Opening Comments
My last note was about being disconnected from technology. The most opened links were Bill Ackman’s slides on the debacle at Harvard and the article about the billionaire who is predicting a black swan event for markets.
Hurricane Milton intensified to a Cat 5 (220mph wind gusts Tuesday) and will hit the West coast of Florida as a Cat 4 late Wednesday. An article suggested it was the 3rd strongest storm in Atlantic history. Some areas of Florida are expected to receive 18” of rain and 18’ of storm surge. Nearly 1,500 Florida gas stations are out of fuel as of Wednesday morning. Schools in Palm Beach were closed on Wednesday and Thursday. Generator company, Genrac rallied sharply this week in light of the storm. The stock is +20% over the past month and 34% YTD. This link lists the 42 storms that have reached Cat 5 status in history. Lucky for Southeast Florida, we should largely avoid the storm. I expect some rain and manageable winds. There have been some tornadoes in Southeast Florida.
Markets
IPO Market Update/Stocks During Election Years
Google Ad Search Market Share Declining
Six-Figure Earners Who Don’t Feel Wealthy
TSA PreCheck/Global Entry/Clear
Hurricanes Causing Floridians to Rethink
Hong Kong Apartment Sales at Discounts
Family Buys 100-Year-Old School House
Video of the Day-Life Lesson From Sophia Loren
For those who live under a rock or are too young to know, Sophia Loren is an Academy Award-winning actress from Italy. She was a megastar and viewed as one of the most beautiful women in the world. This short video clip is a riot told by a man given the job of picking up Loren from Kennedy airport in NY. His boss told him to take a limo, bring a 2nd car for her luggage, and be sure paparazzi were there to take her picture. “They don’t need film, we just need her to believe they are taking her picture,” the boss said. Loren came out at the airport with a ton of bags and the man tasked with picking her up asked her why she needed so many bags for a 2-day trip. Loren responded, “Well, there is nothing in most of it. Did you see those photographers? I am a star; they expect it.” She went on to teach the man this lesson: “It’s 50% what you are and 50% what they think you are. There has to be magic.” Here are pictures of Loren over the years. I have often written about “Smoke & Mirrors” on social media. Don’t believe what you see. I know of people on social media who buy thousands of dollars of clothes, hide the tags, put tape on the bottom of the shoes and hire photographers to take pics. After they are done, they return the clothes. Don’t believe me? Just ask Sophia.
Catch Miami
The economics of restaurants are getting more challenging for me to comprehend. For high-end restaurants, the build-out costs of the space, food, labor, rent, insurance and food waste all make it challenging financially. Although I appreciate going out to eat at a good restaurant, I struggle with the economics of how it makes business sense and am growing increasingly frustrated with the price of a meal.
Catch Hospitality Group built out the space in South Beach, more specifically SOFI, at the base of the Continuum building. Estimates are build-out costs in the $20mm range for the 23,000 ft restaurant. The dining rooms and bar are VERY nicely done in green and brass. The finishes are exceptionally appointed, and it feels like you are in for a special evening. The presentation of the food was amazing and the service was top-notch. The wait staff goes through a rigorous training program, and it shows. Of note, many reviews suggest the service was awful, but that was not my experience. Overall, I felt the food was good, not amazing, and the price was full. I felt the same way about the NYC Catch in the Meatpacking District.
We started with a bunch of appetizers served family-style. The food was brought out in short order and the presentation was beautiful. All the appetizers were good enough, but nothing was amazing. I did enjoy the Rainbow Sashimi Pizza which was light and eaten in a hurry. Julia’s favorite was the sobe roll with bluefin toro, Japanese snapper, yuzu miso in daikon radish wrap. The crispy shrimp and crispy cauliflower were fried and a bit heavy but both plates were cleaned. Shockingly small portions for the price point.
For entrees, the branzino for two, a whole fish served wtih chimichurri, was one of the better fish I have had recently. I enjoyed my king salmon over edamame puree, smoked dill, and spring vegetables. I ordered it medium rare and the chef did not disappoint. Again, all dishes looked like a work of art. The lobster mac and cheese was quite small for the price, but felt the breadcrumbs added much-needed texture.
