MidSouth Week in Review:
March 20, 2017

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Mar. 20, 2017 | RedChip Companies

From Buzz (buzz@msifund.com)
For the week the S & P closed slightly up.  Today the NASDAQ hit a record high.  As expected, the Fed raised interest rates on Wednesday.  Consumer confidence figures from the University of Michigan hit a 13-year high of 97.6.  Among Democrats, the expectations index at 55.3 signaled a deep recession was imminent vs. a 122.4 reading from Republicans, indicating a new era of robust growth was ahead.  Crude oil closed up for the week after a couple of weeks of decline.
Expensive Stock Market – As measured by multiples of underlying intrinsic business and economic values, such as replacement cost or cyclically normalized profit, stocks have gotten this expensive only 2% to 3% of the time in the annals of market history.  In comparison with the size of the economy and total revenues, stocks have never been this expensive before.  It is unlikely this market can grow into justifying such lofty valuations in an anemic economy with annual productivity growth of 1% or less – Martin Conrad, Chief Investment Strategist at C.I.G. 
Gentility – What is left over from rich ancestors after the money is gone – John Ciardi
Buybacks Out of Style – In the 4Q, non-financial companies bought back a net $323 billion in equities, half as much as in the previous Q and the lowest amount since the 2Q of 2014 – Wall Street Journal
Learning to Spell – In high school I forged a letter from my mom saying, “Please excuse Lyman for being late to school this mourning because he was ill.”  After the first period the principal called me to his office and asked me how to spell morning.  “M-o-u-r-n-i-n-g”, I replied.  He then asked me if I had written the note and I replied, “Yes, How did you know”?  “You had better learn how to spell morning next time,” he replied, just before he let me experience three licks from his board of education – Buzz
Losing financial Ground – The nation’s 75 million millennials earn far less than their boomer parents did at the same age.  The 24 to 34 group have an average household income of $40,581, a 20% decline (adjusted for inflation) compared with those the same age in 1989.  They also have less than half the assets; $10,900 compared with the young boomers $25,035 – Young Invincible
Labor Surcharge – Restaurants in AZ, CA, NY and CO are adding surcharges of 3% to 4% to help offset rising labor costs.  CA currently has a $10.50 minimum wage, rising to $15 an hour by 2023.  The Federal minimum wage of $7.25 hasn’t increased since 2009 – Wall Street Journal
March Madness – Warren Buffett will pay $1 million annually to any Berkshire Hathaway employee who correctly picks the Sweet 16.  In 2014, 14 of 11.57 million pulled it off on ESPN.com or about 1 in 826,000.  The odds of randomly picking just the first 32 games correctly is 1 in 4.29 billion – SportsMoney
30-Year Mortgage Rate – has moved up to  4.30% from the benchmark rate of 3.68% a year ago – Freddie Mac
Stock Market Caution – With growth momentum nearing its peak and rates worsening with a hawkish Fed, the future of equities is turning increasingly negative.  A slowing cycle makes equities more vulnerable to higher rates and also stocks – Goldman Sachs
Welcome to the Crowd – “There’s nobody over regulated in such a ridiculous way than the American songwriter.” – Bart Herbison, Songwriters Association International
Sorry Charlie – Many Playboy subscribers who recently signed up for two-year subscriptions for as low as 88 cents an issue, will begin receiving the following message from the magazine: “Starting May/June 2017 you will no longer be receiving the print version of Playboy and will be transitioned over to the digital version of the magazine.” – Wall Street Journal
I Quit – In January, 3.22 million workers quit their jobs, the highest number in 16 years.  People quitting jobs at a high rate is a sign they are confident they can get another – Yahoo Finance
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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