MidSouth Week in Review
November 27, 2020

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Dec. 2, 2020 | RedChip Companies

For the holiday shortened week, the S&P rose 0.8%.  The Dow, NASDAQ and the small cap Russell 2000 all made new highs.  Tesla rose 22% for the week to 598 and is now up 44% from last Wednesday’s announcement that they will be joining the S&P 500 index.  Tesla traded at 70 in March.  The Dollar hit a 2 ½ year low.  A weak dollar can help multinational companies since it makes earnings in foreign currencies worth more in dollar terms.  Goldman Sachs says we are in the very early stages of a commodity super cycle that will last for years and ultimately drive resource prices much higher.  Crude surged to 46 from an early November low of 34.  Wholesale gas rose to $1.26 from its $1.00 low, so expect to soon see a nice price increase at the pump.  Copper rose to a seven year high.  Bitcoin rose to 19,400 before declining to 16,600.  Jobless claims rose for the first time since July.  30-year mortgage rates hit nearly a 50-year low in falling to 2.72%.  Sources:  Wall Street Journal and New York Times.




Capital Gains Strategy – By donating an appreciated stock to say a relative, they take on your cost basis.  For 2020, singles with income below $40,000, pay 0% capital gains tax on long-term gains, as do married couples filing jointly, with income below $80,000 – Wealth Management


The Big Miss – My New Year’s Resolution was to lose ten pounds.  I missed it by 15 pounds! – William Cavico


The KBW NASDAQ Bank Index – through November 20 was down 22% for the year and is on pace to underperform the S&P by more than any year going back to 1993 – Wall Street Journal ….. This week the S&P Regional Bank Index (KRE) rose 3.6%.


GoodRx vs. Copays – For the 100 most prescribed drugs, GoodRx users paid less than the average insurance copay 37% of the time, with savings of up to 54% - MPH


125 Years Ago – was the first engine-driven race on Thanksgiving day in Chicago in 1895, that included only six cars.  The race was won at an average speed of 7 mph.  Several newspapers across the country ran the same three-word headline above their recaps of the race:  HORSE IS DOOMED – Sports Illustrated


The Big Mistake - Airbnb has filed to go public in December with a $30 billion valuation.  In 2008, co-founder Brian Chesky attempted to raise $150,000, at a $1.5 million valuation, for 10% of the company.  Chesky and his co-founders approached seven prominent Silicon Valley investors, five passed and two ignored them completely – INC.


Lockdowns – have resulted in 56% of high school students surveyed reported talking to their parents more, 54% having dinner with their parents more often, 46% spending more time with their siblings and 68% saying they have become closer to their families.  Depression dropped from 27% in 2018 to 17% in 2020 – Institute for Family Studies


Social Security Uncertainty – 2020 will be the first year since 1982 that Social Security costs will exceed income, requiring the program to draw down on its nearly $3 trillion trust fund.  The fund is expected to cover benefits until 2035 at which point benefits will not be able to be paid out in full amounts.  This year beneficiaries received a 1.6% benefit increase – Wealth Management


UK, England, Wales Virus Surge – accounted for 95% of deaths for those 60+ years old during the August 1 to November 1 period.  Of those, 57% were male – Wall Street Journal  


Recent Grads – The pandemic has tanked the job market for the 2020 class with a 70% drop in “entry level” or “recent grad” listings.  Given the acceptance of remote work, students should open their search to places thousands of miles away.  Up to 30% of internship apps have said they’re considering changing fields – Money


Covid-19 Deaths – are now around one in 167 cases, according to the Institute of Health Metrics at the U. of Washington but infection-disease model Jeffrey Shaman at Columbia University believes the death rate is now only one in 667 vs. one in 1,000 for seasonal influenza – Wall Street Journal ….. The Centers for Disease Control and Prevention estimates that there are 8x more coronavirus cases than recorded.


Sad Situation – The American College Health Association’s 2019 National College Health assessment found that 45% of students reported feeling so depressed in the previous 12 months that it was difficult to function; 66% felt over-whelming anxiety; and 13% considered suicide.


Turkeys – More than half of all sold over the course of a year were consumed this week.  Because of social distancing measures in place there has been a greater demand for smaller turkeys know as hens (10 lbs) vs. larger turkeys (toms 15-25 lbs).


Old Photos - http://douglascountygensoc.org/photos002.html


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. 

"I work with many of the companies that would be RedChip companies. And we certainly ascribe to the same view that the RedChip Companies do, which is Discovering Tomorrow's Blue Chips Today."

  • Bob McCooey, Senior Vice President, NASDAQ Stock Market