Never Judge A Book By Its Cover +Restaurant Review of Stubborn Seed
11-10-24
Opening Comments
My last note summarized the election and it received so much positive feedback. Here is one example: Eric, this is your best piece you have written. Your spot on about why democrats lost and what Trump needs to do to be a successful president. I would love to see your piece published in WSJ. Thank you. I received dozens of notes like this, which is always a nice surprise. The most opened links were Dimon’s comments about preparing for WWIII and the UFO story.
Uncertainty hurts deals and markets. Now that the election is behind us, markets are ripping and deal flow is picking up. Real estate activity is much higher than the past month or two and even car sales pop post-election, regardless of which party wins.
Markets
Markets Discussion with Market Leaders
RFK Jr. on the FDA
Emotional Intelligence
Chicago Condo Sale Debacle
Mortgage Rates Spiking
Palm Beach Island
NYC Office Building Distressed Sale
Pictures of the Day-Stubborn Seed Is Amazing Indeed
My love of food is legendary. Two dinners is not out of the question when I need to try new places. I had been dying to eat at Stubbon Seed in the SOFI area of Miami Beach. Jeremy Ford is the chef of this Michelin Star winner. He is a James Beard Award Semi-Finalist and Top Chef’s winner in season 13. The small restaurant on 2nd and Washington packs a punch. It is an eight-course pre-fixe dinner for $175. However, at the bar, there is a small a la cart menu. I did not have time for 8 courses given the election party I attended. Stubborn Seed delivers a beautiful presentation and is packed with flavor. I spent $150 on three courses and two glasses of wine. That blows the doors off the value relative to neighboring Carbone, which is overrated. However, the vibe/scene at Carbone is better.
I started with the sake & citrus cured Japanese yellowtail. It came with cantaloupe and honeydew and was literally so beautiful, I did not want to eat it. The passionfruit emulsion was bonkers and I loved the chips used to dip in the sauce. My Stubborn truffle chicken was a healthy portion served with pomme puree, turnips, and brussels sprouts. The chicken was tender and another work of art. My side dish was the crunchy truffle bravas, which are fried potatoes with garlic and aged parmesan. That was a full portion for $17. The food, service and price were all very solid. I went at 6pm on election night and only two people were in the restaurant when I left. What is going on? This place is too good to not be jam packed. Was it the election or do people not like to eat amazing food? Next time, I am doing the pre-fixe for $175.
Food/Presentation-9.2
Service-9
Ambiance-7 (empty due to election). Bar is nice.
Wine-8
Never Judge a Book By Its Cover
It was 1998 and I was living in Manhattan while running the Loan Trading Business at Chase (which became JPM in 2004). I was making a good amount of money for someone who was 28 years old and had been putting it away living well within my means. Regardless of my income, I spent a fraction of what I made. I always wanted a fancy car (horrible investment) and went on a Saturday to look at the Mercedes Benz dealership which at the time was at the mouth of the Lincoln Tunnel in the 40s and 11th Ave (no longer there).
The weather was awful with torrential rain. I wore jeans, Timberland boots, a bright yellow NBA raincoat and a baseball cap. Let’s not discuss the look, it was over 26 years ago. I also looked very young for my age. This is a picture from four years later when I was 32 and in a suit and tie.
I was the ONLY customer in the showroom, given the weather. There were at least 8 salespeople in the salesroom at their desks. I was walking around looking at cars for 20 minutes and NOT ONE SALESPERSON approached me. I kept looking around and it was as though I was a leper.
After 30 minutes of being frustrated, I asked to see the manager and they pointed me into his office. I will admit, I looked like a wet rat with my ensemble and red baseball cap. However, it is NYC, where young Wall Street folks make millions, so anything is possible. I sat down and the manager asked, “How can I help you?”
I said, “I have been looking at cars for 30 minutes and not one of your salespeople will give me the time of day. I asked for help and two different salesmen both told me they would be right with me and never came back. You do understand that in NYC young people make a fair amount of money and can afford the finer things, right?”
He was livid and said, “Yes, I understand. My team should be more professional and help everyone, my apologies.”
He then pranced me out to the showroom and three different salespeople came up to try to pry me away from the manager. Two of them were the ones who blew me off and disrespected me. I said, “I will let this guy help me, as the other two refused to help me when asked.”
In the end, I did not buy a car from them as I felt I should have been treated differently. I bought a $17k used Jeep Grand Cherokee instead. My frugality is legendary, at every age. However, had I been treated better at the Mercedes dealer, maybe I would have bought a car there.
The idiot salespeople did not realize that despite my youthful look, I was making millions at the time. I guess the old saying is true, “Never judge a book by the cover.”
