MidSouth Week in Review:
December 28, 2018

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Dec. 31, 2018 | RedChip Companies

Is the Bull back?  The S & P closed positive for the week (+2.8%) with a three-day advance of 5.6% vs. Monday’s half-day 2.7% decline.  The 1000+ point Monday Dow drop was the largest in history.  Last week’s mutual fund redemptions of $56.2 billion was the largest outflow since Oct. 15, 2008.  Crude rose 8% on Wednesday, its largest one-day gain since Nov. 2016!


Hope everyone has a happy and prosperous New Year.


P.S. – Dianne says my coloring is coming back.




Dogs of the Dow – consist of the ten highest yielding Dow stocks at the beginning of the year.  Through today, the group had a total return of -1.2% which would be their first negative return since 2008.  Only four of the Dogs were negative for the year:  GE (-56% return), Exxon Mobil, IBM and Chevron – Wall Street Journal


Financial Resolutions – will be hot in 2019.  The trend is particularly pronounced among American millennials, with 94 percent of the group stating their intention to make 2019 financial resolutions.  The need for resolutions seems to be well-founded among that age group.  Millennial respondents reported being the most likely to have a problem with spending outside their means, while baby boomers reported being the most secure – Principal Financial Group survey


Buying the Dip (BTD) – If you had bought every stock in the Russell 1000 index that fell at least 10% more than the index on a single day, your average returns would have beaten the Russell 1000 by an average 0.47% the next day, by 4.8% over the next 30 days, and by 28% over 240 days.  These occurrences happen typically around 200 to 300 times a year.  BTD is a strategy for traders, not long-term investors – James K. Glassman, Glassman Advisory  


U. S. Population Growth – for the year ending July 2018 was 0.6%, the lowest rate since 1937.  Nevada, Idaho, Utah, Arizona and Florida saw the largest population gains, from 1.5% to 2%.  Nine states had negative gains including: New York, Illinois, West Virginia and Louisiana – Wall Street Journal


Firearms – are responsible for more than a four-year loss of life expectancy among black Americans vs. 2.2 years for whites.  The discrepancy was driven by substantially higher homicide rates for blacks up to age 20: 3.41 years for blacks vs. 0.51 years for whites.  Life expectancy loss attributable to firearms related suicides was 1.62 years for white Americans vs. 0.60 for blacks.  60% of gun deaths in 2017 were suicides and 37% were homicides.  Life expectancy for whites is 78.9 years vs. 75.5 for blacks – BMJ Evidence-Based Medicine


Parenting Time – The amount of money parents spend on their kids use to peak when in high school vs. now when they are under 6 and over 18.  For the first time it’s not likely kids will be as prosperous as their parents.  Research has shown that children with hyper-involved parents have more anxiety and less satisfaction with their lives, and that when children play unsupervised, they build social skills, emotional maturity and executive functions – New York Times


The Debt Bombs -  According to the FDIC, nearly 20% of student loans are already delinquent or in default.  That number could balloon to 40% by 2023, according to a Brookings Institution study.  China devoted mountains of cash to build airports, factories and entire would-be cities, now known as “ghost cities”, since they are populated by large empty skyscrapers and apartment towers, all in the name of economic growth.  If China explodes its likely to sprinkle the global economy with ash – New York Times


Harlan County – in eastern KY is in the middle of coal country where only 600 work in the industry vs. around 2400 in the early days of the Obama administration.  54% of the county’s income comes from government aid vs. 28% in 1990.  13% of residents receive disability benefits.  40% receive food stamps.  The typical family income is $25,000.  Coal jobs pay around $1,550 a week.  Opiate abuse is rampant.  The population has shrunk by more than two-thirds over the past century.  In 2016, 9 out of 10 voted for Trump – New York Times


The First Birds – descended on Santa Monica, CA in early September 2017 with 10 Birds.  Within days, this small immigration became an invasion with Bird scooters all over the city.  In the first 14 months, Birds landed in more than 120 cities.  After noticing the excitement of the new mode of transportation, Lime was launched later in the year followed by nine other companies in 2018, including Lyft - https://www.youtube.com/watch?v=uJwy0QhfBCw





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