MidSouth Week in Review
January 22, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Led by the tech sector, all major stock indexes made new highs this week.  For the week the S&P rose 2.2%.  The S&P was up a record 11.86% from the November 3 election date through the Wednesday inauguration date.  Junk bonds hit a record low yield of 4.13% this week.  Bitcoin had a morning low of $29,000 vs. a Tuesday high of $37,000.  The Pound rose to $1.37 against the Dollar vs. $1.14 in April.  Biden is proposing a $15,000 first-time homebuyer tax credit, which could be accessed immediately by the buyer, thereby serving as down payment assistance.  Sources:  Wall Street Journal and New York Times.

BuzzBits

Bull Markets – There is more anxiety in being out of a bull market – than being in one – Anon.

Trying – Wife: Can you stop yawning when I’m talking to you?  Husband: I’m not yawning, I’m trying to say something – Oldtimers

Appreciated Stock – If you sell them, you will incur a large capital gain tax bill.  Instead consider transferring your stock to a charitable non-profit organization where you will receive an itemized income tax deduction and avoid all capital gains taxes associated with the sale of your stock – Hillsdale.edu

Flu Cases – are down 98% in the U.S. this year.  Why?  The decline was driven by mask wearing and other Covid preventive measures, fewer people traveling, and a record number receiving flu vaccinations – NBCNews.com

Social Security – A 62-year-old couple would get a total of $50,700 if they immediately begin starting their benefits.  If one spouse waited to reach 65 and five months they would get $32,200 a year.  If the other waited until 70 to file, they would receive $44,640 a year for a total annual benefit of $76,840.  When one dies, the survivor will receive the highest of the two checks vs. only $29,700 if both had taken their benefits at 62 – Wall Street Journal

Criminal Behavior – Chicago had a 50% increase in shootings last year and one of every eight murders in the U.S.  New York City logged a 40% increase in homicides last year.  In Minneapolis, where Floyd was killed, there was a 77% increase in murders. – Washington Examiner

Theranos – Before the blood-testing firm collapsed, 36-year-old founder Elizabeth Holmes was the darling of Silicon Valley with a fortune valued at $4.5 billion.  Now with a zero net worth, prosecutors will take her to court in July for criminal fraud – Wall Street Journal

The Gun Craze – The FBI processed a record 39.7 million firearm background checks in 2020.  Also, checks related to the sale of firearms hit a record high, totaling 21 million – National Shooting Sports Foundation ….. Firearm manufacturer Smith & Wesson reported October quarterly earnings of 87 cents vs. 1 cent on a 119% sales increase - Buzz

Student Debt – averages $30,000, requiring an average $393 monthly payment.  54% of young adults that went to college used student debt.  2-in-10 student loan borrowers are behind on their loans – NYFedResearch ….. Advice – Avoid private colleges, attend a community college for the first two years – Buzz

Restaurants – Biden has proposed raising the minimum wage to $15 an hour.  This would kill the restaurant business.  The current minimum wage for tipped workers is $2.13 an hour.  The $15 an hour would cost a restaurant an extra $20,000 in pay for a server working 30 hours a week for a year.  Ouch! – Wall Street Journal

The Dollar – has declined 13% since March.  Citigroup believes the Dollar could decline another 20%.  In the late 1970’s, the dollar depreciated quickly against the German Deutsche Mark.  That made me decide to sell my older Mercedes and buy a newer one in anticipation of an increase in valuation.  Three years later, I sold the newer Mercedes at slightly more than I paid for it – Buzz

Retirement – 51% will not be able to maintain their standard of living in retirement vs. 40% in 2007.  Factors cited include increased life expectancy and decreased interest rates effect on savings – Boston College Center for Retirement

Moving Out – The states with the most outbound moves include:  New Jersey, New York, Illinois, Connecticut and California.  What do they have in common?  High taxes – Van Lines

Covid Vaccine – 56% of those surveyed say they will get the vaccine soon vs. only 26% in October and 32% in December – USA TODAY

Year is 1920!  One Hundred Years Ago!!!

What a difference a century makes.  Here are some statistics for Year 1920:

The average life expectancy for men was 47 years · Fuel for cars was sold in drug stores only · Only 14 percent of homes had a bathtub · Only 8 percent of homes had a telephone · The maximum speed limit in most cities was 10 mph · The tallest structure in the world was the Eiffel Tower · The average U.S. wage in 1919 was 22 cents per hour ·The average U.S. worker made between $200 and $400 per year · A competent accountant could expect to earn $2,000 per year · A dentist earned $2,500 per year · A veterinarian between $1,500 and $4,000 per year · A mechanical engineer about $5,000 per year · More than 95 percent of all births took place at home · Ninety percent of all Doctors had NO COLLEGE EDUCATION! Instead, they attended so-called medical schools, many of which were condemned in the press and government as “substandard.” · Sugar cost four cents a pound · Eggs were fourteen cents a dozen · Coffee was fifteen cents a pound · Most women washed their hair once a month and used Borax or egg yolks for shampoo · Canada passed a law prohibiting poor people from entering into their country for any reason.

The five leading causes of death were: 1) Pneumonia and influenza  2) Tuberculosis 3) Diarrhea  4) Heart disease  5) Stroke

The American flag had 45 stars · The population of Las Vegas was only 30 · Crossword puzzles, canned beer, and iced tea hadn’t been invented yet · There was neither a Mother’s Day nor Father’s Day · Two out of every 10 adults couldn’t read or write · Only 6 percent of all Americans had graduated from high school · Marijuana, heroin, and morphine were available over-the-counter at local drugstores · Back then pharmacists said, “Heroin clears complexion, gives buoyancy to mind, regulates stomach, bowels, and is a perfect guardian of health!” · Eighteen percent of households had at least one full-time servant or domestic help · There were about 230 reported murders in the entire USA vs. 769 in Chicago in 2020.

It is impossible to imagine what it may be like in another 100 years.

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