MidSouth Week in Review
February 12, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

All the major indexes registered new highs for the week with the S&P up 1.3%.  The yield on the 30-year Treasury hit 2% for the first time since the pandemic began.  On Sunday Covid cases dropped to 88,044, falling below 100,000 for the first time this year.  Crude inventories fell by 3.5 billion barrels, resulting in crude rising to a 13-month high to $59.63.  Lumber made an all-time high today, benefitting from new home construction.  Copper hit an eight year high.  Bitcoin hit $48,532 today vs. a January 27 low of $29,604.  Sources: Wall Street Journal and New York Times

Happy Valentine’s Day!

BuzzBits

Valentine’s Day – is Sunday, February 14.  A Civic Science poll of over 2000 adults showed that people are planning a whole lot of not-much for the day:  only 6% say they will go to a restaurant or bar; 1% are going out to an event; 25% say they will do something special, but at home, and 60% say they don’t have any plans – Wall Street Journal

Bitcoin – surged this week from $37,000 to $48,00 on the announcement that Tesla just bought $1.5 billion of Bitcoin.  On the news, Tesla tanked, going from $877 to $785, a 10% decline – Buzz

S&P Small Caps – price-to-earnings ratio vs. large caps are the lowest since 2001.  The large cap vs. small cap ratios were 1.3 in the 2011-2012 period vs. only 0.7 today – Galapagos Capital ….. Retail trading of individual stocks now represent roughly 25% of overall stock volume vs. 10% in 2019 – Goldman Sachs

Homes Sales – Despite a global pandemic and an economic downturn, U.S. home prices rose to an average price of $315,900 in the 4Q, making 106 straight months of year-over-year gains – National Association of Realtors

Once A Year – sell at least one stock, choosing the weakest on the list with no consideration whatsoever for its original cost.  Replace it; buy a more attractive stock – A. Vere Shaw, Barron’s 1925

The Coming Boom – Consumers are sitting on tons of cash.  The boom could start in April.  Beneficiaries include; soaring business for restaurants, the vacation industry should thrive, elective surgeries and other medical procedures are likely to come back and even movie theaters are in for better days – The Kiplinger Letter ….. Lyft’s ride-hailing business should also greatly improve after reporting a 44% 4Q revenue decline – New York Times

Pot Stocks Popped – Led by Tilray (TRLY), the cannabis group got slammed yesterday over worries about Federal legalization.  TLRY was selling at 67 and at 37x sales per share with no earnings before declining 58% to $28 a share vs. its beginning of the year low of $8 a share – Buzz

A Tough Year – for the traditional blue-bloods of basketball:  Kentucky, Duke, Kansas and North Carolina.  This is the first time in 60 years that none of them are ranked in the AP Top 25 poll.  Kentucky is 5-13 and Duke is 7-8 – New York Times

Bumble – Shares of the online-dating company jumped 64% yesterday in their trading debut.  31-year-old founder, Wolfe Herd became a rare female billionaire and only one of the three 559 IPO founders over the past 12 months who were female – Wealth Management

Minimum Wage Increase – to $15 an hour by 2025 could deliver raises to 27 million workers, but the policy would cost 1.4 million their jobs over the next four years.  The idled workers would be disproportionately younger and less educated and CBO projects that half of them would permanently be out of the labor force – Congressional Budget Office

Tough Gal – 117-year-old Sister Andre who lives in France lived through the 1918 flu pandemic, two World Wars and “many sad events”, she once said.  The world’s second oldest person also survived the coronavirus.  A tough lady – New York Times

Junk Bonds – The average yield on U.S. junk bonds fell below 4% for the first time ever.  Bank of America warns that if inflation gets hotter than the Feds new policy is aiming it may trigger widespread bond selling – Macro Strategy News ….. With agricultural prices soaring, metal prices hitting the highest in years and oil well above $50 a barrel, JPMorgan believes commodities have begun a new super-cycle of years-long gains.

2000 Earnings – About 85% of companies have now reported with about 8 of 10 beating estimates and the change in earnings compared to 2019 is now projecting 3.6% growth.  That compares to an expected 9.3% contraction – Forbes Billionaire’s

History lesson for today - The workers shown in this video would never have imagined that people in 2021 would be able to watch them at work and driving -  https://safeshare.tv/x/ShbgvwazCZ

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