My Love/Hate Relationship With Apple
7-10-24
Opening Comments
My last note was regarding my wife and daughter working while costing me money. I received a lot of positive feedback on the piece. The most opened links were the actual cost to manufacture a Dior purse and the 500-year-old Polar Shark that may hold the secret to extending human life.
I have written often about 3i Members and the networking potential. The group is up to 500 people, and I am constantly making new connections. Just last week, I had drinks in Bridgehampton with a handful of members, had dinner with the CEO of 3i, played tennis with two members and golf with a member. I am really enjoying meeting interesting people and have made many good friends from the 3i network.
I went to Nantucket for one night to see friends. It was a great time, and the island is beautiful. It is very different from the Hamptons and may to a theme piece comparing them soon. Beth and Beau were great hosts and showed me around town. The fog was so thick, no planes could land and my boat ride over was surreal given the lack of visibility. I stayed at a quaint inn called 76 Main that I highly recommend that is steps away from downtown. I am back in Southampton for a little bit if there is padel, golf or tennis to play.
As a reminder, readers send me story ideas and help me with content. If you have ideas, send them to rosenreport@gmail.com. Robert, Peter, Billy, Beau, Ed, Max, Debbie, Steve and others were especially helpful this week. Thank you. Please remember to hit “View Entire Message” as some systems truncate the report.
Markets
YTD Hedge Fund Returns
French Election Shocker
Spain Tourism Protests
AirBnB Crackdowns
$135mm NYC Apartment Sale
Exodous of Kids Leaving Cities (NYC -18%)
San Fran Office Update
Austin Office Issues
Video of the Day-Jon Stewart on Biden
Jon Stewart is a Democrat and a funny dude. This 15-minute video will make you laugh. It is mostly full of critical commentary on Biden with supporting videos but also throws shade at Trump. I think you will enjoy it.
My Love/Hate Relationship with Apple
I hate that I am so reliant on my iPhone and other Apple products. If I misplace my phone for more than 7 seconds, panic sets in and I hyperventilate. Apple is so ingrained into my life, it is irritating. I like to be responsive and sleep with my phone next to my bed. It is the last thing I look at before I fall asleep and the 1st thing I find when I wake up.
Steve Jobs was a genius in product design and understood the consumer better than anyone in history. I have bought countless iPhones, Macs, Airpods, iPads, iPods, watches, cases, Airtags, chargers…over the years. Given I have a family of four, I presume I have spent tens of thousands of dollars on Apple products.
I had an older Apple Watch that I was struggling to connect to my iPhone. When I was in Florida, I went to the Apple store and asked for assistance. I said, “I have this watch that will not connect to my phone. Can you tell me what I am doing wrong please?” The man in the front of the store looked at me like I was an idiot but clearly did not mean to offend. He asked, “Do you know what model this watch is?” The truth is, I had no idea but thought it was a few years old. He called an “watch expert” over and they said, “This is a model 3 and we are on watch model 9. Your watch will not connect to the newer phones given it is too old.” I had no idea I had the watch 6 years old. He said, “Sir, you need ot buy a new watch.”
Son of a….. I hate buying new things when the old ones are not broken. I walked over to the watch department and bought a new watch so it could connect to my phone. I had to buy a band and of course the damn new chargers which do not work with the old ones. Over the last fifteen years, Apple has created four charging cables for their iPods, iPhones and iPads . They first used a 6-Pin FireWire connector on the original iPod, then the 30-pin dock connector to FireWire, followed by the 30-pin dock connector to USB and finally the newest 8-pin Lightning connector.
Did I mention I hate Apple? I think I spent about $350 on my new watch. I asked for help setting it up because I figured I could not do it alone. The woman was knowledgeable, and the product was so well designed that even a technology idiot like me could set it up. Sadly, I love the watch. It counts my steps and sleep and looks nice. It is also water resistant, and the battery life is much improved. After wearing the new watch for 15 hours, the battery was 67% full.
Apple makes such amazing products that integrate into your life so well they become indispensable. I hate it when that happens. Despite my disdain for the company due to all the money I spend, I cannot live without these addictive products. Please stop changing the chargers as I have about 30 of the old ones and do not want to buy all new ones. Jobs, you were a brilliant man that changed the world. I love you and hate you at the same time.
