Frank Curzio 00:00

Let’s go now. Today is Thursday, September 17. I’m Frank Curzio, this is the Wall Street Unplugged podcast where we’re breaking the headlines and tell you what’s really moving these markets. This is Thursday, Q&A day, post-Fed day. We get to write in to askcurzio.com for free, and every Thursday Daniel and I answer your questions on stocks, the economy, Fed, any sector, sports, even personal issues, which is going to be one of the questions we get today. It’s going to be kind of cool. 

But it’s askcurzio.com. We still get a lot of questions with frank@curzioresearch.com, daniel@Curzioresearch.com, but put them at askkersio.com and this way we can answer them Thursday. And we let you know. We’re going to email you and say, “Hey, we’re going to answer this question.” So keep them coming in. We’re starting to get a lot of great questions. It took a while to build this up. Now finally people are like, “Hey, you can answer these questions for free and get free advice and all this stuff.” And again, it’s not advice, remember, it’s not financial advice.

Frank Curzio 00:59

Even though we talk to an audience, we’re allowed to talk to audiences, we can’t talk to individuals, you guys know. But let’s begin, because lots of great questions, and let’s start with one from Jack, which is Jacques. He goes, “Hi Frank and Daniel.” Daniel, going to be bringing you in here. “Your reason for recommending selling a handful of positions in the Alpha portfolio. When are you deciding when you’re deciding on what to sell, how much does the tax liability factor in? Do you ever hold a stock longer than you otherwise would just to get long-term capital gains treatment, or is that kind of a thing that sounds smart in theory but really does not hold up once you factor in opportunity cost and market risk? It’s been drilled into me that short-term capital gains have to be avoided like the plague.” Daniel, you want to take that question first?

Daniel Creech 01:40

Sure. I’ll be short and sweet. Regular listeners know my heart here. I think it is a ridiculous lie to make decisions based on tax consequences. I get it. Nobody likes paying taxes. I’m a huge capitalist. I’ll argue, love debating, and all that kind of stuff. I just think if you get too tied up in that, I just agree to disagree. If your thesis changes, pay the tax. The other side is, if you’re making a lot of money and you’re paying a lot of taxes, at least you are making it. We can get into a whole debate there. And lastly, just because I want to be transparent and provide value, you care about your money more than anybody. I don’t care about your tax bill. I’m not trying to be a prick. I do not care about your tax bill. The only person’s tax I care about, Frank, is guess whose? Mine. That’s the way it is. That’s the way it should be.

Frank Curzio 02:30

So many things going on with their taxes. But when it comes to stocks in general, that’s not our job, right? And I think I hear that all the time with people like, “Oh, I got to pay taxes.” If you’re paying taxes, it means you made money. It’s not the worst thing in the world, right? And yes, if you could avoid short-term gains where selling something at 11 months compared to 13 months is definitely going to help, right? It’s going to help tremendously. But you have to be careful because if you’re looking at that as a tax consequence, you’re looking at names that are not the biggest names in the world, right? So you are going to see tax loss selling, especially year like this where, believe it or not, a lot of people made money. We did well in the portfolios. No one’s done really great in the past maybe couple of months and stuff. It’s been rocky and a lot of stocks is more lows than highs, believe it or not, even though the S&P is close to as high. It’s been bad for the past two, three weeks.

Frank Curzio 03:15

We’ve seen a rebound today, which is fine. We told you that, again, a couple of weeks ago, we didn’t like this market at all. We still don’t like it. And maybe it goes up or down after the Fed meeting, which we said yesterday. We broadcasted before that. And it winded up coming down. Now it’s rebounding a little bit because we’re incredibly oversold. But still, the risks are still there. Getting back to your tax questions, for me personally, I care, right? For me personally. But I don’t do that for the portfolio. That’s up to you, right? We’re not looking at your taxes and, “Okay, we’re going to sell this at a couple of weeks later.” Just be careful. I mean, the ones that could fall, if you want to avoid paying a short-term gain and you’re 10, 11 months in it and it’s a small cap that’s driven up by a story, be careful because there’s algorithms now and AI that factor a lot of this shit in. And when these stocks are coming down, they’re going to be sold off even more because you don’t want to pay short-term gains on them.

Frank Curzio 04:05

Depending on when the news flow came in, you could have a stock that just stayed there forever, especially small-cap players, not large-caps, right? You’re not going to see these massive fluctuations unless it’s earnings season like in the middle of nowhere. But there’s small-caps that don’t have a lot of liquidity, much less than large-caps and mid-caps that, going in, they know if they trigger certain things, they’re going to have certain reactions. That’s what AI is about. That’s what trading is about. That’s what a lot of these algorithms are about. They’re about your sentiment and your feelings and what’s going to happen. Every single time that happened with this stock over the past 60 years is now programmed to AI into split second to let you know, “If this happens, this is the reaction you’re going to have with your stock.” So be very careful. So if you’re waiting for those last couple of months, you might watch your stock go down 30, 40 percent and those short-term gains you don’t really care about, right? Because now you have losses. So I’ve never made a financial decision based on taxes when it comes to that. If I’m in that period where it’s 10, 11 months, I’ll look at it.

Frank Curzio 04:53

Maybe I’ll hold a little bit longer personally. But we don’t focus on that. And I don’t think any fund manager should be focusing on that because their job is to make you money. They don’t know what else you own in terms of taxes. I’m assuming that you have other stocks that you have in your portfolio that you don’t have. Just from our recommendation, most people have lots of different financial newsletters that they follow. So for us, we just want to focus on stocks, focus on the gains. When we don’t like them, our thesis change, that’s when we’re selling them. I’m not going to say, “Okay, the thesis changed, but let’s wait another two months. Let’s wait for the gains, for the tax gains.” Daniel’s right. Every person is different. That is up to you, not up to us. But for me personally, yes, I’m looking out just like you’re looking out. So I don’t say that it’s overblown for short-term capital gains. Remember, if you’re paying short-term capital gains, it means you made a lot of money on your stock or you’re up on your stock. But just be careful if it’s like the last month or two of a stock that’s not that volatile that maybe you want to hold a little bit that’s going to give you long-term gains because that’s a big difference.

