MidSouth Week in Review:
January 31, 2020

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Feb. 3, 2020 | RedChip Companies

The S&P ended the month of January with a loss of 0.1%.  Going back to 1950, whenever the month of January has been negative, the full-year return for the S&P has averaged being a negative 4%.  The uncertainty about the Coronavirus caused oil prices to decline, interest rates to drop and the current weakness in the stock market.  Both Exxon and Chevron hit new lows today as oil dropped to bear market territory and natural gas dropped to its lowest levels since 2016.  Gold hit its highest level since 2013.  Thirty-year mortgage rates declined to a 3-year low of 3.49% from 3.60%.  On a positive note, Amazon founder Jeff Bezos increased his wealth by around $10 billion today as his company’s stock rose 7% on a good earnings report. 


From Buzz (buzz@msifund.com)




S&P 500 Dividend Aristocrat (NOBL) – The ETF consists of stocks that have raised their dividends consistently.  Over the past 20 years the index has returned 659% vs. 236% for the S&P.  However over the past 5 years, the group has returned only 71% vs. 78% for the S&P 500 – FactSet ….. NOBL has a current yield of 1.9%.


Organized Crime – can easily be stopped.  All we have to do is form a government agency to run it – then stand back and watch it choke itself to death on red tape – Chuck Roast


World Epidemics – Since news of the Coronavirus hit last Friday, the S&P has declined 2.9%.  Going back to 1970, the initial news of epidemics such as: SARS, HIV/AIDS, Ebola, Swine Flu and MERS have caused an initial market decline but soon recovered.  After epidemics, the MSCI World index has averaged market returns of 0.44% a month later, 3.08% three months later and a 8.50% return six months later – Charles Schwab


Infrastructure – The American Society of Civil Engineers has given our country’s byway an overall grade of D-plus while bridges slid to C-plus.  45% of American roads are deemed in poor condition.  The current backlog of federal highway projects that need funding is around $836 billion – Wall Street Journal


The National Debt – increased +86% during George W. Bush’s 8 years as president, reaching $10.63 trillion.  The national debt increased +88% during Barack Obama’s 8 years as president, reaching $19.95 trillion.  The national debt has increased +16% during Donald Trump’s first 3 years in the White House, reaching $23.2 trillion as of 1/20/20 – Treasury Department


The Super Bowl – will be played in Miami on Sunday between San Francisco and Kansas City, with the average ticket in the secondary market going for $7,733 vs. $4,972 last year vs. the record high of $9,723 in 2015, when Seattle and New England played – TicketiQ ….. Since 2000, at least 60 active NFL players have been arrested in the Miami area, with only a third involving Dolphin players.  Fifty-six were black, three were Polynesian and one was Hispanic and none were white.  About 65% to 70% of NFL players are black – USA TODAY


Manhattan – From 2011 to 2019, the average price of a newly listed condo in New York has soared from $1.15 million to $3.77 million.  However, today nearly half of the Manhattan luxury-condo units that have come onto the market in the past five years are still unsold, even as 80,000 people sleep in NYC’s shelters or on its streets – New York Times


Greeting Cards – Sales have declined 13% over the past five years.  Millennials and Gen Z just aren’t sending cards.  Younger Americans “don’t even know how to address an envelope”, says Hallmark VP Molly Biwer, “They don’t have a stamp, or necessarily know how to buy a stamp.  They don’t have addresses.”  Instead, they are celebrating friends and family for free, over social media and through text messages – Wall Street Journal


U.S. Homes For Sale – have declined from 3.4 million in 1982 to 1.22 million today – National Association of Realtors


Tax Increase Proposals – by Democratic presidential candidates:  Sanders, Warren and Klobuchar want to impose Social Security payroll taxes on all income above $250,000 vs. the current limit of $137,700.  Sanders wants to raise the individuals tax rate to 52% from 37%.  Warren wants to have the combined payroll tax raised to 14.8% from 12.4%.  Sanders wants to raise the top marginal tax rate to 69.2% vs. 40.2% and raise the cap gain rate to 52% vs. 20%.  Warren wants to raise the top rate on investment income to 58.2% from 23.8% - Cornerstone Macro


Union Membership – 29.3% of American workers belonged to a union in 1964 vs. just 10.3% today – Department of Labor


Life Expectancy Calculator - https://www.blueprintincome.com/tools/life-expectancy-calculator-how-long-will-i-live/






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