My Birthday Drama-Lost Phone & No Black Friday Sale
12-3-23
Opening Comments
My last piece was about the private credit-increasing opportunity set I have seen recently. The most opened links were the sommelier opening up the old bottle of wine by breaking it and early retirement regrets. I happened to like the links about Charlie Munger who had just passed at 99 years old showing his three basic rules and his life story.
On the heels of my last note, I saw a newer private credit-related chart from Bloomberg I thought I would insert.
I do my best to respond to 100% of the emails and questions I receive. Because I am an idiot from a technology perspective (among others), I seem to lose emails and check drafts, junk, and spam and they are nowhere to be found. I was sending a reader a response concerning estate planning and I cannot find any part of it. If you sent me a question on that topic or ANYTHING else and I did not respond, please resend to rosenreport@gmail.com. Apologies. If I did not respond to a question it means I did not receive it or it disappeared into the ether.
I mentioned I would be launching a job site. A big focus will be trying to find summer internships for college students at NO CHARGE. I mentor many kids and always try to assist them in their professional and personal development. I have a dozen Rosen Report readers who have chipped in to help speak with some of these kids and can always use more from different fields. I spend hours each week with college-aged and young professionals trying to advise and help them on their careers. I truly hope with your help, we can do more to assist college students with developing their careers. I will also be doing a job board with resumes for permanent positions at a fee. I have a handful of amazing resumes of extremely talented professionals I am assisting in their job search. Right now, I am working with a senior CIO-level investment professional, a former hedge fund manager, CFO candidate (Lawyer/Accountant), a young consultant from a top firm, and a few others. The company hiring will pay me a placement fee. I will be bringing in various other executive recruiters from time to time to help place people as well. I received the 2nd iteration of the site and am making some adjustments for a more complete Beta site shortly. I need the support of companies to post opportunities for jobs and internships. I will have a referral program for those who refer companies or people that results in a successful placement.
I will likely do an upcoming piece entitled, “Boys Night Out,” about Thursday night’s fun in Miami at Klaw (drinks) and Casadonna (dinner) with my good friends from Boca. Brightline down to Miami and Uber home was the way to go. I will only say that Groot Hospitality (LIV, SWAN, KOMODO, GEKKO, Papi Steak..) and TAO Group (TAO, Hakkasan, LAVO, Beauty & Esses, Legasea Bar & Grill…) sure got it right on the ambiance, vibe, and scene at the Miami HOT SPOT Casadonna. The food was far better than I expected and it was a great night. DO get the Tuna Carpaccio, Bolognese, Chicken Diavolo, Dover Sole. 100% chance I go back. If you go, sit outside at both restaurants. Young, hip, cool best describe them both. This sounds like a strong statement, but after going to Casadonna, I think it is the hottest spot in Miami today and among the hottest in the country. I cannot fathom it during Art Basel this week. My friend went last night at my suggestion and was blown away by the ambiance. He could not get a table despite his generosity.
Markets
The Great Wealth Transfer
Crowded Multi-Manager Trades
Tiger Global Private Valuations
Kissinger Died
Discounted Pierre Co-Op Sale
Zombie Malls
Nashville is Growing
Video of the Day-Musk on Advertising Boycott of Twitter/X
I believe Musk is the single most important person in the world today. I appreciate his brilliance, engineering acumen, and visionary skills. Although I find his straight talk and attitude refreshing, in my opinion, he could be a bit more CEO-like in his presentation and commentary. This short video shows Musk’s response to the advertising boycott. He uses strong language and although I am not the biggest fan of Andrew Ross Sorkin, I felt he did an amazing job of trying to push Musk. “If somebody’s going to try to blackmail me with advertising? Blackmail me with money? Go f--- yourself. Go. F---. Yourself. Is that clear?” X owner and CTO Musk said during the interview. He talks about bankruptcy again. I think Musk sounded a little weird.
My Birthday Drama-Lost Phone & No Black Friday Sale
I think my clearance sale shopping skills have me in the stratosphere with Michael Jordan. I am the best of the best when it comes to sale shopping. I wrote a piece entitled, “You Had Me At Clearance Sale,” which was very well received and I have written extensively about my remarkable ability to find deals.
