MidSouth Week in Review
December 31, 2020

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

I and I imagine everyone else will be happy to see year 2020 end tonight.  Living in Nashville, we had a disastrous year.  A $200 million tornado hit the city, followed by a major wind storm, just before the pandemic hit the country.  When it hit, by late March I had lost my a** in the stock market and there were 25 hours of weekly activities that I could no longer participate in.  Thankfully the markets did improve but Covid didn’t.  Then on Christmas Day we had a bomb hit two blocks from our office.  Thank goodness I was in Boston at the time visiting my daughter Annsley and the grands.

For the year the S&P was up 16% and was up nearly 14% in the November/December period.  Only seven other years has this two-month period ever been up 10%+ and in every January the market has been up 4.7%+.

Hope everyone has a great New Year’s Day and a great year in the stock market in 2021.  Sources:  Wall Street Journal and New York Times

BuzzBits

The Shortest Bear Market – ended on March 23, after a 33-day 35% decline, followed by a bull market that saw the S&P rise 70% through today – Economist Allen Sinai

Women Quotes – Whatever women must do, they must do twice as well as men to be thought half as good.  Luckily, this is not difficult – Charlotte Whitton …. A male gynecologist is like an auto mechanic who never owned a car – Carrie Snow …. A man’s got to do what a man’s got to do.  A woman must do what he can’t – Rhonda Hansome

Margin Debt – has soared 50% over the past 8 months.  Over the past 30+ years, such investor euphoria has happened only twice:  March 2000 and June 2007 – Jay Kumar

U.S. Air Travel – over the Christmas weekend was the highest since the pandemic began, but still down 60% from the 9.5 million who traveled over the same period in 2019 – New York Times

New Presidents – The S&P has averaged a 2.3% gain in the new president’s first year vs. a 11.6% gain when the incumbent party retained the White House.  However, under new Democratic presidents following Republican presidents, markets averaged a 10.6% gain the first year – Jeffrey Hirsch, Stock Trader’s Almanac

Influenza – has killed 12,000 to 61,000 Americans annually over the past decade, most of them 65 or older, and has sent 140,000 to 810,000 people a year to hospitals.  Based on the most recent stats, about one-third of adults over 65 had not received a flu shot within the past year – New York Times

Crazy! – AeroCentury (ACY), a provider of financial and leasing services to regional aircraft, rose 1300% on Monday with no news.  Going from a Friday close of $2.69, the stock rose to 38 before closing at $13.85.  I was an owner of the stock and sold out at $15 on the way up.  Yesterday the stock declined to $6.55 and closed at $10.75 today – Buzz

The Personal Income Tax – was first imposed in 1913 with the top rate set at 7%.  That turned out to be a record low.  The high rate was 94% in 1944-1945 – Federal Tax Policy

Bitcoin – hit $29,123 today.  Warren Buffett warned investors not to invest in Bitcoin.  Bitcoin is “probably rat poison squared,” he said – Becky Quick, NBC ….. Ten years ago someone paid 10,000 Bitcoins to buy two Papa John’s pizzas.  Today those same Bitcoins would be worth $290 million - $PZZA

Alcohol Consumption – has tripled in Italy since the beginning of the pandemic, and 10 million people are either alcoholics already or well on their way – Italian National Health Service ….. Some 81,000 American’s died of drug overdoses between June 2019 and May 2020, the highest in history.  The cause:  isolation, stress and depression – CDC

Housing Trends – In 2021, mortgage rates will rise from record lows.  Home prices will slow and American’s will continue to migrate to less dense regions.  The Mortgage Bankers Assoc. says mortgage rates will average 3.3% in 2021 – Bankrate.com ….. CoreLogic expects home prices will rise 4.1% in 2021 vs. 7.3% in 2020.

California – is worried about the departing of several of their wealthy residents, so they are considering a tax on their part-year residents who spend more than 60 days inside the state’s borders in a single year.  The state’s wealthiest 1% pay 46% of total state income taxes – Wall Street Journal

Covid-19 Shot – was the fastest vaccine ever created.  The previous record for the fastest vaccine developed was four years for mumps – Dr. William Schaffner

Homicides – are up 40% in the 10 largest cities.  The sudden rise, a reversal after a general decline since the early 1990’s.  Also, the percentage of unsolved crimes has risen because bringing in witnesses, canvassing crime scenes and knocking on doors are all harder due to social distancing – Wall Street Journal

Meaningful Message – Video attached

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.