Maybe there is a good reason Apple stock is worth $3.4 TRILLION and has returned 193,358% since 1980. I think my purchases and reliance on Apple has disproportionately propelled the stock to new heights.
Quick Bites
All non-bolded text below is excerpted from the cited articles. Bold are my thoughts.
Fed Chair Powell says holding rates high for too long could jeopardize economic growth. “At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face,” he said in prepared remarks. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.” Despite these more dovish comments US Treasuries have been volatile. The 2-Year Treasury yield is now 4.63% and the 10-Year is 4.28% and both are -7bps for the past week. We have a 75% chance of a rate cut in September and the market is forecasting 1.8 cuts in 2024. Stocks seem to go up every day and set new highs while volatility as measured by the VIX is at low levels around 12 to 13. The S&P 500 was above 5,600 for the first time and appears it will close above that level. However, check out the disparity of returns by index YTD. Obviously, the Magnificent Seven have seen outsized returns driving the data below.
So far this year, hedge fund managers have failed to beat the S&P 500, one of the cheapest, easily available investment vehicles for ordinary investors. Hedge funds returned just 5% in the first half of the year after a 0.2% loss in June, with event-driven strategies the biggest laggards, according to data firm HFR. In comparison, the S&P 500 climbed 15% through June this year, marking one of its best first halfs. This Bloomberg article gives other fund returns.
Holy Cow, Batman. The French elections looked as though the Right under Le Pen were going to win big and it turns out the final vote went more Left than originally believed. Time said it best with this headline, “Macron’s Disastrous Election.” The first projections in the 2024 French legislative election say leftists have won most seats. The surprise put President Emmanuel Macron’s centrist alliance in second and the far right in third. The leaders of France’s left-wing parties have acknowledged they made compromises to unite in an effort to keep the far-right National Rally party from taking power in France. There likely will be weeks of intense political negotiations to choose a new prime minister and form a government. France’s president risks being forced to share power with a prime minister opposed to his pro-business, pro-European Union policies. Despite avoiding a far-right government, the result means France is plunged into political limbo, with no party reaching an absolute majority, leaving parliament gridlocked. Based on polling and the first round of votes, I sure did not see this one coming, as Le Pen was in 1st place but ended up finishing 3rd. It shows that it ain’t over until it is over. There are now stories of France reinstating onerous wealth taxes. France’s left-wing coalition could break French and EU law with its proposed radical programme for government that includes a 90 per cent tax on the rich and a series of high-spending policies. The discussion is a 90% tax on annual income above Euro $400k. Jews and wealth should be running out of France. The last chart shows the premium in basis points investors are demanding to buy French bonds over German bonds.
There has been chaos in Spain as anti-tourism protesters have been demonstrating against mass-tourism. The demonstration was organised by a group of more than 100 local organizations, led by the Assemblea de Barris pel Decreixement Turístic (Neighborhood Assembly for Tourism Degrowth). According to official figures, almost 26 million visitors made an overnight stay in the Barcelona region in 2023. However, the Assemblea de Barris pel Decreixement Turístic says that these visitors increase prices and put pressure on public services, while profits from the tourism industry are unfairly distributed and increase social inequality. Demonstrators marching through areas popular with tourists on Saturday chanted “tourists go home” and squirted them with water pistols. On Saturday, the city’s mayor, Jaume Collboni, highlighted a series of measures that he has announced recently to reduce the impact of mass tourism. At the end of June, Collboni also announced that it would end apartment rentals for tourists by 2028 by scrapping short-term rental licenses for more than 10,000 apartments.
Interestingly, many cities are cracking down on short-term rentals over concerns that so much potential housing supply is taken out of the market for the short-term rental market. Some of the cities listed in this Bloomberg article include Barcelona, Vancouver, Honolulu, Singapore, Berlin and others. In Nantucket, short-term rentals were rejected as the nature of the client is changing the dynamics of the community and residents are complaining.
