You Had Me at "Clearance Sale"
12/29/21
Opening Comments
Video of the Day-Motorcycle Crash Unscathed
You Had Me at Clearance Sale
Quick Bites
Markets/US, Market Breadth, YTD Performance, $900 BN Cash Pile
Thomas Hoenig on Fed, Shipping Rates, The Great Resignation
New 2022 Technologies, Beverage Companies Blurring Lines
Chicago PD
Other Headlines
Virus/Vaccine
Data-Cases Exploding, Deaths Declining
Correlation-Vaccine & Cases/Hospitalizations/Deaths
Omicron vs Delta
Fauci Considering Vaccines for Domestic Travel
Novavax and Omicron
Antiviral Complications
Real Estate-Expanded Today
My General Comments-Bocaire Community
Houses Outside London
Jake Paul Miami PH
Opening Comments
Happy New Year. We have been through a lot together and I am cautiously optimistic, that 2022 will be a better year. I hope everyone has a safe and healthy New Year and does great things in 2022. The Rosen Report has come a long way thanks to the support of my readers. THANK YOU for putting up with me and my antics and listening to the Rosen Family travails. My open rate is now 62-66%, despite the fact that 20% of my readers seem to not get my report. I think today’s subject piece is fun and hope you enjoy it. Remember, to hit the heart/like button if you read something you enjoy. For some email systems (Gmail), the note gets truncated and reads “Message Clipped-View Entire Message.” From time to time people do not realize this fact that you need to click on “View Entire Message.”
The weather in South Florida has been SPECTACULAR. Clear skies with warm days and cool evenings. Unfortunately, many people are cancelling trips due to the pandemic. It really is disappointing that the virus continues to disrupt our lives. My daughter is beside herself with another vacation from school in shambles. I fished while Jack golfed on Tuesday and got this nice bass. They sure get aggressive in the winter time when spawning. I was on a phone call with a reader when I caught this and had no headphones. Yes, I am that good and did it all one-handed.
A reader and good friend, Rich, took me and my son, Jack, to Bocaire Country Club for golf the other day. Despite missing a couple short putts, Jack shot even par, 72. All I can say is that two months off of golf due to arthritis did not help my game. I believe in 5 months, I may have played 3 rounds. I lost two golf balls on one hole. The highlight and low light for me came on the same hole. It was a 265-yard par 4, and I drove the green to 15 feet of the pin with a perfect drive. I did not want to leave my eagle putt short and I had a lip out leaving me 6 feet and missed it. I three-putted for par, and it was humiliating. The course is in great shape and it was fun. Hey, Mr. Country Club Collection, why did you not get my drive on video for your Instagram account? You always put Jack on the CCC, what about dad? The Greyserman boys would probably hit 3 wood or less, but I need to get a golf clap for driving it on a string right at the pin. Let’s not talk about the 3 whack or the multiple lost balls during the round.
I have never seen worse traffic in Florida. Despite this, we are heading to Miami Beach for dinner at Layla tonight with Rosen Report readers who just bought in Miami. The kids will be eating at Blue Ribbon Sushi while we eat with friends.
I get dozens of emails per week asking me how to subscribe to the Rosen Report. There are BIG RED buttons all over this report and if you hit it and insert your email, you are a subscriber. Hit the button below.
Video of the Day
In Florida, you see a great deal of idiocy. I would guess at least once a month, I see a pack of motorcycles doing wheelies on busy streets while speeding. In this short video, a motorcycle decides to race a brand new Porsche 911 GT3. Watch for yourself, but how this guy is not dead is a miracle. Shortly after this photo, things go wrong and the video lasts a few seconds. Not sure where this happened, but if you told me South Florida, I would not be shocked.
You had me at Clearance Sale
In the 1996 film, Jerry Maguire, Renee Zellwegger said to Tom Cruise, “You had me at Hello.” The two-minute scene is in the link and well worth the view, as it is amazing. Well, that is how I feel about clearance sales. I have made it crystal clear that I am a frugal person. Having grown up with limited means and washed dishes, cleaned toilets, bused tables, delivered pizza, painted houses, washed cars….since a young age, I always believed in saving money any way possible. I definitely understand the value of a dollar and don’t take money for granted much to the chagrin of my family. I would rather give it away than spend it foolishly.
