MidSouth Week in Review:
July 12, 2019

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Jul. 15, 2019 | RedChip Companies

The S&P, Dow and Nasdaq all made new highs after Fed Chair Powell promised Congress Wednesday that the Fed will lower interest rates by a quarter-of- a point most likely by the end of the month.  The S&P crossed the 3,000 level and the Dow crossed the 27,000 mark.  For the week, the S&P was up 0.8%.  The record long economic expansion entered the 11th year, unemployment is at a half century low with the only worry being the inflation rate that has fallen short of the Feds 2% target.  The Treasury Department said this week the budget deficit increased 23% from October to June vs. the same period a year earlier.  The 30-year mortgage rate remained unchanged at 3.75%.




The S&P 500 – Ended the month of June up 17% YTD, marking only one of the 12 times the index has ever climbed 16%+ in the first half.  Whenever the index has climbed 15% to 18% in the first half, the index has continued to rise in the next two quarters. – Dow Jones Market Depth


Gloria Vanderbilt – According to probate documents, the value of her estate, which will be left to son Anderson Cooper, is less than $1.5 million vs. the $200 million she was believed to be worth – Wealth Management


Investment Timing – “Don’t wait until the time or the market is just right to start investing – start now.  The best time to plant an oak tree was 20 years ago – the second best time is now.” – James Stowers


American Retail Stores – 7,037 have closed Y-T-D through 6/30/19, already exceeding the 5,864 closures that occurred during all of calendar year 2018.  This year’s store closures are on pace to exceed the all-time record of 8,139 from 2017. – Coresight Research


Flippers – Investors accounted for more than 11% of U.S. home purchases in 2018 which was twice the level before the 2008 housing crash – Wall St. Journal


Fake Meat – Beyond Meat (BYND - $167 ) went public in May at $25 per share before hitting the $200 level in June.  BYND has no earnings, a mere $115 million in revenue and a stock valuation of $10.7 billion vs. Kellogg, the largest producer of meatless burgers (Morningstar Farms Division), that has $13.1 billion in sales, $1.2 billion in profits and a stock valuation of only $18.7 billion. - Buzz


The New Scam -  is by unidentified hackers getting into a city’s computer systems and asking for ransom in Bitcoin.  Lake City, FL recently agreed to pay $600k in ransom demands.  At least three Florida cities have recently been hit as well as Atlanta, Baltimore, and Dallas.  Atlanta elected to not pay $51k in extortion demands that has so far cost the city $7.2 million. – New York Times


The Personal Income Tax – was first imposed in 1913 with the top rate set at 7%.  That turned out to be a record low.  The record high was 94% in 1944 - 45  - Federal Tax Policy


Wedding Specific Loans – have quadrupled since last year as more people want “Instagram-worthy” nuptials.  One online lender said couples borrow an average of $16,000 with interest rates between 7% and 18%. – The Washington Post


Compound Interest – Understand the magic of compound interest!  If you received $1,000 a day for 30 days you would end up with $30,000.  If, on the other hand, you received one penny the first day, then double the previous day’s total the second day and so on for the entire 30 days, you would end up with an astonishing $10,737,418.34.  Halfway into the 30 days you would only have had $327.67, but does it ever pick up steam over the second half.  Moral:  Reinvest all dividends, interest and capital gains distributions.


Elizabeth Warren – is running against capitalism. “She probably ranks as the most business-unfriendly candidate of a major party in a century,” noted Dan Clifton, Strategas Research Partners’.  That might be an exaggeration, but she would like to eliminate private health insurers and break up the technology giants, while taking on energy, drug, and banking industries.  – Barron’s


Financial Tips for Widows – you might want to pass this excellent article from Fidelity on to a recent widow friend… (https://www.fidelity.com/viewpoints/personal-finance/8-financial-tips-for-widows)..... widowers over the age of 65 are very vulnerable to a quick romance resulting in marriage to the first lady from the church who brings over a casserole dish… - Buzz 


Love You Honey


There were several of us recently sitting around in the locker room at the club after exercising.  Suddenly a cell phone on one of the benches rang.  One of the members picked it up, and the following conversation ensued: “Hello?” “Honey, it’s me.  Are you at the club?” “Yes.” “Great! I am at the mall.  I just saw a beautiful out-of-season mink coat.  It’s absolutely gorgeous !! Can I buy it?” “What’s the price?” “Only $6,350.” “ Well, OK, go ahead and get it, if you like it that much…”  “Ahh, and I also stopped by the Jaguar dealership and looked at 2019 models.  I saw a red F-class convertible I really liked.  I spoke with the salesman, and because the 2020’s are coming out soon he gave me a really good price… and since we need to exchange the BMW that we bought last year..” “What price did he quote you?” “ Only $71,500…” “OK, but for that price I want it with all the options.”  “Great! But before we hang up, something else…”  “What?”  “It might look like a lot, but I was reconciling your bank account and… I stopped by the real estate agent this morning and saw the lake house we had looked at last year.  It’s on sale!!  Remember?  The one with a pool, English Garden, acre of park area…”  “How much are they asking?”  “Only $975,000 – a magnificent price… and I see that we have that in the bank to cover…” “Well, then go ahead and buy it, but just bid $950,000 OK?”  “OK, sweetie … Thanks!  I’ll see you later!! I love you!!!”  “Bye … I do too …” The man hangs up, and raises his hand while holding the phone and asks to all those present:  “Does anyone know who this phone belongs to?” - Buzz




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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