I Should Have Been in the NBA
3-10-24
Opening Comments
My last note was about Jeff Bezos and his views on regrets and management principles. It was one of my favorite theme pieces given the nuggets of wisdom inside of it from an amazing founder and manager of talent and processes. The most opened links were the #1 interview question that can help you uncover a big red flag and the Cold Case Ice Cream link.
I played Padel for the first time the other day and am addicted. It is a cross between tennis and squash. I will write about it in an upcoming report.
My wife needed dental work including two implants and a bridge. We have dental insurance that does not cover ANY of it. How much does it cost in total? Try $15,000. How is this possible? How would the median American family handle this? In 2022, the median American family had $8,000 in savings. When my wife told me how much it costs, I asked, “Are you getting a platinum grill like Post Malone or dental implants?” I think Jill would look amazing with a diamond-crusted grill.
Markets
Labor Data
EV Environmental Impact
Restaurant Costs Skyrocketing
People Having Less Sex
State of the Union
NYC Cash For Condos
Kyle Bass Favored States
$24mm West Delray House
$120mm Miami PH
Big House Sale in Royal Palm Boca
Video of the Day-Texting vs Talking
My Instagram reels addiction is no joke and I found this short video that outlines a study of teenage girls. The study had girls call their moms and other text. It showed the levels of oxytocin (love hormone) increased for those who spoke with mom on the phone and decreased for those who texted with their mother. As brilliant as the smartphone invention was, in total, I believe they have been a disaster for kids. I liked this WSJ headline, “Why Some 20-Somethings Are Saying No to TikTok.” The latest trend: quitting the app to focus more on life and work.
I Should Have Been in the NBA
Although I prefer surfing to any other sport, if I could have done anything for a career, it would 100% have been to be an NBA basketball star. I had dreams of being a point guard in the NBA and dishing it off to Jordan, Malone, Ewing, Barkley, Robinson… I dreamed of being the point guard for Jordan on the Bulls during their run. As an aside, I am back to the Kelly Slater Wave pool in mid-April (pics below from April 2023).
I look back and think of what kept me from playing basketball at the highest levels and it was not much. Only a few small shortcomings kept me out of the NBA. I am not tall enough, strong enough, fast enough, don’t have good enough dribble, shot, defense, rebounding skills or passing skills. I lack the 48” vertical leap required at my height and there is no shot I could make the clutch free-throw in front of 20,000 screaming fans. Other than those few things, I feel I could have been an all-time great. Clearly, first ballot Hall of Fame caliber. Just look at me. Yes, it is my hair. Yes, I am very intimidating and would inject fear into the big men who outweigh me by 150 lbs and are 15” taller.
My sister just found pictures of me from around 1991 and when I look at these I think to myself, how was I not drafted in the 1st round of the NBA that year? Larry Johnson was the #1 pick at Power Forward and Kenny Anderson was #2 at Point Guard. These pictures prove I should have been the 2nd pick. I know it looks like I am only jumping 3 feet, but it was closer to 5 feet. I think we were playing on 12-foot rims here as that is the only way I can explain why I am not above the rim. Do you see that form? This is not NBA material?
What made me think of my NBA dreams? I was walking into the gym at the Boca Resort and a massive human was walking out casting a shadow over me. It happened quickly, but said, ‘I think that was just Zo.” I said it aloud and he turned around. It was Alonzo Mourning (Hornets, Heat, Nets, Hall of Fame). He is 6’11” and 260lbs. Although he is 54 and long retired he is a physical specimen of epic proportions. It made me realize how big these guys are and his calves were about the size of my waist. So the other thing keeping me out of the league is massive calves. These are Alonzo’s top 10 plays. Note that the first play shown starts with an assist from Muggsy Bogues, the 5’3” point guard. So maybe I have a chance after all. I tower over that guy. Remember, I recently wrote “Exceeding Potential” and there is a discussion about Muggsy vs Shaq. Here is me speaking about it in a 2-minute video.
Quick Bites
Stocks sold off on Friday and Nvidia took a breather (-8% including after hours) but were +4% on the week. All three major indexes finished the choppy week lower. The broad S&P 500 pulled back by 0.26% this week, while the blue-chip Dow and tech-heavy Nasdaq fell 0.93% and 1.17%, respectively. Fed Chair Jerome Powell said inflation is “not far” from where it needs to be for the central bank to start cutting interest rates. Oil fell 2.5% on the week as crude imports in China fell almost 6%. However, oil is +8.5% YTD.
Nonfarm payrolls increased by 275,000 for the month while the jobless rate moved higher to 3.9%. Economists surveyed by Dow Jones had been looking for payroll growth of 198,000. The December gain also was revised down to 290,000 from 333,000. Post the data, Treasuries rallied bringing down the yield by 4bps on the 2-year (4.48%) and 2bps on the 10 year (4.07%).
