MidSouth Week in Review
June 25, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Jun. 28, 2021 | RedChip Companies

The S&P jumped 2.8% for the week, for its 31st record high for the year, after Biden and a group of senators agreed on a $1 trillion infrastructure plan.  Bitcoin dropped below $29,000 on Tuesday after China intensified its crackdown on Bitcoin.  Natural gas prices doubled from last year as demand is picking up as the world’s economy reopens and Americans dial down their thermostats for what is expected to be a hot summer.  Crude rose to $74 from last months $61 low.  Lumber tumbled from its 1727 May high to 774 today (-55%).  Walgreens, one of the nation’s two largest drugstore chains plans to give $25 in store credit to anyone over 15 who gets a Covid vaccine.  The gift is good through Saturday.  Sources:  Wall Street Journal and New York Times.




Hot, Hot, Hot – The S&P has set 180 all-time record closing highs over the last 5 years with an average of 3 record closes per month – BTN Research


Class Action Suits – Cake for lawyers, crumbles for the clients – Business Week


Value Stocks – should be favored over growth.  The former has been outpacing the latter, a trend that is likely to continue.  Some value-oriented mutual funds to own in this environment:  Dodge & Cox Stock Fund (DODGX), Ariel Fund (ARGFX) and the Vanguard Value Index Exchange-Traded Fund (VTV) – The Kiplinger Letter


Golf – The odds of hitting a hole-in-one are around 13,000-to-1.  The odds of making a double-eagle are 1 million-to-1.  Approximately 40,000 aces a year are made in the U.S., compared to just a couple hundred double eagles – Golf World Magazine ….. 3 million played golf in the U.S. for the first time in 2020 ….. Nothing increases your golf score more than witnesses – Anon.


The Net Worth – If the total of all Americans was equally divided among all households in the U.S., it would represent a net worth of $1.1 million for every American household – Federal Reserve


Inflation – Since 1976 when the inflation level was (0% - 2%), stocks rose slightly above 10%.  When inflation was in the (2% - 4%) level, stocks rose slightly above 11%.  When inflation was in the 4%+ level, stocks only rose 6% and bonds had negative returns – Charles Schwab ….. In May inflation rose 5%.


Covid – Over 80% of deaths to-date have come from the 65+ age group.  The group is now 90% vaccinated, resulting in a 92% decline in deaths thus far, resulting in a new pandemic low – Covidtracking.com


Health Savings Accounts – are a good investment.  The money goes in tax-free.  The money comes out tax-free and the money grows tax-deferred.  The maximum contribution is $3,600 for individuals and $7,200 per year for families – WealthManagement.com ….. “A HSA is arguably the single most powerful wealth-creation tool that an employer can offer as a benefit” – PLANSPONSOR.com


Always – sell your boat before you die.  The art of life is passing losses on – Robert Frost


Surging Homicides – After years of declining crime rates, in 2020 the homicide rate in 34 cities in the U.S. was up 34% in 2020 and is up 24% in 2021 – DailyBeast.com


High-Earning Millennials – are struggling financially.  A study from PYMNTS and LendingClub found that 60% of the group earning $100,000+ say they are living paycheck to paycheck.  Lifestyle living and rising education costs may be partially to blame – FSI NewsBrief


Ouch! – The S&P has downgraded the credit rating for Illinois state-issued debt five different times since 2009.  Taxpayers recently turned down a tax increase which some believe will cause their debt to go to the junk-bond category – S&P


LA Public Schools – 80% of the students live in poverty and nearly 100,000 are learning English.  Next year the school-system plans on spending $21,000 per pupil, which is less than the $30,000 per student that NYC spends.  The in-state tuition at Cal State University is $6,834 – New York Times ….. The public school system in Williamson County, adjacent to Nashville, spends $9,333 annually on school costs and has an average ACT score of 25.5.  The U.S. average cost is $12,383.


Strange – Despite inventories of existing homes listed for sale rising for three months, sales of existing homes declined for the fourth month in a row, by 5.9% in May from April, to the lowest sales rate since June 2020 – National Association of Realtors


Electronic System – as a percent of total car costs was 5% in 1970 before rising to 35% in 2010.  By 2030, semiconductor- based electronic systems are projected to make up 50% of a cars cost – IEEF Spectrum


Long Living – The life expectancy rose to 77.8 years in 2021 vs. 60.8 year in 1921.  The life expectancy has been increasing by a year every 6 years over the last century – CDC


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