However, when I see “Clearance Sale” in bright lights, I become possessed and obsessed and the endorphins overwhelm me. Judgement can quickly be tossed out the window, as I fear missing the deal of a lifetime. There is something which happens to me when I feel I am getting something for 60-80% off which is very exciting. In my early days, I was a rookie and would buy things I would never buy just because they were cheap. I would take it home and then ask myself, “Why in the hell did I buy this thing?” In one famous episode when I was 25 and in Portugal, I bought a full set of colorful ceramic plates and bowls (service for 10) because I thought they were cheap. I almost ended up in traction carrying these things back on the plane with me, but none broke. I recall trying to get my 100-lb carry on into the overhead and almost killed two people in the process. A good sale is just hard to beat. That event put me on the short list of the best and dumbest sale shoppers ever. My frugal ways will follow me to my grave.
Some retail outlets mark the price higher only to slash it by 80% to make you think you are getting a deal and it is a powerful psychological tool. Now that I am a seasoned pro, I am very careful to pace myself and buy things which I know I will use, but big discounts bring any sane person to their knees making you consider buying.
A golf course Jack and I play at has a few sales per year and I missed the one the day after Thanksgiving. I more than made up for the miss on the day after Christmas sale last week. We arrived in the am, and three sale racks of clothing were just getting put outside of the pro shop with a sign that read $35 or 4 for $100. I am talking about amazing brands such as Chervo, K Jus, G4, RLX, LuluLemon, and others. For those who do not follow golf attire, wearing a Chervo shirt is akin to wearing something made of butter. It is the best brand of golf clothing ever made. I am far too frugal to buy anything with the Chervo logo at full price. A full price golf shirt is $150-200 for perspective. However, at 75-90% off, I am a kid in a candy store, and I could not contain myself. I am not sure the last time I was so happy prior to this monster sale.
Generally, I do not time it right, and when I arrive only a couple shirts in my size are left in awful colors or patterns. NOT THIS TIME. I ended up buying 25 shirts. They had a ton in my size, and I called a couple friends who always ask me to get them things as well. I cleaned up and also bought yet another pull-over with a zipper because it was Chervo and $25. I needed this like I needed a hole in my head, as I have over a dozen with different brands, but the price was right and I was not about to let anything with the Chervo name in my size be left behind. Remember, in Florida, it gets below 60 degrees about as often as the Cubs win a World Series, but Chervo called my name.
I called my wife and said, “Jill, this is the best day of my life.” She did not think it was so funny as it should not have eclipsed my wedding day or the birth of our children, but we are talking about 75-90% off of Chervo. She understood my joy, but asked me to sleep on the couch. I did not mind as I used my Chervo shirts as pillows, and I did not miss a wink. Chervo shirts are akin to 5,000 thread count sheets and I do not need to listen to snoring, so it was a win/win.
The pro shop was egging me on to buy more, and I found myself getting carried away. I felt my purchases should have resulted in a special award. I said to the pro, “What is more impressive, the Tiger Slam or my purchases today.”
Rudely, he responded, “The Tiger Slam is a bit more impressive.” To me, he was just too quick with the comment, but I guess, Tiger controlling four majors at once is slightly more impressive than my sale shopping. Here are some of my purchases of Chervo (C), G4, K Jus (KJ) and RLX:
I feel there should be a plaque or trophy with my name on it, but I won’t hold my breath. It might read
Eric Rosen
Champion Clearance Sale Shopper of the Year 2021
Quick Bites
The statistics of records for the indices is remarkable and scary. The S&P 500 rose Wednesday, eking out its 70th record close of 2021. The benchmark index ticked up 0.1% to 4,793. The Dow added 91 points, or 0.3%, at 36,489. The blue-chip average closed at a record for the first time since November and posted its sixth-straight winning day. The Nasdaq bucked the trend and ticked down 0.1% to 15,766. The S&P 500 has closed at a record 28% of the time in 2021. This year has seen the second-highest number of record closes ever, behind 77 closing highs in 1995. Investors are hoping to end the year on a high note with the S&P 500 returning more than 27% in 2021 and the Dow up more than 19%. The two indexes are both within striking distance of their all-time highs. I quickly outlined below some of the major indices, crypto and commodity YTD performance. The following bullet highlights the biggest stocks YTD performance as well as I discuss market breadth, or lack thereof.