Quick Bites
The market ripped on Wednesday post the election results with the Dow+1,400 points and the Russell +5%+. The first chart outlines sector performance Wednesday and financials were the big winners, while R/E was the big loser. Both were driven by the increased rates. Financials generate higher Net Interest Margins at higher rates and higher borrowing costs hurt the real estate industry. Wednesday, the US stock market rose by $1.6 trillion, the fifth-best one-day showing ever. Trump’s pro-growth and pro-business policies were welcomed by the markets. The Dow topped 44,000 and the S&P crossed 6,000. Yes, markets prefer Trump to the current administration. On the week, the S&P was +4.7%, Nasdaq +5.7% and Russell +8%. Treasury yields surged with the 10-year +15bps and the US Dollar rallied sharply. Despite the 25bps rate cut Thursday, Treasury yields remain elevated, but off recent highs with the 10 year back to 4.3%. Speaking with big crypto players, it seems they have never been more excited given the Trump win and the prospects for the crypto market in general. Bitcoin at $76k (all-time high) is saying something. Remember, it was $16k just 22 months ago. The total crypto market cap is now $2.6 trillion and is approaching the all-time high of $3.1 trillion from November 2021. Strategist Tom Lee believes Bitcoin could reach $100k by year’s end and TSLA hit $1 trillion market cap on the back of the Trump victory and brought Musk’s net worth to over $300bn.
Earnings Disappointments-Nissan, AMC
As part of my partnership with 3i Members, I moderated a Webinar Thursday afternoon with Alicia Levine (BNY Mellon), Peter Boockvar (Bleakley Group) and Alon Rosin (Oppenheimer). I always learn from this impressive group of close friends. Alon and Peter joined 3i due to my introduction. On the webinar, we discussed stocks, rates, US$, consumers, Federal Reserve, deficits, commodities and more. Viewers asked dozens of questions via chat that the panelists and I addressed. You can watch the video here. One consistent question was about M&A. I feel strongly that Lena Khan (FTC) is out and M&A activity will pick up DRAMATICALLY in 2025 and that is one of the many reasons for the massive stock rally. Again, the vote for Trump was a vote against the status quo and the markets love it.
RFK Jr suggested “entire departments” at the FDA “have to go,” and I agree. Everything I have learned in recent years suggests to me that the FDA has failed US consumers on many fronts and we need to blow it up. “In some categories … there are entire departments, like the nutrition department at the FDA … that have to go, that are not doing their job, they’re not protecting our kids,” Kennedy said during an interview on MSNBC. This interview with Jason Karp is eye opening on the subject of food and the FDA. Shocking. Check out this short video of the Fruit Loops in the US relative to Europe. You will be livid. The food in Europe is so much cleaner and healthier than the food in the US. The FDA is to blame for a lot of it. Over 42% of American adults are obese and almost 2/3rds are overweight. For example, Japan has a 4% obesity rate and Italy is 12%. We are failing in this regard. I have been playing with the Yuka app and the food from Europe is consistently MATERIALLY healthier than food from the U.S. Note the countries worse than the US in terms of obesity and note that no super powers are worse than the US in that regard. UK Ministers may impose taxes on unhealthy food. GREAT IDEA.
I felt this article about emotional intelligence was spot on. The piece gave 5 things to do when you meet someone. Long explanations for each item can be found in the thoughtful piece. I would say I am amazing at the first 4 on the list but need to do more of #5. As I age, I seem to forget everyone’s name.
1. Show Genuine Enthusiasm For Meeting
2. Offer A Compliment
3. Ask At Least Two Open-Ended Questions
4. Find Something You Share
5. Say Their Name Before You Leave, And Commit Key Facts To Memory
2024 Election
Harris conceded in a phone call to Trump Wednesday. She also gave what I felt was a weak concession speech at Howard University to many tearful fans. I did not feel her 12-minute speech was memorable or impressive. Pelosi was gloomy and refused to answer questions on swapping out Biden for Harris. I do not feel Biden had any chance. The swap was the right thing to do, but should have been done earlier and there should have been an open primary for the Dems to truly get behind a candidate.
I do not feel Harris was placed in a position to succeed and believe neither Harris or Walz will be a factor in 2028. Although I felt Trump would win, I did not see him getting the popular vote, an indictment of the Democrat’s campaign. I believe this loss for the Democrats is the best thing that could have happened to the party. Leadership will realize the move to the Left, following the Progressives, is not what Americans want. Idiotic policies and open borders are not the way forward. Bill Maher told the Democrats to “look in the mirror” in his monologue. I think the Dems will come back stronger in 2028 with new blood. This stat is shocking to me as of Tuesday night: Dearborn is the largest majority Arab American city in the country, and as of 11:35 p.m. EST Trump had 46.8%of the vote compared to 27.8% of the vote for Harris and 22% for Green Party Candidate Jill Stein. In 2020, Joe Biden won the city with a 74.2% of the vote, compared to 24.2%% for Trump. Also of note, Trump beat Harris/Walz in the home county of Walz. It is a major indictment of the campaign for the Democrats. Billionaire Bill Ackman hopes a Trump win leads to ‘the implosion of the Democratic Party.’
