To all my Partners,
By now all of you have received your individual monthly statements. If for any reason you have not, please contact me and will be glad to resend it to you.
Now that Labor Day (and Hurricane Francine) is in our rear view mirror, Wall Street typically springs to life. Major U.S. stock indexes closed the books on a rocky August with all the indexes edging out small gains. We at Bena Capital Fund ended up +3.36% for last month, and +11.22% YTD. According to research firm PivotalPath, hedge funds from January 1st through August 31st averaged +7.2%. We at Bena Capital Fund, easily beat them!
Hedge Fund returns YTD
Jan. 1st – Aug. 31st
+11.22% +7.2%
Bena Capital Fund Avg. hedge fund returns
Source: PivotalPath Research
|
Bena Capital up months |
Bena Capital down months |
| February | January |
| March | April |
| May | July |
| June | |
| August |
As I write this, our Bena Capital Fund is down for September
-0.05%
September 1 thru September 15th
September is living up to its reputation as a tough month for stocks!
Going back to 1928, the S&P 500, has declined an average -of 1.2% in September, the weakest month of the year for stocks. The index has ended lower 56% of the time over that stretch, according to Dow Jones Market Data.
September to Remeber:
Since 1928
+19.2% -1.9%
September ended lower September ended higher
Source: Morningstar
S&P 500 in September
| 2024 | ?? |
| 2023 | -4.9% |
| 2022 | -9.3% |
| 2021 | -4.8% |
| 2020 | -3.9% |
One popular theory (and remember, it’s just theory) suggests that traders returning from vacation are selling their winners and harvesting tax losses, which can amplify market moves.
If the S&P 500 ultimately finishes the month in the red, it would be its 5th consecutive September with a decline.
The consensus on Wall Street is that when the Federal Reserve meets this week (September 17-18), it is widely expected they will drop the interest rate 25 basis points (0.25%) from their present 5-5.25% interest rate.
So much for the bad news, are you ready for some good/hopeful news?
According to a Goldman Sachs’ report, the last 8 times the month of September started with a 1% or more decline (which occurred this September), the market had regained the losses within 4 weeks afterwards….all 8 times. (We’ll see if this time for September of 2024, will make the 9th time!) Professional investors have also embraced the stock market for last month. Net bullish bets tied to the S&P 500 futures by asset managers rose last month to the highest level since 2020, according to the Commodity Futures Trading Commission data.
The economy is certainly slowing according to last month’s JOLTS (Job Opening & Labor Turnover) report by the Bureau of Labor. This measures employment, layoffs, job openings and those quitting in the U.S. economy. This is viewed as a major report by the Federal Reserve on the health of the economy. An expected 8.1 million was expected but August’s numbers came in at a much lower at 7.67 million!
According to the Labor Dept, the non-farm payrolls for August was lower than expected coming in at 142K jobs but were expecting a higher 161K. What was also disappointing was that the month prior’s Job Openings that were reported higher (in August) was also downgraded to a low 89K from their originally reported last month of 114K. The economy is certainly slowing and employers that were in such demand for employees one-year ago have disappeared. The latest (August) jobs reported were:
Where Are The Jobs?
| Leisure & Hospitality | +46K |
| Health Care / Social Assistance | +44K |
| Construction | +34K |
| Government | +24K |
| Retail | -24K |
Source: BLS
I say the economy is slowing because notice 2 areas of the highest jobs needed are in Health Care and in Government. Both of those 2 categories (government and health care) are dependent on tax dollars and not selling a product or services. Retail though which are sales in the private sector….was down for last month losing 24,000 jobs!
Last month, the Federal Reserve’s ‘preferred inflation gauge’ the PCE (Personal Consumption Expenditures) was released and inflation’s rate of growth is slowing. Personal consumption rose +0.2% for last month and for the year is up +2.7%
+0.2% +2.7%
M/M Y/Y
Stock sectors for last month were:
| +5.0% | +4.6% | +4.2% | +3.7% | +0.1% |
| Consumer Staples | Real Estate | Health Care | Utilities | Technology |
Food Prices & Inflation
in August
| 8oz. yogurt | White bread/lb. | Ground beer/lb. | Milk (gal.) | Eggs (12) | |
| 2022 | $1.44 | $1.72 | $4.89 | $4.16 | $2.98 |
| 2023 | $1.57 | $1.98 | $5.10 | $3.97 | $2.10 |
| 2024 | $1.68 | $1.98 | $5.50 | $3.98 | $3.08 |
So, what do we do?
