better than negative class! I was appalled when candidate Trump trashed a personal hero to me, the late Senator John McCain. Now, I am appalled that the former President trashed another personal hero of mine, General Colin Powell. In fact, it is sickening…
For those who would like to read my quarterly column in “Inside Business,” you can find it here: https://www.pilotonline.com/inside-business/vp-ib-expert-flinchum-1018-20211018-vroi6ciql5df5opycfm4wlfjfa-story.html#nt=pf-double%20chain~top-headlines~feed-driven%20flex%20feature~automated~unnamed-feature~VROI6CIQL5DF5OPYCFM4WLFJFA~2~2~3~4~art%20yes
Most scholars believe The Ten Commandments was written over 2,000 years ago. However, I believe that, if lawyers and regulators had been writing it, they would still be writing and every tree on this planet would have already been converted to paper. During the Obama Administration, the “Fiduciary Standard” was adopted, and I was a big supporter. It requires that financial advisors put the interests…
Sometimes, you have to push work aside, stop watching the news, prop your feet up and share someone else’s joy . . . When “Star Trek” was a new TV phenomenon, I appreciated the show’s originality but was not impressed by the “pretty-face-actor” William Shatner, playing Captain Kirk. After that role, he was forgettable in many non-blockbusters, but did many “special appearances” during which he…
One of my favorite economists was Joseph Schumpter, who died 71 years ago. In my opinion, his greatest contribution was his study of “creative destruction,” which argued that good things happen when bad things happen. Inefficient industries would be destroyed and replaced by new, more efficient ones. You’ve probably already heard someone say that capitalism is efficient but cruel. That was part of my thinking…
Few subjects are more vexing than immigration. My religious training is that we are obligated to feed and clothe the poor. My military training makes me intolerant of rule-breakers. My economic training asks how much money for how many people for how long before they start paying taxes? However, my political experience tells me that my Republican friends are utterly obsessed with the immigration problem,…
Today, the post-pandemic economy is being hurt by the supply-chain problems, which have been more severe than expected and will exacerbate inflation pressure. The delays in shipping are a huge part of the problem. Nike says shoes imported from China that normally takes 40 days now requires 80 days. That increases the level of needed working capital, as the shoes have already been paid for…
Imagine looking out your window and seeing a bunch of boys playing “cops & robbers” with toy plastic guns. Then, you realize the immature, incompetent boys have REAL guns. What could go wrong? That’s the way I see the Congressional debate to raise the debt ceiling. Republicans are wrong . . . this time! Democrats were wrong . . . last time! The out-of-power party…
Economists tend to be a pompous bunch and easily given to hyperbole. Modern Monetary Theory (MMT) is changing the world – making it better in the short-run. Of course, that begs the question of how short is short-run, and how long is long-run? As a refresher, MMT explains that nations with a reserve currency, such as the dollar or the euro or the yen, can…
Remember: if you are not paying for a service, you are not the client. Instead, YOU are the product! Somebody is paying money for information about you or for access to you. Readers know I have long believed that Facebook is a cancer on America. Facebook users pay nothing to Facebook. But they do enter information about themselves, which Facebook then sells to advertisers. Now,…
September is usually the worse month of the year for the stock market. But, the worse week of the year is usually the week in September having the third Friday. Grab your calendar and you’ll see that we’re right now in the middle of worse week all year, historically. One reason is that the “triple witching” or expiration of futures contracts and other derivatives. That…
I have never seen much value to crypto-currencies like bitcoin, except for criminals and speculators. However, the collapse of Afghanistan has demonstrated other uses. Importantly, crypto-currencies are easier to hide from the Taliban than Dollars. In addition, crypto-currencies allow Afghan citizens in the U.S. to send spendable money to family remaining in Afghanistan without governmental restrictions. Last year, crypto-currency holdings in Afghanistan were among the…
For twenty years, I have remembered September 11th as the day when I watched the Pentagon burning from my fifth floor office, as the wind pushed the smoke into my wife’s office on the Potomac. Including the World Trade Center, 2,996 Americans died that day. For eighty years, elderly Americans have remembered the sneak attack on Pearl Harbor on December 7, 1941, when 2,403 Americans…
In early August, the University of Michigan Index of Consumer Sentiment crashed to a ten-year-low. Not surprising as consumers were weighed down by the Covid surge, rising concern over possible inflation, the fragility of our supply chain, and the painful images of our troops leaving Afghanistan. It was a depressing month. In late August, the government’s Consumer Confidence Index also fell but only to a…
I have voted for Republicans, and I have voted for Democrats, but I’ve never been as disgusted with both as I am right now. Imagine you’re attending the wake or memorial ceremony for your spouse. As you’re sitting there, with your head bowed, when someone barges into the sanctuary and screams “it is all your fault”! Seconds later, someone else barges in, screaming “the doctor…