As of Saturday, 18 House races are yet to be called with 9 in CA and 3 in AZ. How is it possible that days post-election we still don’t have votes counted?
These articles from the Guardian and the NY Post outline potential candidates who could be in Trump’s administration. Some names mentioned include: Musk, Kennedy Jr., Grenell, Cotton, Carson, Bessent, Waltz, McCarthy, Rollins, Landry, Schmidt, Rubio, Ramaswamy and others.
President-elect Trump names Susie Wiles as chief of staff, making her first woman in the post
Battle to replace McConnell as Senate GOP leader heats up in final sprint
The suggestion is John Thune (SD) and John Cornyn (TX) are battling to take over for Mitch McConnell (KY).
The day after the election, Columbia University professors cancelled class for the day and eased course requirements. The most famous college in the world, Harvard, cancelled some classes given the somber campus post-Trump win. Let’s spend $100k/year to indoctrinate kids and teach them to be soft when the ball does not roll their way. Brilliant. Yale psychiatrist calls it ‘essential’ for liberals to cut off Trump-voting loved ones during holidays. This is the cancel culture that got the Democrats in trouble with voters. I spoke with a student at a top NYC high school and teachers were in tears on Wednesday and many classes were used to “discuss the horrific outcome of the election” and used words like fascist and Nazi to describe Trump. Would you hire these kids? I sure would not consider it. They are being taught to not work hard in the face of adversity. I received a lovely note from a reader about my election piece and he too complained about Fieldston. “During our parent interview at Fieldston, the admissions officer asked us how we teach our son DEI initiatives at home. Keep in mind he was four years old at the time! I wanted to explain that the topic the previous night was trying to get the kid to brush his teeth but unfortunately you have to play the game during the process. Needless to say, it rubbed us the wrong way and we did not send our son there.” As I said, I literally walked out of the Fieldston school tour in disgust in 2011 and the school has only become more woke.
Trump says there's 'no price tag' for his mass deportation plan
Polymarket ‘whale’ who bet big on Trump win raked in $48M in profits
He bet $30mm and made $48mm in profits. WELL DONE!
Jeff Bezos, Sam Altman, Tim Cook and other tech leaders congratulate Trump
As I mentioned in a prior report, these guys felt Trump was going to win. They see all your keystrokes and know your preferences.
Elon Musk says this election is just the beginning of his involvement in politics
Moment ‘polling Nostradamus’ who predicted Kamala Harris would win election realizes he was wrong
Fuming Joe Scarborough blames racism, misogyny from black and Hispanic voters for Harris’ loss
I think Scarborough is out of touch. It is not because Harris is a Black woman, it is because her policies did not work and she hid from taking tough interviews until the very end.
DOJ moving to wind down Trump criminal cases before he takes office
Will these celebrities follow through with their threats to leave America?
I understand not liking a candidate or their policies. I am fully supportive of those unhappy to leave the country. Elon Musk’s daughter also announced she is leaving the country post-election, as did Richard Gere The issue is there is no panacea. Every place has problems. As many issues as the USA has today, I am not convinced there is a better place to live. If you find it, let me know.
Sarah McBride becomes the first out transgender person elected to Congress
Israel/Middle East
The October 7th attacks were incredibly successful in not only killing innocent civilians, but unleashing antisemitism globally. Amsterdam saw attacks on more Jews after a soccer match, with some hospitalized and others still missing. An attack video can be seen here. Another video. This video suggests that this was a planned and coordinated attack using the Uber network to pull it off and planned it in advance on Telegram. Netanyahu sent planes to rescue Jews and told them to stay in their hotel until help arrives. Welcome to the new world, where Jews are not safe anywhere. I hope Israel finishes the job and does whatever it takes against Hamas, Hezbollah and the Houthis. Jewish students were also attacked at DePaul University in Chicago while they were showing support for Israel. I did not realize, but men carrying weapons and anti-Israel manifesto tried to enter the US Capitol on election day.
Iran loves the Biden/Harris administration’s policies but knows Trump is coming for them.
'You are not welcome here,' Qatar tells Hamas
Do you think these are a coincidence or the Trump impact? It is an indictment on the Biden/Harris administration’s foreign policy. Trump gets elected and Hamas and Qatar cave within hours.
