Live Life To the Fullest-Learn from Mark Martinez
4-3-24
Opening Comments
My last note was about a funny misunderstanding. The most opened links were “Red Flag” interview phrases and side hustle tip to make extra money.
My family went down to the Miami Design District last Saturday for dinner (review of MaryGold’s coming). We walked around the shopping area that is home to very high-end stores including Alexander McQueen, Baccarat, Bottega Veneta, Bvlgari, Chanel, Dior, Cartier, Fendi, Givenchy, Golden Goose, Gucci, Hermes, Harry Winston, Hublot, Louis Vuitton, Pucci, Prada, Tom Ford and many others. Most people were carrying numerous bags. The spending was out of control and there were lines to get into many stores. Say what you want, but the money in Miami is no joke. It is a fun place to walk around and there are a handful of good restaurants to try in that area: ZZs, Contessa, Mandolin, Swan, Michael’s Genuine, Cote, L’Ateiler De Joel Robuchon, Kith Treats, and others.
Now the RR is read in 49 states and 91 countries. I thought we had an Alaskan signup, but that was not the case. I have readers in Nigeria, Ghana, Tanzania, South Africa, Morocco, Indonesia, Australia, Iran, Turkey and throughout Europe. I recently added China to the list of readers. Someone read the RR from Alaska, please.
Restaurant Review-Imoto At Buccan
I must admit that I find sushi in South Florida shockingly disappointing. Last I checked we catch most of the fish for sushi in our backyard (Tuna, Wahoo, Snapper, Grouper, Amberjack, Kingfish, Yellowtail, Shrimp, Lobster…). The only main missing fish is Salmon that you cannot get near here. Imoto at Buccan in Palm Beach is decent. No, it is not NYC good or close, but for South Florida, it is passable and has a good vibe. I liked the Hamachi Sashimi, King Salmon, and Lobster Potstickers as well as the Sushi. I felt the Spicy Tuna Roll disappointed, as the spicy sauce was not interesting. The Tuna coloring was quite impressive, but not close to the quality in NYC. I would go back again. Just remember, we are in Florida, so it is a low bar. It is fully priced, but I did not find it offensive. The service was snappy and the room was hip enough with a younger crowd. Of note, it was full and we did not sit down until 9pm, which is past the bedtime of the senior citizens in the area.
As a funny aside, an elderly man was getting into his massive Rolls Royce coming out of Buccan next door to Imoto. He was pressing the brake and yelling at the valet that they “Broke my Rolls.” He could not drive given he was hitting the brakes, not the gas. Funny and scary at the same time. Welcome to Palm Beach Island.
Separately, before Imoto, my friend, Beau, and I played tennis and ran into a charity event that his wife, Beth attended. We caught the end of the event and I was speaking with Beth and her friends. Just as we were leaving, one of her friends said, “Eric, you give off the Matthew McConaughey vibe… in a good way.” I started laughing as that was not the first time I had heard this. Another woman chimed in, “I agree.” Beth said, “I have a feeling we are going to read about this in the Rosen Report.” Well, you can count on that, Beth. I do not see any resemblance to Matthew, but he is a big movie star, and many women find him attractive, so I am going to take it. I am getting old and appreciate any compliments at this stage of my life. The fact that I have heard this comparison a few dozen times means there could be something to it even if I don’t see it myself.
Shout out to Max Greyserman, loyal RR reader, who finished tied for 7th in the PGA Tour Event this week after a -10 finish. The rookie had his best performance the year and took him to 106th in the FedEx Cup. You go, Max! Incredible playing. Remember, on your first victory all credit goes to the Rosen Report, not years of deliberate practice. Potential sponsors, I can connect you. Max is an amazing young man with a degree from Duke who is off to a fantastic start on the PGA Tour. The commentators were singing Max’s praises this weekend. He remained poised under pressure.
Markets
Ken Griffin Annual Letter
Great Story of Entrepreneur at 55-Morris Chang
Private Club Mania NYC
Murder Clearance Rates Plummeting in U.S.A.