Frank Curzio 05:46

That’s a really big difference. I don’t know what the difference is. If it’s 45% to 20% now, I’m not too sure. I forget. But it is a big difference. So next question is from Frank. He says, “Hi Daniel and Frank, thanks for your continuing education. Why did financials fall when the rate hike was announced? Is this indicative of continued lowering of the financial sector?” I think that’s a great question when you look at the markets. And this happens often, okay? And again, we got great questions today. And I’ll take this first, Daniel. You take it after. If you look at the XLF, and Jeff, we got that up on the screen there. So the XLF, this is a three-month chart, and this goes on to September 3rd. Why September 3rd and not all the way through? Because you’re going to see financials come off. Now, why are they moving up? They’re moving up because that’s when we had the Fed meeting, Jackson Hole. That’s when we saw, especially the last couple of months, where the odds of a rate hike started to increase.

Frank Curzio 06:39

So look at what financials did compared to the NASDAQ. I mean, you look at the NASDAQ down 2%, financials are up 14%, right? So this is what you play. This is why markets are forward-looking. So what happens is the XLF really took off. Now, what do you see? This is more like classic buy the rumor, sell the news. Now, Joe, if you can, push that chart out to the full three months and you’re going to see what happens here. Or better yet, if you want, put a five-day chart up there. Put a five-day chart up there and compare it to the NASDAQ. So if you do a five-day chart and compare it to XLF, which is a financial ETF, the large-cap ETF, and you do it over the five days, look at that. So you’re seeing the financials down 2.5%, and this is the last five days. If you look at the last day, it’s even better. And the NASDAQ’s flat, but even in the last 24 hours, we’re seeing the XLF down and we have a nice healthy game for the NASDAQ, right? So when you see this, this isn’t a sign that the trend is changing.

Frank Curzio 07:37

This is just a sign that financials blew away the markets. I mean, who made 14% over the past three months? I mean, the past three months, you’re looking at all consumer-related stocks are down tremendously. I mean, down 20% on average each if you look at consumer stocks. If you look at a lot of names outside of oil, outside, even AI names are down tremendously. Yes, they were up 200, 300 percent. We benefited tremendously on some of these names, even a 10X and an 8X, I think, or 7X we have with Celestica and BE when we sold this in our portfolio. But lately, it’s been a shitshow, right? So other names, healthcare, some of the other names, but look at financials where they went. So to answer your question, Frank, it’s a good question. It’s not indicative of a continued lowering of the financial sector. It’s just, “Hey, this trade made a lot of sense, and now it’s going to sell off on the actual news.” And this is classic. This happens all the time in the markets. It’s, “Buying this trend, buying this trend,” and that’s why stocks go up crazy into earnings.

Frank Curzio 08:25

They blow out the earnings and then they’ll pull back 5%. Well, that stock went up 25% in the past three months, okay? That’s going to happen almost all the time, no matter what the numbers are, unless they’re insanely blown out like you saw with Dell, which continues to move higher and goes to new highs. So this is very, very normal. It doesn’t mean to get out of XLF because we know that more rate hikes are coming. They’re not going to just hike once. They’re going to come and maybe not. People are predicting they’re not going to do it next month because of the election and all this shit. You don’t know. I mean, I do like that meeting yesterday, though. I really think he held true to what he said and with all the noise and stuff like that and not be able to forecasting as much. But I really liked the way he handled that press conference because he’s saying exactly what he’s going to do, which is what you want out of the Fed. Whether you like it or not, I want more clarity. It was a pretty quick meeting.

Frank Curzio 09:10

I liked it. But that’s your answer to the XLF. But no, it’s not a reason to pull out of financials, but this is expected. A little bit of a pullback here in some of the financials. And then I think you see them re-rate, just like we see with Nvidia, sell off post-earnings a lot and then go a lot higher because they reported great earnings.

Daniel Creech 09:25

Yeah. Not too much to add for me on that, just other than if you want exposure to this, I guess the way I would think about this, if you want exposure to the financials because you think the economy is as strong as what many believe, then rate hikes shouldn’t really cause a whole lot of disruption there. And obviously, it’s good for net interest income, which we talk about all the time and how JP Morgan and those banks just make absolutely tons of money on the spread between what they pay you in deposits and what they take in in terms of interest on loans. Unless you really think that the rate hike is going to slow down the economy outside of oil and such, I think that this would be a good place to at least have some exposure to. Not crazy about it after the huge run-up. I like the regionals only, well, not only, but partially because I believe that Mr. Bessent, our Treasury Secretary, the administration has to get very busy, especially with midterms coming up and post-midterms, on any type of regulatory changes they want to make to help the bond market and such.

Daniel Creech 10:31

And in my opinion, they do. What’s going on with the bond market? The easiest thing, in my opinion, we’ve talked about this in the past, is you can loosen or you can change some regulations on the smaller banks and even large banks, but regional banks would be best. And you could allow them to buy more treasuries and stuff. As Frank talked about yesterday, you got to balance the supply and demand in the bond market and everything. Yeah, great answer there from Frank. I think it’s buy the rumor, sell on the news. I would look more at regional banks. HOMB is my favorite because of the manager or the CEO.