I was an early EV owner and go back to 2018 for our 1st TSLA. I feel they have some real limitations around the range, charging locations, and affordability and have questioned how much better they are for the environment. In the past week, there have been many articles suggesting that EVs release more toxic emissions than internal combustion engines given tire issues. EVs go through tires much quicker given they weigh 30%+ more than traditional cars (batteries are heavy). According to the study, tire tread releases more toxic particles than exhaust emissions. You cannot make this stuff up. BILLIONS upon BILLIONS have been spent on EVs to “save the environment” and states have forbade future sales of traditional automobiles in favor of EVs. Now, they are worse for the environment? The study, which was published in 2022 but has begun circulating again after being cited in a WSJ op-ed, found that brakes and tires release 1,850 times more particulate matter compared to modern tailpipes which have filters that reduce emissions. I have owned two Tesla’s and not sure I buy another one. This Reuters article and this Bloomberg story outlines why EV sales growth has slowed sharply.
On a related note, this article outlines the US Power Grids are strapped given soaring demand from data centers and heat waves. Crypto mining and growing EV charging will only make matters worse. No, EV’s will not be taking over the US anytime soon.
Interesting WSJ article entitled, “The Skyrocketing Costs Driving Cheeseburger Prices Up—and Restaurant Owners Out.” Independent restaurants are on financial life support, owners say, squeezed between escalating payroll costs and diners’ dwindling tolerance for ever-higher checks. Wages for waitstaff, table bussers and line cooks will grow more expensive for many eateries this year, with 22 states in January raising the minimum wage for hourly workers. American restaurants emerged from the Covid-19 pandemic to find their traditional economics no longer work. After struggling to stay afloat through lockdowns, restaurant operators endured surging food costs and supply chain shortages. Restaurateurs raised menu prices. In January, prices for food eaten away from home were up 30% compared with the same month in 2019, Labor Department data showed. I have multiple friends who own restaurants and the common theme is inflation is killing them. It is very hard to make money for most of the small operators today. Check out the bottom chart that shows wholesale price increases since 2018. I feel it when I go to the grocery store. This article shows $24 for a burger, fries and small drink from Five Guys. This is a WSJ article suggesting surge pricing is coming to more menus.
There are multiple articles about people having less sex in society today. A survey of Californians aged 18-30, the percentage reporting no sexual partners in the prior year reached an all-time high of 38%. Here’s an even more eye-raising statistic: in 2021, among that same age group, just 9% of women reported having at least 2 sexual partners. The widespread belief that these young adults are having a ton of casual sex is demonstrably false. The common perception of 'sexually promiscuous' likely doesn't align with a 25-year-old having only two sexual partners in a year. The charts don’t lie. Look at the last one. Every category is having less sex than 30 years ago. What are the ramifications? What is the impact on the population as it ages? The article has good charts that I did not include.
Expectations management is key and I had low expectations around Biden’s SOTU. I believe Biden exceeded those expectations from a delivery perspective with no clear “Senior Moments” that we all have become accustomed to in recent years. He even went off-script and kept it together. He did mispronounce Laken Riley’s name, but the blunders were few. In a weekend interview, Biden suggested he should not have called Riley’s alleged killer “illegal,” but “undocumented.” The SOTU message was fiery, feisty, raucous, and very partisan. Fox News agreed that Biden checked the box for his supporters. However, Fox felt it was overly partisan suggesting it was a campaign speech attacking Trump more than a SOTU. One of my readers on the Right wrote me, “Biden knocked it out of the park.” Obviously, CNN, MSNBC and the Left media loved the speech. The CNBC headline was “Biden electrifies Democrats, spars with Republicans in fiery State of the Union address.” This NYT Article is entitled, “‘Was It Feisty or Angry?’: Readers Rate the State of the Union.” When it comes to many of Biden’s policies, I do not believe they have been effective on key issues (Border, Inflation, Foreign Policy, Energy, Deficits, Crime, Wokeness, Circumvented the SCOTUS on student loan forgiveness, discharged troops for refusing vaccine…). The latest NYTimes Sienna Poll is clear about which candidate has better policies according to Americans. The voter’s biggest issue is the border and Biden did not address it until the 40-minute mark which was a mistake in my mind. Trump holds a 29-point lead (58%-29%) on who would better handle immigration. I will say that the president looked old and frail, but delivered the performance he needed, albeit the message was more divisive than I would have liked. The country is fractured and we need a leader to bridge divides, not grow them. I am not convinced either candidate is the best at bringing the country together. Biden yelled about the wealthy not paying their fair share of taxes. Did he forget that his rich son did not pay over $1.4mm in taxes for years? We cannot tax our way into prosperity. We have a spending problem, not a revenue one. If anyone here tries to cut Social Security or Medicare or raise the retirement age, I will stop them,” Biden said. I 100% disagree with his stance as Americans are living 20 years longer than when Social Security started in the 1930s and these programs are massively underfunded. When it comes to the Republican response, I felt the performance from AL Senator, Katie Britt, was awful and even my Right readers called it, “Horrible,” and another called it, “Beyond a disaster.” The SNL Cold Open about Britt’s speech was funny. One of my Left readers thought Biden’s speech was “Excellent, especially relative to expectations.” He further stated, “He demonstrated that he’s in full command of his faculties and is perfectly capable of providing our country with another four years of strong leadership.” I do not agree with that statement and believe that if he wins, Kamala Harris will be the President. Viewership was 32.2mm+18% over last year.
