Leaving Your Comfort Zone
4-17-24
Opening Comments
My last note was entitled, “Zumba Shoes,” and within minutes I was told my newsletter made it to the founder of Zumba Fitness, Alberto Perlman, and he contacted me. Alberto is sending my wife a pair of Zumba shoes. I also found out my note made it to the founder of the Pura Vida restaurant. The reach of the Rosen Report is growing each day. Thank you. The most opened links were the video of comedian Nate Bargatze and the story on college rankings for antisemitism.
I had not written about Omakai recently. It is a casual sushi joint in Wynwood. Is it my favorite sushi? No, but I believe it is the best value for the quality in town. The various Omakase offerings are reasonable for the volume and quality of the fish. The Happy Hour Specials are another level and worth a go. This is not the high-end ridiculousness that makes you cry when the bill come,s and the staff is super friendly. The other place I am hearing about is in the Design District called Sushi Yasu Tanaka but have not yet been. Everyone who has gone raves about it.
I was in LA for 28 hours and had a great lunch with 3i Members at Cecconi’s in West Hollywood Monday. The food is not overly impressive, but good enough given the vibe and room. The Hamachi appetizer was the best on the menu. I made some amazing new connections through the power of the 3i network. Whenever I travel I send a note to the network to connect with members and have made some solid friendships. I recently wrote a piece on the power of networking and am a firm believer you never know where a relationship can lead.
I had a fantastic time at the Dodgers game Monday night as well. Weather was beautiful, albeit a chilly 56 degrees. Our seats were right above the dugout and it was an exciting game on Jackie Robinson Night. I had a blast and got a cool new baseball hat as well to commemorate Jackie Robinson. I was so close, you could see the baseball when pitched in the photo.
I arrived at the Kelly Slater Surf Ranch Tuesday afternoon. I surfed for the first time in a year and was rusty. I got clocked on my first wave trying to get too deep into the barrel. I thought I was going to drown. Still surfing to do, but here are some shots from my go pro. I’ll have the drone footage soon. I was a little underwhelmed with my first session after a one year break. I just did not feel as comfortable as I wanted. I twisted my knee and am limping a bit. Need to get through today’s sessions.
Abbreviated note as I have been in meetings, a long car ride and surfing. I know I missed stories. Apologies.
Markets
Harder to Sell Treasuries (WSJ)
Improvements in Homicides in Big Cities
Scottie Scheffler’s Amazing Run
Florida Price Cuts
New Apartments Coming on-Line
NYC Office Example
LA Mayor Request to the Wealthy
Video of the Day-Kobe Bryant on Practice
Kobe is a top 5 All-Time NBA player. This short video outlines his thoughts and regiment and practice habits. All should listen to what this man did from childhood on. It is incredibly motivating. Every NBA pro who knew Kobe would talk about his work ethic. It is a lesson in what it takes to be great.
Leaving Your Comfort Zone
I think we have all been “comfortable” at times in our lives and careers. Pushing yourself outside your comfort zone is hard. Growing and developing requires you to extend your boundaries and experience new things. I have a few examples in my life of leaving my comfort zone that improved my career path and outcome. I grew the most as a person when I was outside of my comfort zone. To me, being comfortable is being complacent.
I largely grew up in South Florida after leaving Chicago shortly after my father passed away when I was five years old. I grew up going to public school where few people went on to greatness. I had a high school internship at Smith Barney working for a stockbroker, Rick. He was a great person, and during college offered me a job to work with him and eventually take over his book of business when he retired. It would have been the “comfortable” move and I feel I would have made a very good living. Being near home where I knew people and family and working in a familiar environment was the easy path. When I was struggling to find a job in 1991 (recession from July 1990-March 1991), the prospect of Smith Barney seemed like a solid one. It was not what I wanted to do for a living, but it sure beat delivering pizza. I told my mom, Pauline, I was taking the job at Smith Barney. She lost it on me and told me I needed to “expand my horizons” outside of South Florida. Luckily, I got a job at Continental Bank and the rest is history, but had I not pushed harder due to my mother’s insistence, my career and life would have been far different. Thanks Mom!