We’re living during interesting times. We just learned that GDP growth during the second quarter was a sizzling 6.6% — even better than expected. Corporate profits surged 9.2% — also much better than expected. It’s not surprising that the stock markets keep setting new record highs. What, me worry? The Grim Reaper called Covid still hangs over our economy, of course, but we proved our…
If the first casualty of military warfare is the truth, then the first casualty of partisan warfare is academic debate. Maybe, the Socratic approach won’t offend. . . ? Assuming Ronald Reagan was correct that America is that shiny city on the hill, does that mean non-Americans will want to be there ? If continued in-migration can be expected, can we channel Nancy Reagan and…
Let’s say you have two neighbors. Neighbor #1 picks up a baseball bat and hits neighbor #2, before handing the bat to the neighbor he just hit. Neighbor #2 takes the bat and hits neighbor #1, before handing the bat back to neighbor #1. As they continue to hit each other, do you think they are just plain stupid? The Federal debt ceiling is equally…
Famed World War II General Douglas MacArthur said “Old soldiers never die. They just fade away.” The same can be said about old theories. In 1986, three professors named Brinson, Hood, & Beebower (BHB) published a research paper entitled “Determinants of Portfolio Performance.” They showed 93.6% of a portfolio’s performance was determined by the asset allocation. (A similar 1991 study showed a 91.5% correlation.) Asset…
One of my long-running complaints with the financial planning profession is that it has become too academic. If planners spent less time memorizing IRS Code sections and more time looking into the eyes of their clients, it would be a better world. Estate planning is the most stark example – full of tax and probate advice but void of the world’s most universal emotion. There…
The most closely watched economic report each month is the “Jobs Report” on the first Friday. Today’s report was surprisingly strong, with 943 thousand new jobs created last month, a hundred thousand more than expected. Plus, we learned that the number of jobs created in May and June were even more than we realized. The unemployment rate dropped to 5.4%, a post-pandemic low, pushing average…
My Republican-friends like to blame everything on the mainstream media. My Democratic friends like to blame everything on greedy, rich “fat-cats”. They’re both wrong! My Republican-friends see the immigration problem as a bunch of lazy, disease-ridden derelicts trying to milk American generosity. My Democratic friends see the immigration problem as a bunch of poor, miserable, uneducated human beings in search of a better life. They’re…
It takes a certain emotional maturity to talk about one’s own death. Part of my job as a financial advisor is to help clients reach that level of maturity or self-awareness. Too often, “estate planning” ends with signing a bunch a documents. That’s the easy part! We also need to do “end-of-life planning”. For years, I have encouraged them to make their own funeral arrangements,…
Sometimes, good news is not good enough! That was the case with yesterday’s release of second quarter GDP growth, which was a whopping 6.5%. That’s the highest in 35 years. The good news is that it improved from a very robust 6.3% during the first quarter. Despite a 3.4% drop in GDP last year, we are now fully recovered and even 0.8% ahead of GDP…
Some years ago, I had the opportunity to tour China. In Beijing, our hotel was close to the national headquarters of the Communist Party. A short walk later, I stood mesmerized in front of their massive building. While I confess to being 100% biased against the Chinese Communists, their headquarters building made my skin crawl. It just seemed genuinely sinister or evil! Absolute power corrupts…
I love my wife, but she is a little weird. She is fascinated with air vibrations. She even has a word for it. She calls it M-U-S-I-C. Scientists call it mere air vibrations hitting your eardrum. Of course, she says that’s the reason God made ears, so we could appreciate M-U-S-I-C? Recently, I attended a M-U-S-I-C festival of some kind. There were literally thousands of…
I know very little about Catholicism but was anxious to read the article in last weekend’s “Wall Street Journal” entitled “Is Pope Francis Leading the Church To a Schism?” The word – schism – has great significance to that faith, as it recalls the division and the separateness created by Martin Luther in 1517. Catholics seem to dread it. Today’s Catholic Church is mired in…
Wartime veterans often have a certain understandable, justifiable smugness. Veterans of the war on inflation during the 1970’s are no different. They tend to think the current inflation is as explosive and pernicious as it was back then. Fed Chair Jerome Powell doesn’t think so, and neither do I. Powell agrees with monetary economists that the huge increase in liquidity is inflationary, but that increase…
How can American companies have nine million job openings, when nine million workers need a job? My Republican friends tell me that Americans are just lazy and won’t work when unemployment payments are generous. Certainly, there are lazy workers who milk the system, but how many? A recent survey suggests 26% of workers would return to work if unemployment benefits were eliminated. Certainly, 26% of…