For dessert, we had the carnival, which is warm ricotta donuts with various frosting options. The carousel-like appearance made the dish more special. I ate 2.5 of the donuts because they were so they were good. The “Hit Me” chocolate cake with white chocolate ice cream, brownie and devil’s food cake was different and devoured.
Overall, Catch Hospitality does a lot of things right at their Catch Miami Beach location. The decor was top-notch, as was the service and food presentation. Although the food was solid and I would go back, I was not blown away by it, especially for the price. The wine list is strong but expensive. Valet parking in peak season could result in a 20-minute wait for your car, given they park 5 blocks away at times. It is also $25 to park. Also be aware: they automatically added a tip to the bill. Scores below are out of 10.
Food-8
Ambiance-9
Service-9.5
Cost-Fully Priced
Quick Bites
On Monday, Stocks sold off due to rates increasing and Middle East developments. 10 year hit 4%. Since the rate cut 3 weeks ago, the 2-year yield is +41bps to 4.01% and the 10-year yield is +42bps to 4.07%. However, stocks rebounded on Tuesday and Wednesday, with new highs for the S&P 500. The VIX hit 23 early in the week, after being 12 in July. NVIDIA stock is +25% in the last month ahead of tech earnings. Oil rallied on Middle East tensions and traded over $77/barrel before settling at $73. WTI is now +11% since September 26th.
I thought this was an interesting Tweet and chart on the struggling IPO market. The value of IPO deals is sitting near its lowest levels since the 2008 Financial Crisis. Since 2021, the 12-month moving average of monthly IPO deal value is down 90% to just ~$3 billion. Even as the S&P 500 has made 41 new all-time highs this year, IPO volume is crashing. The 2nd chart shows S&P monthly returns since 1950 showing all years and then election years in yellow. The S&P outperforms in November in election years.
Great WSJ article about Google losing its grip on the search advertising market. I am very happy to see this, as I felt Google was too dominant. Google’s grip on the nearly $300 billion search advertising business is loosening. For years, the tech giant has seemed invincible in this corner of the ad market, which is the foundation of its business. Now, rivals are beginning to eat into its lead, and new offerings—fueled by the rise of artificial intelligence and social video—threaten to reshape the landscape. TikTok, the wildly popular short-form video platform, has recently started allowing brands to target ads based on users’ search queries—a direct challenge to Google’s core business. Perplexity, an AI search startup backed by Jeff Bezos, plans to introduce ads later this month under its AI-generated answers. On October 8th, it was reported that the DOJ indicates it’s considering Google breakup following monopoly ruling. This process is likely to take years.
Interesting WSJ article about the wealthy not feeling rich, entitled, “Meet the HENRYS: The Six-Figure Earners Who Don’t Feel Rich-When you’re a HENRY—high earner, not rich yet—a hefty salary isn’t enough to buy freedom from financial pressure.” New census data show 14.4% of U.S. households bring in $200,000 or more a year, a near record. Yet the money doesn’t have the buying power those earners wish it did, partly due to the rising prices hammering us all and partly due to the supercharged costs of things like houses and cars. HENRYs describe feeling stuck on a hamster wheel—a nice one that other hamsters envy—but running in place nonetheless. Inflation has been brutal. The cost of healthcare, private schools, food, travel, and property and casualty insurance have hurt many families, even wealthy ones.
This CNBC article compares TSA PreCheck, Global Entry and Clear. I have all three and recommend all of them. TSA-Pre Check is the most basic. Clear is great where they have it available and Global Entry is amazing for international travel. When I was in New Orleans a couple of weeks ago, my flight was at 9 pm and both TSA PreCheck and Clear closed at 7 pm. The regular line was 250 people long with ONE person checking ID’s. It took 30 minutes to get through the line. Yes, it was irritating.
2024 Election
Harris was interviewed on 60 Minutes. The interviewer asked probing questions and pushed her on the border issues. I did not feel Harris impressed, and it turns out 60 Minutes edited out some of her answers when they published on YouTube. She also dodged the border questions.
CNN Reporter Warns Kamala Harris Campaign Looks ‘Like a Loser’
Just 28% of Americans think that the United States is currently headed in the right direction under its Democratic leadership. Enten said that this a problem for Harris, the party’s nominee, given that, on average, this figure sits at 42% in years when the incumbent party wins & 25% when it loses.
