MidSouth Week in Review:
May 17, 2019

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

May. 21, 2019 | RedChip Companies


The S & P was down 0.7% for the week.  The Dow declined 0.9% for the week, its fourth consecutive down week and on Monday registered its biggest down day for the year.  Tesla declined 11.8% for the week to $211.08, a 2 ½ year low.  The yield on the 10-year Treasuries declined to 2.39%, its lowest level since March.  The 30-year mortgage rate declined to 4.07%.  The monthly confidence level of U.S. home builders hit the highest level in seven months after registering a big decline in December.  Bitcoin rose to $8,332 on Thursday from $4,112 on 3-30 on the news that Fidelity and several retailers are going to accept cryptocurrency.  Today Bitcoin declined 9.64% to $7,117, its biggest one-day drop in 18 months.

 

 

BuzzBits

 

Bear Market Stats – The average length is 10 months.  The average stock market loss is 36%.  One happens around every 3.6 years.  Bear markets have been less frequent since WWII.  They don’t necessarily indicate an economic recession.  Over a 50-year investment horizon, you can expect about 14 bear markets – Ned Davis Research

 

Actual Complaints – received by “Thomas Cook Vacations” from dissatisfied customers.  1) They should not allow topless sunbathing on the beach.  It was very distracting for my husband who just wanted to relax.  2) My fiancée and I requested twin-beds when we booked, but instead we were placed in a room with a king bed.  We now hold you all responsible and want to be re-reimbursed for the fact that I became pregnant.  This would not have happened if you had put us in the room that we booked.

 

Weighted vs. Unweighted – The S & P 500 is a weighted index with a 3-year annualized return of 11.6% vs. the NYSE composite which is an unweighted index (every stock in the NYSE has an equal weighting) with an annualized return of 7.2%.  The annualized return for the S & P for the 20-years through April was only 6%.  That made it one of the worst 20-year periods since 1928 – Buzz

 

Coffee – The risk of heart failure or stroke drops 8% for each additional cup of coffee consumed per day, according to the American Heart Association.  A Spanish study found that those who drink four cups a day had a 64% lower risk of dying.  A British study of 498,134 found that those who habitually drank coffee were 10 to 15% less likely to die during a 10-year period vs. non-drinkers – INC.

 

Wills – 45% of those 55 and older don’t have a will, according to a Merrill Lynch survey.  Die without a will and your state’s laws determine who gets your assets.  For those on a budget, one can go to www.freewill.com , a no-fee, online will-writing service, which will enable you to have a will in 15 minutes to no more than half an hour.  If you have significant assets, children from multiple marriages or complicated business arrangements, an estate attorney is recommended – Personal Finance

 

The Perfect Score – The valedictorian at Walnut Hills high school in Cincinnati scored a mere 35 on his ACT.  However 17 of the students at the school scored a perfect 36.  In 2010, 1 of every 2,600 students got a perfect score vs. 2018, when 1 of every 500 nailed it.  From 2017 to 2018, the number of students scoring 1400+ on their SAT’s has risen from 5% to 7%.  Why the pop in test scores?  The most likely answer is a booming test-prep business built on the hopes and fears of parents and students wanting to get an edge.  One service charges $1,700 for its comprehensive private test-prep package – USA TODAY

 

Divorce or Separation – odds during a first marriage.  Within five years is 20% and 33% after 10 years.  40% to 50% of marriages end in divorce.  About 10% of the adult population is comprised of divorced people.  That’s why prenups are strongly advised prior to marriages – Financial Advisor

 

Michigan Auto Insurance – is the most expensive in the nation because they are the only state that requires car owners to buy no-fault insurance. That liability has pushed Detroit insurance premiums to $6,000+ vs. the $1,500 national average - Wall Street Journal

 

Childbirths – per woman needs to be at least 2.1 for the population to grow.  In the U.S. it has dropped to 1.82, a 32-year low.  Fertility rates for selected countries:  Mexico (2.18), Japan (1.44), Italy (1.34), China (1.62), Israel (3.11), South Korea (1.17), U.K. (1.79), Germany (1.60), Canada (1.54) – Fortune …. 35% of the fertility decline in the U.S. from 2007 to 2016 was because of declines in pregnancies; that were likely unintended – Kasey Buckles, Notre Dame

 

Overpaid Baseball Players – Bryce Harper of the Phillies and Chris Davis of the Orioles make $25.3 million and $23 million annually but have terrible batting averages of .220 and .188, respectively.  Cody Bellinger of the Dodgers is hitting .401 with 15 home runs, yet only makes $605,000.  Assuming each player was at bat 500 times for the season, the team cost per hit for Harper would be $230,000, for Davis $244,681 and a mere $5,500 for Bellinger – Buzz ….. Harper who has a $330 million, 13-year contract, has hit only .147 over the past 20 games – Follow@Baer.com 

 

60% of Millennials – consider themselves entrepreneurs, yet only 4% are currently self-employed.  In 1996, young people launched 35% of start-up’s vs. 18% in 2014.  Why?  Student debt which has caused the group to be more risk averse.  70% of college grads leave school with an average of $29,800 in debt and 60% of them borrowed, expecting to be paying off their loans into their 40’s – ThomsonOne

 

Movies

 

Most of the better movies come out later in the year because it increases the chances of winning an Oscar.  However I saw two movies last week that I really enjoyed.  Ask Dr. Ruth is about the life of Dr. Ruth Westheimer, from the time her parents placed her in a Swiss orphanage from Germany in 1938, through today.  The movie was so well done that I predict it will win an Academy Award for best documentary.  The movie carries a viewer rating of 100.  The other movie, Poms, is not that well rated but if you are a woman from the south and are age 60+ you should love it.  I did! The 73-year-old Diane Keaton dumps her home of 45 years and moves into an upscale Georgia retirement community.  Being bored she gets some of the ole gals and forms a cheerleading group that competes.  Very funny movie.  I asked some millennials, a couple of black gals and a few oldsters if they liked the movie.  They all gave it a thumbs up.  However, the professional movie critics didn’t care much for the movie.  AARP gave it a favorable review - Buzz

 

buzz@msifund.com

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