MidSouth Week in Review
April 30, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Both the NASDAQ and S&P made new highs this week.  For the week, the S&P was unchanged.  Amazon reported a 220% 1Q profit increase, benefitting from the surge in online buying.  Several brokerage firms raised their price target on the stock after the earnings report.  Lyft and Uber declined 15% to 18% this week after Biden suggested he was in favor of getting rid of independent contractors and making them full-time employees.  The stock market was up 10%+ during the first 100 days of the Biden administration, making it the best first 100 days since FDR in 1933.  Weekly jobless claims declined to a pandemic-era low.  The Canadian Dollar hit a 3-year high of $0.814 vs. $0.68 a year ago.  Consumer confidence rose to 121.7 vs. a pre-pandemic high of 132.6 last February.  Sources:  Wall Street Journal and New York Times

BuzzBits

Corporate Tax Hikes – The Biden administration is proposing raising the rate to 28% from 21% which would mark the first increase since 1993 and the sixth tax hike since 1945.  During the five prior corporate tax increases, in 1950, 1951, 1968 and 1993, the S&P index posted an average calendar year gain of 12.9% with positive returns in each instance – Yahoo Finance

Quick Riches – “The people who have gotten rich quickly are also the ones who get poor quickly” – Sir John Templeton

1919-1929 Stock Market – rose 20% per year from 9-1919 to 9-1929.  During the period people played the market as a grand game, abetted by technological innovations and new mass media.  Scarcely anyone, outside of investment professionals knew what a price earnings ratio was.  It didn’t end well however:  Including inflation, the index crashed 77% from September 1929 to June 1932 – Robert J. Shiller, Yale ….. Investors before the crash were buying stocks on margin with as little as 10% down on their purchase – Buzz

Copper – hit a 10-year high this week at $4.55 and is up 14% from its April low.  Goldman Sachs expects commodities to rally another 13.5% over the next six months, headed by copper.  An electric car contains 4x more copper than that of a fossil-fueled vehicle.  Demand for copper from the power and auto sectors is expected to rise at an annualized growth rate of 7% by 2030 – Sonami

Covid Shots – Only 1 out of every 13,000 fully vaccinated Americans contracted the Covid-19 virus after receiving all of their shots – Department of Disease Control

Lumber – hit a record $1,400 per thousand board feet this week, which was up 325% over the past year.  The skyrocketing lumber prices have increased the cost to build a typical new single-family home by $35,872 in the past 12 months and $13,000 for a typical new multifamily unit.  Framing lumber was priced at $1,200 per thousand board feet in April, up from $350 a year ago – HousingWire ….. Home prices rose 12% for the 12-month period ending in February, the highest annual price growth since February 2006 – Wall Street Journal

Shohei Ohtani – will go down in history as the first MLB home-run leader to be a starting pitcher in a game since Babe Ruth in 1921.  The 26-year-old Ohtani’s seven home runs through Monday were tied for the league lead – New York Post ….. The 6-4, 210 lb. Ohtani is from Oshu, Japan – Buzz

California – The state levies a 13.3% tax rate on both capital gains and ordinary income earned by its wealthiest residents.  Taxpayers can only deduct $10,000 of state and local taxes on their federal tax returns, a major blow to wealthy residents in some blue states – New York Times

Tax Cheats – The IRS estimates the difference between what taxpayers should have paid and what they did pay in tax at between $140 billion and $1 trillion annually – IRS

The Oscars – Before COVID, I used to watch about two movies a week but since, haven’t seen a movie.  That may have been the reason fewer than 10 million watched the show vs. 30 million in 2019 vs. 23.6 million last year – Buzz

The Post Office – Since 2006, mail volume is down 26% and there is less mail than in 1984.  In 2006, there were 5.6 daily pieces of mail per delivery point.  Last year there were three.  By 2030 the estimate is 1.7.  The USPS is meant to be self-sufficient, but it’s losses since 2007 have totaled $87 billion and lost $10 billion last year – Wall Street Journal

Primary Causes of Death – by age group: Ages 1 to 17 – Injury, suicide, cancer.  Covid ranked 10.  Ages 18 to 49 – Injury, cancer, suicide, Covid.  Ages 50 to 84 – Cancer, Heart disease, Covid.  Ages 85+ - Heart disease, Covid, cancer – New York Times

Grade Incentives

When my daughter Annsley was in the third grade she made a C, so I offered her an incentive plan.  I said I would give her $5 for each A she made, nothing for B’s and she would owe me $5 for each C she made and I would double the amount if she made all A’s.  She never made another C and went on to become a Merit Scholar and attended Vanderbilt.  I also did this to the grands and Frances, the oldest (age 13), made all A+’s one period last year.  Last weekend I had dinner at my cousin Susan’s house and she told me the story about her grandchildren in Chicago.  They were fun loving grammar school kids but were only making C’s, so she decided to offer them the same grade incentive plan that I used successfully.  Within a year, each of the kids were making all A’s.  I wish my parents had made the same proposal to me since I finished last in my class in college (I have ADD).  My dad also finished last in his class at West Point (goat of the class) which was a big deal and got his and the goat’s photo in the New York Times - Buzz

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.