In One Day, Two of the Biggest Brakes on Israel’s Netanyahu Disappeared
Iran 'terrified' of Trump presidency as Iranian currency falls to an all-time low
Trump’s policies against Iran were effective in crushing them financially. The Biden Administration did not come close to hurting Iran.
Trump’s victory throws diplomatic bombshell into Israel's multi-front war
Iran-Backed Houthis Reportedly Declare Ceasefire Shortly After Trump Victory
I do not believe this is a coincidence.
Victorious Trump pitched to Jewish voters on his support for Israel; they didn’t back him
I question the accuracy of this article.
FBI foils New York man's 'evil plan' to wage jihad on ISIS' behalf in Syria
Universal Music Group will move to U.S. exchange in 2025, Ackman says
This is due to antisemitism. Thank you, Bill.
Other Headlines
I am not convinced tax cuts and massive tariffs are the answer. We are running $2 trillion in deficits.
What Trump’s historic election victory means for the global economy
DoubleLine’s Gundlach says expect higher rates if Republicans also win the House
Elevated yields seem to have traction. Fears of a 5% 10-year are prevalent. This is the Gundlach interview on CNBC. Lots of info.
Steve Madden to slash China sourcing by as much as 45% - Trump’s tariff plan
Powell says he would not resign as Fed chief if Trump asked for his resignation
Super Micro shares plummet 22% after financial update heightens investor concerns (-82% from March high)
Coinbase CEO Brian Armstrong is more than $2 billion richer post-election
Nov. 5 shows America wants to make crime illegal again and boot woke DAs
Shooting on NYC's Upper West Side causes major subway delays
This was a few blocks from my apartment when I lived on the UWS.
Labor backs 16 as the minimum age to use social media ahead of cabinet meeting
Australia is considering banning social media for those under 16. I LOVE this idea. Social media is toxic.
FDA proposes ending use of decongestant found in many cold, allergy medicines
Ten die and 100 sent to hospital after taking off-brand Ozempic
What fizzy drinks really do to your body – and the worst ones for your health
I have not had a soda in 40 years and have never tried an energy drink.
Eerie moment UFOs appear in sky above Spain next to double rainbow – before deadly flash floods hit
Real Estate
This Real Deal article outlines a Gold Coast (Chicago) condo sale for less than it sold for in 1989. Chicago was once a mecca for big business; now due to horrific crime and awful progressive policies, it is a disaster. The three-bedroom unit on the 59th floor of the 66-story Bloomingdale’s building, at 900 North Michigan Avenue, sold for about $378 per square foot, a sharp decline from the $596 per square foot it fetched in 1989 — a value equivalent to $1,500 when adjusted for inflation. I lived on the Gold Coast, literally 2 blocks from this unit. The best condos in Miami can now go for $6k/ft and in sleepy Boca, we are seeing sales in the $2.5k/ft for nicer units.
Mortgage rates surge higher on Trump victory, causing housing stocks to fall. The average rate on the 30-year fixed mortgage surged 9 basis points Wednesday to 7.13%, according to Mortgage News Daily.
The number of houses for sale in Palm Beach continues its slow creep upward, with three properties joining the local multiple listing service over the past three weeks in the $25 million to $50 million range. Leading that price category is a freshly renovated-and-rebuilt house at 1230 S. Ocean Blvd. Priced with its furnishings at $49 million, the house stands on about an acre fronting the coastal road on the stretch of Billionaires Row that runs between The Mar-a-Lago Club and Widener’s Curve. Meanwhile, the MLS showed another eight recent listings were priced between about $14 million and $20 million, as of early this week. In all, 83 single-family houses and townhouses were listed for sale. Inventory for newly built product is very limited on Palm Beach Island. On MLS, there are 9 homes on the market built between 2022-2024 for $5mm+ on Palm Beach Island. The price ranges from $11.8mm to $88mm with the median at $17.5mm. The lowest price home is on the south end of the island and is 4,546 ft. The median priced home is on the north end of the island and is a 4,560 ft single-story home. Some of these homes are under construction and not yet complete.
The Vanbarton Group has unloaded the Midtown office building where the company is headquartered at a steep loss, after defaulting on a nearly $90 million loan on the property earlier this year. The investment firm sold the 26-story Art-Deco office building at 292 Madison Avenue, located between East 40th and 41st Streets, to 60 Guilders and Sentry Realty, for approximately $90 million last week. The group purchased the property for nearly $180 million in 2016, renovating the building’s lobby, elevators, and building systems in 2018. In May, it defaulted on an $87.5 million loan Deutsche Bank had provided.
© 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™ #733 ©Copyright 2024 Written By Eric Rosen.
I try to avoid depreciating assets in any market!
Never judge a book by its cover...also, never buy a depreciating asset in a bull market!