History reminds us that it has typically been better to ‘buy’ than ‘bail’.
We at Bena Capital Fund are playing the long game! By that I mean in two to three years from now, we really won’t remember did the Federal Reserve cut 2 or 3 times back in 2024? If markets drop for a month, or more it may create a market correction which have occurred naturally throughout the years.
For all 24 corrections in the S&P 500 since W.W. II (1945), it took only 4 months to recover losses.
Never let your emotions become your portfolio’s worst enemy.
So, how did we do?
| For August | 1-year (12-month) Returns: | ||
| Dow Jones: | +1.27% | Dow Jones: | +16.97% |
| S&P 500: | +0.7% | S&P 500: | +21.63% |
| Nasdaq: | +2.3% | Nasdaq: | +22.67% |
| Berkshire Hathaway: | +8.59% | Berkshire Hathaway: | +28.07% |
| Bena Capital Fund: | +3.36% | Bena Capital Fund: | +27.63% |
Some highlights of last month:
- August’s unemployment rate drops to 4.2%
- August’s Non-farm payrolls added 142K jobs down from an estimated 161K jobs
- July’s Non-farm payroll jobs are revised down from month prior to 89K from prior 114K
- August’s Average hourly earnings up +0.4% for August (up +3.8% Y/Y)
- Labor Force Participation for August rose to 62.7% (same as from July)
- August’s CPI rose +0.2% for month over month
- August’s CPI increased+2.5% for year over year
- Interest on national debt reaches $1 trillion on JUST interest costs
- Dell Computers & Palantir join S&P 500 and American Airlines & Etsy are being removed from S&P 500 on Sept. 23rd
- New data from Census Bureau, median household income is at $80,610, up from 2022’s $77,540 per year.
- 4 states have now enacted laws banning cell phones in school: Louisiana, Florida, Indiana & South Carolina (Los Angeles will be banning next year)
- 30-yr fixed mortgage rates down to 6.15%, with hopes of Fed’s lowering interest rates
- McDonald’s extends their $5.00 value meal
- Boeing strike halts the output of their 737s
Bena Capital is beating all hedge fund averages!
hedge fund returns from January 1st – August 31st
+11.22% +7.2%
Bena Capital Fund Avg. hedge fund returns
Labor Force Participation for Prime Workers (25-54)
Dips to 83.9% in August
| 83.5% | 83.5% | 83.4% | 83.5% | 83.6% | 83.7% | 84% | 83.9% |
| January | February | March | April | May | June | July | August |
Source: BLS; 9/7/24
Unemployment Rate
At 4.2% in August
| 3.7% | 3.9% | 3.8% | 3.9% | 4.0% | 4.10% | 4.10% | 4.2% |
| January | February | March | April | May | June | July | August |
Source: BLS; 9/7/24
August’s CPI (Consumer Price Index) Key Leaders
Month-over-Month
Food away from home: +0.3%
Apparel: +0.3%
Shelter: +0.5%
Interest on National Debt
| +30% | $3 Billion | $35,000.000 |
|
Increase from last year (FY2023) |
Per day | Per second |
Source: CNBC; September 12, 2024
U.S. economy under Joe Biden & Kamala Harris Administration
January 20, 2021 – present
$7.4 Trillion +19.4%
Added to National debt Overall inflation
Real Median Income Comparison
+$7,690 (10.5%) +1,050 (1.3%)
2016-2019 2020-2023
Under Trump Under Biden-Harris
Source: U.S. Census Bureau
U.S. economy under Joe Biden & Kamala Harris Administration
January 20, 2021 – present
+19.7% -1.7% 8.1 Million+
Overall inflation Real wages adjusted for inflation Southwest land border encounters
Source: Treasury Dept.; Bureau of Labor; Customs & Border Protection
Illegal Southern Border Crossings
10+ Million
Source: U.S. Customs and Border Protection
Nationwide Border Encounters of Single Adults
FY2021 to FY 2024 (YTD)
508K 302K 152K 78K
Venezuela Haiti China Russia
Vice President Kamala Harris’ Tax Proposals:
* Corporate tax rate: 28%; Currently 21%
* Capital gains tax: 28%; Currently 20%
* Unrealized gains tax: 25%; Currently 0%
Source: Harris-Walz Campaign & White House
Household Annual Income
for FY 2023
| $80,610 | $112,800 | $89,050 | $65,540 | $56,490 |
| U.S. avg. | Asian | White | Hispanic | Black |
Source: U.S. Census Bureau
401(k) Retirement Accounts at Fidelity Worth at Least $1 Million or More
497,000 +31% +2.5%
As of 2Q From last year From 1Q of 2024
Source: Fidelity Investments
Ford Shrinks Its EV Rollout Plans
Carmaker cancels electric SUV and expects to take $1.9 billion in related special charges
and write-downs. Ford will lose about $5 billion this year and is losing $44,000 on every electric vehicle that is sold.
