MidSouth Week in Review
November 19, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Nov. 22, 2021 | RedChip Companies

For the week the S&P was up 0.3% but the small cap Russell 2000 declined 0.3%.  The 5-year Treasuries hit a 21-month high yield this week.  The Dollar hit a 26-month high which was probably the reason Bitcoin declined to 55,000 from its 68,000 November high.  The Euro declined to 113 from its January high of 123.  Crude declined to 75 from its 85 November high.  Consumer confidence dropped to a 10-year low.  Sources:  Wall Street Journal and New York Times




Great Bond Buy – The government is giving out 7.12% interest on new Series I savings bonds.  That’s more than 14x the average rate of a CD today.  The bonds are sold in an unusual way:  You buy them directly from the Treasury’s website, with an annual limit of $10,000 per person ยท You can buy another $5,000 with your tax refund – THE WEEK


Covid Cases – are no longer dropping.  They will likely tick up a bit soon as people travel and gather for Thanksgiving and Christmas holidays.  Also the arrival of cold weather across much of the country will send people indoors – Kiplinger ….. Last year, the number of Covid cases in Tennessee more than doubled in December vs. November – Buzz


The 4% Rule – A popular strategy to gauge withdrawals from one’s retirement portfolio, won’t work as well in coming decades due to lower projected stock and bond returns.  The withdrawal rate should instead be 3.3%.  That can have a big financial impact on retirees – Morning Star


Mortgage Payments – While median wages have increased 4.3% October-to-October, typical mortgage payments (30-year fixed rate with 10% down) increased nearly 17% - National Association of Realtors ….. 30-year mortgage rates have risen from 3.06% to 3.25% this month – Wall Street Journal


Market Overvaluation – The so-called Shiller P/E Ratio is at a very lofty level.  This version of the price earnings multiple, or P/E is at a level that surpasses the run-up to the 1929 crash and is nearing the record set right before the 2000 dot-com implosion – Richard Bernstein


Taxes – Today the highest combined federal and state personal tax rate is 42.9%, but would climb to 57.4% by 2026 under the Democratic plan.  Under J. F. Kennedy, the top tax rate was 90%+ before he had Congress lower it to 70%.  Ronald Regan continued the march down by lowering it to 50% and again with the tax reform of 1986, that cut the top rate to 28% - Wall Street Journal


Crazy – Rivian (RIVN), the electric vehicle manufacturer that went public last week with no revenue, now has a higher market valuation than Starbucks ($29 billion revenue, $4.2 billion net income) and Target ($100 billion revenue, $6.3 billion net income) – Compound@CharlieBileild …..The biggest mistakes I have ever made in the stock market were with companies with a lot of promise, but no earnings – Peter Lynch


First Year In Office – During Obama’s first year in office in 2009, the S&P was up 26.5%.  During Trump’s first year, the market was up 21.8% and during Biden’s first year, the market is up 26.2% with 7 weeks to go in the year – BTN Research


Repossessed Homes – 20,331 were repossessed year-to-date vs. 50,238 homes for all of 2020 vs. 230,305 homes in 2018 vs. 291,574 homes in 2017 – ATTOM Data Solutions ….. October home sales declined 7% vs. a year ago – Richard Courtney


Who is Quitting Work? – New surveys show that low-wage workers, employees of color and women outside the management ranks are those most likely to change roles – Labor Department


Ouch! – The retail gas pump average for regular in March 2020 in Nashville was $1.84 with Costco selling it for $1.49 – Buzz ….. The average gas price for regular in California today is $4.70 – gasprices.aaa.com


Copper – The world can’t get enough copper.  China is lapping it up faster than it can produce.  Copper prices are up 23%+ this year and over 110% from the March 2020 lows – Wall Street Journal ….. Production of electric vehicles requires 4x more copper than gas autos – Buzz


GM – says it will upgrade its hand-free driving system, to be called Ultra Cruise, which it says it will allow hands-free operation in 95% of driving scenarios, planned for release in 2023.  On electric cars, GM says it is spending $35 billion by mid-decade to introduce 30 plug-in models globally – Wall Street Journal


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Cats Will Be Cats And Why I Love Dogs - https://youtu.be/z1NXQ9PQDfg



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