MidSouth Week in Review
October 8, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

For the week, the S&P rose 0.9%.  The Senate voted 50-48 to temporarily increase the debt ceiling.  The U.S. trade deficit increased to a record $73.3 billion in August as a small gain in exports was swamped by a much larger increase in imports.  Jobless claims declined to 326,000 from 364,000, its lowest level in a month.  Natural gas hit its highest level since 2008.  Wholesale gas and crude rose to their highest levels since 2014.  Yields on 10-year government bonds rose to the highest level since March and the yield on the 2-year bonds rose to their highest level since March 2020.  Bitcoin surged to $55,000 vs. a low of $41,000 three weeks ago.  Cotton prices reached a decade high because of a growing China demand.  Lumber surged 14% today to $721 vs. an August low of $445.  Sources:  Wall Street Journal and New York Times

BuzzBits

Yearly Stock Returns – Going back to 1936, the S&P has averaged a 6.7% return during the 1^st year of a presidential term, 8.7% during the 2^nd, 18.5% during the third and 9.8% during the 4^th year.  Year-to-date the S&P is up 17% - BTN Research

Dreaming – My most secret fantasy is having two men – one cooking, the other cleaning – Darlene Cline

Tesla – delivered 241,300 vehicles in the 3Q, which was a 20% increase from the 2Q and 73% higher than last year.  Tesla has a market valuation of $760 billion vs. $74 billion for GM and $252 billion for Toyota, the world’s largest auto manufacturer – New York Times ….. GM said it aims to more than double its revenue by 2030, with an influx of battery-electric models, saying it aims to take the lead in electric-vehicle sales in the U.S. – Wall Street Journal

Golfers – 61 PGA golfers have averaged at least 300 yards for driving distance vs. only one in 2001 (John Daly) – PGA

Tax Break – Under current law, individuals who invest in stocks in a C company with assets of less than $50 million, then sell the company more than 5 years later, can exclude taxes on 100% of their gain – Kiplinger Tax Letter ….. I put $100,000 into one of these companies and last year got back around $2.2 million tax free – Buzz

Used Autos – The average age rose to 12.1 years in 2021, which is 2.5 years older than the average in 2002 – CNBC

Only In California – A federal jury awarded a former Black Tesla elevator operator $136.9 million because he said he was called racist names and shown racist cartoons on a wall while working there in 2015 and 2016.  If the guy was working for $15 an hour, it would have taken him 4,388 years of work to have made $136.9 million – San Francisco Chronical ….. Tesla is moving its headquarters from California to Austin, Texas most likely for tax reasons.  TX does not have a corporate income tax vs. 8.84% in CA – Taxfoundation.org 

Weird – On Monday and Tuesday, Rossiglione, Italy got 29.2 inches of rain in 12 hours, nearly 60% of its 50 inch normal annual rainfall – Washington Post ….. The record 24-hour rainfall in the U.S.: Hawaii 50", Texas 42".  The record 24-hour rainfall in Wyoming is only 6".

Home Affordability – Home prices are rising at a record price.  The median American household would need 32.1% of its income to cover mortgage payments on an average priced home.  That is almost the same as November 2008, when the same outlays hit 34.2%, followed by a big home market decline -  Federal Reserve Bank of Atlanta

Trump – was dropped off the Forbes list of America’s richest for the first time in 25 years with a wealth of $2.5 billion vs. a previous high of $3.1 billion – USA TODAY

Covid Vaccination Rates – 88% of Democrats are vaccinated vs. 55% of Republicans – Breitbart News ….. 83% of Democrats who have children under 12 plan to get their kids vaccinated vs. 21% of Republicans – Gallup

Oil Prices – rose this week to a 7-year record high of $79.59.  Bank of America believes oil will hit $100 a barrel for the first time since 2014 – WorldOil.com ….. Wholesale gas also hit a 7-year high of $2.37, so you had better load up on gas at the station this weekend – Buzz ….. This week regular gas at the pump rose to an average of $3.20, its highest level since October 2014 – American Auto Assoc.

Stuck – 73 vessels were anchored and awaiting entry into the port of Long Beach and Los Angeles last month because of a shortage of trucks and drivers to pick up the goods.  An additional 37 vessels were drifting within 20 miles of Long Beach and LA – Marine Exchange of Southern CA

Crazy – Because of the increased demand, the country club I belong to has recently doubled their admission fee to $100,000.  The club was started in 1953, with an admission fee of only $200 and monthly dues of $12 - Buzz

Bad Times - https://youtu.be/P-IzlvgRxA8

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