MidSouth Week in Review
January 6, 2023

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Jan. 10, 2023 | RedChip Companies

The S&P was up 1.4% during the first week of 2023.  The S&P companies spent a record amount on dividends in 2022, a trend that is expected to continue despite a slowing economy.  Federal Reserve’s Ester George anticipates additional rate hikes and sees rates staying above 5% well with 2024.  The 3-month Treasury yield rose to 4.6% vs. 0.2% at the beginning of last year.  Gold rose 15% from its November low.  Tesla fell 12% on the first trading day of 2023, its worst decline in over two years.  Sources:  Wall Street Journal and New York Times




Brokers Tip – Watch the first five days of trading in January.  It’s a very reliable indicator of the market for the rest of the month and for the year ….. Last year the S&P declined 1.9% during the first week of January.


Lawyers Creed – We win some and we lose some, but we get paid for all of them – Good Housekeeping


Value Stocks – could outperform growth.  Value stocks in the S&P 500 index returned -5.1% in the past year versus -26.3% for their growth counterparts.  Higher interest rates hurt the valuations of fast-growing companies like tech firms because a lot of their profits won’t materialize until later years – BottomLine ….. Goldman says they believe value stocks will continue a winning streak this year as interest rates remain higher and investors avoid pricey tech and growth stocks.


Coastal Flooding – could cost $34 billion in lost real estate over the next 30 years.  Seas are expected to rise between 8 to 23 inches over U.S. coasts by 2050, especially along the northern gulf coast and mid-Atlantic.  More than 48,000 properties could be entirely below high-top lines, mostly in Louisiana, Florida and Texas – Climate Central


Household Net Worth – which includes the value of investment assets and real estate, fell roughly 9% compared to the 3Q of 2021.  Americans net worth peaked at $160 trillion in December of 2021 vs. $143 trillion in the 3Q of 2021 – Axios


Cheap Drugs – GoodRx operates a telemedicine producing platform and a free-to-use website and mobile app that track prescription drug prices in the U.S. and provide free drug coupons for discounts on medications.  They work with more than 75,000 pharmacies in the U.S.  I have been using GoodRx for several years for my drug purchases.  This week I bought a drug at Publix Pharmacy for $13 that they had listed at $64.95 for retail purchases – Buzz


Buffalo – Over the past eight months the city has buffeted from one tragedy after another: A rapist massacre at Tops supermarket in May, a death Christmastime blizzard, a house fire that killed five children and their football teams 24-year old who collapsed after making a tackle and suffered cardiac arrest – New York Times


New Car Buyers – paying $1,000+ monthly jumped to a record high last quarter according to Edmunds.  15% of new buyers are paying $1,000 monthly vs. only 10.5% one year ago.  Also, according to a recent study, new cars depreciate 30% over the first year.  Also more expensive SUVs and pickups can cost 30% more than the base price – CNBC ….. The U.S. auto industry is poised to post its worst annual sales in more than a decade – Wall Street Journal


Abortion Pills – For the first time, retail pharmacies will be allowed to offer abortion pills in the U.S. under a regulation recently changed made by the FDA.  Under the new rules, patients will need a prescription from a certified health care provider.  The two makers of the pills are Danko Lab and GenBioPro – New York Times


A Recession – More than two-thirds of the economists at 23 large financial institutions that do business directly with the Federal Reserve are betting the U.S. will have a recession in 2023.  Two others are predicting a recession in 2024 – Wall Street Journal


Elon Musk – is the first person to lose $200 billion in net worth thanks to sagging Tesla shares, though he is still worth $137 billion.  However, if he brought Twitter public, he would probably only get back about half of his $44 billion purchase price ….. Fidelity invested some money in the Twitter purchase and has slashed its valuation by 56%.


Accountants – More than 300,000 U.S. accountants and auditors have left their jobs in the past two years, a 17% decline, and the dwindling number of college students coming into the field can’t fill the gap – Wall Street Journal


Winter Temperatures – in the U.S. have increased by more than 3 degrees Fahrenheit over the past half-century – Climate Central


Apartment Rents – Vacancies are piling up.  The biggest wave of new rental buildings in nearly four decades is expected to cut the growth rate across the country.  Some sunbelt cities are already experiencing rent declines.  More young people are now getting roommates and moving in with their parents – Wall Street Journal


Mortgages – About 1 in 12 homes purchased in 2022 are already worth less than their mortgage.  At least 10% of June purchases are now underwater - Yahoo


I Want To Hold Your Hand - https://www.instagram.com/reel/ClMLcSVpH4O/?igshid=MDJmNzVkMjY=



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. 


"I work with many of the companies that would be RedChip companies. And we certainly ascribe to the same view that the RedChip Companies do, which is Discovering Tomorrow's Blue Chips Today."

  • Bob McCooey, Senior Vice President, NASDAQ Stock Market