Each year, I look forward to the Black Friday Sale at my golf club in South Florida. I arrive early on Friday am to be among the first to get a look at the sale rack and pick out the best values of the top golf clothing brands. On Thursday, at Thanksgiving, I was excitedly talking about the sale and when I woke up early Friday, Jack and I headed to the course.
I said hello to the managers in the front and darted down the steps to the location of the sale racks as they have been there for the past 6 years. To my shock and disappointment, there was NOTHING THERE. I repeat, NOTHING THERE. No sale racks. I started hyperventilating. This must be some cruel joke, I thought to myself. I asked the new pro shop employees about what was happening and they dared to tell me, “There is no sale this year.” I almost passed out. I felt weak, but I powered through it as professional sale shoppers do to find the Director of Golf. He started laughing when he saw me in panic mode knowing I was the KING of said sale. My clearance sale shopping skills are so famous, I sign autographs and pose for pictures as though I am a Hall of Fame athlete. My wife called me about this time and asked excitedly, “What did you get?” I screamed, “NOTHING! NO SALE. CODE RED. NO SALE.” I was in tears as my elite sale shopping skills could not be showcased for the world to admire.
Adding insult to injury, my birthday was the next day, and thought I might buy myself something, but NO. The words “Full Price” are against my religion. I proceeded to call my lawyer to see if there was the possibility of a lawsuit. Clearly, I need new legal representation as he did not think I had a real case. After 6 straight years of a sale there was a precedent and cutting it off without warning has to violate some obscure law. We can all agree if nothing else, that the laws of common decency were violated.
I went to the new GM and petitioned for a Black Friday Sale, a tradition the Rosen family came to love and appreciate. He too had an unsupportive response. He asked, “When are you going on holiday? The racks will be out the day after you leave.” It is akin to making Augusta “Tiger Proof.” They lengthen the tees and trick up the course so Tiger cannot bomb his way around the course and win by 12 shots. They have to put sale racks out only when I am out of the country to level the playing field. Don’t they know I will find out and use FaceTime to clear the racks in my size? You cannot stop greatness. The Jordan Rules did not stop MJ and General Managers cannot outmaneuver the greatest sale shopper ever. I am unstoppable in this regard.
The next day, I picked up my friend, Patrick, at the Brightline and then to the course. The employees were all talking about the lack of a Black Friday Sale and giving me crap. I had my phone with me and remember putting it in my golf bag when we teed off. On the 5th hole, I wanted to check my phone given it was my birthday as I was getting many messages. My phone was nowhere to be found. I asked the caddy to reach out to the pro shop to see if anyone turned it in. NO JOY.
At the turn, I went into the clubhouse and retraced my steps and nothing. On the back 9, I said, “I think the manager must have my phone and is playing a joke on me because of the Black Friday Sale thing.” Patrick and the caddy laughed and agreed that must be it as we were all talking about it at the club. I am now without a phone for 3 hours and have developed a slight tick as a result of the withdrawal symptoms. I get hundreds of emails and texts 7 days a week from my readers and given it was my B-Day, I was getting even more.
After the round, I went back into the pro shop and it was clear no one had the phone or they should be nominated for an Oscar. No chance these guys could have been so stone-faced if they had my phone unless Merrill Streep was giving them acting lessons…. for 20 years.
I used the Find My Phone app and started beeping it. A member on the course heard it and found it in the trees on #3. I hit my drive into the trees on that hole and the caddy drove the cart over to find my ball (Patrick and I walked). The cart must have hit a root launching the phone out of my bag and into the pine straw. It is a miracle someone found it.
I later told the managers that I thought they were playing a joke on me with my phone and everyone had a good laugh. All I know is this no Black Friday Sale better be a one-time thing and next year I want to see 10 sale racks all in my size with the following sign:
Quick Bites
The S&P 500 soared to a closing high for 2023 on Friday, extending November’s rally into the new month. The broad market index rose by 0.59%, ending the session at 4,595. The Nasdaq advanced 0.55% to 14,305.03. “There’s a trifecta of drivers here. The first is the inflation. Second is the Fed seeming like it may be stepping to the sidelines, and then third is this cooling in the economy that is starting to unfold, but at a very gradual pace,” said Mona Mahajan, senior investment strategist at Edward Jones. Oil prices were down on Friday following a 2% drop on Thursday, with the market seemingly unconvinced that the latest round of production cuts by the OPEC+ coalition will be able to lift prices out of their recent slump. OPEC+ will reduce production by 2.2 million barrels/day in the 1st Q of 2024.