When I was working at Bank America (former Continental Bank) as my University of Chicago MBA was wrapping up (worked full time), I was considering jobs in NYC. I was nervous about leaving Chicago. I did not have many friends in NYC having grown up in South Florida. I called my then 91-year-old grandmother, Nell, to tell her about my fears around moving to NYC and wondering if I had what it took to succeed in the Big Apple. Let’s just say, she humiliated me and yelled at me for fearing failure. I won’t repeat the exact words of the towering 4’10’ fireball, but she pushed me into leaving my comfort zone of Chicago. The rest is history. I thrived early and my career would have been a fraction of what it was if Nell had not “strongly suggested” I needed to step outside of my comfort zone and expand my horizons.
I remember getting the call in November of 2004 to run the Credit Trading business. I was nervous. My career thus far had been on the Loan Trading side of the market. Now, I had responsibility for Commercial Paper, High-Grade/High Yield bonds and Credit Derivatives (CDS), Loans, Distressed, Preferred Stock, and other trading desks. It was a big jump in responsibility and profile. It was a great time in my career when I learned from incredibly smart people and added many arrows to my capability quiver. I become more in tune with the macro side of the market and my network exploded. My profile was rising and I loved it. The team was rowing in the same direction and felt my leadership skills blossomed despite having reservations about being able to fill the role. We went on to record results and the problems in the business prior to my leadership were solved. Being nervous is good. It is how you harness that energy that matters.
Just today, I left my comfort zone. I rarely surf anymore. In 7 years, I have been in the water a total of 2 days. When I was surfing a lot, I felt comfortable in the water and would take risks. I did not like my surf session last night and I was in the water watching a far more accomplished surfer in JP (most interesting man alive). He is so fluid and comfortable, nothing like me. Between his guidance and a surf coach at the ranch, I put more pressure on my front foot while in the barrel and got far better results. I stepped out of my comfort zone and it paid off despite losing my contact lens and having a sore knee. However, to be candid, I had a couple wipe outs to get it done properly. I will share those pics when I get them. There was a photographer in the water and will have an amazing picture of it within a few days. Here is a taste. I do like to do things with people who are better than me so I can learn and improve. I don’t like to lose and being with super stars brings up your game.
Today, in “retirement” I am doing a lot of new things and pushing myself between the Rosen Report, speaking engagements podcasts, selling real estate, executive search, hard money lending, expanding my social media presence (shockingly challenging), and some new endeavors which will be discussed in coming reports. I continue to push myself to learn, grow, develop, and expand my network. I realize that leaving my comfort zone is where I thrive. Trying new things and becoming better and smarter is what I appreciate. Making new friendships and learning from people smarter than me are what I love to do.
Push yourself to be better and challenged at every point in your life. I tell my kids that the easy path is rarely the right one. Failing is good. Learn from it. If you never fail, it means you are not challenging yourself. When I look back at my career, my most memorable moments were when I pushed myself out of my comfort zone and excelled despite feeling uneasy during the process.
Quick Bites
On the markets, we have seen stocks weaker due to inflation and geo-political concerns. Powell said there has been a “lack of further progress” on inflation pushing Treasury yields higher with the 2-year crossing 5% briefly. His comments are suggesting higher for longer. Futures are pricing in 1.5 rate cuts in 2024 after pricing in 6 cuts just a few months ago. AMSL earnings dragged semi conductor stocks down Wednesday (1st chart as of 3pm). Stocks were lower today led by chip stocks. The 2ndst chart outlines the S&P 500 Valuation Current Percentile Ranking Relative to History. Oil fell 3% today as the market is discounting further escalation in the Middle East.
