MidSouth Week in Review
January 8, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Jan. 12, 2021 | RedChip Companies

For the first week of the New Year, the S&P was up 1.8% because the Democrats won in Georgia and now control the House and the Senate.  The 10-year Treasury yields rose from 0.93% to 1.10%.  The rising interest rates caused bank stocks to get a nice bounce.  Mortgage News said that mortgage rates jumped to 3.25% this week.  Gold, silver and oil all made recent highs.  Oil was helped on the announcement that the Saudis plan to cut oil production to push prices higher.  Tesla surged 25% for the week and is now up 118% since the November announcement of their S&P listing.  Bitcoin also went parabolic moving from a 29,000 Monday low to a 41,000 high today.  The manufacturing index rose to 60.7 in December vs. 57.5 in November, its highest level in over two years.  The sheer number of IPO’s of nearly 500 have led comparisons of the dot-com bubble of 1999.  Sources:  Wall Street Journal and New York Times




Growth vs. Value – Growth stocks outperformed value stocks last year by one of the largest margins ever:  S&P 500 Growth +33.7%, Midcap 400 Growth 22.4%, Smallcap Growth 19.5% vs. Value: S&P 500 Value 1.2%, Midcap Value 3.5%, Smallcap 500 Value 2.6%, DJ Dividend -4.9% ….. This week the Russell 2000 smallcap value index rose 5.9% vs. a gain of 2.5% for the NASDAQ - Buzz


New Year’s Eve – “I stayed up until the New Year came, not to make sure the new one arrived but to make sure the old one left” – Buzz


New Investors – opened more than 10 million brokerage accounts in 2020.  The shift to commission-free trading in 2019 helped swell the market volatility.  On peak trading days in 2020, individual traders were estimated to have accounted for nearly 25% of U.S. trading activity – Wall Street Journal


Dieters – who kept food diaries lost about 18 pounds in six months vs. only 9 pounds for those who didn’t keep food diaries.  The biggest losers attended group meetings and did more exercise – American Journal of Preventive Medicine


Global Stock Indexes – The best gainer for 2020 was Comex Silver (+47.7%).  The biggest loser was S&P 500 Energy (-37.3%) – FactSet ….. U.S. Treasury bonds gained 15.9% in 2020 – J.P. Morgan ….. U.S. bank stocks were one of the biggest losers in 2020 but the Regional Bank Index (KRE) was up 9.6% for the week - Buzz


Dogs – The adoption rate by April 2020 had increased by 30%.  Spending on dogs reached a record $99 billion.  A recent research report found that after getting a dog, people walked 2,589 more steps a day.  Loneliness in the group decreases 40%.  Plus, dogs encourage their owners to get out in nature, maintain a sense of routine and stay in touch with their neighbors – New York Times


Barron’s – was founded 100 years ago by Clarence W. Barron in 1921.  In 1887, Barron’s founded the Boston News Bureau, which supplied financial news to bankers.  Fifteen years later, he bought Dow Jones & Co., including the Wall Street Journal for $130,000 – Barron’s


French Sexual Discrimination – The French government fined the city of Paris $110,000 for sexual discrimination.  Why?  Because 11 of their top 16 officials hired in 2018 were of the same sex - women.  Their law states that no more than 60% of new hires in a given year can be of one gender – THE WEEK


Capital Gains Break – If one invests or buys stock in certain C corps with assets of less than $50 million and holds it for more than five years, they can exclude from taxable income 100% of the gain when they sell the stock.  Certain industries do not qualify such as; banking, insurance, oil and gas and personal services.  The cap on the tax exclusion is 10x your investment – Kiplinger’s Personal Finance


Strange – There were 108 homicides in Nashville in 2020 vs. 83 in 2019.  Of the group, only 16% were older than 40 – Buzz


Nice Paydays – On January 2, the University of Texas dropped their football coach with a $15 million buyout offer and $9 million to be paid to his assistants.  Auburn’s football coach got a $21.5 million buyout and Will Muschamp, who was fired in November at the University of South Carolina, got a $15 million buyout – Bloomberg


Nursing Home Deaths – represented 59% of coronavirus deaths in Spain, 72% in Canada, 57% in Belgian vs. 38% in the U.S. – Wall Street Journal


Medical Debt – Millions of Americans have unpaid medical bills because of the pandemic.  Many have lost their jobs and employer sponsored health insurance.  If you have a hospital bill you can’t pay, many hospitals have financial aide programs, under which they’ll write off part or even all of your debt – Kiplinger Personal Finance Advisor


Spelling 101


When I was a 15-year-old sophomore in high school, I was late for school one day, so I forged a note from my mom to deliver to the principals office.  I wrote: “Please excuse Lyman for being late this mourning because he was ill.”  About 30 minutes later, when I was in my homeroom, a call came over the speaker, “Tell Heidtke to come down to the principal’s office.”  When I sat down in the principal’s office, the principal asked me how to spell morning.  I said m-o-u-r-n-i-n-g.  The principal then asked me if I wrote the note.  I said yes, how did you know?  He said, “You had better learn how to spell morning next time.”  After three good licks from the board of education, I returned to my classroom – Buzz.



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