Transcript Globalization It`s here … and it`s powerful! Present by

When to Bailout?
The Water is Deep …
Interest Rates are Cruel …
But, cash can be safer!
Presented by
Outline
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6.
Legal Mumble-Jumbo
Economy
Stock Market
Inflation/Sequestration
Market Timing or Not
SELL Strategy - When
About Jim Flinchum
• B.S. - Old Dominion University
• M.B.A. - College of William & Mary
• M.S. in World Trade - University of Dallas
• Taught economics – American Institute of
Banking and the University of Texas
• Certified Financial Planner® and Certified
Investment Manager Analyst®
About Jim Flinchum
• Managing Principal of BayCap
• 35-year career in banking & investing
• Jobs included Vice President of Citigroup,
Senior Vice President for Bank of America,
and retired as Senior Vice President for
SunTrust
About Jim Flinchum
• Former city councilman in Texas
• Gubernatorial appointee to the
State Depository Board in Texas and
currently Virginia Public Building Authority
• Officer, Army Special Forces (1967-’70)
• Past Chairman of the Virginia Beach
Chamber of Commerce
About This Presentation
• Bay Capital Advisors is a registered investment adviser.
• This presentation is only intended for clients and interested
investors residing in jurisdictions in which the Adviser is qualified to
provide investment advisory services. The Adviser does not attempt
to furnish personalized investment advice or services through this
presentation. Any subsequent, direct communication with a
prospective client will be conducted by the Adviser’s investment
advisory representatives. Some of the information given in this
presentation has been produced by unaffiliated third parties and,
while it is deemed reliable, the Adviser does not guarantee its
timeliness, sequence, accuracy, adequacy, or completeness and
makes no warranties with respect to results to be obtained from its
use. Sooner or later, you will die . . .
Economists vs Strategists
Where’s the economy ?
Contrary to popular belief . . .
• The Sky is NOT Falling !
It Ain’t That Bad - I
• Unemployment is improving 3+4.9=7.9%
• Q3 GDP = 3.1% vs 30 yr avg of 2.9%
• Early-cycle sectors (homes & auto) great
• Consumer confidence is up but only 58.6
• Corporate profits are good
• Dollar is stronger – Deflation - War?
• Inflation is low . . . now!
It Ain’t That Bad - II
• Fed remains dovish
• Energy independence by 2020?
• Manufacturing improving
• Foreign wage disparity decreasing
• Best looking horse in glue factory
Q4 Anomaly
Q4 Anomaly
Q4 Anomaly
The U-Word
• Uncertainty has a chilling effect on
business spending (Q4) but did you ever
see high certainty with an under-valued
stock market?
• Affects both the economy & the market
Where’s the stock market ?
It Ain’t Bad At All
• PE on trailing 12 months only 14
• Only 10% of equity outflows back
• Up 5% already this year
• Cash-financed wave of M&A?
• Large caps are still lagging
• Opportunity cost embarrassment
• Best looking horse in glue factory
Fearless Prediction
1575
3+ Wet Blankets
• Presidential Election – Recession?
• Fiscal Cliff – Recession or Crisis?
• European Financial Crisis – 3 events
Debt “Jaws”
Protect yourself from what?
• Recession . . . or Financial Collapse ?
130 Data Points/Month
Pick Your Focal Points
Congress to the Rescue
Bernanke to the Rescue
Sugar High ?
Uncle Milton
• “Inflation is always and everywhere a
monetary phenomenon.”
GDP = PT = MV
Velocity is Dropping
• Recession . . . or Financial Collapse ?
• Muscle Pull or Heart Attack?
• A Jim Fixx Moment ?
Congressional Cooperation
Let Us Pray . . .
Market Timing ?
• Or . . . Time in Market
S E L L Strategy
• Identify the particular triggers for
implementation of a program to sell
particular securities over a pre-specified
period.
European Financial Crisis
Domestically
Garden-Variety Recession
• The “Death Cross”
My Conclusion
• “Buy & Hold” is a good strategy for
long term equity investors to survive
garden-variety recessions, but you
need a SELL strategy to survive a
financial collapse.
Complaint Department?
Contact information
• Jim Flinchum, CFP®, CIMA®
• (757) 963-5699
• www.baycapitaladvice.com
“The Flinchum File”
• “For Honest Economic Analysis and
Existential Opinions”
• Go to . . .
• http://baycapitaladvice.blogspot.com/
Shameless Commercial Plug
Happy Mardi Gras !!
•Questions ??