Source: WSJ; 8/25/24
Auto Insurance Rates Rising:
Auto Insurance
Full coverage average cost
+15% +22%
1st half of 2024 By end of 2024
Source: Insurify
States with Highest Auto Rates….and Rising!
Total 2024 projected insurance hikes
+61% +54% +58%
Minnesota California Missouri
Source: Insurify
Most Expensive States for Auto Insurance
June 2024 – Full coverage annual costs
$3,400 $3,336 $3325 $3,271 $3,201
Maryland South Carolina New York Nevada Florida
Source: Insurify
Official NFL Valuations
(average value of NFL team is $6.5 billion)
Most valuable teams
#1
$11B
Dallas
Cowboys
#2
$8B
Los Angeles
Rams
#3
$7.9B
New England
Patriots
#4
$7.85
New York
Giants
#5
$7.8B
Las Vegas
Raiders
(and the bottom)
#28
$5.58B
New Orleans
Saints
#29
$5.4B
Detroit
Lions
#30
$5.35B
Buffalo
Bills
#31
$5.3B
Arizona
Cardinals
#32
$4.1B
Cincinnati
Bengals
Source: CNBC
Jerry Jones’ owner of the Dallas Cowboys is a wise investor!
Dallas Cowboys
$11B $1.2B $150M
Today’s value Revenue Purchased in 1989
NFL (at-a-glance)
$6.5B
Current average team value
$20.5B
2023 total league revenue
$9.2B
Average annual value of network deals
(+85% from previous cycle)
Source: CNBC; 9/5/24
If you’re curious why some NFL players prefer to play on certain NFL teams and not the other, this is the State & Local income taxes a player would have to pay on each $1 Million they receive (and they ALL get more than $1 Million in salary. This does NOT include Federal taxes!
Based on salary of $1 Million
Los Angeles Chargers $104,082
Los Angeles Rams $104,082
San Francisco 49ers $104,082
Green Bay Packers $91,780
Minnesota Vikings $91,780
Baltimore Ravens $90,428
Washington Commanders $89,319
New York Jets $74,873
New York Giants $74,484
Detroit Lions $68,109
So much for ‘fill her up’
1 in 5 or 20%
Electric vehicle charging stations in America do not work
Source: Georgia Institute of Technology & Harvard Business School
Tax Revenues Before and After 2017 Trump Tax Cuts
$3.31 Trillion $4.89 Trillion
FY2017 Receipts FY2022 Receipts
+47.73%
Percentage increase in Revenue
Source: Congressional
IRS increasing of audits for those making under $200K
Passage last year of the ‘Inflation Reduction Act’, an increase to the IRS was included for $80 billion to hire 87,000 more agents and the promise that this would go towards audits for those making $400K or more. Now, according to the Treasury Inspector General for Tax Administration (page 16) in his August 31, 2023 report says:
“63% of SB/SE Division’s FY2023 total new examinations will be on taxpayers with less than $200,000 TBI.”
Well, so much for believing a politician!!
I’ve been asked to repeat this from our March’s Partner’s Letter, so:
History has shown that some months are kinder than others to investors.
According to records spanning over 95 years, since 1929:
Months with the biggest gains: Months with the biggest losses:
January, April, July, and December February, May, August, and September
The S&P Rises 3 out of 4 years since 1926!
The S&P is up approx. 75% of the time going all the way back for almost 100 years (since 1926)!
| S&P | % advance each year |
| 20%+ | 36% |
| +10% to +20% | 21% |
| 0 to +10% | 15% |
| 0 to -10% decline | 15% |
| 10%+ decline | 13% |
Source: Dimensional Funds
Have you moved?
If you have moved or changed addresses to where your 1099’s should be sent, please contact me with the new information.