I have written about market breadth and this CNBC story discusses the growth of the biggest companies in 2021 and it is remarkable. Given market weightings, when the biggest companies gain, they disproportionately impact the market performance. Over the past year, Apple and Microsoft got within arms reach of a $3 trillion market cap, while Tesla and Facebook parent company Meta both reached the $1 trillion milestone for the first time. A company’s market cap is total value of all the shares of a company’s stock. Of the six biggest companies in the world, all but Saudi Aramco are American tech firms, and all are worth more than $1 trillion. The top 10 S&P stocks account for 30% of the market value of the S&P today. This CNBC article outlines the NASDAQ is poised to under perform the S&P 500 for the 1st time since 2016. I went into the Fidelity one-year change for sector performance and found these under performers:
Diversified Telecommunications Services -11.02%, Entertainment -1.83%, Airlines -1.44%, Media +2.26%, IT Services +6.62%, Containers and Packaging +6.71%. Remember, there are many companies performing poorly, but the large index gains are being driven by the biggest companies which are outperforming. In the S&P 500, there are 65 stocks down YTD and 136 stocks up less than 10% YTD.
These are the bottom performers on the S&P 500.
Special-purpose acquisition companies, which take startups public through mergers, raised about $12 billion in each of October and November, roughly doubling their clip from each of the previous three months, Dealogic data show. So far in December, three SPACs a day are being created. While that is below the first quarter’s record pace, it brings the total amount held by the hundreds of SPACs seeking private companies to take public in the next two years to roughly $160 billion. The cash committed to venture-capital firms and private-equity firms focused on rapidly growing companies but not yet spent also is ballooning. So-called dry powder hit about $440 billion for venture capitalists and roughly $310 billion for growth-focused PE firms earlier this month, according to Preqin. Good charts below. Lots of cash waiting to pounce.
I have written about shipping rates at length. I spoke with an importer on Tuesday night. For his 40 foot containers from China to the Midwest, he was paying $3,500 pre-pandemic. It went up to $27k and then down to $18k a couple months ago. Unfortunately, it is back to $27k. This makes manufacturing in China uneconomical for many products. It is actually cheaper in the US despite unions and high wages. Think about that for a second. Hopefully, one of the positive outcomes of the pandemic is less reliance on China and more manufacturing in the US.
Politico has a long, but interesting article entitled, “The Fed’s Doomsday Prophet Has a Dire Warning About Where We’re Headed.” Thomas Hoenig knew what quantitative easing and record-low interest rates would bring. Hoening was the president of the Federal Reserve bank in Kansas City and the article retraces his consistent “No” votes about accommodative policy during the GFC. The piece goes into detail about his concerns about the long-term ramifications of easy money policies. “There is no painless solution,” Hoenig said in a recent interview. “It’s going to be difficult. And the longer you wait the more painful it will end up being.” The article discusses inflation, bubbles, defaults, income inequality…I receive a great deal of email traffic asking questions about the topics in this piece. If Fed Policy and inflation of are interest, it is worth the read.
The “Great Resignation” may be about to pick up steam again in the new year.
Kathryn Minshew, co-founder and CEO of career website The Muse, is predicting another wave in January and then again once companies start finalizing their back-to office plans. Right now, she believes that may be in the spring. There have been signs that the Great Resignation, or what some call “The Great Reshuffling,” has slowed down. The rate of those quitting their jobs declined in October, according to the most recent data available from the U.S. Department of Labor. On top of that, the holiday season is when many people pause their job hunt, Minshew said. They may have also stuck around for a year-end bonus. The inability to find workers is remarkable. I have spoken with hotels who are literally short hundreds of workers and are limiting services and hours due to the lack of help.
This WSJ article outlines new technology available in 2022 which will “Change your life.” Items include EVs (over 100 models will be available in the US), Sustainable Products, Kid proofing Social Media (PLEASE), Chips, Robots, Mixed Reality, Health Sensors, Passwords, 5G, and more.