In my last piece, I wrote about estate and inheritance taxes and the topic alone generated over 100 emails, calls and texts with questions. A reader sent me this interesting UBS report entitled, “UBS Billionaire Ambitions Report 2023: The Great Wealth Transfer,” which suggests billionaires accumulated more wealth through inheritance than entrepreneurship last year. “This is a theme we expect to see more of over the next 20 years, as more than 1,000 billionaires pass an estimated USD 5.2 trillion to their children,” said Benjamin Cavalli, Head of Strategic Clients at UBS Global Wealth Management.” A total of USD 150.8 billion was inherited by 53 heirs over the last year, exceeding the 84 new self-made billionaires’ total of USD 140.7 billion. The link gives details by geographical region. Be sure to think about estate planning, trusts, charitable donations and where you domicile. I have ZERO faith that the government will ever do the right thing with my money or yours. Dying in a state with high estate/inheritance taxes without a proper estate plan is criminal. I don’t care who you give it to, but not to the state and Federal government. This CNBC article outlines the UBS report as well.
Interesting Bloomberg article entitled, “Citadel and Its Peers are Piling Into the Same Trades and Regulators are Taking Notice.” These multi-manager platforms have exploded in size and given the use of leverage, they have substantial positions. I can speak for the illiquidity of the credit markets given that was my world for 30 years. Most investors complain about the liquidity in the credit markets today. Multiple credit managers have told me stories of a multi-manager pod that is forced to cut risk and sell bonds that caused sharp price drops. The other managers who own the same bonds then get under pressure as well. One solution here is allowing dealers to take more risk. Excerpt from the article: Multimanager funds like Griffin’s Citadel have come to dominate the hedge fund industry, riding a steady run of outperformance to oversee more than $1 trillion, including a healthy dose of leverage. But the explosive growth has led the industry giants to pile into many of the same trades. That has built unease among regulators, investors and traders over these so-called pod shops. And while Citadel’s billionaire founder has vocally opposed any notion that his firm and rivals pose systemic risks and need more regulation, even he acknowledges that crowded trades could lead to widespread losses if all of them head for the exits at once. “Could you see the multimanager hedge funds take a joint 10, 15, 20% hit to their equity? It’s possible,” Griffin said. I remember when Citadel was crushed during the GFC and it looked as though they may not make it. However, Griffin has bettered the competition with remarkable returns and growth since, averaging 19% returns since inception or 500bps better than the next competitor, Millennium.
I have written extensively about the valuations of private investments and how they are being valued by funds. I had heard many stories of funds carrying investments at unrealistic valuations in the new world. This Bloomberg article primarily outlines some recent markdowns at Tiger Global, but make no mistake it is an industry-wide issue. Investors in Tiger Global Management’s biggest venture fund were sitting on an 18% paper loss at the end of September after the firm slashed valuations for multiple portfolio companies, according to people familiar with the matter. The nearly $13 billion Private Investment Partners 15 fund marked down AI-powered email company Superhuman by 45% and cut its valuation for privacy search engine platform DuckDuckGo by 72%, said the people, who asked not to be identified because the information is private. Tiger Global also marked down its stakes in Bored Ape Yacht Club, a collection of nonfungible tokens, by 69%, and NFT marketplace OpenSea by 94%, the people said. All of the figures represent how much Tiger Global has written down the valuations since first investing in each company. Tiger Global cut valuations in its venture funds last year by about 33%, resulting in a $23 billion decline in value. The venture capital industry is facing a reckoning as startups struggle with cash flows amid higher interest rates. Philippe Laffont’s Coatue Management also slashed its internal valuation for OpenSea by 90%, and marked down its stakes in Calendly and Notion, Bloomberg previously reported.
