MidSouth Week in Review
June 4, 2021
Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund
Jun. 7, 2021 | RedChip Companies
No major stock indexes made new highs this week with the exception of the Russell 2000 Small Cap Value Index (IWN). For the holiday shortened week, the S&P rose 0.6%. Both crude and wholesale gas made 3-year highs. Jobless claims dropped to 385,000 vs. 405,000 the previous week. The use of margin debt on the NYSE increased to $847 billion in April, the 6th consecutive month of setting all-time highs. Sources: Wall Street Journal and New York Times
BuzzBits
Sell In May – and go away and then reinvest in November used to be good advice for investing. Now it might be to sell in June since eight of the past nine Mays have been up months – LPL Research
Insider Buying – Stocks with insider buying outperform the market by 8% annually. Those with insider selling underperform the market by 2.5% - Buzz
Junk Bonds – Bondholders of 43 U.S. companies that defaulted on their debt in 2020 received an average of 45 cents on the dollar through bankruptcy – Moody’s ….. When a company that I like is in bad shape financially I will quite often try to buy their bonds if available for around 30 cents on the dollar. I tripled my money on HealthSouth and Shoney’s and currently own some junk bonds on a shopping center company – Buzz
The Poor President – only made $607,336 last year vs. an adjusted gross income of $1,695,225 for Vice President Harris – White House
Getting Smart – The percentage of people claiming Social Security benefits at age 62 has fallen to 34% of women and 31% of men vs. around 60% of women and around 55% of men during the 1985 to 2005 period – InvestmentNews ….. The Senior Citizens League projects Social Security benefits could increase 4.7% in 2022, which would mean a Social Security benefits increase of around $1,000 for a 71-year- old who began their payments at 62 vs. a $1,900 increase for a 71-year-old who began their payments at age 71 – Buzz ….. The CPI rose 4.2% for the 12 months ending in April, up from 2.0% in March., the largest increase since 2008 – Bureau of Labor Statistics
Easy Sale – The typical luxury home spend only 61 days on the market during the 1Q vs. around 100 days during the 1Q of 2020 – USA TODAY
A Good Return – The New York State pension fund registered a record 33.55% return for the 12 months ending March 31 vs. a negative 2.7% return in the previous year. The Fund’s expected return is 6.8% annually – Chief Investment Officer
A Good Bet – Last week 50-year-old Phil Mickelson won the PGA Championship. The odds were 300-to-1 that he would not win. However a gambler won $300,000 betting a $1,000 that Mickelson would win his 45th career PGA event – DraftKings Sportsbook ….. U.S. golfers eager to get out of the house played 14% more rounds of golf in 2020 vs. 2019, the biggest gain since 1997, when Tiger Woods became the game’s prominent star and ignited interest – National Golf Foundation
The Biden Tax – A $1 investment that doubles annually and is sold tax free each year would be worth more than $1 million in 20 years. But if the gain was subject to a 39.7% tax rate it would only be worth only $12,550 over the same period – Buzz
Uber And Lyft – prices are up and wait times are longer. April costs were up almost 40%. Why? Because they can’t find enough workers – Rakuten Intelligence
The Founding Fathers – were often thought of as being old and gray. But not so as of July 4, 1776. Aaron Burr was 20, Alexander Hamilton 21, James Madison 25, John Jay 29 and Thomas Jefferson 33 – New York Times
Ouch! – California’s average gas cost at the pump is $4.18 a gallon, which includes 63 cents a gallon in state and local taxes vs. the 36.8 cent average elsewhere in the country. The state also charged an additional 14 cents in cap and trade program and 10 cents extra for a special extra-clean burning gasoline blend – Zero Hedge ….. Californian drivers can soon look forward to paying more than $5 a gallon at the pump as the state’s green mandates ratchet up and gasoline refineries shut down or convert to renewable fuels – WSJ op-ed
Home Equity Loans – rose 80% in the 1Q from a year earlier. Many of the borrowers have decided they were better off adding to their home rather than buying in this years overheated market. Most of the loans are used for home improvement, but if not, they will no longer be eligible for mortgage interest deduction on their taxes – Wall Street Journal ….. Existing home prices have risen for 39 consecutive quarters – Federal Housing Finance Agency
The Postal Service – For the first time since January 2019, there are plans on raising the price of a first-class stamp to 58 cents from 55 cents. A postcard would increase to 40 cents from 31 cents and an international letter to $1.30 from $1.20. Hopefully the terrible service will improve – New York Times
College Grads – 40.3% aged 22-to-27 are working in a job that typically does not require a college degree – Federal Reserve
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