Frank Curzio 11:01

Yeah, I think so too. Joe, pull up a chart on KRE. That’s the S&P Regional Banking ETF. I just want to see what’s going on here. If you look at six months, it’s about the same. Look at a year. If you look at a year chart, it’s almost, I mean, not double, about 80% higher than regional banks. So remember, whenever you have a bull market, and we’re going to have a bull market in banks. We have a bull market in banks. Higher interest rates really helps the sector. You’re always going to see the more risky names go higher. I mean, even a new regulation coming down, I mean, higher interest rates are really great for the big banks, but they’re really great for these regional banks, right? These are small. They’re going to generate much higher profits, right? They’re more nimble. These are names like every sector in small caps. Small caps going up, the most risky ones are going to go up higher. However, when you have a downturn, the more risky ones are going to go down much more than the big names.

Frank Curzio 11:52

But if you’re really looking and saying, “Eh, you know what? Financials pull back just a little bit on this news.” Again, this is like a sell the news story with the rate hike. You’re going to see more odds, the odds going up on rate hikes. Maybe for next, if not next month, definitely for December. I don’t even know what the odds are, but they’re probably very high for a December rate hike. Another one. They’re not just going to hike once. But that’s very, very good for the banks. I mean, the net interest income goes absolutely through the roof. They were predicting that rates would be a lot lower over the past pretty much 18 to 24 months, and they remained high and now going higher. And their profit margins are exploding. These companies are making money hand over fist, but it’s really good for regionals. So I think banks are going to do good in a weak market, especially if rates continue to stay high. They’re pulling back a little bit. That’s why the market’s doing better. But overall, you might be better off KRE or what we do is we’ll look into a lot of these indices and ETFs.

Frank Curzio 12:45

We want to pick out the individual stocks, not just the ETF, but KRE might be a good starting point to find out what are some of these best regionals that you could buy because they’re clearly, over the past year, they’ve outperformed. And if interest rates stay relatively high, we get some more rate hikes going forward into 2027. These are likely going to outperform some of those big, big large caps, which you still should have exposure to. They’re paying massive dividends, buying back a shitload of stock. The balance sheets have never been stronger in their history. These guys are just rocking and rolling right now, the big banks. And they’re bigger than they’ve ever, ever been in history where JP Morgan, did they pass the JP? What’s JP Morgan’s market cap, Joe? Pull up here on my screen. Is it a trillion yet? $930 billion. $930 billion. I think at 366, you’re pretty close to that. So it was almost a trillion dollars. But it’s going to be a bank, a trillion dollar valuation market cap, JP Morgan.

Frank Curzio 13:38

And that’s going to go higher as long as interest rates stay high because these guys are printing, printing, printing money right now, more than they have had in their history, which we cover every quarter. Everyone says, “Oh, the banks, and all these derivatives, and the balance sheets. Holy shit, the world’s going to end.” I mean, these guys are producing more money than you ever seen. We come out and I say it on Twitter at Frank Kurzweil all the time. I break down the top four banks, how much in profits they make, whatever. If for the quarter, what was it? 40 billion in profits and 115 billion in revenue for the quarter they generated. And people worry about the banks. The bank’s perfectly fine. Those profits are going to continue to go higher and higher as long as rates stay higher. So okay, let’s get to the next question. It’s from Keith. Is there a risk to data center need as small language models can do almost as much as large language models and compute is moving to laptops and phones? Seems like the need for data centers has become less.

Frank Curzio 14:24

Does this provide any risks for DGXX and Vivo? V-I-V-O. And he goes, “Thanks.” The small language models, let’s talk about them because the small language models are different from large language models. So they can’t do as much as the large language models. That’s false. If you’re looking at the compute power, you’re looking at small language models use fewer parameters, less memory. So you could say, basically, less infrastructure, right? So their parameters range from 1 to 40 billion. And that may be okay for some companies who want to store their own information on their own cloud, but it’s difficult because the cloud is the wild card here. And the amount of cloud that’s needed and how these clouds operate and have their security on it as well for safety and how they operate with just within your systems and are able to operate with other systems, it’s very hard to do. If you’re a small company, it’s different, but that’s not where the money is coming from for AI. So just small language models, 1 to 40 billion to put in that perspective, large language models, which power not just AI, but all cloud infrastructure for the hyperscalers, you’re looking at parameters that are much, much, much bigger than that, where they’re approaching hundreds of billions to over a trillion parameters compared to 1 million to 40 billion.

Frank Curzio 15:43

So the big companies are always going to need that no matter what, right? That’s huge. That’s not slowing anytime soon. That’s why hyperscalers committed 2 trillion already to build out data centers in the next two years. Those are going to be built. We’re talking about politics right now. We’ll get to a question in a minute, but those politics are kind of saying, “Hey, you know what? We want to slow down anything new for now until the election.” And then nobody really cares about people anymore. They don’t care about them while politicians are in elections. And that spending is going to be over 7 trillion by 2030. So you can’t fake those numbers. So when I look at DGXX and Vivo, even if you’re looking at an iron ride in that these Bitcoin miners are transitioning and DGXX is generating money, Vivo is still generating money off this. This isn’t something they’re doing. They’re doing now. It’s just going to get better and better. They own the assets, the electricity. The biggest companies in the world are in dire need of.

Frank Curzio 16:33

And that’s not going to change. So eventually, these guys are going to pay up for it. I went over the ERCOT, which is Texas and providing power, how they have to build demand for 2X the capacity than they currently have right now. Through 2030, this is four years. This isn’t a long time. So they can’t fulfill it. It takes five to seven years to build a lot of these transmission lines and get everything up and running. But that’s where the demand is. There’s massive, massive demand. And these guys are sitting on their own electricity. So I love the fact that we got into these names early. It’s always going to be volatile. You have politics that’s creating that volatility now, and these stocks have moved up and come down. But getting in early to these names are key because you go right out the volatility where we’re up 100% plus on these stocks, even though they’re down probably 30, 40% from their highs. But still, going forward, I love where these are. The thesis is still intact. These guys, I talked to the CEOs.