I sound like a broken record on deficits, spending, entitlements, debt levels… This WSJ article is entitled, “America’s Bonds Are Getting Harder to Sell.” I wonder why? Foreign buyers have pulled back. The US is issuing a record amount of debt. The high IQ folks in the Treasury Dept refused to term out our debt when interest rates were zero costing US taxpayers TRILLIONS. The CBO is projecting almost $20 trillion more in debt over the next 10 years. Inflation is remaining higher than planned pushing rates higher while we have massive debt maturities. The Fed is essentially selling Treasuries via Quantitative Easing while the Treasury market is weak with high issuance and inflation. Our population is aging rapidly and we have far fewer workers per retiree to support it. In 1940, there were approximately 40 workers per retiree, and today there are 3 going to 2 by 2050. Where does the idiocy end? Do you know what would help? A plan where our fearless government leadership says, “NO MORE.” We are going to do the right thing by the country and slash spending and have entitlement reform (raise the age and means testing). Tough decisions need to be made by leaders. The math will not work any other way.
I have been critical of crime policies and have often cited all kinds of concerning statistics. This WSJ article entitled, “Homicides are Plummeting in American Cities,” shows some nice trends. Homicides in American cities are falling at the fastest pace in decades, bringing them close to levels they were at before a pandemic-era jump. Nationwide, homicides dropped around 20% in 133 cities from the beginning of the year through the end of March compared with the same period in 2023, according to crime-data analyst Jeff Asher, who tabulated statistics from police departments across the country. Philadelphia saw a 35% drop in killings as of April 12 compared with the same period last year, police data show. In New York City, homicides fell 15% through April 7. Homicides in Columbus, Ohio, plunged 58% through April 7. We are seeing a return to pre-pandemic levels and for that, I am thankful. This article goes through 2023 and shows improvement in homicides and other violent offenses relative to 2022: (-3%), carjacking (-5%), but robberies and domestic violence (+2%). Motor vehicle thefts were concerning (+29%).
I love watching greatness in sports. Following elite athletes such as Tom Brady, Gronk, Barry Sanders, Jerry Rice, Jack Niklaus, Annika Sorenstam, Serena Williams, Michael Phelps, Katie Ledecky, Novak Djokovic, Federer, Nadal, Graff, Jordan, Kobe, Magic, LeBron, Gretzky, Jeter, Bo Jackson, Usain Bolt, Messi, Ali, Caitlin Clark… I vividly remember Tiger’s amazing runs in golf in 2000 (10 wins & 3 majors) and 2006 (9 wins, 2 majors and won 6 straight and 7 in a row including 2007). However, the recent run by #1 in the world, Scottie Scheffler is amazing and if he keeps going, we will talk about it as one of the greatest runs ever. He has won three of his last four starts and one 2nd place finish. The Arnold Palmer Invitational, The Players Championship and The Masters was won by Scottie while he finished 2nd in the Houston Open. His ball striking and control have been ridiculous and despite not putting his best, he is dominating. It has been fun to watch and for the good of the game. I hope he keeps it up. This is no fluke; he won 74 times in junior golf between 2004-2010 or approximately 60% of his starts. Nice young man. Congrats on your greatness.
Israel
Iran president warns of ‘massive’ response if Israel launches ‘tiniest invasion’
Israelis flock to beaches, cafes after Iran drone attack: ‘It’s normal life for them’
The article made me realize how lucky we are to live in the USA and not need to fear missile attacks. The strength of the Israeli people is amazing.
Chicago pol slammed for appearing to celebrate Iranian attack on Israel
Google staffers storm NYC, California, Seattle offices to protest $1.2B Israel contract
Other Headlines
El-Erian Says World ‘Frozen’ by Strong Dollar, High US Rates
He said the Fed raising rates is a “real risk.”
Goldman Sachs tops first-quarter estimates fueled by trading, investment banking
The American dollar store has fallen on hard times
Family Dollar announced the closure of 1,000 underperforming stores.
California-based 99 Cents Only is shuttering its 371 stores.
Dollar General’s growth has slowed from earlier projections.
Trump Media shares close down more than 14%, company says Truth Social to launch TV streaming
I crushed this stock which is down 69% since I first commented two weeks ago. I did not think it would fall this fast or I would have shorted it. Down 79% and STILL OVERVALUED at 830 times sales and comps are 5-8 times.
