MidSouth Week in Review:
October 12, 2018
Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund
Oct. 15, 2018
| RedChip Companies
The stock market got sucker-punched this week registering a 5% Wednesday-Thursday S&P 500 decline before rising 1.4% today. Through Thursday, the FANG stocks averaged being down 22% from their 2018 highs: Facebook (-31%), Amazon (-17%), Netflix (-24%), Google (-16%). 30-year mortgage rates hit a seven-year high of 5%. The regional bank index (KRE) declined 9% for the week. Ten-year Treasury yields declined to 3.15% from 3.23%. Sears declined to 34 cents a share and will probably file for bankruptcy protection next week because they will be unable to make $134 million debt payment due on Monday. Social Security benefits will increase 2.8% in 2019, the largest increase in seven years.
BuzzBits
Zero Taxes on Long-Term Gains and Dividends – if taxable income other than gains or dividends does not exceed $38,600 for singles, $77,200 for joint filers, then dividends and profits on the sales of assets owned for more than a year are taxed at 0% until they push you over the threshold amounts – The Kiplinger Tax Letter
Remember When – Motorola introduced the “Brick”, the first commercial cellphone in 1984? The issue price was $3,995 for the 2.5 pound phone that lasted only 30 minutes on a 10-hour charge. Apple introduced the iPhone 23 years later in 2007 – Wall Street Journal
Bankruptcy Change by Age Group – Ages 18-24 (-78%), 25-34 (-64%), 35-44 (-40%), 45-54 (-2%), 55-64 (+66%), 65-74 (+204%). The 65+ age group filing for bankruptcy has tripled over the past 25 years. Reasons for the large increase in the senior sector: living longer, vanishing pensions, higher eligibility for Social Security, reduced income and increased health care costs – AARP
Buy Parents House and Rent It Back To Them – Your parents gain instant access to their home equity (without moving out) and you’d pick up some generous new tax deducts. Two good reasons for your parents to opt for the plan: It puts cash in their pockets without dipping into a home equity loan and it allows them to put money into safer investments than the real estate market – www.SmallBizTax.net ….. According to a large Zillow.com study, having a home with black or charcoal-gray front doors sold as much as $6,271 more than expected.
Election Stats – In 2014, 140 million people did not vote, the lowest turnout since 1942. In 2016, just 25% of adults voted Donald Trump into the Oval Office. 256 women are running for Congress vs. 48 in 1978. The governors’ offices have been the hardest for women to win with only three running this year. 22 states have never had a female governor – New York Times
Harvard Attendance – Depression and anxiety are prevalent on campus, and high rates of absenteeism aren’t helping. A Harvard study noted attendance dropped from 79% at the beginning of the year to 43% at semester’s end. At Harvard, where tuition and housing costs some $70,000 a year, each missed class amounts to several hundred dollars – Wall Street Journal
Uberizing Uber – Bird is pioneering an alternative to cars for short commutes: Electric scooters. Now in about 40 cities, the startup provides scooters that you locate through a smartphone app and then park wherever your trip ends. The company estimates it has prevented more than 1.6 million miles of driving at its Santa Monica location and the pollution that comes with it – TIME
The National Debt – grew from $10 trillion in 2008 to $21.5 trillion this year, growing at an 8% annualized rate vs. the Congressional Budget Office’s 2008 estimate of a $12.7 trillion deficit by 2018 – Treasury Department
The Hog Glut – Three used Harley’s are sold today vs. every new one vs. a decade ago when it was the other way around. New hogs are selling for around $18k to $25k vs. a good conditioned used one that can be had for less than $15k – National Passport Auctions
Four Day Schools – represent 76% of Nevada school districts, 58% of Colorado’s and 43% of New Mexico districts. Why? The schools save on transportation and utility costs, have fewer absences by students and teachers and academics don’t suffer. One school executive said, “I think everybody likes having a three-day weekend.” – Wall Street Journal
Mexican Drug Trafficking – charges have plummeted from 973 in November of 2001 to 262 in July of 2018, benefiting from the Trump administration’s “zero tolerance” crackdown on illegal immigration – USA TODAY
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