Nonalcoholic beverage giants Coca-Cola and PepsiCo are entering alcohol, while beer brewers are pushing into hard soda and spirits. New entrants mean tougher competition, which is stirring worry among some alcohol companies about the effect on the three-tier system that has long governed that industry. I am not convinced this is a good thing for kids as it is likely to promote under aged drinking. Just what we need-video game loving, vaping kids drinking spiked soda while on Snapchat. Jeez, I sound old. I am quite concerned about vaping among young people (15-25), exotically boys. I am in shock about how many historically fit and healthy kids are addicted. I see young kids on the golf course doing it all the time.
The Chicago dispatcher who was widely praised for his calm demeanor while assisting officers who came under fire over the summer issued a stark warning on social media last week, saying at least one district is dangerously understaffed. Keith Thornton Jr., the dispatcher, took to Facebook to inform followers that there is a staffing problem in the 16th District, despite assurances from city leaders, the Chicago Sun-Times reported. "If you are a Chicagoan, living here or doing business here, even just visiting as a tourist here, your safety is compromised and in jeopardy," he said according to the paper. "When I’m getting text messages from officers that they’re scared and afraid for their safety because they’re working by themselves, and then the beat next to them—that would normally back them up—they’re not even there because the cars are down. That’s a problem," he told the station. I am not sure why the chaos in the police department is a good thing for anyone. I cannot imagine being a police officer and risking my life while I am being hated on by so many. I sure would not want to police the streets of Chicago without a partner and ample backup nearby.
Other Headlines
Former Bear Stearns CEO Jimmy Cayne dead at 87
A story for another time, but I was adamantly opposed to the JPM purchase of Bear. I was one of 15 in the room and only two of us were against the purchase.
Legendary NFL coach and broadcaster John Madden has died at age 85
Man banned from leaving Israel for 8,000 years over child support payments
Richard Marcinko, the first head of the elite SEAL Team Six, has died
I read some of his books and must tell you his stories and profanities are remarkable.
Man who faked being disabled teen to get diaper changed arrested again
What the hell is wrong with people? Some pervert does this and I am a nurse, I punch him in the face.
With just $36.6 million in ticket sales, ‘West Side Story’ is officially a box-office bomb
The production budget was $100mm before marketing costs. OOPS!
Chicago police alert residents to burglaries targeting senior citizens. Suspects pose as Water Department employees to lure elderly victims out of their homes
$1 million worth of Birkin bags robbed in Palm Beach boutique smash-and-grab
This type of headline is generally in Chicago, LA, SFO, not Palm Beach.
Defund police backer Brad Lander to have NYPD security detail as comptroller
Nothing like hypocrisy in politics. Its bad for you and good for me.
Tahoe shatters 50-year December snowfall record with more than 16 feet of snow
The skiing is insane out West. It snowed 39” in 24 hours. I sure wish I was snowboarding right now. I feel invincible in these conditions.
COVID HEADLINES
I think the headlines are scarier than they need to be. I believe there has been one Omicron death in the US and most people are not getting very sick at this point.
World Hits Record Daily Covid Cases as Omicron Mars Christmas
5 college football bowl games have now been canceled because of Covid-19
CDC Shortens Covid Isolation Time With Omicron Cases Surging
Goldman Will Require Covid Boosters, More Tests as It Sticks to Office Return
Over 6,000 NYPD cops out sick, many with COVID or flu-like symptoms
There are 36,000 cops, so 17% of the force is out.
