MidSouth Week in Review:
March 08, 2019

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Mar. 11, 2019 | RedChip Companies

The S & P was down 2% for the week in dropping for five consecutive days.  The Dow Transports have declined for ten consecutive days.  The yield on the 10-year Treasuries declined to 2.62%, in approaching the lowest yield level since Jan. 2018.  The unemployment rate declined from 4.0% to 3.8% and the jobless rate of 7.8% was the lowest since Oct. 2008.  The trade deficit widened to $891 billion, delivering a setback to Trump’s goal of narrowing the gap.  December new home sales climbed to their highest level in seven months.  Household wealth declined 3.5% in the 4Q because of the weak equity markets.  Household debt rose at a 2.9% annualized rate.  Kroger had a 2-day, 14% decline after reporting a profit margin decline.





The Bull Market – had its 10-year anniversary this week.  At the start of the run in March 2009, only 20% of investors were bearish on the stock market.  Today only 20% of investors are bearish – American Assoc. of Individual Investors


At the Confessional – “Go ahead son” …..  “No, you go first Father”.


Insider Selling – SEC research found that when corporate execs sell significant amounts of stock following an announced corporate buyback, the companies underperform the broader market in the long run – Yahoo Finance


Disappearing Private Colleges – 650,000 people of college age will disappear in the 2020’s because birth rates plunged by almost 13% from 2007 to 2012.  Of the 1,800 private schools, they may be long on history, but many are short on money and shorter on students.  Over the past three months, three new England schools have closed and 17 have closed in Massachusetts over the past six years.  A Harvard study predicts half of all colleges will close or go bankrupt over the next decade – Allen Guelze, Gettysburg College …..In 1970, tuition and room and board at a 4-year private university or college was $3,000 a year vs. $63,000 today – New York Times


Lyft – has filed to go public this month.  In their IPO filing the company said, “The average cost of a new vehicle is over $33,000, which most households cannot afford.  On a  per household basis, the average annual amount spend on transportation is over $9,500.  We believe car ownership is in a permanent decline” – Business Insider  


Newspapers – Remember when most cities had an afternoon and evening newspaper, timely delivery and on time news?  Well not any more.  Since 1990 the number of workers in the industry has declined 69%, going from 457,800 workers to 139,900 in December – Bureau of Labor


Recent Democratic Proposals – include raising Social Security benefits by 2%, which would involve steadily raising the Social Security payroll taxes from 12.4% to 14.8% and applying to tax income above $400,000.  Another proposal would be free healthcare for everyone.  A Hill-Harris X survey found that only 13% of registered voters said they would prefer a health system that covers all citizens and ended private plans.  England has such a plan where 4.1 million Brits were recently waiting to be admitted to a hospital in England to have non-urgent surgery, the highest wait list since 2007.  In Canada the wait time to see a general practitioner is 8.7 weeks; between a general practitioner and an orthopedic surgeon, it’s nine months.


Baseball – The number of people who play the game surged 21% last year vs. 2014.  The dabblers, who played between 1 and 12 times in a year grew 53% during the period.  Tackle football participation dropped 3.4% during the period and hockey and soccer saw one-year drops of 3.8% and 4.3% respectively in 2018 – Wall Street Journal


Only in California – A lawmaker there has introduced a bill that would ban schools from dissecting animals such as frogs – THE WEEK ….. British officials revealed that escape hatches in subs and ejector seats may have to be enlarged because so many servicemen are obese (fat).


Love You Dad! – 53% of Americans ages 21 to 37 received some form of financial aid from their parents.  This may include: Cell phone (41%), groceries and gas (32%), rent (40%) or health insurance (32%).  On average each millennial parent receives $11,011 per year in financial support and a private school recently said 10 to 15% of its checks come from grandparents – New York Times


Spam – In 2017, 3.7% of inbound calls were spam.  In 2018, that figure had risen 8x to 29%.  Analysts expect another big jump in 2019 to 49% - Techcrunch



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