The past week, we have seen the passing of Charlie Munger and Henry Kissinger at 99 and 100 years old respectively. I have already written about Munger so I will focus on Kissinger here. Kissinger, a Jewish refugee from Nazi Germany, reached the pinnacle of the American political establishment and in turn became an unlikely household name. He was secretary of state and national security adviser under two Republican presidents, Richard Nixon and Gerald Ford, and advised powerful leaders in both American political parties for decades. He is also viewed as having helped to create the post-WWII world order. He came to be seen as one of the leading diplomats and international relations intellectuals of the 20th century, an exponent of “realpolitik” who orchestrated the normalization of relations with China and helped ease tensions between the U.S. and the Soviet Union. Kissinger won the Nobel Peace Prize for negotiating the settlement that ended the Vietnam War, jointly receiving the award with Le Duc Tho of North Vietnam, who refused the honor. Kissinger helped open diplomatic relations between the U.S. and China during the Nixon administration in the early 1970s. But he was also one of the most singularly reviled public figures of his age, one whose legacy is inextricably bound up with bloodshed around the world. In the eyes of his critics, he was synonymous with the brutality of American power and some of the costliest foreign policy decisions in modern history. The link above is worth a read as it goes over all things Kissinger from childhood to Watergate and everything in between. Below is from Michael Ramirez, the award-winning cartoonist.
Israel
Israel resumes combat in Gaza, says Hamas violated temporary truce
Israel Plans to Kill Hamas Leaders Around the World After War
Little food, a beating and lice: What freed Israeli hostages are saying about being held by Hamas
Gaza: Hamas Kept Women Hostages in Cages, Forced Children to Watch Videos of October 7 Massacre
Israel should not stop until 100% of Hamas is dead. They forced kids to watch massacre videos? WTF is wrong with people.
Why would a Jew go to Harvard today?
Who is the mystery man bringing hateful anti-Jewish swastika signs to protests across NYC?
Other Headlines
Fed Chair Powell calls talk of cutting rates ‘premature’ and says more hikes could happen
Retail Traders Cash Out on Bet That Market Rally Is Nearing End
After a strong year for stocks, some investors argue trouble is lurking ahead for the tech giants that have fueled gains in 2023.
Fed’s favorite gauge shows inflation rose 0.2% in October and 3.5% from a year ago, as expected
I feel strongly that leadership needs to be more fiscally responsible. We have a spending problem. Running a $1.7 trillion deficit with 3.5% unemployment is careless and reckless. Both parties can do better. We need to show restraint.
Walmart to pull all ads from Twitter as Elon Musk's website X plunges into crisis
Ford reinstates 2023 guidance, says UAW deal to cost $8.8 billion over life of the contract
EVs are way more unreliable than gas-powered cars, Consumer Reports data indicates
Plug-in hybrids scored even worse.
Sandra Day O’Connor, first woman on Supreme Court, dies at 93
George Santos Expelled From Congress in Tense House Vote
How long before this clown show has a Bravo reality TV show? For perspective, in history, 21 members of Congress have been expelled (15 in Senate and 6 in House). Tell me why Bob Menendez is not expelled as well.
Takeaways from the DeSantis-Newsom debate
The big debate took place Thursday night and there were some fireworks. I am attaching various perspectives for you outlining the results. The above link is CNN and this is the Fox News take. Both candidates are young and articulate, a welcome change, but each has issues. I do think there is a good chance Biden will bow out and Newsom will step in. However, given the CA debacles, I am not so excited about his policies on a national level (crime, homelessness, taxes, gas prices, education, sanctuary cities, business exodos…). I think the ship has sailed for DeSantis. Given it was Fox/Hannity, I do want to give some credit to Newsom for showing up. A total viewership of 5.5mm for the debate was an impressive turnout. DeSantis believes Newsom is running.
Speaker Johnson says he believes GOP has the votes for Biden impeachment inquiry
Of note, this is a CNN link. This WSJ article suggests Republicans could vote this week on the topic.
GOP speculation mounts that McCarthy will exit Congress early
Suspect in custody in killings of 3 homeless men in Los Angeles
German tourist stabbed to death in Paris 'terror' attack
Close to the Eiffel Tower and the attacker was a radical Islamist with mental health issues known to authorities.