2024 Election
In light of the craziness that has unfolded, I felt having a separate section for the election was warranted. Those interested can check it out and those who have less desire to read about the embarrassing state of U.S. politics can skip it. What I find interesting is after years of covering for Biden, the media has turned as have many one time ardent supporters. I am getting inundated with emails from serious Democrats who once supported Biden and now want him to exit the campaign. However, in the last couple days as Biden has been adamant about staying in the race, the betting odds of him as the Democratic candidate have spiked but he still trails Trump handily. You know you are in trouble when George Clooney is begging you to step aside.
This CNBC story is entitled “Democratic power players are circulating a proposal for Biden to exit, launch ‘blitz primary.’” I like this idea and feel it will invigorate voters as they suggest having Oprah, Taylor Swift and Stephen Colbert moderate forums between candidates after Biden announces he is stepping down. Huge social media push as well. Almost two years ago, I called that Michelle Obama would be the Democratic candidate and believe she would win today. The “blitz primary” idea will bring more people out to vote and help the Democrats stave off “down-ballot” issues.
The doctor is a Democrat.
George Stephanopoulos says 'I don't think' Biden can serve 4 more years after ABC interview
‘No one is picking up the phone’: Joe Biden’s fundraising confronts new hurdles after debate
Major donors are no longer supporting Biden. The President and his delusional family and staff can think all is well but with no major money flying into support him, he is DOA.
Brilliant idea. Trump also challenged him to another debate. Sadly, I do not believe Biden could beat Trump even with 20 strokes and Biden had told Trump he could beat him at golf during the embarrassing debate.
Top ex-Obama strategist David Axelrod twists knife on Biden: ‘Not winning this
Biden Makes Embarrassing “First Black Woman” Gaffe in New Interview
“By the way, I’m proud to be, as I said, the first vice president, first Black woman, to serve with a Black president,” Biden said.
Biden says Philadelphia voters helped him win Delaware Senate seat
“Even when I was running for Senate, each time I ran, quite frankly, not a joke, Philadelphia, in particular, got me across the line,” he said during a campaign event. Biden was the Senator of Delaware, so he did not have help from Philly voters to get him elected to the Senate.
Biden 'sits in a trance' at church as pastor asks attendees to stand
Former Trump Staffer Reveals New Texts Alleging More Secret Payoffs and Settlements
Biden narrows Trump’s lead in swing states after debate debacle
I question any poll that suggests Biden is doing well after that awful debate, less than stellar ABC interview and countless missteps on the campaign trail. Biden is in no position to run for President or serve out his term.
Less Is More: Trump Quiet As Biden Flounders
I agree with this strategy. Biden is only hurting himself.
Ray Dalio says Trump and Biden reflect decades of ‘horrendous leadership’ by baby boomers
Israel/Middle East
American seriously wounded when Hezbollah fires 20-rocket barrage at Israel
Hamas says senior government official in Gaza killed in airstrike
Iran Paid Anti-Israel Protesters in America, U.S. Government Says
Berlin bans red triangle symbol used by Hamas to mark targets
3 Columbia deans ousted for texts that 'touched on ... antisemitic tropes'
Spanish 'Let's Go Bomb Tel Aviv' song draws ire from Jewish group
I love this. I would never hire anyone who was involved in these anti-Israel protests.
Other Headlines
Credit Card Debt Unexpectedly Surges as Card APR Hits New All-Time High
What to Watch When Bank Earnings Season Kicks Off, in Charts
Amazing charts in the link. Here are a few.
Helen of Troy stock plunges on Q1 miss, weak outlook -29%
"As has been widely reported, the macro environment and the health of consumers and retailers has worsened. Consumers are even more financially stretched and are even further prioritizing essentials over discretionary items.” I have been critical of the US consumer for a year and we are finally starting to see more data suggesting weakening.
Senators strike bipartisan deal for a ban on stock trading by members of Congress
Wait. Did we just see politicians get to the right answer? How the hell did that happen? Sadly, if it passes, it is not effective until March 2027. So politicians you have almost 3 years to continue to trade on inside info but if I do it, I go to jail. Seems fair.
