MidSouth Week in Review:
February 26, 2018

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

For the holiday-shortened week the S & P was up 0.4%.  Today was the first in five trading days that the market didn’t have a sharp early morning advance that was followed by an afternoon sell-off.  With three trading days remaining in February, the S & P is down 2.8% for the month.  The last time we had a negative February was in 2009.  The markets today were helped by a slight pullback in Treasury yields.  Jobless claims hit a 45-year low.

BuzzBits

Investment Deductions – If you itemize you may be able to deduct the following expenses:  Fees for investment counsel, software or online services used to manage your investments, transportation to your broker or investment advisor’s office, safe deposit rent, IRA, a Keogh (Custodian fees) if paid by cash outside the account, attorney, accounting or clerical, costs necessary to produce or collect taxable income – Personal Finance

Classic Schwarzkopf Response – In a 2001 interview, General Norman Schwarzkopf was asked if he thought there was room for forgiveness toward the people who have harbored and abetted the terrorists who perpetrated the 9/11 attacks on America.  His answer was classic Schwarzkopf.  The General said, “I believe that forgiving them is God’s function .. Our job is to arrange the meeting.”

Winter Olympics – Norway (population 5.3 million) has won more medals than any other country.  Norway is also the 2018 medal leader with Germany (population 83 million) in second place.  The U.S. (population 323 million) is fourth in the medal count.

Remington – filed for bankruptcy last week.  The company, which dates back to 1816, experienced a sharp decline in sales after Trump’s win eased fears among gun enthusiasts about losing access to weapons – THE WEEK

Thin Skinned – A white Princeton professor is under fire for using racial slurs while teaching a course on racial slurs.  Lawrence Rosen asked his students whether it was worse for a white man to punch a black man or call him “a n-----”?  Several students walked out, but Rosen says he can’t teach his course, “Hate Speech, Blasphemy and Pornography,” without quoting examples of hate speech – THE WEEK

Red Wine – A Journal of Agricultural and Food Chemistry study found that red wine contains chemicals that could help prevent tooth decay and gum disease.  The study further links drinking red wine in moderation to helping the heart, boosting good bacteria in the gut, lowering the risk-of-diabetes and increasing a person’s longevity – Newsweek …. Drinking about two glasses of wine or beer a day was linked to an 18% drop in a person’s risk of early death, an even stronger effect than the life-preserving practice of exercise, according to the researchers at the American Association for the Advancement of Science.

Deadbeats – up to 30% of monetary awards to investors in arbitration claims go unpaid during the 2012/2016 period.  Why?  The investment firm and/or the investment person was busted – FINRA, PIABA

Loneliness – Studies have linked it to a social isolation and to a greater risk of heart disease, cancer, depression, diabetes and suicide.  A former U.S. surgeon general has written that other effects include:  reduction in life span similar to that caused by smoking 15 cigarettes a day and even greater than that associated with obesity.  One 2004 study said that one in four Americans had no one in their life they could confide in vs. one in ten in the 1980’s – New York Times

Seward’s Folly – In 1867 U.S. Secretary of State William H. Seward signed a treaty with Russia for the purchase of Alaska for $7 million.  Despite the bargain price of roughly two cents an acre, the Alaskan purchase was ridiculed in Congress and in the press as “Seward’s folly,”  “Seward’s icebox,” and President Andrew Johnson’s “polar bear garden.” – Thomson ONE

Hurtful False Advertising – A California judge has refused to dismiss a claim against Krispy Kreme, which claimed that consumers were denied the health benefits found in raspberries because the company’s “raspberry-filled” doughnut’s don’t contain any real fruit – New York Times

Future Problems – Three states have more than 25% of their residents receiving health insurance through Medicaid:  California (25%), West Virginia (26%) and New Mexico (31%) – Kaiser Family Foundation

Teaching Kids About Money - https://www.selectquote.com/blog/2018/02/01/teaching-kids-about-money/?cid=t:eml:ad:INF:c:201802Leads:se:nws&utm_source=Email&utm_medium=newsletter&utm_campaign=201802Leads

Newbie Investment Mistakes

Matthew Frankel, The Motley Fool 

1. Investing in “Penny” stocks (less than $5).  Many are scams.
2. Putting too much in one, or just a few stocks.
3. Investing in story stocks or “the next big thing” rather than investing in high quality companies.
4. Avoid investing on margin.  Doing so can double your gains but can also double your potential losses.  You can’t go broke if you don’t owe anything.
5. Never put money with a company you don’t fully understand or can’t tell what they do in a sentence or two.

Other Investment Mistakes 

1. Buying Options.  I have never seen any long term buyers make money.
2. Paying more than 50x’s earnings.
3. Buying companies with no earnings and/or a negative net worth.
4. We all look smart and beautiful in a bull market but when the tide goes out is when you see who is standing naked in the water. - Buzz

buzz@msifund.com

This 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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