Army vet, 94, kicked out of NYC nursing home to make room for migrants
I believe I had inserted a similar story in the past, but it is so frustrating, I do not know where to begin. American Veterans deserve better. We are too focused on illegal immigrants and not Americans who served.
Pfizer’s twice-daily weight loss pill joins a long list of obesity drug flops
Jon Rahm to LIV Golf is a 'done deal'
Rahm is #3 in the world and has won 11 times on the PGA Tour and 8 international victories as well as two Majors. He has been ADAMANT that he will not join LIV, but the world does not believe him. The rumors are $600mm would be paid over time. I feel the PGA Tour is in serious trouble and question if the LIV merger will take place. The articles suggest the financial terms are set and Rahm wants changes to LIV before signing.
Bradley Cooper’s ‘Maestro’ Is a Masterpiece
Cooper was under scrutiny for his prosthetic nose used for the film. However, Rex Reed calls it the “Movie of the Year,” and praised every aspect of it.
Cancun And The Mexican Caribbean Expected To Shatter All Tourism Records This Winter
If you recall, I wrote a recent piece on the insanity of luxury vacation prices and we are heading to Cancun in a few weeks.
The alien hunter: has Harvard’s Avi Loeb found proof of extraterrestrial life?
No, this article did not convince me, but I do believe we are not alone in this vast universe. Aliens, if you are subscribers to the Rosen Report, please abduct me and take me to your planet. I will write about the experience for all to see. Given you are so much more advanced than humans, I am sure you know how to find me.
Real Estate
Ali al-Fayed, owner of shirtmaker Turnbull & Asser, which counts members of the British royal family among its clientele, has sold his apartment at the Pierre, a co-op and luxury hotel that overlooks Central Park on the Upper East Side, for $9.8 million. Brother to deceased billionaire Mohamed al-Fayed, whose son, Dodi, died alongside Princess Diana, the 79-year-old Ali had originally asked $18 million for the three-bed, three-bath co-op unit in 2017. Ali bought a pair of units at the Pierre, at 795 Fifth Avenue, in 2007 for $10.2 million, records show. He later combined and renovated the apartments into a single unit. There are countless examples of condos and co-ops that were purchased some years ago and selling at discounts to that price. What are the ramifications of wealth leaving a major city? Clearly, income tax revenues and related spending/sales taxes is one direct result. However, the R/E taxes on the units will fall as will the R/E taxes on commercial buildings sold for a fraction of the prior price. The cumulative impact of all the lost taxes and spending is a “Doom Loop” that results in cuts to spending. Adams announced no new Police academy for the next 5 classes to cut cops from 34k to 29k. In 2000, there were approximately 41k cops. What could possibly go wrong? The $15 proposed congestion tax for drivers south of 60th Street in Manhattan plan details can be found here. I sold my Park Ave Co-Op to Sandy Weill in 2016 because I saw the direction of the city and sold at the peak of the market.
Crazy WSJ article entitled, “Owners Keep Zombie Malls Alive Even When Towns Want to Pull the Plug.” The article gives the example of Namdar Realty and Mason that buy distressed malls and keep them running despite the town and other developers wanting to repurpose the real estate. Namdar owns approximately 80 malls now and has only sold 10. It sounds as though the tenants are not always traditional retailers and have doctors and call centers today. I just had no idea about this topic and found the article interesting. In June, Namdar Realty and Mason purchased the Crystal Mall in Waterford, Conn., for $9.5 million. It was appraised at $153 million in 2012. They bought Midway Mall in Elyria, Ohio, in 2017 in an online auction for $4.5 million.
“You make your money in buying at the right price,” Namdar said.
I have gone to Nashville a few times in the past few years and LOVE it. I could live there 6 months of the year without issue. Nashville has a lot to offer and so many major companies have big offices in the city. The food and music scene are top notch and the cost of living (getting worse with growth) and people are incredibly friendly. This CNBC article is entitled, “Nashville added nearly 100 new residents per day in 2022. Here’s why people are moving to Music City,” and is worth a look.
Rosen Report™ #635 ©Copyright 2023 Written By Eric Rosen