Frank Curzio 17:21

They’re going crazy, doing everything they can. Again, they actually say that they’re talking to other hyperscalers. I mean, these guys are in great, great position where they have an asset that’s in dire need by the biggest companies in the world. That’s not changing anytime soon. So when I look at your question here, even if you’re looking for the compute power, but this is Jevons Paradox, right? This is like people are saying, and Daniel and I covered this yesterday about cheaper tokens, which is a model behind small language models, right? Results in not just an increase, but a surge in demand. If we’ve seen that industry and industry, I mean, my first computer was a compact computer. Compact doesn’t even exist anymore. I paid three grand for it, right? And it’s lucky if it could get online today. So cheaper prices are going to help scale and same with smartphones and TVs. But when I look at this model with small language models, it’s good for personal computers. It’s good for smaller things, but this isn’t what’s driving the market.

Frank Curzio 18:14

It’s the biggest companies in the world that need this to fuel their cloud. And cloud growth is unbelievable. Just starting with that, there’s a new cloud growth wave. And that’s why you saw a lot of these hyperscalers go through the roof. No one’s anticipating cloud as percentage-wise to start increasing even more for the Googles, the Metas. You’re looking at Microsoft and Amazon, right? Holy shit, with that cloud platform, it’s lots of money. So you’re going to need the large language models for that, and it’s going to continue. But good question. But the small language models, they can’t do almost as much as long language models, not even close. However, there is going to be demand for them, but not enough to where we say, “Okay, we’re going to see a decrease in spending for data centers.” And hopefully, that answers your question, Keith. And Daniel, I don’t know if you want to continue with that because I know you love about the tokens, and you talked about that yesterday and hiking demand for the tokens and the prices come down tremendously.

Daniel Creech 19:03

Yeah, I think, listen, I’m not going to go against economic history. When the price of something plummets, the usage is going to skyrocket. I don’t think that’s any different. This is a great question, Keith, on the demand for data centers. One, in the short term, I think it’s political. It’s the biggest headwind for data centers. We’ve talked about that. Number two, I would look at efficiencies and technology. There’s a lot of talk about, “Hey, copper recently hit an all-time high. You need a lot of copper for all this stuff.” But now optical fibers is going to—I’m screwing that up, Frank. What am I trying to say? Maybe it is optical fibers. I’m second-guessing myself. Anyway, that’s going to replace copper. My thing is, hey, data centers, whatever you think of a data center right now, it’s going to get more efficient, just like it’s been getting more efficient over whatever timeline. The cooling and the cooling systems like Vertiv we’ve talked about are only going to get better. They’re only going to be more efficient with power, water usage, and all that kind of stuff.

Daniel Creech 19:54

And honestly, the third thing that I would say, looking down the pike, if you will, about risk to data centers is this not only efficiency, but I don’t think, Frank, whatever the number of data centers right now in the queue is, they’re not all going to be built. And the simple reason behind that is because there’s no barrier. Until recently, you’ve seen ERCOT and some people do put in kind of hoops to jump through, but there’s no barrier to say, “Frank, we want to build a data center for Curzio Research. Let’s put that in the queue and see if we can get in the pipeline.” Once it comes up and once you have to start saying, “Hey, how much do you need? What power are you going to do? How are you going to source this? How are you going to finance this?” You’re going to see some of that drop off. It’s not that it’s so bloated. It’s overstated. I’m just saying, take everything with some salt right now because everything that we see right now in demand is not counting on, in my opinion, more efficiencies, which is going to happen.

Daniel Creech 20:48

And you got tons of money going at it. So don’t bet against engineering. And also, again, when push comes to shove, who’s going to be able to actually finance that and everything? I think the demand is there because I’ll agree with Frank, large, small, open, or proprietary, I think the power and electricity demand is going to continue higher. And that’s our main goal there.

Frank Curzio 21:06

Yeah. And I would say, I mean, I don’t know if that’s what you meant, but there are barriers. We just can’t go and say, “Hey, we’re going to build this.” There’s a lot that’s required.

Daniel Creech 21:12

No, but I mean, to put in the queue to go ask for certain things.

Frank Curzio 21:15

You need to have the money. You need to have like there’s a whole, even for the guys that we talked to, like there’s a whole process behind that. Even the, who was it? The Core Weaves set. I mean, they’re not taking out debt unless they know exactly how much from the project, from the guarantees that they have, and then they go out and take debt once the business is built. Once that business is logged and they say, “Okay, this is what we need. This is what we have. This is their money.” They do the credit checks and everything. Then they go out and they say, “Okay, we’re going to take on debt.” And people are like, “Wow, look at all the debt you’re taking on.” They say, “Listen, this is based on the business that we get and we repay it 18 months later.” So with that, we’ll see. I mean, I think it was something like 60% have not been fulfilled or something, but I’m going to look at these statistics. They change all the time. I know it’s even different now, but the new projects coming out, that’s the ones that, in terms of politics, that they’re holding back on, not the existing ones that are already in the process of being built, right?

Frank Curzio 22:01

You can’t just hold them and stop them. So which isn’t really a big deal. It’s the future of anything that’s coming out that hasn’t really been built yet. We’ll see what happens. But good question. But the small language models are definitely good. They’re good for businesses, they’re good for personal, but it’s the large ones that are going to be driving the world when it comes to cloud and corporate and business to business and stuff like that. And that’s the game changer. So you’re always going to need massive data centers and they’re going to get more efficient. But that spending, I don’t see slowing anytime soon, especially 2 trillion committed in the next two years. And then they’re saying 7 trillion, 7 plus trillion for five years. I don’t see that changing. There hasn’t been a slowdown. In fact, they keep increasing those numbers as we go further every single quarter that passes. Let’s see what happens this quarter. So this one’s from my buddy Elhoff. I call him Elhoff because if I say his full name, everyone’s going to know it. He’s from Holland.