Guilt Tipping
South Florida-Bezos Spends another $90mm-
Other High End Examples
Another DC Office Disaster
Video of the Day-Ed Sheeran on Natural Talent
Very funny self-deprecating video from Ed Sheeran. Let me be clear, this shows how awful he was early in his career. He claims “Artists are not born with talent.” His voice is worse than mine in his early days, which is almost impossible. Hard work and deliberate practice make perfect.
Live Life To The Fullest
In 2009, I met a young man named Mark Martinez while surfing on a chilly day in May in Southampton, NY. He had a big smile and loved the water. We exchanged numbers on the beach and became fast friends. We both enjoyed surfing, fishing, good food, and fun. Mark was the easiest person to get along with as he was always happy.
It turns out Mark was a high-end contractor who did construction on some of the most important apartments in NYC. The work of his company, Interior Management was impeccable from the units I saw, and I knew quite a few of his clients who raved about him (biggest hedge fund managers and bankers). Sadly, I started my 4.5-year construction project in NYC from hell before I met him. However, he advised me numerous times to get the project on track.
Mark and I fished a lot and he took my son on the famous trip where Jack out-fished both Mark and me despite a broken arm and being 7 years old in June of 2013.
Mark had a philosophy about trying to have a good time whenever possible. He enjoyed life, loved a good time, and hated missing out on fun. Although he took his work and clients seriously, he loved having fun. I would call him last minute when something exciting was brewing and I never recall him turning me down. I remember I had an extra ticket to the Rangers game as a client canceled an hour before the opening face-off. I called up Mark and the conversation went like this: “Mark, it’s Eric. I have an extra ticket to the Rangers tonight. Seats you love. Are you in?”
He replied, “Are you serious? You know I cannot miss an opportunity like this. Of course, I am in. I just need to move something around.”
For Mark’s 40th B-Day, a dozen of his friends went with him to surf in Fiji on the island of Namotu in the South Pacific. I flew to LA and then went off to Fiji in late October of 2012. Does anyone know what happened then? If you said, “Hurricane Sandy hit NYC,” you were right. I was on an island in the middle of nowhere but that is a story for another time. I was panicked about my family in NYC with no real way of connecting as the cell service was virtually non-existent.
The trip was legendary with some fantastic waves and some crazy times. Mark attacked every wave with no fear. At night, I recall him bragging about his “Fiji Tattoo.” He fell on the reef which dinged him up pretty well, yet he was all smiles.
One of the last pictures I took of Mark on the trip.
In January of 2014, 15 months after our Fiji fun, Mark was not feeling well. He went home to take a nap (his wife was in France with a friend) and the kids were at a cousin’s home. Sadly, Mark never woke up. He had a massive stroke. I recall going to the hospital and watching him on a ventilator. I am not sure I ever cried harder in my life. My friend was no longer with us. I thought back to all the great times we had surfing in Fiji, Costa Rica, Hamptons, and Long Beach…the great fishing, dinners, Rangers/Knicks games…I hugged him and walked out of the room devastated. Mark was 41 years old and left behind a wife and two young daughters.
Learn from Mark. He lived each day like it was his last. He gave everything 110% from the way he worked to the way he played and loved. He was a great friend and always there for you. It is hard to believe it has been just over 10 years since he passed. I miss you, buddy. I remember the picture below like yesterday. We just surfed the break, “Restaurants,” and got out of the water. It was the last picture I ever took of Mark.
The lesson here is to enjoy life and don’t let the little things bother you. Be grateful for the blessings in your life. Everything can change instantly, and you need to say “Yes,” more to the fun stuff, because soon enough you won’t be able to. Last summer, I wrote a piece entitled, “Perspective,” which had a similar theme and received a lot of positive reviews.
