MidSouth Week in Review
April 8, 2022

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Apr. 11, 2022 | RedChip Companies

For the week the S&P declined 1.3%.  The yields on the 10-year and 30-year Government bonds rose to the highest level since late 2018.  Bitcoin declined from 48,000 to slightly below 43,000.  The Dollar hit a two-year high.  Lumber declined from its March high of 1367 to 855.  Mortgage rates have soared to nearly 5%.  Crude declined from its March 24 high of 116 to 94 this week.  New applications for U.S. unemployment benefits fell last week to a near 54-year low as employers held on to workers in a tight labor market.  Sources:  Wall Street Journal and New York Times




April – has been the #1 best month for the S&P over the past 30 years, gaining an average 2.34% – BTN Research


Money – can’t buy happiness, but it keeps the kids in touch!


Investment Wizard Warren Buffett – doesn’t use fancy computer models.  Nor does he hire teams of Ivy League-educated Ph.D.’s in economics or Wall Street derivative genius’ to navigate the market.  He doesn’t even have a quote machine in his office.  His main investment tool:  common sense.  Buy great businesses at reasonable prices and only buy businesses you understand.  “Keep it simple, stupid,” as he likes to say – Lisa Lee Freeman, Investor’s Business Daily …. Through today Berkshire Hathaway stock is up 17% year-to-date.


Bank Stocks - usually do well when interest rates are rising but not this year.  Why?  Banks are big holders of government bonds and the value of the long term bonds have possibly had a record three month decline due to the recent short-term surge in interest rates, causing a big drop in the value of their bond holdings.  The value of long-term bonds has declined about 9% this year – Buzz


IPOs – Only 22 companies have gone public this year, raising $2.3 billion vs. 79 companies going public and raising $36 billion during the same period last year – Wall Street Journal


The Amazon Forest – is nearly the size of the contiguous U.S.  It spreads into nine countries, but lies mostly in Brazil – New York Times


Barrels of Oil – When the first oil wells were drilled, there was no provision for storing the liquid so they used water barrels.  That is why to this day we speak of barrels of oil rather than gallons.


Shrinking Population – The population of New York City, Chicago, Los Angeles and San Francisco shrank by more than 700,000 between July 2020 and July 2021 – Census Bureau


Stocks vs. Housing Returns – From 1972 to 2021 the S&P returned 12.47% annually vs. 5.41% for residential housing, based on the Case-Shiller index.


Murders – rose 29.4% in the U.S. in 2021.  Murders rose 55% in Chicago with at least ten major cities hitting new murder highs.  Chicago led the way with 797 – Hillsdale College


Commodity Prices – rose 29% in the 1Q.  The rally was the strongest for commodity investments – energy, wheat, corn, metals – in more than 30 years – S&P GSCI index


Remote Work – Some 4.9 million say they’ve relocated since 2020 because of the opportunity to work remotely.  Another 18.9 million say they plan to move because of remote work


Tax Refunds – are up 4.1% vs. last year.  The average refund is $3,305, up 12.9% vs. a year ago- USA TODAY


Student Loans – The Biden administration is planning to extend the deferred payments until August 31.  This will be the sixth delay on making resume payments since the policy was enacted 2+ years ago – New York Times


St. Peter’s – The team that beat Kentucky in the NCAA tournament played Long Island University in its home opener in front of just 434 fans in its 3200-seat arena - ESPN


Reproduction – The U. S. population grew at the slowest rate in history in 2021.  From 2011 to 2017, the population grew 2+ million a year but last year, it was down to 393,000 – THE WEEK


Housing Bubble – is a period marked by an unusual spike in housing prices, fueled by high demand and low supply and speculation by investors.  It ends when demand decreases or stagnates because of higher mortgage rates or inflation eating into savings or when construction catches up with demand – USA TODAY ….. The average home has appreciated 31% over the past two years and the average mortgage rates have risen from around 2.8% to 4.8%, resulting in todays home buyers now paying approximately 67% more in annual mortgage payments vs. two years ago - Buzz


Major Auto Makers – reported an estimated pullback in 1Q U.S. sales of an estimated 16%, as a shortage of vehicles or dealer lots continued to hamper business – Wall Street Journal


Kid Dancers - https://youtu.be/exisV40JHpY


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