MidSouth Week in Review
December 17, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Stocks slumped today amid a drop in global tech shares, worries about higher interest rates and the spreading of the Omicron variant.  For the week, the S&P was down four of five days in declining 1.8%.  The Fed announced an anticipated three rate hikes in 2022 to help control the rising inflation.  However, projections suggest that inflation is nearing its peak.  October privately-owned housing starts were 12% above estimates.  The producer price index rose 0.8% in November to reach an annual increase of 9.6%.  The Department of Labor said that wholesale prices rose 9.6% in November.  Sources:  Wall Street Journal and New York Times

BuzzBits

The Santa Claus Rally – tends to come to Wall Street nearly every year, bringing a short, sweet, respectable rally within the last five days of the year and the first two in January – Stock Trader’s Almanac

Covid Deaths – 75% of people who have died of the virus in the U.S. have been 65 years+.  One in 100 older Americans have died of the virus – New York Times

The S&P 500 – for the year through December 9, the S&P 500 was up 24.3%.  35% for the gains came from only five stocks – Tesla, Google, Microsoft, Apple, Nvida – Goldman Sachs ….. Through today, Tesla had a 26% decline from its November high - Buzz

Charitable Contributions – can reduce taxes for itemizers and those who don’t.  Taxpayers who take the standard deduction can claim charitable contribution deductions of $300 ($600 for married couples filing jointly) for cash contributions to qualified charitable organizations – Kraft CPAs

Market Corrections – Going back to 2009, there have been 25 corrections of 5%+ with an average decline of 7.6%.  Going back to 1979, there have been 57  10%+ corrections in the Russell 2000 Index, averaging 73 days and an 18.35% decline - @CharlieBilello

Car Buying – December and the winter holidays have been a good time to buy a new car as dealers would cut prices to tempt bargain-hunting shoppers.  One key resource for a used car shopper is Carfax, which provides vehicle history reports for cars that have been previously registered and will let the buyer know if the car was damaged in an accident and its recorded mileage at the last transaction.  To run a Carfax history report, you will need the car’s VIN number – New York Times ….. In November, 87% of all new vehicles sold at or above the sticker price – Wall Street Journal

The Top One Percenters – made $546,434+ of income in 2019.  The top 5% had income of $221,572+.   This group made 35.93% of nationwide income and paid 59.44% of the federal taxes – IRS

Gift Tax Exclusion – rises to $16,000 per donee in 2022, a $1,000 increase from 2021.  Next year, you will be able to give up to $16,000 ($32,000 if your spouse agrees) to each child, grandchild or any person without filing a gift tax return – The Kiplinger Tax Letter

The Big Win – The Georgia Southern women’s basketball team (8-2) beat Carver College (0-14) by 118 points, 133 to 15 – USA TODAY

Tesla – is more valuable than the combined market value of the 10 largest auto makers, despite the fact that those 10 combined make far more money than Tesla – Fortune ….. Over the past 12 months, GM has made $10.9 billion vs. only $3.47 billion for Tesla – Buzz ….. Trailing 12-month vehicle sales were 10 million each for both Toyota and Volkswagen vs. only 700,000 units for Tesla – New Constructs

Government Math – The U.S. tax revenue was $2.2 trillion and the budget was $3.8 trillion.  The national debt is now $19.2 trillion.  Removing 8 zeros, that would represent income for a family of $21,700, the family would be spending $38,200 with $16,500 of new debt and outstanding debt of $93,000.  Ouch! - Tim Draper

Student Loan Payments – will be required beginning February 1.  For more than 40 million, it will be the first time in nearly two years that they will be required to make payments.  As many as 89% of borrowers say they will have trouble making the payments – InvestmentNews.com

Social Security – Their board said that if nothing is done, the trust fund will be depleted by 2033, which would mean Social Security would be able to pay out only 76% of promised benefits – Kiplinger’s Personal Finance

Crazy – My last six stock purchases have had an average PE of 5x, which is equivalent to paying a 20% after-tax investment return on my purchase.  I can remember many times when finding a stock selling at 10x earnings was almost impossible – Buzz

Vehicle Renting – Rental car rates are soaring as the severe car shortage plagues the industry.  The national rental rates for the holidays is expected to soar above 50% higher to about $100 per day – The Kiplinger Letter

This is Beautiful - http://assets.evie.com/asset/cc1afc44ee3cdaac9ae2f354f834dd30d7aa343e/video_inline_h540

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