Frank Curzio 22:47

And he asks a lot of questions. He’s been a follower of ours for a long time. And this is a personal one. I like it. He goes, “You said drop me all your questions. So can you drop a question in your podcast? I’m sick of being alone. I gave up internet dating. If you know a woman interested in a serious long-term relationship with me, let me know.” He goes, “Plus points, financial stability, dual citizenship. I’m a family person.” He says, “I’m a foodie. Negatives. He’s in Holland. I’m considered a right-wing conservative guy. I have a terrible backlog on freelance writing and possible gigs. I don’t know why that’s a bad thing.” He goes, “I’m not a US citizen. I’m confirmed legally blind and braille reading. Can you help me?” Dan, you want to take this first or you want me to take? I will say, if you’re legally blind, it’s going to be a lot easier since looks don’t matter. I’m joking. I’m kidding there. Just funny joke. Sorry. I just say it. But I have a lot to say on this, Daniel. I don’t know if you want to take this.

Frank Curzio 23:39

I love questions like this to break it up a little, but yeah, I’m going to have some good news for you, Mr. HOF. So in a second when I go. Daniel, yeah, you take it.

Daniel Creech 23:48

I would just say this gentleman does email us a lot, and I mean this as a compliment. He’s got a great sense of humor. He makes me laugh. And if you can make somebody laugh through writing or email, I think that’s a good gesture. Me being going to die alone, Frank, and leave money to my nephew and nieces, I am zero value on adding this. So this is all you, my friend.

Frank Curzio 24:07

I have a close friend who sold his company for well over $100 million, and his partner is the one that started at a partner. And his partner was single, rich, older, and decided to put an ad in the paper. And he asked, “Hey, I’m looking for a woman. I’m wealthy.” And provided all the necessary parameters, which everyone says, “I want younger, sweet, fun travel.” And just like girls say, “I want a nice guy.” Well, no girl really wants a nice guy. But young, sweet, fun travel, all this stuff, right? And my friend made fun of him at the time. And when he told me the story, I was like, “Really? That’s what he put in the paper? Holy cow.” And he got like a ton of offers, right? So he wound up finding a girl and started dating. And I think they are married now. This was eight years ago. And the girl he met is beautiful, half his age. And you could say whatever you want, and I don’t judge anyone. They’re still together today. And my friend always tells the story, and he tells it again now, and he goes that they’re one of the happiest couples he knows.

Frank Curzio 25:08

It doesn’t mean go get married to a gold digger. I’m not saying that. Make sure you’re completely buckled up with a prenup. But there is a thing out there, right, where older rich men who want a relationship, who have been alone, and now they make a ton of money. And you’re looking at that with Belicheck. Same thing. You know what? I’m jealous of Belicheck. Are you kidding me? I mean, look at that. People are like, “Oh, look at this young girl. He’s with his dad. He’s laughing. He’s having fun.” They both know the deal, though. They both know the deal, right? And there’s a lot of young women who know the deal. And maybe you’ve been through it and the love part and all this stuff. And now they want the partner up because financial security is very important to them. I don’t judge. It’s not something I would do. I’m just saying it works and people are happy. And that’s the ultimate success in life. People think it’s money. No, I know a lot of very, very rich people from 30 years of what I’m doing.

Frank Curzio 25:56

And I could tell you, a lot of those people are not happy. And the people who are happy are just cool to be around. They’re fun, have a good relationship. They love what they do and stuff. And it does work. So whenever I see that, every one of you saw it, you see some older guy walking down with some young woman, they both know the deal. And they’re both happy. I don’t judge. If that’s what makes both of you happy, that’s what makes both of you happy. If he knows, listen, it’s not going to be true love, that’s fine. It’s not going to be true love. And she likes to have financial security to be able to buy whatever she wants or whatever. But there’s hope. There’s women out there that love that. And that’s what I would focus on is putting it in those places instead of just going on a regular dating center or whatever. I mean, I’ve never been on a dating app because I’ve been in a relationship pretty much all my life, but since that’s happened. But it does work. And I’ve seen it work. So it might be worth it.

Frank Curzio 26:44

And again, I don’t judge. A lot of people are going to be like, “That’s crazy. Don’t do it.” But we’ve all seen it. Let’s be real. We’ve all seen that older guy walking with a younger girl and both of them are holding hands and they’re laughing. They’re fucking laughing. I see much more people laugh.

Daniel Creech 26:54

Would you laugh if you get paid to laugh, Frank?

Frank Curzio 26:56

Listen, I would laugh.

Daniel Creech 26:57

I’m a fucking fucker.

Frank Curzio 26:57

Yeah. I mean, listen, I’ll marry you if you have enough money, buddy. I mean, I don’t know. I mean, I’m about six months away from my divorce. So I’m in. I want to say, you say you’re well off. Depends what it is. I’m just kidding. But seriously, if they’re happy and I see so many more people who are just, they don’t hold hands, they’re arguing, they never smile. I mean, we all see relationships like that. So again, sometimes people are like, “Hey, I’ve been there. I tried that, but you know what? I want to be with someone financially secure and he wants to be with someone that’s pretty and nice and cool and have fun and travel around the world with.” And that’s a good deal for people. So again, I don’t judge, but that might be a good route. And that’s a good example that I know where it definitely worked. We made fun of him. Not made fun of him, but I was like, “Wow, that’s crazy.” And then he’s happier, probably happier than most 90% of married people that I know. And some of the best out of that. So let’s move on from that because we’re getting to.

Daniel Creech 27:44

You spurred me there. I got to make two comments. I need Joe’s help. Joe, put on your, use your Google machine. Type in the Edge, the movie. I think that’s the movie I want to reference.

Frank Curzio 27:51

You just put a Belicheck name with his girl. It’s so funny.

Daniel Creech 27:54

The Edge with Anthony Hopkins. You’ve seen that movie? It’s an older frank.

Frank Curzio 27:57

Yeah, yeah.

