MidSouth Week in Review:
November 15, 2019
Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund
Nov. 18, 2019 | RedChip Companies
The S&P, Dow and NASDAQ all made new highs today. For the week the S&P rose 0.8%. On Tuesday, the Dow closed at 27691.4864488934, exactly unchanged from the day before. Yesterday, Merrill Lynch said that Apple’s current valuation of $1.18 trillion is larger than the entire market cap of the U.S. energy sector. Apple’s stock is up 63% from its June low. Aramco, the world’s most profitable company, with 2018 earnings of $111 billion, plans to go public around the 5th of December. The following five pot stocks got annihilated over the past five days due to poor financial results: Village Farms -36%, Aurora Cannabis -29%, Canopy Growth -30%, Cronos -27%, Tilray -19%.
BuzzBits
Value Stocks – For three months now, value has outpaced growth. The S & P value index has leaped ahead 12% vs. 5.7% for the growth index – Chief Investment Officer ….. Going back to 2001, value stocks have never been this cheap vs. momentum stocks, based on forward earning yield – Wall Street Journal
No Respect – Arkansas paid Western Kentucky $1.5 million to play them in a home game last week. Western Kentucky won the football game 45 to 19.
3rd Year Charm – If the S & P remains positive for the remainder of the year, it will be the 20th consecutive “presidential 3rd year” to be positive, going back to 1943 – BTN Research
IBM Watson – software will disrupt most traditional industries in the next 5-10 years. In the U.S., young lawyers already don’t get jobs. Because of Watson, you can get legal advice on basic stuff within seconds, with 90% accuracy compared with 70% accuracy when done by humans. There will be 90% less lawyers in the future, only specialists will remain. Watson already helps nurses diagnosing cancer, 4x more accurate than human nurses – MD of Daimler Benz ….. An Oxford study estimated that nearly half of all U.S. jobs were at risk from artificial/intelligence-powered automation ….. Around 5 million manufacturing jobs have been lost since 2000, with automation being the main factor – Andrew Yang, Venture for America
Rate Cuts – Whenever the Fed has three cuts as it has done this year, the S & P has risen, as shown in 1982, 1985 and 1988. More than three cuts prompts a downturn in the index as shown in 2001, 2007 and 2008 – Strategas research
Greenwich Real Estate – Regis Philbin has listed his home for $4.59 million that he paid around $7.17 million for 10 years ago. Leona Helmsley has marked down her Round Hill Manor to $16.5 million from its original $50 million asking price. Ouch! – Wall Street Journal
Bonds – BrewDog, Europe’s largest craft brewer has launched a fixed-income offer yielding 6%, paying half in cash and half in beer. Yummy! – Wall Street Journal
Auto Debt – This year, 33% of car buyers who traded to buy a new auto had negative equity of $5,000 vs. $4,000 five years ago. Auto debt now accounts for 10% of household debt vs. 6% a decade ago – Wall Street Journal …..I would guess that most of the buyers went negative as they drove their new cars from the dealer as the new auto quickly became a used car – Buzz
Billionaires – If Warren’s tax on the rich would have been enacted in 1982, Bill Gates net worth today would be $13.9 billion vs. $97 billion, Jeff Bezos’s would have been $48.8 billion vs. $160 billion and Michael Bloomberg’s wealth would have been $12.3 billion vs. $51.8 billion – New York Times