MidSouth Week in Review
November 18, 2022

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Nov. 21, 2022 | RedChip Companies

For the week the S&P declined 0.7%.  The yield on the 5, 10 and 30 year Treasury bonds all dipped below 4%.  The Euro surged to 104 vs. 96 last week.  The NASDAQ rose 12% from its November low.  Wholesale gas dropped to 2.36 from its 2.99 October high.  U.S. home sales fell in October for the ninth straight month.  The 30-year mortgage rates dropped to 6.61% this week vs. 7.08% last week.  The U.K. inflation rate surged to 11.1% because of large increases in the price of food, heating and gas.  President Biden will turn 80 on Sunday.  Sources:  Wall Street Journal and New York Times




Since 1950 – the average return for the S&P in the 12 months after a midterm election was 15%, with no down years – USA TODAY


Car Wash Sign – We remove old Trump bumper stickers.


Bond Buying – About $2.6 billion of bonds were purchased last week, the biggest weekly total in four months.  The surge suggested investors and inflation is beginning to wane – Reuters


Home Buyers – First time buyers are now only 26% vs. 40% in 1981.  The median age of buyers is 36, the oldest on record.  The median age of repeat buyers is 59, the oldest on record.  The percentage of Black buyers is 3% vs. 6% last year.  Repeat buyers who bought a house for cash is 27% vs. 17% in 2021.  The median number of miles a buyer moved to buy a new home is 50 vs. 15 miles last year – New York Times


The Big Drop – Several years ago when I was running a small-cap value hedge fund, I was down 55% one year.  This caused a Jewish lady client to call and say her family was wiped out, to which I replied, “Well I am too”, to which she replied, “ya but you can afford it”.  The next year my fund was up 100%+. – Buzz


Copper – To build just one electric vehicle acquires 183 pounds of copper vs. 18 pounds for a gas-powered car.  EVs are expected to increase by 1400% by 2030 – Trend Advisor ….. Copper miner Freeport-McMoran (FCX) has moved from 4.82 in March of 2020 to 39 this week - Buzz


Credit Card Rates – according to Bankrate are now 18.7%, the highest in 30 years.  It’s no surprise financial pros are investigating credit card companies now, as they are highly profitable businesses – New York Times


Back-to-Back Best and Worst – The Dow Jones averages dropped 80% under Herbert Hoover (1929-1932) and rose 200% during FDR’s first term (1933-1936).


The Magic of Compounding - $1,000 placed at 7% interest and, compounded quarterly for 200 years would be worth over $1 billion, by which time it will be worth nothing – Lazarus Long


Retailers – are dangling big sales well ahead of Black Friday, a reversal from the past two years when scarcity allowed stores to charge full price for many products, from sweaters to washing machines.  The deep discounting, which started in October, could weigh on retail profits – Wall Street Journal ….. The average discount on apparel is now around 17% - Dataweave


Used Car Prices – are now down 14% over the past year, the largest YoY decline on record with data going back to 2009 – Compound@CharlieBilello


The World Population – hit 8 billion vs. seven in 2011 vs. four in 1974 vs. one in 1804.  Globally life expectancy hit 72.8 years in 2019, an increase of about nine years vs. 1990.  There were 2.3 births per woman vs. five in 1950 – USA TODAY


Luxury Homes – A house in Houston was listed at $27.5 million in February 2022 and is now listed at $20 million.  A house in Beverly Hills was listed at $85 million in January 2022 and is now listed at $59.99 million.  A house in Nevada was listed at $30 million in August 2022 and is now listed at $11.5 million – Wall Street Journal


Smartphones – Researchers found that people who lowered their usage by one hour every day were happier, spent more time being physically active, were less depressed and reduced anxiety symptoms by more than 30% - Reader’s Digest


Health Care Costs – are expected to rise 6% next year.  This year workers on average are paying $6,106, or $509 per month – New York Times


Bankruptcy – In October, 14,161 households filed for Chapter 13 bankruptcy, a 27% increase vs. the prior year.  In 2019 the monthly average was 23,570 – Axios


First Time Homebuyers – made up just 26% of homebuyers in the year ending June 2022, the lowest in the survey’s 41 year history – National Associates of Realtors ….. The annual income needed to afford a median-priced home has risen to $107,281 vs. $60,000 in 2020 - Redfin


Dance video - https://www.instagram.com/reel/ChnnAPUjL_v/?igshid=N2NmMDY0OWE=


1899 Football

The University of Sewanee in Tennessee was a member of the 18-team Southern Intercollegiate Athletic Association.  Well known Vanderbilt, Alabama, Auburn, Texas, North Carolina, Ole Miss, Georgia, Clemson, LSU, Georgia and Tulane all belonged to the conference.  In 1899, the Tigers outscored their opponents 322-10 with 11 shoutouts and won the conference title.  By the 1930s, the state schools had grown their football programs, but private schools like Sewanee won few games and had to drop out of the conference.  That year Sewanee played five road games in six days on a train trip and won them all by a shutout.



The material was prepared by MidSouth Investment Management LLC, and does not necessarily represent the views of the presenting party, nor their affiliates.  This information has been derived from sources believed to be accurate.  Please note – investing involves risk, and past performance is no guarantee of future results.  The publisher is not engaged in rendering legal, accounting or other professional services.  If assistance is needed, the reader is advised to engage the services of a competent professional.  This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.  This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.  This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested.  All economic and performance data is historical and not indicative of future results.  Market indices discussed are unmanaged.  Investors cannot invest in unmanaged indices.

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