MidSouth Week in Review:
January 17, 2020

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Jan. 20, 2020 | RedChip Companies


Benefiting from the signing of a China trade deal, the S&P rose 1.9% for the week and is up 3.0% year-to-date.  A positive January normally results in an above average return for the full year.  The budget deficit hit $1.02 trillion in 2019, a 17% increase from 2018, marking the first deficit exceeding $1 trillion since 2012.  The consumer savings rate rose to 7.9% vs. 3.1% 12 years earlier.  Tesla surged from 330 on 12-5 to 547 on Tuesday on a short squeeze, before declining to as low as 494.  Tesla’s U.S. state auto registrations declined 46% in the 4Q.  On the news, Morgan Stanley cut their rating to underweight but raised their price target to $360 from $250.

 

The markets will be closed on Monday for Martin Luther King, Jr. Day.

 

From Buzz (buzz@msifund.com)

 

BuzzBits

 

Stocks Are Expensive – and extremely so based on several measures.  The S&P 500 is trading for almost 19 times projected 2020 earnings, one of the highest readings in more than 40 years.  Stocks also look rich based on market value/gross domestic product, price/sales, and price/book ratios – Barron’s

 

Classified Ad – in the Knoxville Journal:  “Used tombstone for sale.  Ideal for a family named Campbell.”

 

Standard Oil – This month marks the 150th anniversary of the company, founded by John D. Rockefeller in 1870.  The company controlled 90% of America’s oil refineries until they were forced to break up in 1911.  The first commercial well in the U.S. was in 1859.  In the 19th century, an estimated 236,000 sperm whales were killed to make oil for lamps.  The whaling industry died overnight once Standard Oil began marketing a clean-smelling version of kerosene – The Blessing and Curse of “Black Gold” – Amanda Foreman

 

Timeshare Stats – 9.5 million Americans own timeshares •  Many are financed at rates up to 17.9% •  Maintenance fees average $1,000 annually •  95% of timeshares will have zero value on the resale market •  Nearly half of owners want out of their contracts due to financial issues – the usual resale value is about a tenth of the original price – Timeshare Exit Team

 

A 720 Credit Score – could expect an average mortgage interest rate of 3.67% on a 30-year, $300,000 mortgage and monthly payments of $1,374 vs. a 620 score which would average a 5.03% rate and $1,616 in monthly payments, a $86,891 difference over the life of the loan – Informa Research ….. If you make a late payment, miss a payment or pay less than is required by your credit agreement, it all gets added to your credit history.  Over time, this could lead to your credit score being classified as ‘very poor’ or ‘poor’ by the credit reference agencies that determine how easily you can borrow money https://www.barclaycard.co.uk/personal/money-matters/credit-scores/what-are-the-causes-of-a-bad-credit-rating      ..... The average credit score (FICO) rose to 703 in 2019, an all time high.

 

Retirement – In a recent poll of 6,372 workers, 50% said they don’t expect to retire at 65 and 13% plan to never retire.  The number expecting to work past 65 has increased threefold since 1995 – Wall Street Journal

 

Billionaires – NYC has the most billionaires (105), followed by Hong Kong (87), San Francisco (75), Moscow (70), London (65) and Beijing (55).  San Francisco has the largest number of billionaires per –capita with one for every 11,600 residents – Wealth-X study

 

IRS Tax Audits – have dropped from 1.1% of personal returns in 2010 to 0.45% today.  Heavier workloads and cuts in the agency’s budget have let billions of dollars go uncollected even as budget deficits rise.  Harvard economist Lawrence Summers says investing in enforcement and tightening could generate $1 trillion over a decade – Wall Street Journal

 

The Debate – Six and a half months ago, 18 million tuned in to watch the Democratic presidential debate vs. only 7.3 million on Tuesday vs. 13.5 million who were watching “Jeopardy” on ABC – New York Times

 

Ouch! – Administration costs make up 34% of U.S. healthcare expenditures – Annals of Interior Medicine

 

Football – In the Kansas City/Houston NFL playoff game last weekend, Houston scored the first 24 points, followed by four consecutive touchdowns in the 2Q explosion by Kansas City and a 51 to 7 run over the last three quarters of play, causing the KC announcer to comment:  “Chief fans, we are sorry to report but due to your support and the Chiefs continually finding the end zone, we have run out of touchdown fireworks.” – New York Times ….. LSU won the NCAA football championship Monday.  Their victories included wins over five of the top eight AP teams.  Two years ago, LSU lost to Troy State, a team they had paid $1 million to be roughed up.  Next to LSU, Tennessee’s six game win streak is college football’s longest.  Tennessee started the season with a 1-4 record that included losses to Georgia State and BYU. – GO TITANS!!!

 

Movie Review

 

Just Mercy is a true story about a Harvard law grad (Michael B. Jordan) who moved to Alabama about 32 years ago to defend those who were wrongly sentenced to die.  One of his first cases was to defend a fellow (Jamie Foxx) who was wrongly sentenced to die for the murder of an 18-year-old girl.  Great movie that is rated 99 by Rotten Tomatoes viewers.  https://www.rottentomatoes.com/m/just_mercy

 

 

buzz@msifund.com

 

 

 

This material 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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