Daniel Creech 27:58

That’s a great movie.

Frank Curzio 27:58

I don’t think it’s, is it called The Edge?

Daniel Creech 28:00

Well, I thought it was. That’s why I’m checking.

Frank Curzio 28:02

Yeah, this is The Edge. Yeah, this is a great movie. This is a great movie.

Daniel Creech 28:04

The line in there is when those guys come to blows, if you haven’t seen this, you should, and I’m going to ruin a section of it.

Frank Curzio 28:09

This is a great movie.

Daniel Creech 28:11

Baldwin is talking to Anthony Hopkins and the truth is coming out about Baldwin being with Anthony Hopkins’ wife. And he says, “You know what people think and say when they see you with your wife? There’s a guy with a plane because he’s significantly older than this young, beautiful woman.” And there’s nothing wrong with that. Number two is on Pretty Woman, which is my favorite chick flick in the world. Yes, I admit it. That is a fantastic movie. And to show you, I can go across the aisle. They are goofy liberals in that movie and I still love it. And one of the best lines in there is, “He rents her for the week.” They fall in love, of course, which is the path I’m trying to go down, Frank. Need some more money before that. But the cool thing about that is he says, “Hey, I don’t want any drama. I got businesses. We can go out to dinner. I just don’t want any drama.”

Frank Curzio 28:52

You don’t want anything. You’re balls busted.

Daniel Creech 28:53

Let me all ruin this just for my 40 years on this wandering the earth, Frank. You know why movies stop right after the happily ever after? It’s because that’s not reality. It’s a movie that’s hard work, people. Anyway, best of luck to all of you out there, but again, I’m the last guy you want to ask about this.

Frank Curzio 29:09

I mean, the whole system of marriage is kind of broken. I don’t want to get too much on this, but just there’s so beautiful.

Daniel Creech 29:14

No, it’s not broken.

Frank Curzio 29:15

It’s so beautiful on day one, the beautiful wedding, the beautiful dress, everybody’s at the seller. I mean, it can’t get any better than that day, right? And then it’s just beautiful weddings and stuff like that. But yeah, it gets tough. It gets tough. And some people.

Daniel Creech 29:30

Moving on.

Frank Curzio 29:31

Are great married and good for you. And that’s awesome. So there is hope. So let’s move on here. I will say that Ellen McPherson is in Edge. And if you want to see one of the most beautiful women of that time.

Daniel Creech 29:41

Is that her ex-husband?

Frank Curzio 29:42

Ellen McPherson. Yeah, that’s his wife. Unbelievably beautiful. Yeah. So that was, yeah, when I was younger in the ’80s and stuff like that.

Daniel Creech 29:48

And if you need some motivation, it’s great when they have to repeat, “We’re going to kill the effing bear.”

Daniel Creech 29:52

We’re going to kill the Florida bear. Say it again.

Daniel Creech 29:54

That’s a good line.

Frank Curzio 29:55

So this question was addressed to you, but they said, “What is our opinion?” He goes, “Hello, Daniel. What is,” and it’s from Walt. He goes, “What is Frank your opinion on why Anthropic wants the government to slow down the development of AI? During the start of the war against Iraq, Anthropic did not want the Pentagon to use their software to help in the categorizing of Iraq military sites. After the Pentagon stated that they would not do business with customers, Anthropic changed their mind. Now they want the government to step in. In your opinion, what’s changed?” Daniel, you want to take it first?

Daniel Creech 30:24

Sure. I’ll take a stab at this. And I’m not trying to call him out. He may be talking more about Iran as well and Venezuela, maybe Iraq as well. But anyway, the point is still taken and thanks for the question. I think it’s all about liability. And Walt, check out, if you can, YouTube it or something. Alex Karp of Palantir was on CNBC this morning and he was talking about this. And he said some great things. But as I talked a little bit yesterday and in the past, I went over how much money Anthropic and OpenAI represent for the cloud services and also the backlog. So I’m not able to ignore the numbers and the financial incentives to this. Everybody talks their own book. That’s the way it is. That’s fine. I do think this is more around liability. And to paraphrase what Mr. Karp was saying, essentially, and he’s been on this sovereign AI thing that I should have elaborated more on in the past. But he is out there saying how angry CEOs are of businesses telling Karp this that when they use these proprietary models from Anthropic and OpenAIs, they’re essentially stealing OpenAI and Anthropic all their materials and then using them in their own products.

Daniel Creech 31:33

And he makes this comment several times about, “If you don’t know who the mark is, you are the mark.” Frank, it’s very similar to if you sit down at a poker table, everybody’s heard this. If you don’t know who the, what do you call them, loser or patsy or whatever it is, then you are it. And I thought he did a great job in saying, “Listen, they just got too greedy and ahead of themselves.” And what happens is now you’re okay when you’re basically taking everybody else’s products and using them as your own. But now if you’re able to build something so dangerous, then now you’re liable for it. And they need the government to protect their butts is what they need. I think it’s, I hate to say this, daniel@curzioresearch.com. I think it’s that black and white. I think this is a liability issue. And I don’t know, one last thing here. I’m going to try to remain an adult about this. Yesterday, Elmer Fudd, Gary Gensler was on CNBC. And this guy with a straight face, which is hard to look at, this guy with a straight face was saying, “Well, Anthropic just wants to cash in like SpaceX did.

Daniel Creech 32:33

And all they have to do is disclose it.” And Joe Kernan’s like, “If you just disclose, oh, we can wipe out humanity?” Well, yeah, you got to disclose it.

Frank Curzio 32:39

Oh, you have to disclose it. I’ve said that a million times. If you disclose, you could say that I’m.

Daniel Creech 32:43

That’s just so hard to take serious. And it really shows you why you shouldn’t take most things serious with those guys, but you have to because they have all the, they have the power and blah, blah, blah. I just, again, I could be wrong. Daniel Kreech looks at the money and then he looks at the incentives and the liability. And they have to have somebody the size of the government protect them because of their business practices to be as nice as I can.