Quick Bites
Markets sold off to start the 2nd quarter, as bond yields increased and fears of higher for longer prevailed. However, equity markets rallied slightly on Wednesday. The 2-Year is now 4.69% and the 10-Year Treasury hit 4.36% (high since November). Fed President, Bostic sees only one rate cut in 2024. Private payrolls increased by 184k in March, better than expected. However, ADP data is not very predictive in my opinion. Oil is rallying on the heels of Israel’s attack in Syria and fears of Iran repercussions as it approaches $86/barrel. Remember, our Strategic Petroleum Reserve was massively depleted by the Biden Administration and with the rally in oil, they have canceled the plan to purchase some back. Bitcoin sold off in conjunction with higher rates and is now at $66k after hitting $73k+ two weeks ago.
Ken Griffin of Citadel fame wrote his 2023 year-end letter and it was dated April 1, 2024. You can read the full letter here, but I wanted to highlight a couple of things in it. I love the fact that he gave credit to the team for the remarkable success of the firm. That is leadership. The strength of our team is the bedrock of our success. We are dedicated to the continuous strengthening of Citadel’s most vital asset: our people. Griffin then goes into the topic I harp about and it is finally getting more attention: However, as we have cautioned over the past year, the surging U.S. public debt is a growing concern that cannot be overlooked. For example, the Congressional Budget Office estimates that net interest spending will reach 3.1% of GDP in 2023, which is a full percentage point higher than the average from 1974-2023. It is irresponsible for the U.S. government to incur a deficit of 6.4% when unemployment is hovering around 3.75%. We must stop borrowing at the expense of future generations. The Western world urgently needs a significant increase in productivity growth as the burden of rising government debt and entitlement spending strains almost every major economy.
I enjoyed this WSJ article, “He Turned 55. Then He Started the World’s Most Important Company.” The world’s most valuable tech companies were founded in dorm rooms, garages and diners by entrepreneurs who were remarkably young. Bill Gates was 19. Steve Jobs was 21. Jeff Bezos and Jensen Huang were 30. But what might just be the world’s most invaluable company was founded by Morris Chang when he was 55 years old. Never has anyone so old created a business worth so much as Taiwan Semiconductor Manufacturing Company, known simply as TSMC, the chip manufacturer that produces essential parts for computers, phones, cars, artificial-intelligence systems, and many of the devices that have become part of our daily lives. Chang had such a long career in the chip business that he would have been a legend of his field even if he’d retired in 1985 and played bridge for the rest of his life. Instead, he reinvented himself. Then he revolutionized his industry. Chang was such a workaholic that he made sales calls on his honeymoon and had no patience for those who didn’t share his drive. Great story that you are never too old to innovate. I also love his work ethic.
Article entitled, “Members-Only Mania: Why Are More Private Clubs Popping Up in New York?” Private clubs have long shaped the fabric of New York social life. Many of them formed during the Gilded Age, meticulously designed to be showstoppers before Manhattan’s skyscrapers surrounded them. Some of the original clubs still exist, sitting on prime real estate near Central Park and now officially designated as city landmarks. But in recent years, a new wave of clubs, including Casa Cipriani, has proliferated, varying in price point, exclusivity and amenities. These clubs have risen by filling two voids left by the pandemic: the loss of “third places,” or locations distinct from work and home that can foster a sense of community, and the abundance of empty office space amid a new work-from-home culture. The article outlines a ton of NYC private clubs including the Aman, Casa Cruz, ZZs, Soho House, Verci and others. I do believe there is a place for a curated experience with like-minded people and the growth of private clubs has been impressive. Here is another Gotham article on the private club scene. I am all for the idea, I just feel some of them have become out of control on price and not worth the cost of admission.
A reader sent me an article about how murder cases get solved with far less regularity over the past 60 years. The share of murders going unsolved is on the rise in the US, according to the FBI’s Criminal Justice Information Services (CJIS). As the chart shows, 2020 saw a record low of only 54.4% of the country’s homicide cases cleared. A case is “cleared” when either it is solved and the suspected killer has been arrested and formally charged or when the case has been deemed an “exception”, which means the assailant cannot be arrested, whether that’s because they are already dead, imprisoned elsewhere, or for another reason. Two different sources of data below and similar trends show a far lower percentage of solved murders over time. The US has one of the lowest murder clearance rates in the industrialized world as we approach 50% and Germany sees a clearance rate of over 90%. I read that in Finland and Sweden, the clearance rates are over 95%. Multiple articles I read suggested a lack of trust in police and the process makes potential witnesses less willing to give information to help solve the crime. Oakland, CA has a 27% murder clearance rate for perspective.
