MidSouth Week in Review:
March 15, 2019

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Mar. 18, 2019 | RedChip Companies


Today was “triple witching” Friday, as contracts for stock-index options, individual stock options and individual stock futures all expire.  For the week, the S & P 500 was up 2.85% vs. being down every day last week.  The only day the market was down this week was on “Pi day,” March 14 (3.1417).  The S & P is having its best quarterly advance since 1998.  Tech stocks were hot for the week causing the iShares U.S. Technology ETF (IYW) to rise 6% from its last Friday low.  Oil hit a 2019 high as U.S. sanctions on Venezuela and Iran begin to tighten their squeeze on global oil supplies.  Wholesale gas prices are up 40% from their January low.  Levi’s announced plans to go public again.  The company that was founded in 1853 in San Francisco took itself private in 1985. 

 

BuzzBits

 

500-Point Drops – There have been 32 of them since October 1987, when the S & P declined at least 500 points in a day.  14 occurred in 2018 and nine of those were during the Oct. 10- Dec. 24 period – Bloomberg

 

Ouch! – Alan Wilzig, the race car driver who was featured in the movie “Wolf of Wall Street”, recently sold his New York townhouse for $12.65 million, down from his original $44 million asking price – Wall Street Journal

 

Ivy League Education – A study of Ivy League grads vs. those who were rejected found there was no difference in the salaries of either group.  For high-income white male grads, a study found no relationship between college selectively and future salaries.  Women attending elite schools had a 14% increase in earnings because they stayed in the workforce longer, delayed marriage and child births longer vs. those who attended less selective schools – WealthManagement.com ….. Ivy League schools enroll more students from the top 1 percent of income than the bottom 50% combined – Harvard economist Raj Chetty ….. Yale admitted 6.3% of its applicants, down from 8.6% a decade ago and 20.7% in 1980.

 

Texas Instrument Hand-Held Calculator – came out in the early 1970’s - Don Bathrick, my office mate then and whose dad had been CEO of Pontiac, bought one for around $400.  I was impressed because it made my financial slide rule look like it came out of the ice age.  Within six months pocket calculators were selling for around $150 and below $100 a few months later.  The inventor, Terry Merryman died last week – Buzz

 

3.8% February unemployment – Unemployment Demographics – Chinese (3.2%), White (3.3%), Hispanic (4.3%), Black (7.0%).  Unemployment by educational level:  Less than high school (5.3%), high school (3.8%), some college (3.2%), Bachelor’s or higher (2..2%)……“I haven’t had anybody tell me that they are not going to be adding head count,” Tim Gimbel, LA Salle Network staffing.

 

Scooters – The average lifespan of a shared electric scooter in Louisville was just 28 days, according to city data.  After costs, scooter-sharing companies took in just $2.32 per day from each vehicle between August and December.  A typical scooter, worth at least $360, only generates around $65 to $75 in revenue over its working life – Oversharing

 

Golf - In 1998, John Daly led the PGA with an average driving distance of 299.4 yards.  Last year, Cameron Champ was the driving leader with an average drive of 328.2 yards.  Today’s era benefits from lighter shafts, larger club heads with springy faces and a solid core multi-layered golf ball.  Players are bigger, stronger, more athletic, pay close attention to nutrition and hone their bodies in the gym.  In 1982, Fred Couples was a limberbacked 22-year-old with immense flexibility.  He averaged 268.7 yards in driving distance, which was eighth on the PGA Tour.  In 2009, Couples was a 49-year-old with a decade-and-a-half of battling serious back problems.  He averaged 297.5 yards in driving distance, which was 24th on the PGA Tour  – PGA ….. The world’s top four golfers include two Justin’s and a Dustin, just in case you were wondering.

 

Ouch! – Commercial rents on Fifth Avenue in NYC are $2,250 per square foot or $2.25 million for a 1,000 sq. foot location – Cushman & Wakefield

 

Sad! – Blockbuster, the video rental chain that once had 9,000 stores will soon be down to only one location.

 

 

Fleeing New York

 

New Fed tax laws limiting deducts of state and local income taxes have created incentives for New Yorkers to move to Florida and other low tax states.  To check on residency fakers, New York is looking at cell phone records, social media feeds, vet and dentistry records in verifying residency.  The wealthy flight was blamed for the state’s Dec-Jan $2.3 billion revenue shortfall.  3,000 non-residency audits were conducted each year from 2010 to 2017.  More than half of those audited lost, with the average collection in the 2015-2017 period being $144,270.  If you are a high earner and you move to FL, the chances for residency audit are 100%.  The combined NYC and state taxes are now 12.7% vs. Florida which has no income tax or estate tax – Barry Horowitz – CNBC ….. The tax savings on $1 million of income in NYC would equal the principal and interest payments on a 30-year mortgage to purchase a $2.12 million condo in Florida.  NY also has an estate tax rate of up to 16% on high net worth individuals, which is the primary reason wealthy senior residents are leaving the state - Buzz

 

buzz@msifund.com

This material was prepared by MidSouth Investment Management LLC, and does not necessarily represent the views of the presenting party, nor their affiliates.  This information has been derived from sources believed to be accurate.  Please note – investing involves risk, and past performance is no guarantee of future results.  The publisher is not engaged in rendering legal, accounting or other professional services.  If assistance is needed, the reader is advised to engage the services of a competent professional.  This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.  This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.  This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested.  All economic and performance data is historical and not indicative of future results.  Market indices discussed are unmanaged.  Investors cannot invest in unmanaged indices. 


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