Frank Curzio 33:07

Yeah. Look, and you say Iraq, I think you’re right. I ran Walt, why Anthropic changed his mind. They changed their mind because every single company, and I’ve seen this personally with companies that I covered over 30 years that become, they go from small cap to mid-cap and then they become large caps. When they become large caps, the CEOs get very political. They want to be in the right political circles. It’s very, very important for business. If you don’t think it’s important, look at BlackRock, which is the biggest in the world, whatever, 13 to 15 trillion in assets, how quick they flip-flop from DEI, all the stuff, and this is the future of the world and the Biden administration. And now they cut all their programs immediately, right? So I’m not faulting them for them. You got to be part of the administration because politics could crush your business at any single time. We see it. We see it with so many mergers and acquisitions and things. You want them on the right side. So yes, Anthropic was smart to change their mind because of politics.

Frank Curzio 34:02

You want the most powerful person on the universe on your side because now you’re going to get contracts. It’s easy for you to build. Now you have all those relationships. I mean, think of the circle and the amount of money around Trump. For capital raises, for venture capitalists, for all these people, the billionaires that are raising money. And if you give them a good idea, you’re going to raise, seriously, you’ll raise a half a billion dollars in days, right? So you want to be on the right side of politics, no matter if it’s a Democrat or Republican. That’s why we’ve been, I mean, how many times have we said this, Daniel, about, and we recommended companies within the Trump circle. You could hate it. You could hold up a sign, do whatever the hell you want to do. I don’t care. But it opens up massive doors, especially on the mining side. We just recommended a company that’s getting, we recommended a company that is, it’s going to take 1.1 billion and have one of the best research teams and best geologist teams ever, that one of the only ones that have been able to build these certain type of mines.

Frank Curzio 34:56

And so the financing is the biggest part. They got to raise money. They got to keep raising money. The government is giving them $1.6 billion and the mine’s going to cost $1.2 billion. I’ve never seen that ever. So you’re talking about you’re removing the biggest risk because you’re in the right circle. And now they’re going to be able to build this mine. If people complain and write about New York Times, you can try to figure out the stock. I don’t think you will, which is amazing. So this is one of the ones we recommended. And this is one I want people to hold for a long time. But being part, it’s just politics. I mean, Trump said, yeah, he said this is a new climate change hoax, right? When it came to AI and the safety and stuff. And personally, I don’t believe, it’s not that I don’t believe climate change is not real. But to say it’s going to threaten our existence if we don’t spend trillions on shit technology and carbon credits and solar and wind, which can never replace fossil fuels ever.

Frank Curzio 35:46

That’s crazy. We’ve already seen that. I mean, a good example is this. Do you know first time, Daniel, first time since 1941, we know this because we’re in Florida. Zero hurricanes formed on the East Coast. Why is hurricane season of the satellite ever that began.

Daniel Creech 35:59

Hey, so far, we’re not out of it yet.

Frank Curzio 36:00

So far. High Arctic just experienced its coldest summer since records began in 1958. And we hear about the wildfires. We hear everywhere. And despite what you think, and there’s tons of stories of wildfires. And I’m not downplaying the damage because I know people who are in these areas in Canada, Washington. I also have a close friend of mine that lost his house in LA. But the amount of acreage burned by global wildfires are below average this year, even in Canada and Europe. The Great Barrier Reef, remember that Barrier Reef? Climate change is going to destroy marine biodiversity and devastate local economies who rely on fishing and tourism. That’s the story they tell. It’s really good news for you. You probably don’t know. The Great Barrier Reef experienced five of its best years of coral cover on record. So if you really believe in climate change is going to basically destroy our existence, we should be seeing a trend, this secular trend constantly of getting worse, worse, worse, worse, worse. And we’re not seeing that.

Frank Curzio 36:46

So think about that. Okay? We only hear the stories about record heat in Europe, some places in the US. This is the media, right? This is what we see. This is what consumes our lives is whatever you’re looking at, whether it’s the TikToks, whether it’s the X’s, whether it’s whatever. That’s why I like the feature on X because you get to police that. You get to have statements and say, “Wait, this is not true,” right? And you get to have these comments on if somebody’s reporting something. You don’t really, you don’t see it on TikTok. You don’t see it on Instagram even. So the media’s intention, it’s fear mongering. Why? Because that fear drives fast emotional reactions. And they also, it gets famous influencers and musicians and actors who are in dire need of more attention to speak out against shit they really don’t know about, right? And which politicians love and is perfectly planned. They’re smart because those are outlets that they can make a fortune on, whether it’s climate change, the policies in place for illegal immigrants.

Frank Curzio 37:41

We’ve seen all the shit that’s happened illegally, right? Carbon credits, even crypto policies. Politicians make our laws and those laws will 100% be in favor of them making money and securing their legacies. That’s the way our system is built. So when I see this on Anthropic and getting more to that question with Anthropic and worried about safety and all this shit, it’s horseshit. It’s hilarious. I mean, AI is not going to end the world. Nobody’s ever going to monitor it. No matter how much these companies say that they’re slowing down, what are they going to do? Who’s going to monitor each company that they’re slowing down? Imagine telling the company, “Hey, you know what? You got to stop innovation. You got to slow down.” Because if they fall too far behind, we’re seeing it with OpenAI right now. They’re falling behind. That’s why they’re pushing this. Oh, we need to slow down. Because they can’t fucking keep up with Anthropic. Not because of safety. Anthropic’s kicking the shit out of them right now.

Daniel Creech 38:30

Florida, right?