Trump’s Plan Boosts Budget Deficits by $7.5 Trillion, Double Harris’s Proposal
This WSJ article outlines broad ranges for both candidate’s budgets. I do not feel tax cuts should be on the table given our massive deficits. Both candidates are forecast to add a material amount to the deficit. We just cannot afford to be so fiscally irresponsible anymore. As you can see, both parties run deficits and the last surplus was under Clinton, 23 years ago.
Trump’s 7 Secret Calls and Personal Gifts to Putin Revealed
Bob Woodward (Watergate fame) is reporting this.
Walz’s Minnesota: Almost 70% of Eighth Graders Not Proficient in Math
In 2022, the results of statewide assessments revealed that only 41% of 4th grade students throughout the state were proficient in math. Only 32% of Minnesota fourth graders tested proficient in reading. For 8th grade reading, a total of 30% of eighth graders were proficient.
Walz says Electoral College 'needs to go,' but Harris campaign says that's not its position
Putin’s ‘Merchant of Death’ Is Back in the Arms Business. This Time Selling to the Houthis.
I was extremely critical of this “swap” of WNBA star, Britney Griner, for the Merchant of Death when it happened in 2022. Bout is now selling arms to the Houthis, who are firing missiles at US ships.
An American education: Classrooms reshaped by record migrant arrivals
The arrival of more than half a million school-age children since 2022 has strained school budgets and left teachers grappling with language barriers, a Reuters survey found.
FBI arrests Afghan man who officials say planned Election Day attack in the US
Kamala Harris' husband Doug Emhoff faces explosive new allegations from his time at top LA law firm
Fairly aggressive accusations about Emoff’s behavior in his law firm about the treatment of women. It is fair game given how the media crushed Melania for her accent despite speaking 4 languages, “modeling” and any initiatives she offered. Melania called herself, “the most bullied person in the world.” Emoff’s alleged behavior is far worse (accusations of domestic abuse, fathering a child with the nanny while married, and misogynistic behavior at his law firm).
Israel/Middle East
Monday was the 1st anniversary of the horrific attacks in Israel. Senseless murders and rapes of innocent civilians have shaken the Jewish community globally. I feel less safe today than one year ago. There were protests in NYC on October 7th (celebrating the attacks) and signs that read: “Germany 1945. Finish the job” and “White Jewish trash go back to Poland.” A pro-Israel man was left bloodied by the pro-Palestinian protestors. Since the attacks, 61% of American Jews have encountered antisemitism. Campuses across the country have had anti-Israel protests and made countless students feel unsafe or worse. My thoughts are with the families who lost loved ones. I only hope that Israel has the strength and support to end Iran’s ability to fund terrorists and build nukes. There are still 97 hostages, including 4 Americans, being held by the terrorists. Yet, many US Muslims deny Israel’s right to exist and do not want the US to aid Israel.
Esmail Qaani missing: Did Israel kill Soleimani's successor in Beirut?
Hezbollah fires over 100 rockets at Israeli civilians in Haifa
I interrogated Oct. 7 mastermind Sinwar for 180 hours — there can be no peace as long as he lives
Read this story and you will be sick about how demented someone can be. The amount of Jew hate is disgusting. He had kindergarten-aged kids playing a game to hunt and kill Jews.
Columbia donations drop nearly 29% to $21.4M in wake of anti-Israel protests
As a group, I find Jews to be far more philanthropic than most other groups. When you consider the US population is 2% Jews and see the names on schools, museums, hospitals, parks, and other structures, Jews are far more prevalent than their size in society. This article shows half of the most generous philanthropists in the US are Jews. Think about that, they are 2% of the population and represent 50% of more charitable people in the US. I am glad Columbia and other Jew-hating schools are suffering. Think of the donations to Harvard, Penn, Columbia, Stanford, Michigan, Hopkins, Albert Einstein School of Medicine, UCLA and many other schools who received hundreds of millions or billions from Jews. Let’s not forget the Columbia alum who decided to give $260mm to an Israeli university rather than to Columbia, given all that has gone on there. This article outlines some major donations from Jews to Ivy League schools.
Antisemitism is exploding — because we’re teaching hate in public schools
Anti-Israel protester lights himself on fire outside of White House, video shows
Social Darwinism at its finest.
