MidSouth Week in Review: Dec 28, 2015
Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund
We had a 2% rally this week going into the Christmas weekend. Oil stocks were hot, hot, hot as crude prices rose from the $34 barrel level to $38 on the announcement that U. S. crude inventory fell by 5.9 million barrels last week vs. an estimated increase of 1.1 million barrels. Most commodity stocks also had nice short covering rallies as seen by copper producer Freeport-McMoRan, that gained 20%+ for the week.
November existing home sales declined 10.5% vs. October. Median home sale price rose 6.3% to $220,000 vs. the same period a year earlier.
The Dow is down slightly year-to-date but has not been down in a pre-election year since 1939. The good news is that the last five days trading of the year are usually in the plus column. Let’s hope so.
Hope everyone has a Merry something this weekend.
- Investment Fees –“The only thing I’m sure about investing is the lower the fee I pay, the more there is going to be for me. Actively managed funds don’t beat the markets” – Burton G. Malkiel, Princeton….over the long term cheap funds outperform their costly cousins – MorningStar
- Strange - The Maxwell House Hotel was completed in Nashville in 1869 where seven Presidents stayed as guests, including “Teddy” Roosevelt, who in 1908 said their coffee was so good, that “it was good to the last drop.” On Christmas night 1961, I went to the Tennessee Theatre across the street from the hotel to see “The Peppermint Twist”. Coming out I noticed smoke coming from the 4th floor of the southwest corner of the hotel. My friend and I went to the front of the hotel and assisted an Indian princess and her agent in leaving the hotel before it was completely destroyed. My current office is directly above where the Maxwell House fire started – Buzz
- Weird – Chipotle Mexican Grill has now dropped 35% from its October high, resulting in an $8.6 billion drop in market value, which represents $4.3 million per store location, as a result of six E. Coli and a Salmonella outbreak in their restaurants since July. For a company that was always been a stock market darling, one can’t help but wonder if someone or group isn’t behind Chipotle’s recent misfortunes – No other restaurant chain has reported any health problems this year – Buzz
- Christmas – About nine out of ten (92%) Americans and nearly all Christians (96%) celebrate Christmas. But what might be surprising is that a big majority (81%) of non-Christians in the U.S. also celebrate Christmas, including 87% of those with no religion, according to a new Pew Research report – Investor’s Business Daily
- Time for a Foreign Vacation – The U.S. dollar has appreciated 8.7% year-to-date against major currencies. Some spectacular U.S. dollar increases vs. other country’s currencies include: Argentina (55.0%), Brazil (50%), Australia (14%), New Zealand (16%), Turkey (25%), Russia (17%), Euro (11%) Canada (20%), South Africa (31%)….On the downside, if you are in exporting or dealing with foreign travelers, your goods and services have become equally expensive to your customer - Buzz
- Arguing With a Woman – is like reading the Software License Agreement. In the end you just give up and check “I agree” – Anon
- Christmas Comes Early – Lower gas prices has resulted in saving the average driver approximately $1,000 in annual fuel expenses. This week I got my home natural gas heating bill for the month of $161.14 vs. $298.40 last year, based on an average temperature reading of 52 vs. 44 last year. These savings are going straight to the bottom line and will most certainly contribute to a nice Christmas for most Americans - Buzz…The temperature in NYC is expected to hit 73 today vs. a previous record high of 56 in 1988
- Wait a Day – Apparel buyers, especially for teens, can pick up merchandise averaging 45% off retail by shopping on Dec. 26. Designer clothing has even better deals at an average 49% off, according to Adobe Marketing….Jewelry prices on Christmas Eve drop 25% - USA TODAY
- Xmas Tax Break – Congress last week passed a bill allowing IRA owners 70 ½ and older to donate as much as $100,000 to charities. For most this is a much better way to give to avoid taxes or Social Security benefits, Medicare premiums, higher tax brackets and surtaxes, such as the 3.8% net investment income tax. The assets must be transferred directly from the IRA to the charity. The law is retroactive to January – Wall Street Journal.