Virus/Vaccine
Although cases are exploding, hospitalizations are growing slowly and deaths are actually declining slightly. I never recall the case rate increasing at 126% and went back and checked the Delta wave and found case growth in the 20% range, not over 100% like today. Apart from Puerto Rico which is seeing over 4,000% case growth, Florida is the worst at just over 1,000% in terms of case growth. However, for the US, hospitalizations and deaths were increasing at a far faster pace with in the last wave. US Cases grew to 267k for the 7-day average and were up 126% from the prior two weeks despite only an 18% increase in testing. On December 27th, we had 543k new cases in the US. For perspective, I believe the previous peak on Jan 8th was 300k new cases. The US positivity rate has grown to over 14% from 7% a few weeks ago. Hospitalizations grew by 11% and totaled 75k. The prior peak was 136k on Jan 15th. Deaths actually declined by 3% to just over 1.2k in another sign that hopefully Omicron is just not as lethal as the prior variants. The prior peak had 3.2k deaths per day. December death growth was most severe early in the month going from approximately 900 deaths a day to 1,300 a day. Since December 9th, data has stabilized and in the past week, trended down. I hope we see deaths decline now that Omicron has become more prevalent. However, it should be noted that the CDC revised the estimates of the Omicron variant down sharply in recent days. The CDC statement is a bit confusing about the prevalence of Omicron and concerning if indeed the growth we are seeing is not almost exclusively Omicron, a less lethal variant. CDC: The public health agency’s previous estimate that the rapidly spreading variant accounted for 73.2 percent of cases nationwide on Dec. 18 is now revised down to 22.5 percent — a significant drop that falls outside the agency's earlier 95 percent prediction interval, or likely range where future analysis will fall, of 34 to 94.9 percent of all cases. I am not sure how the CDC got this wrong. IF Omicron is a low percentage of cases and it is dominated by Delta, then I am far more concerned. I am awaiting another post and a hopeful Omicron is more prevalent than Delta.
I receive a lot of calls, text and emails from the Rosen Report and 97% of them are quite supportive, thankful and appreciative. However, I do get messages from time to time with people who disagree with a point I made or did not make. I do my best to get out stories of interest and educate people and have some fun along the way, but obviously, by myself, I cannot cover everything despite my best efforts and spending up to 30 hours a week on this project. I feel a reader rightly pointed out something I have not written enough about and that is the correlation between cases, hospitalizations and deaths for vaccinated and unvaccinated people. It took me time to find the data and I don’t have the most up to date points, but it is clear that the adverse outcomes have largely driven by those unvaccinated by a serious factor. Even if there is noise in the data, the charts below are clear. I do not recall ever suggesting otherwise, but feel the charts below make it crystal clear of the benefits of the vaccine to reduce severe outcomes historically. I do believe Omicron cases will show that the vaccine is less effective against catching the virus than prior variants and hopeful it shows the vaccine continues to result in improved outcomes.
The charts below are pretty self-explanatory that cases, hospitalizations and deaths have been disproportionately those unvaccinated. Remember, I am double vaccinated, but I will not take booster shots every 2 months the rest of my life and this NY Times article outlines concerns over Israel and the 4th shoot with respect to the impact on the immune system. The new data on Pfizer booster effectiveness was in my prior report and was disappointing. If I did take a booster, I would take Moderna at this point based on what I have read. With respect to hospitalizations, I have spoken with some doctors and heard from various readers. Many hospitalized were in the hospital for other ailments and tested positive for COVID. Here is data on Miami for perspective from a Miami Herald article:
Jackson Health System, Miami-Dade’s public hospital network, reported 212 inpatients with COVID-19 on Monday — about a 150% increase over the 83 inpatients reported on Dec. 19. But the share of Jackson Health inpatients diagnosed with the disease after being admitted for an unrelated medical reason outweighed those whose primary reason for hospitalization was COVID-19. Of the 212 inpatients with COVID-19 reported at Jackson Health, 127 or 60% were diagnosed after being admitted for another reason, according to the hospital system’s internal tracking report.
Also of note, I have spoken with physicians at a handful of hospitals in the US in the past 48 hours. One in NYC has 20% of the residents infected and almost all are double vaccinated and boosted. Another hospital on the east coast claims that of those hospitalized for COVID, over 90% are unvaccinated.
This CNBC article is something I am hoping for with respect to the virus. The immune response of people infected with omicron appears to increase protection against delta more than fourfold, according to a study from South Africa. Omicron could displace delta as a consequence, the team of scientists found. If omicron also proves less severe, Covid infections could prove less disruptive to society, they wrote. However, the study has not been peer-reviewed, current data on severity is preliminary and epidemiologists have warned omicron could still strain hospitals.