This CNBC article is entitled, “‘Guilt Tipping’ is getting out of control, but signs show consumers are pushing back.” I must tell you, it is getting incredibly frustrating. Everywhere you go a tip is expected. The fish market, the wine store, the deli and you feel like an idiot not giving anything. What shocks me is many “recommended” levels go from 20-30% for someone who rang up my bottle of water. Nearly 3 in 4 Americans think tipping has gotten out of control, according to a recent WalletHub survey, especially when it comes to the predetermined point-of-sale options. That is up from two-thirds of Americans who had a negative view of tipping less than a year ago, a separate report by Bankrate found. I grew up as a busboy, valet parking attendant, and pizza delivery… and I relied on tips. I felt I was doing a service and my salary was very low with most of my income coming from the gratuity. However, I do not see why I am tipping people who are being paid $20/hr to do their job. It seems as though more Americans are pushing back and tipping less. If you deliver me food or valet park my car, I am 100% in agreement that you should get a nice tip. If you ring up my cookie, I don’t think so.
Israel
Israeli strike on Iran’s consulate in Syria killed 2 generals and 5 other officers, Iran says
I am surprised oil did not rally far more post this attack. $85/barrel. It is +18% YTD, but I thought it would be up more post the news.
'Preparing strikes on Israeli embassies': The coming Iranian response to Syria strike
The Middle-East is escalating and the markets are not factoring that in yet.
Israelis stage largest anti-government protest since the war in Gaza began
Jewish freshman’s face plastered on anti-Israel flyers at Rutgers in act of ‘unabated antisemitism’
I have spoken with dozens of Jewish parents and the list of schools we will not send our kids to is growing. Jews donated disproportionately to philanthropic endeavors. At 2% of the US population, how many named buildings are there at major academic institutions? Far more than 2%. The long-term impact to colleges and universities will be severe.
Pro-Palestinian protestors harass Jewish woman in NYC
Read the vulgarities they called the Jewish women. Hamas raped and mutilated women while killing babies.
Other Headlines
BOE Warns That Investors May Be Too Complacent About Risks
The Bank of England on Wednesday warned that investors may be too complacent about the challenges facing the global economy, with the result that there is an increased risk of a “sharp correction” in asset prices.
Bitcoin could soar to $150,000 this year, hedge fund manager Mark Yusko predicts
He cites the “halving” of the mining reward in April as one of the catalysts.
The global gas glut could reach multi-decade highs in the coming years, Morgan Stanley says
Tesla shares drop 7% on first-quarter vehicle delivery and production report
Q1 Deliveries were #386k vs estimates of 443k. The stock is -32% YTD and -60% from the highs.
Ulta shares fall as CEO warns beauty demand is slowing (Stock -15%)
Rubrik files to go public as tech companies see thawing of IPO market
Trump Media shares fall sharply after company reports net loss of $58 million in 2023
I wrote extensively in my prior two notes about how overvalued this crap company was. Despite a 31% drop in share price from peak, it still has a $6.6bn market cap which remains likely $6bn too high. Remember, it was $10bn last week. With $4.1mm in revenue, it is valued at over 1,600 times sales despite the sell-off. Twitter is valued between 5-8 times sales. Does anyone see a mispricing here?
Calif. $20 wage increases for fast food workers to begin Monday — here’s how it will impact stores Some items are costing almost $2 more now.
AT&T is investigating a leak that put millions of customers’ data on the dark web
Joe Biden Is Funding Border Security In Foreign Countries As U.S. Border Exceeds Record Numbers
I wrote about this briefly when the $1.2 trillion spending bill passed, but this shows more details. So many of our bills provide HUNDREDS of millions to secure the border of other countries while the US does not have a border. Also, we are running $2 trillion deficits in perpetuity. We need fiscal responsibility and focus on our own country. $380mm for the borders of Jordan, Lebanon, Egypt, Tunisia and Oman?