NJ high school accused of banning yellow ribbons honoring Israeli hostages: ‘Blatant antisemitism’
Other Headlines
China’s Stock Market Fever Breaks as Authorities Disappoint
After peaking on October 8th. the CSI China Index is -11%.
Corporate Insiders Are Sitting Out the 2024 Stock-Market Rally
Warren Buffett, Jamie Dimon and Jeff Bezos are among the business leaders exhibiting caution
Private Credit to Outperform in a Downturn, Apollo’s Zelter Says
Private credit has “better companies, larger companies, better covenants, better structure” than public markets.
I have been writing about this. The automation angle could be a deal breaker. Watch this negotiation carefully. Many U.S. ports remain laggards on automation compared to the rest of the world, and the union has used aggressive rhetoric in discussing it, with Dennis Daggett, executive vice president of the ILA and ILA president Harold Daggett’s son, calling automation a “cancer.”
China’s Drive for Global EV Dominance and the Roadblocks It’s Facing, in Charts
Super Micro shares soar after server company says it’s shipping over 100,000 AI GPUs per quarter (Stock +15%)
Squadron of squatters ‘terrorized’ NYC neighborhood after taking control of $4M brownstone
NYC homeowners don’t have enough rights.
Sledgehammer-wielding men smash window of Upper East Side Chanel store
This is at 64th and Madison.
‘Tren de Aragua’ migrant gangbangers busted for pistol-whipping woman during $75K jewelry heist
Another example of how a poor border policy impacts innocent Americans.
Decorated off-duty Atlanta officer Aubree Horton shot, killed while breaking into neighbor’s home
Crazy story of a former “Investigator of the year” who broke into a neighbor’s home and was shot and killed. It is believed he had a mental health episode or was on drugs.
Mexico mayor’s decapitated head found on his car six days after taking office
Lawyer for Diddy child accuser vows to out famous accomplices 'we all know'
All Chicago School Board Members to Resign Amid Budget Chaos
The Chicago public school budget is $9.4bn. 31% of Chicago public school elementary school students are proficient in reading, while 19% of 3rd-8th graders were proficient in math. A lot of this country’s problems are solved with education.
Sweden told people to open their hearts to immigrants 10 years ago. Its U-turn has been dramatic
Interesting article on Europe’s changing stance on accepting immigrants. Sound familiar?
Special ops vets form ‘Redneck Air Force’ to ferry aid into NC mountains after feds come up short
People are getting salmon sperm injected into their faces. Why?
Where does the lunacy end? I am pretty sure Kardashian has had more beauty-enhancing procedures than I can count. I would never know she is the same person from 20 years ago.
Women will be having more sex with ROBOTS than men
Rotten Tomatoes gave it a 33%.
Real Estate
Given the hurricanes in Florida, more people are questioning home ownership in the state. This Business Insider article outlines the issue. Insurance is getting harder to find and the prices have increased 300-400% in many cases. Good luck getting an older home on the water covered for hurricane damage. The article suggests that the cost of insurance is impacting the selling price of homes. More insurance providers have pulled out of the state and those that have remained have aggressively increased prices. Remember, give Kevin Lang from Lang Insurance a call (866-964-4434) and he will be sure you get the best coverage. He focuses on higher-end coverages for property and casualty in all 50 states. Dozens of Rosen Report readers have signed up with Lang Insurance and I have received many thank-you notes citing his responsiveness and cost savings.
Sun Hung Kai Properties Ltd., Hong Kong’s biggest property developer, sold more than 200 apartments in one day after it offered the units at a discount to boost sales. All of the 204 homes available for purchase at the Cullinan Sky project — located in the Kai Tak area of the city’s former airport — were sold on Saturday, according to a representative of the developer. The first batch of flats in the 906-unit development was priced 20% lower than nearby new projects.
Cool CNBC story of a family from NYC that bought a 100+ year old school house near Indianapolis sight unseen and completed a ton of renovation to make it their home. They paid $175k for the schoolhouse. The family started a social media campaign sharing the development of their dream home. Great videos and a comprehensive history of the construction. I love exposed brick inside a home and they did a very nice job on this massive project.
© 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™ #724 ©Copyright 2024 Written By Eric Rosen.