Anthony Fauci said on MSNBC on Monday that it would be “reasonable to consider” a requirement to be vaccinated for coronavirus before getting on a domestic flight. Later, in an interview on CNN, he said people should consider avoiding larger New Year’s Eve parties. “When you make vaccination a requirement, that’s another incentive to get more people vaccinated,” Fauci said. “If you want to do that with domestic flights, I think that’s something that seriously should be considered.” I have read nothing to suggest that a vaccine stops Omicron and literally over 100 double vaccinated and boosted readers have told me they are infected. I just don’t see this proposal going over so well. This is a NY Times Headline-”As Omicron Spreads and Cases Soar, the Unvaccinated Remain Defiant.”
Novavax CEO Stanley Erck said on Monday that his company is at the "tipping point" as it pertains to its COVID vaccine and noted that the two-dose series will be "very effective" against the highly-contagious omicron strain. Speaking on "Varney & Co.," he acknowledged, however, that "nobody really has efficacy data." He noted that there is efficacy data available from the company’s phase 3 clinical trials, "which shows that our vaccine works between 90 and 100%" against the original strain and the delta variant.
If you consider taking the antiviral drugs, please read this. There are issues with interactions with other medications. As the omicron surge pummels a pandemic-weary nation, the first antiviral pills for Covid-19 promise desperately needed protection for people at risk of severe disease. However, many people prescribed Pfizer’s or Merck’s new medications will require careful monitoring by doctors and pharmacists, and the antivirals may not be safe for everyone, experts caution. The Food and Drug Administration authorized Pfizer’s Paxlovid for mild to moderate Covid in people as young as 12 who have underlying conditions that raise the risk of hospitalization and death from the coronavirus, such as heart disease or diabetes. However, one of the two drugs in the antiviral cocktail could cause severe or life-threatening interactions with widely used medications, including statins, blood thinners and some antidepressants. And the FDA does not recommend Paxlovid for people with severe kidney or liver disease.
Real Estate
My General Comments-When I golfed at Bocaire, I spoke with people about the real estate there. It is a gated community with about 230 homes and an 18-hole golf course, tennis, pool and a clubhouse with a gym, restaurants, card rooms…. It historically was for older, retired people. At one point, the average age was WELL into the 70s. Now, I believe it is in the 50s and families live there today. I would guess it is 80% Jewish. One resident bought a 16,000-foot lot in 2012 for $35k and then the house next door in 2018 (same lot size) for $125k. Today, a 16,000-foot lot would be $700k. Homes which went for $500k are going for a $2mm. Now, the high end there is $4mm+. Remember, this community is on Military Trail, which is west of I-95 and some 3 or 4 miles from the beach. How many of the 230 homes are for sale today? Pre-pandemic, the answer was 20-25 and you could not give them away. Today, there are three homes for sale. The available homes now have a low end of $900k where you get a 3/2 built in 1979. The high end is a 3/3.5 built in 1993 for $2.2mm. Welcome to the new world of South Florida real estate. By the way, the lunch buffet is pretty solid and unfortunately, it was closed on Monday. Jack and I were bummed we did not get the turkey carving station. Rich, next time, the Rosens are available any day but Monday.
London residents spent the highest in a single year on housing outside the city in 2021, as people sought more living space during the coronavirus pandemic, the FT reported, citing an analysis of official data. The 54.9 billion pound ($73.5 billion) tally beat the previous record of 36.6 billion pounds ($49 billion) set in 2007, even as the total number of transactions fell short at 112,780. The study by estate agent Hamptons used data from HM Revenue & Customs. As the coronavirus pandemic led to a sharp rise homeworking, many have chosen to abandon the city for commuter towns where larger homes with gardens are more affordable. Three quarters of those leaving remained within easy commuting distance, the FT reported.
The celebrity siblings partied at the nightclub E11even and toured the sales gallery for the residential project following Jake Paul’s win against five-time UFC Welterweight Champion Tyron Woodley. The Pauls’ adviser and a co-developer of the tower, Marc Roberts, gave the brothers a virtual tour. The Paul brothers are buying three-bedroom, three-and-a-half-bathroom units that are asking $20.5 million apiece, according to a spokesperson for the project, who declined to say what they are paying. They are expected to sign their contracts after the holidays. Stories like this just make me mad. They have nothing on the Rosen Report other than the fact that Jake Paul has 17mm more followers than me. Son of a…
