MidSouth Week in Review
December 10, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

For the week the S&P rose 3.8%.  The 30-year bond yields declined to their lowest level since September.  The unemployment rate fell to its lowest level in 52 years.  Covid cases from Omicron are expected to be less severe than from the Delta variant.  Labor costs increased at a 9.6% annualized rate in the 3Q.  The U.S. Energy and Inflation Administration projects gas prices will drop to $2.88 a gallon in 2022 vs. $3.39 in November.  The Senate passed a Bill to raise the debt ceiling to prevent a debt default.  Weekly jobless claims dropped to 184,000, a 52-year low.  The Consumer Price Index rose 6.8% in November, slightly above estimates, a 39-year high.  Lumber prices surged to $1069 from the November $600 low.  Sources:  Wall Street Journal and New York Times

BuzzBits

Tax Loss Selling – Investors tend to get rid of their losers near year-end for tax purposes, often hammering these stock’s down to bargain levels.  Studies have shown that stocks selling at their lows on December 15 will usually outperform the market by February 15 in the following year – Stock Trader’s Almanac

Presidential Elections – At one point in a debate, Abraham Lincoln was accused by his opponent, Douglas, of being two-faced.  “I’ll leave it to my audience,” replied Lincoln.  “If I had two faces, would I be wearing this one?”

Stock Option Trading – has increased by 35% since last year, according to Option’s Clearing Corp.  I and most of my friends in the business have all tried buying options and we have all lost money.  Why?  Because they lose value every day.  For instance, AMC is currently selling for $32.35 and the Jan. 32 options are selling for 5.80, so the stock would have to rise 16.8% in about six weeks for the buyer to break even.  Over the long run it never is profitable and that is the reason I am only a seller of puts and calls – Buzz

Odd Name Towns – Disco, Dismal, Difficult and Defeated, Tennessee; Bald Head, Maine; Boring, Maryland; Ding Dong, Texas; Todd Suck, Arkansas; Hell, Michigan

Covid Vaccines – will be needed well into the future.  Annual vaccinations are likely to be needed to maintain a very robust and very high level of protection – Pfizer CEO Dr. Albert Bourla ….. Pfizer said lab results show that Covid vaccine neutralized the Omicron variant after three does – MarketWatch.com

High-Tax States – Certain states continue to alienate their own tax bases with high taxes and uncompetitive business environments.  High tax states are losing taxpayers at an alarming rate.  The five states that lost the most taxpayers include: New York, California, Illinois, New Jersey and Massachusetts.  These states have an average state-local tax rate of 11.8%.  The five states that gained the most taxpayers, including those that have no state income tax include:  Florida, Texas, Arizona, North Carolina and Washington – ZeroHedge

Ouch! – Bitcoin dropped 20% last Saturday to $42,000 before recovering to $51,791 this week.  Bitcoin had hit $68,000 in early November.  Bitcoin closed today at $48,285.

Home Buying – Only 8.4% of Americans live in a different home than they did a year ago.  The aging of the U.S. population, a lack of new housing, and increased caution during the pandemic have produced the lowest rate of mobility recorded since 1948 – TheHill.com ….. 25 years ago (1996), 16.3% of Americans moved during the prior 12 months – Census Bureau

Blood Pressure – has increased during the pandemic. Why?  Stress, people aren’t exercising as much, aren’t getting regular care, drinking more and sleeping less.  Almost half of all Americans have hypertension – Dr. Luke Laffin

The Presidential Race – Only 22% of Americans want President Biden to run again in 2024, according to a recent I&I/TIPP poll.  When it comes to other potential candidates, only 12% say they want V.P. Kamala Harris to run and 4% say they want transportation Secretary Pete Buttigieg, but 31% are not sure – The National Desk

Ship Delays – A small container ship left Hong Kong in late August and got to LA on September 12.  It floated in the Pacific Ocean for 54 days before it got to unload its cargo.  One small firm had Halloween boots that missed Halloween.  On September 19, there were 100 container ships in the port – Marine Exchange of Southern CA.

Death Benefit Payments – rose 15.4% in 2020, mainly due to the pandemic, and the biggest increase since 1918, when the payments rose 41% - American Council of Life Insurers ….. Last month, the number of Covid deaths in 2021 surpassed the toll in 2020 – John Hopkins University ….. My good Buddy and ex Merrill Lynch broker Larry Stumb died yesterday after getting Covid.  I am so sorry – Buzz

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