Israel
The Golden Age of American Jews is Ending
Antisemitism on the right and the left threatens to bring to a close an unprecedented period of safety and prosperity for Jewish Americans—and demolish the liberal order they helped establish.
FBI hunting for Iranian spy who allegedly plotted assassination of Mike Pompeo, other US officials
Jewish woman confronts retired pastor after she catches him drawing swastika on her groceries
Where are the police? What are the consequences? One idea is to deport them to Gaza.
Some Columbia Professors Accused of Pro-Palestinian Indoctrination
Lawsuit filed against MIT accuses the university of allowing antisemitism on campus
Fury at $65,000-a-year Chelsea private school as event sells anti-Israel merch
My kids attended Avenues in NYC for 5 years. A bazaar in the school had vendors selling “From The River To The See, Palestine Will Be Free,” Merchandise.
Here is an idea. All the Jew-Hating, Hamas-Loving, can move to Gaza.
Other Headlines
Credit scores decrease for the first time in a decade as more borrowers fall behind on payments
'Buy now, pay later' goes from niche to normal as young people use it for daily essentials
What began for many as a way to pay for concert tickets and vacations is becoming an ordinary tool that Gen Z and millennial shoppers use for food, contact lenses, and trash bags. What could possibly go wrong with paying up to 30% interest to buy food?
Layoffs rise to the highest for any February since 2009, Challenger says
$84k layoffs in Feb (+3% from Jan &+9% year over year). In Feb 2009, 186.4k were laid off.
Powell: ‘There will be bank failures’ caused by commercial real estate losses
Family offices have tripled since 2019, creating a new gold rush on Wall Street
Americans saw their net worth soar to records last year thanks to the stock market
The Budget Deal Is Overflowing With $12 Billion of Earmarks
Read some of the lunacy. Much of it should be paid for by the states.
Gap shares pop as company’s holiday earnings blow past estimates, Old Navy returns to growth
Hugo Boss plunges 12% on pessimistic sales outlook in worst day since 2016
Tough consumer sentiment was mentioned. Boss had record results!
Victoria's Secret falls 30% as shrinking demand hits sales forecasts
HelloFresh shares dive 42% after meal kit giant warns on outlook
Trump Begs for a Debate With Biden After Skipping Every Primary Debate
College junior wins GOP primary against 10-term incumbent NC state lawmaker
Why gas is so expensive in California
High taxes, special pollution reduction blend required in CA, and refineries in the state have dropped by 66% in the past 40 years. US average is $3.4/gallon and CA is $4.9/gallon.
NYC newsstand vendor left ‘covered in blood’ in broad-daylight lotto ticket, cash heist
Gangbangers openly sell fake IDs, green cards to migrants on NYC streets as officials warn of danger
At least 10 men camped out in broad daylight at four different corners along Roosevelt Avenue in Queens, hawking bogus documents for $80 to $250.
MIT Claims Superconducting Breakthrough Means Fusion Power Can be Practical
"Overnight, it basically changed the cost per watt of a fusion reactor by a factor of almost 40 in one day," Dennis Whyte, former director of MIT's Plasma Science and Fusion Center and a professor of engineering, said.
How many recent incidents have there been? What is going on? 4 United emergency landings in the past week.
Russian oligarch’s yacht is costing U.S. taxpayers close to $1 million a month
I was critical of the overreach of the US Government in seizing Russian Oligarch ships and wrote of the cost to maintain them. Now, US taxpayers are spending $1mm/month to maintain one ship. It was so obvious this would happen.
10,000 steps really could keep you from an early death — especially if you’re sitting all day
Please do your best to get in exercise. I am a big fan of combining weights with some form of cardio (walking, tennis, swimming, biking).
Hypervaccinated man had Covid jab 217 times for ‘personal reasons’
No side effects? Seem almost impossible.
Jake Paul set to fight 57-year-old boxing legend Mike Tyson - and vows to put him to sleep (bad idea)
Will political protests disrupt the Academy Awards? The LAPD is prepared to prevent that
Worms living near Chernobyl have developed a new 'superpower', scientists discover (Immune to radiation)
Espionage Probe Finds Communications Device on Chinese Cranes at U.S. Ports
I am sure it was not intentional. The Chinese Government is generally very transparent and would never spy on the US. WORST PARTNER EVER.
