MidSouth Week in Review
October 30, 2020

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Oct. 30, 2020 | RedChip Companies

For the week the S&P declined 5.8% and was down 3.0% for the month.  The Dow declined 6.9% for the week, its biggest weekly decline since March.  Many of the tech stocks got slammed today including: Amazon (-6%), Facebook (-7%), Netflix (-6%), Apple (-6%) and Tesla (-6%).  The presidential election is Tuesday, but studies show the stock market won’t be effected much by whoever wins.  European stocks hit a 5-month low.  Crude has declined 15% from last week’s high, causing wholesale gas to decline to $1.01 from $1.22 earlier in the month, so expect some price drops soon at the pumps.  The economy (GDP) grew at a record pace in the 3Q, increasing 7.4% to a 33.1% annualized rate.  The consumer confidence level dropped to 101.3 in October vs. 100.9 in September.  Lumber prices declined to $473 vs. $850 in August, possibly signaling a softness in housing starts.  Sources: Wall Street Journal and New York Times


Saturday night is when we fall back from daylight savings time, so set back your clocks.  Saturday is also Halloween.  About 20 years ago, I waited at home for kids to visit my next door neighbor’s house.  As they did, I got in the back of a group of about six, with my Hillary mask on and got on my knees to look like one of the kids.  As my grumpy ole-tight-fisted neighbor brought out a bowl of candy and said “only one!”  I responded, “Why you tight ole SOB”, to which he replied, “Who is that?”  For some reason my lawyer neighbor didn’t think the joke was too funny. - Buzz




Probability of Portfolio Negative Returns – 1 month 38%, 1 year 26%, 3 years 16%, 5 years 11%, 10 years 6% - S&P, Bloomberg, Bank of America


Love You Dad – Visiting our son in college, my wife and I were surprised when he offered to pay for a nice meal we had enjoyed at a restaurant.  It impressed me that he had managed to save money, even with all his school expenses.  Then he pulled out my credit card, the one I had given him for emergencies – Frank Karkula


Odd Lots – are stock shares that are other than a multiple of 100 shares and has increased in recent years.  In 2019, such trades accounted for nearly two-thirds of market trades.  Higher priced stocks and algorithmic trading (buying a dollar amount of a stock) have resulted in a higher percentage of odd-lot trades – AAII Journal


Biden Wins – based on stock market probabilities.  The S&P was down 3% for the month and whenever October is negative, the incumbent usually loses.  The S&P declined 3.6% Wednesday.  A 3%+ one-day decline has happened only twice in the six days prior to a presidential election, 1932 and 2002, and both times the incumbent lost – Buzz


Virtual Medicine – Telehealth appointments jumped from a pro-Covid level of 5% to 95%.  By September it has dropped to around 25%.  Virtual sessions are good for less-complicated nonemergency complaints such as acne, allergies, flu, nausea, pink eye, rashes, sore throat, vaginitis, coughs, certain gastro intestines issues, sprains and sinus infections.  Most doctors are now offering virtual visits but if yours is not you can go to the following virtual-care companies: Teladoc Health, Amwell, iCliniq, Plush Care, Doctor on Demand and MDlive – Mayo Clinic Platform, THE WEEK


Bad Odds – State lotteries pay back only 62% of money received from ticket sales, the smallest of any legal gambling games.  Slot machines have the worst odds of any private casino game, paying back only 80% of the money fed into them – census data


The Hamptons – The beachfront community, which is about 100 miles from New York City by car, saw real estate prices surge around 40% in the 3Q.  The surge in prices spurred by New Yorkers fleeing to the beach, amid the pandemic vs. 2019 which saw repeated price cuts of luxury homes.  The ultra high category saw a 65.7% surge in high income home prices to $5.8 million – Private Wealth


Wealthy – In a pre COVID survey, participants said it would take $934,000 to be financially comfortable and $2.6 million to be wealthy.  Now they say financial comfort requires only $655,000 and wealth comes at just $2 million – USA TODAY …. The richest person in the world is Jeff Bezos ($188 billion), but the seven living heirs of Sam Walton are worth $239 billion – Forbes ….. In 2017, 99% of tax returns had income of less than $515,371 and 98% had income of less than $339,478 - IRS


75 Years Ago – in 1945, the first ballpoint pens were introduced at Gimbels Department Store in New York at the  price of $12.50 each, which is the equivalent to $181 in today’s dollars – Buzz


Drive-Through Sales – McDonalds drive-through traffic now makes up 90% of their revenue vs. 67% before the pandemic.  Their sales have increased by 4.6% - Chicago Tribune


Dog Owners – experience a 65% reduced risk of mortality after a heart attack and a 24% lower risk of death from any cause.  Why?  Pet owners have lower cardio risk factor overall including lower plasma cholesterol, triglyceride values and blood pressure – Bottom Line Health …..Pet adoption and ownership are at an all-time high – Harry Lawton, Tractor Supply


Death of Newspapers – Gannett (GCI - $1.22), owner of 261 daily newspapers and USA TODAY, has lost $5.29 per share ($630 million) over the past 12 months and has seen their stock trade as low as 63 cents vs. $19 two years ago.  This week, Salt Lake City (population 200,000) announced the closing of both of their daily newspapers, including the Tribune, which has been published for 150 years – Buzz ….. In 1846, five daily newspapers in New York City pooled their resources to cover the Mexican-American War.  The result of this cooperative effort eventually became known as the not-for-profit Associated Press – AP


Debit Cards For Teens


A few weeks ago, Jay in the office told me he got a debit card for his daughter Saisha just after she turned 13.  I then told my daughter Annsley and suggested she get one for her daughter Frances who also recently turned 13.  Both kids are loving their debit card.  I deposited $100 in Frances’s card to get her started and her mother deposits money in to her account weekly, representing her allowance and money for her chores done around the house.  If the chores don’t all get done, such as making up her bed, money gets deducted from her weekly deposit.


Jay has money automatically transferred into his daughter’s account weekly from his bank account, with no fees charged.  This is a great way for young people to learn about money management and to practice the basics of budgeting.  Jay’s daughters account is with STEP for teens and Frances’ is with Bank of America.  Neither charge a fee, but be careful because some plans charge as much as $5.99 monthly. - Buzz





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