Andreessen Horowitz raises $7.2 billion, a sign that tech startup market may be bouncing back
New poll shows Biden closing gap on Trump — but that’s where good news ends for Democrats
Man slashed in the face at Rockefeller Center subway station in unprovoked attack
NYC block turned into illicit open-air market for migrant crooks, prostitution: ‘It’s relentless’
Brink Of Unrest? Migrants "Flood" NYC City Hall In Protest Of Losing Luxury Hotel Rooms
Brute who slugged little girl in Grand Central was free after another attack days earlier
I have been calling out bad policies since I started writing. Until these cities show there are consequences for crime, it will continue to be chaos and more wealthy people who can leave, will. Don’t be mad that you voted in soft-on-crime DAs, judges, and politicians. Vote them out.
Armed felon could get 7 years in prison after tirade at Brooklyn Dunkin’ Donuts
Read this story about an idiot who pulled a gun over pumpkin donuts.
Watch this concerning video. LANGUAGE.
This reminded me of the movie, Weekend at Bernie’s
How to get rid of NYC rats without brutality? Birth control is one idea
The income everyday Americans earn in every U.S. state—see how your salary measures up
Full listing of each state in the CNBC link.
Those 133,000 split about $20 trillion in wealth between them as of the end of 2023, equating to some $150 million per household, per Bloomberg. The top 0.1 percent now possess 13.6 percent of total household wealth, near a record for this group in Fed data dating back to 1989.
Millennials are moving to these cities – and it’s not Los Angeles or NYC
More young people I speak with want out of NYC, Chicago, LA, San Fran and want a change. These cities need to realize policies matter and people have choices. I feel Larry Robbins said it best and I quoted him Sunday. ‘I know of no business that has generated long term success by driving away its highest paying customers’
NPR Suspends Editor Who Accused Network Of Bias, Issues ‘Final Warning’
88% of workers have sent an email they regret—this 4-step trick will help you avoid it
Caitlin Clark’s rookie salary with WNBA sparks outrage
The 4-year, 338k contract will give Clark $76k in year one. For perspective, the first man in the 2023 NBA draft received a $55mm 4-year contract with $12.1mm the first season. I am not suggesting Clark get NBA numbers, but this discrepancy is a bit much. Clark is getting less than 1% of the NBA equivalent.
Mystery as Underwater Anomaly Larger Than Texas Spotted off African Coast
Just thought this was an interesting chart.
Trudeau, you cannot tax your way to prosperity.
Real Estate
There has been a growing number of articles citing weakness in residential with rising inventories and price cuts in some areas. A record 30% of home listings in Florida saw price cuts in March, according to Reventure. This is above the 2018 peak and significantly above the ~7% low seen in 2022. Meanwhile, home inventory in Florida is at its highest level since 2019. Inventory levels are up 57% over the last year and up 363% from two years ago, according to Reventure. However, at the high end, I continue to see strength in the South Florida real estate market.
The value of a Class A office tower (750 Lexington) in NYC has declined a shocking 83% since 2015. According to Morningstar, the estimated ~$300M valuation from 2015 has been slashed to just ~$50M A $130M loan tied to the building transferred to special servicing back in October for default. My office was at 747 Lexington for my Hedge Fund. The market for these buildings has been hit hard despite what I feel is a nice location near Grand Central. Times sure have changed in the last 5 years.
I was in LA and saw plenty of homelessness, especially in West Hollywood and Santa Monica. Now, the mayor of LA is asking for wealthy to buy housing for the homeless. CA spent $24bn on the homeless with basically no results or tracking of money spent. LA instituted a 4.5% tax on any R/E (residential or commercial) over $5mm and 5.5% tax over $10mm. The proceeds were to be used for low-income housing. The wealthy are already paying for the homeless between the R/E tax and massive income tax. There is NOTHING to get me to ever live in CA.
© 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™ #674 ©Copyright 2024 Written By Eric Rosen.