In Canada. More Chinese lies and spying.
Real Estate
Interesting FT article entitled, “Record number of cash offers show New York property is only for rich.” More than two-thirds of home sales in NYC last quarter were cash purchases, a record, as high rates on mortgages deter all but the richest buyers. As mortgage rates hover around 6%, nearly 70% of NYC homes purchased in the final quarter of 2023 were bought without a mortgage. Cash purchases jumped from just 55% of transactions in the same period in 2022.
I can speak firsthand about the issues of home insurance living in a serious hurricane zone in South Florida. Carriers are canceling policies left and right. Premiums are SKYROCKETING and homeowners are reticent to put in a claim for fear of being cancelled. This Bloomberg article is entitled, “A Hidden Crisis in US Housing,” and it is about the California and Florida markets due to insurance issues. Some 11 million people live in California’s high-risk wildfire zones, areas that include Los Angeles county, San Diego and the vineyards of Napa and Sonoma. Not long ago, they and homeowners in natural disaster regions around the US would have almost certainly had insurance through a big, national company like State Farm General Insurance Co., Allstate Corp. or Hartford. But a growing number of insurers are cutting their business in those areas, deterred by more intense and frequent natural disasters, plus state-imposed limits on how much they can charge. Homeowners in the most risky places are now more likely to be covered by state-created, “last resort” insurance programs that provide protection where the private market won’t. Too much to go over but the article is informative. Remember, Kevin Lang (1.866.964.4434 ) is a sponsor of the Rosen Report and provides property and casualty insurance across all 50 states and dozens of RR readers have signed up.
Billionaire maverick Kyle Bass has divulged his latest real estate conquests, shedding light on where the smart money is flowing these days. The famed investor, renowned for his audacious bet against the housing market in 2008, is once again lending his advice to Wall Street. Bass unveiled his top picks for real estate investments: Texas, Florida and Tennessee. “You have to move real companies where there’s affordability, where there’s expansive activity, where there are natural resources to accommodate those movements,” Bass said, sending a clear signal to investors seeking lucrative opportunities in the property market. He labeled the West Coast and the Northeast as “very high cost, very high tax, one could say mismanaged jurisdictions.” Instead, he championed “pro-business, lower cost, lower or no tax jurisdictions,” like Texas, Florida and Tennessee as prime investment destinations. Hard to argue with his points.
An article about NYCB becoming more aggressive on managing the loan book. The morning after a $1 billion equity investment and leadership change pulled New York Community Bank’s stock from the brink of collapse, its executives said the bank would work to shrink its commercial real estate portfolio as distress hits office and rent-stabilized buildings. Part of that game plan is to take a harder line with troubled borrowers. The suggestion is they will take over some of these buildings. I would not have my money in this bank despite the infusion. -67% YTD.
CNBC article about a large home in West Delray Florida. The owners of this Florida mansion are asking for $24 million for their almost 11,500 square-foot residence inside one of the most expensive gated communities in Delray Beach, Florida. The price tag puts the home, known as Villa Ananda, at a price per square foot of almost $2,100, which is well beyond record-breaking territory for a non-oceanfront home in the town. Over the past five years, the Delray Beach market has more than flourished — it has skyrocketed. Since 2018, the average price per square foot of a luxury home — representing the top 10% of sales — in Delray Beach has more than doubled from $416 to almost $840, according to the Elliman Report. Yes, you get more for your money out West, but I have no interest in living that far from the beach. It is hotter, more bugs and rain. Steve Cohen of SAC/Point 72/Mets lives there.
On the high end Miami PH is under contract for north of $120mm that is 10,500 ft with 7,500 ft of terraces and is located at the Shore Club. Witkoff does it again. He has a magic touch and this breaks the prior record of $60mm for a condo at the Faena House set in 2015. The Robert A.M. Stern building will be completed in 2026 and is 85% sold with most of the units selling for just under $6k/foot. The wealth coming to South Florida is unfathomable and the Blue states are not giving enough reasons to stay (NY, NJ, CT, IL, CA…).
In my community, a house originally listed for $52mm and was last listed for $44.9mm just sold for an undisclosed price. The 1997 home is a tear-down with over an acre on the Intracoastal and another lot across the street. I had written about this listing multiple times suggesting it was worth $35mm range. Can’t wait to see the closing price. Was on the market for almost a year given the absurd asking price.
© 2024 The Rosen Report LLC. All rights reserved. Does not constitute investment, financial, legal or tax advice. Consult with your lawyers and professional financial advisers. Rosen Report™ #663 ©Copyright 2024 Written By Eric Rosen.