Trump posts $175 million bond in New York civil fraud case
The bond, reduced from the $464 million judgment that was originally due 3/25, prevents the seizure of Trump's assets while the case is under appeal.
Steve Cohen says his financial firm can already save $25 million by using AI
OpenAI can clone voices with just 15 seconds of audio
I am begging all my readers to proceed with caution. DO NOT TRUST what you hear. A lot of it is manipulated with AI. If it does not seem right, verify. A CFO was just duped out of $25mm through deepfakes.
Why Are Older Americans Drinking So Much?
An analysis by the National Institute on Alcohol Abuse and Alcoholism shows that people over 65 accounted for 38 percent of that total.
Kia recalls over 427,000 Telluride SUVs because they might roll away while parked
This is my car!
Given the Rosen family has been on college tours, I have more data. I was surprised that some schools told us up to 64% of the undergrads were women (Tulane), while Emory was 57% women in undergrad. The University of Arizona has 69% women.
How Gen Z Is Becoming the Toolbelt Generation
Vocational programs are booming while traditional colleges & universities are struggling to attract students. Students studying construction trades were +23% last year. With the cost of a 4-year degree skyrocketing, more are looking for alternatives.
I beg my younger readers to save money and not build card debt or BNPL plans absent emergencies. We live in an instant gratification society and social media does not help matters.
America is 23rd on the list of happiest countries, down from 15th the prior year. Most surprising about the data on happiness is that the most unhappy demographic is people under 30. But no matter which age bracket you look at, people are feeling depressed. Financial stress is one reason so many Americans want to move to another country.
For the first time in my life, I have spent as much time watching the women’s basketball tournament as the men’s thanks to Caitlin Clark.
My biggest contributor, Robert, sent me this chart about the Super Bowl showing 123mm viewed the game and a commercial was $7mm:
I thought this chart on slowing restaurant traffic was interesting.
Erdogan Suffers Historic Loss in Turkey Municipal Elections
Support for Erdogan’s ruling party is at lowest on record.
Taiwan's strongest earthquake in 25 years kills 9 people, 50 missing
Real Estate
The calls for off-market properties are skyrocketing given there is such limited inventory. I received calls from two buyers looking for things not listed on Palm Beach Island within 18 hours. The Multiple Listing Service has little or nothing to show at the $20-25mm price point on the Island. Many transactions happen without ever being formally listed, and I am uncovering more opportunities through relationships from Miami to Jupiter.
Jeff Bezos bought his 3rd South Florida home for $90mm in Indian Creek after paying $147mm for land in the community. The $90mm property last sold for $2.5mm in 1998 (the house was built since). I feel confident that the house is not worth $90mm, but when you are worth $200bn, who cares? Bezos wanted a house while he was building his new mansion around the corner. There is a rumor that Bezos also bought a huge place in Palm Beach for what I believe would be the most expensive sale in the USA. The article makes some suggestions. I am told it may have been a $350mm sale.
A Palm Beach Island home built over 20 years ago on the Intracoastal sold for $75mm off the market. I am told the house needs a lot of work but has a nice elevation. Welcome to Palm Beach Island.
The Four Seasons Surf Club PH sold for $44mm as well. The Bristol in West Palm just had a $29mm sale. Two buyers split a $132mm La Gorce Island (Miami) property as well. I know a major hedge fund manager had bid on this property at about this price two years ago. The number of properties over $80mm that sold in Miami and Palm Beach recently is bonkers.
Another Washington DC office building has just sold at a massive ~75% discount to what it last sold for. The 175k sq ft tower at 1101 Vermont Ave sold for $16M. The building last sold for $60M in 2006 The assessment value in 2018 was $72M in 2018. Washington DC has been among the hardest hit office markets in the US with absolutely no rebound in sight. I want to add that since 2006, the inflation-adjusted value of the $60mm cost would be $94mm. So the building value effectively fell from $94mm to $16mm or a decline of 83%.
© 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™ #670 ©Copyright 2024 Written By Eric Rosen.