Suspected carjacker shot outside home of Supreme Court Justice Sonia Sotomayor
Another Extended July 4th Weekend Of Historic Violence In Chicago: 109 Shot, 19 Fatally
Gun violence over July 4 week dropped in 2024, but still above 2019 levels
Good news is the data is improving. The bad news is a lot of people continue to be shot and killed. From July 1 to July 7, 340 people were killed and 756 were wounded. In 2023, the week of July 4 in the U.S. saw 451 people shot and killed and another 1,130 wounded.
Exclusive Ivy League Social Clubs Are Desperate for Members
As the clubs lose popularity, some are implementing looser dress codes, discounted dues and speed dating to boost membership. I was surprised by this article. One of the issues mentioned was the opening of all these hip clubs such as Casa Cipriani, Zero Bond, Soho House, Aman… that is taking Ivy Leaguers away from their old stomping grounds.
California family's $444 receipt from Trader Joe's goes viral on social media: 'Insane'
Grocery prices have gone up so much since the beginning of the pandemic. I am in shock when I go to Whole Foods or Publix.
It may look like pink Jello but scientists hope this new invention could revolutionize meat
Here’s how much money Americans in their 30s have in their 401(k)s
Tech prophet who predicted the iPhone years in advance makes alarming forecasts for coming years
These ideas seem crazy to me.
Nearly 10 billion passwords leaked in what may be biggest dataset of its kind ever
Daily Travelers Passing Through U.S. Airport Security Top 3 Million for First Time
CheatGPT: 94% of AI-written college exams go undetected in startling study
Caitlin Clark Makes WNBA History In Win
Clark was the 1st rookie in WNBA history to get a triple-double. The press is all over Clark and Reese and they are bringing so much attention to the sport. It is amazing for the WNBA. Don’t hate, thank them.
Experts reveal the REAL reason UFOs 'target high-speed planes and warheads'
Not sure I buy these theories but do believe we are not alone. I am anxiously awaiting to be abducted by aliens so I can write about it. I hope they have Michelin Star equivalent food wherever they take me.
Ukrainian children’s hospital hit, 31 people killed in daytime Russian missile attack
Real Estate
A penthouse in the Aman in NYC sold for $135mm. The most expensive sale of the year in NYC was for a roughly 12,500 ft apartment that translates into $10,800/ft. The location of 57th and 5th Avenue is a non-starter for me. Too commercial.
There have been a host of articles in Bloomberg, the Gothamist, and others outlining the exodus of families from cities. Families are still leaving large US cities, with the number of young children in NYC down by almost a fifth since the beginning of the pandemic, according to an analysis of the latest census data. Since April 2020, the under-5 population has fallen by 18% in New York, 15% in Cook County, the heart of Chicago, and 14% in Los Angeles County, the Economic Innovation Group said in a report. A total of about 800,000 people moved out of large urban counties last year, or twice the pre-pandemic rate, EIG said. Moves out of the city have combined with lower birth rates to drag down the number of young children in big urban counties. The rising cost of child care in New York City is driving families with young kids to pack up and leave the five boroughs, according to a new report. Households with young children make up 14% of the city’s population but 30% of those fleeing the five boroughs, according to the group’s findings. Think about the implications on business, schools, real estate…. given the continued migration.
Interesting CNBC article about San Francisco’s troubled office market. AI has been a big boon for San Francisco real estate. But not enough of one to make up for the broader struggle across the market. The vacancy rate for San Francisco office space reached a fresh record of 34.5% in the second quarter, according to a report Monday from commercial real estate firm Cushman & Wakefield. That’s up from 33.9% in the first quarter, 28.1% in the same period a year ago and 5% before the pandemic. Meanwhile, the average asking rent dropped to $68.27 per square foot in the quarter, the lowest since late 2015, down from $72.90 a year earlier and a peak of $84.70 in 2020. CBRE is quoting higher vacancy rates than CNBC.
In the last three months, Austin’s skyline kept growing, as developers finished 2.1 million square feet of new office space. Much to their chagrin, almost all of it remains empty. The office vacancy rate has hit a record 25.2 percent, as the city added more space than it has in any other quarter, according to JLL. Some 158,400 square feet more space came on the market than was taken. The new buildings total more than three times the five-year quarterly average for deliveries.
© 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™ #698 ©Copyright 2024 Written By Eric Rosen.