Frank Curzio 38:30

Right? So that’s what it is. Because if you fall too far behind, look, put up BlackBerry. Throw up BlackBerry up there. I mean, this is research in motion, right? This is BlackBerry was the first smartphone. It was amazing. It had like a typewriter on it. A lot of people don’t remember that. It was the greatest thing ever. But there was a lot of flaws to it. Apple said, “Okay, we’re going to steal the smartphone idea,” right? Which they do and Meta’s great at stealing other people’s ideas. And then building a tremendous thing, building much better form and products. And they are no longer producing this. What’s the market cap of BlackBerry right now? And I think they’re into like auto technology and stuff like that. What is it? So it’s, what is that? Billion? 4.7 billion. If you change the B to a T, that’s Apple. That’s what Apple did to this company because they didn’t innovate and they were like, “Okay, well, we don’t know what to do.” They didn’t have the innovation and have the right people.

Frank Curzio 39:21

But they had the right product. They just didn’t know how to build it like Apple did, right? And this goes on in history. You go look at Kodak, you go look at Blockbuster, you go look at Nokia, you go look at Xerox, right? These are names that didn’t innovate and other companies stole their thunder. I mean, Dell would be a dead company if it didn’t innovate. You’re going to ask Dell not to innovate? Hey, Dell, you got to slow down. Don’t do shit. We’re worried that the world is apps that’s the reason because the world is going to end because a couple of people said that, right? Because the world is going to end. I mean, and look at all the stories. Look at everybody talking about it. I mean, you look at Sears as well as another one that’s dead. They’re still big box stores. They just didn’t innovate. So asking companies to slow down their innovation, my 30 years of history, they would rather die than let a competitor beat them because they volunteer to slow down innovation. And they volunteer to say, “Hey, maybe we shouldn’t sign on as many clients right now.

Frank Curzio 40:08

We need to slow everything down.” I mean, it’s all a show. So the slowdown is why are they agreeing? Again, you want to be on the side of politics and everything. And all these companies saying they’re going to slow down, are they really slowing down? Because Anthropic slowing down risks OpenAI catching up. Do you think they want that? Because that’s a trillion dollars. We saw it with Google. We saw it with Gemini. They fell behind. All of a sudden, they got Gemini right, 3.5. And you saw that company’s valuation go from three and a half trillion or three trillion, whatever it was, to four trillion. They added a trillion dollars in value. And actually, we made money. We doubled on that stock, right? We bought it when everybody hated it. Now it’s like at the top. So just the little changes we see within the industry of how fast it could move and how even Microsoft took a beat and now it’s coming back. And these companies, they’re not going to slow down. They say they’re slowing down. They’re not slowing down because they think it’s the end of the world.

Frank Curzio 40:55

And they’re not going to voluntarily do it. It’s just the right thing to do politically because that’s what everybody wants and it’s political season. And so again, that’s my opinion. You’re welcome to disagree, but I’m not biased here. I’m not getting paid by a company. That’s why when I see my buddy Jim Cramer is on TV and he’s talking about masks and stuff like that, he can’t really say what he wants to say, right? That masks are bullshit. Stop wearing them. You’re an idiot if you fucking wear them. You don’t need them. They’re fooling you. And now we know that. It’s sad that we still see people wearing masks. They’ve been so fucking convinced. But again, you can’t say that on TV or you lose your job. You would have lost your job. They would have shut down your company in New York, right? If you said, “Oh, you know what? The vax is not tested. It wasn’t FDA approval when it first came out,” right? Just fast track. Maybe I don’t want to take it if I’m pregnant. Oh, you’re a nurse. You’re fired. Goodbye. You don’t have a job, right? So to me, being unbiased and being able to say what we want to say, that’s the truth.

Frank Curzio 41:43

Is the world going to end from AI? Absolutely not. Come on. It’s not going to fucking end, right? And these guys slowing down, they’re not going to slow. You really think they’re going to slow down? You don’t think they have offshore entities or people working behind closed doors? Because if they slow down, they lose that edge. They lose their job. Everything’s done. They lose their company. And a lot of these people, when it comes to money, they’d rather die than see that happen. So why, if you’re looking at Anthropic and why they switched, one, it’s great to have the most powerful person in the world, no matter who that is, sitting in the presidency, on your side. But, and also don’t think that all these guys are going to be slowing down at the same time. This is just, it’s nice to see. It’s nice to see all these companies coming out. I heard that Zuckerberg hasn’t come out yet and said he’s slowing down. Good for him. But they’re not. I don’t think they’re going to slow down. They’re just saying that right now. It’s going to be a big change come like December, January, where nobody’s going to be worried about the slowdown.

Frank Curzio 42:32

As states say, you know what? Especially Republican states. Remember we said we’re not going to do anything with data centers? We’re going to hold it. No, we did all our research and everything’s fine. Okay, you guys could build. Because the amount of money those states are going to make compared to the amount of monies that the states aren’t going to make, it’s like gambling. You better approve gambling because it’s free money. Approve marijuana. It’s free money to your state. Why not do it? If you don’t, you’re going to be left behind. It’s free money. Everyone’s going to smoke marijuana. Who smokes marijuana anyway? You might as well make money off of it. That’s the way it is. Same thing with AI. So you’re going to see a lot of those laws change, but don’t be fooled by the safety issue and shit like that and the climate change and the world. I mean, the world’s going to end. Everyone was telling us the world’s going to end for the past 50 years. Okay, since I’ve been alive. And you know what? I feel pretty good. The air’s good to breathe and I’m pretty happy. So I don’t know. I’m playing the odds. Anyway, I think that might be all our questions.

Daniel Creech 43:19

Yes, sir.

Frank Curzio 43:20

Yes, sir. And with this, we do have a great football game today. And this football game is the Bills playing the Lions. Four and a half Bills are favored by Joe. Who you taking? I think you’re going to take the Bills because you’re a huge Josh Allen fan, right? Yeah.

Daniel Creech 43:36

Yeah.

Frank Curzio 43:36

My girlfriend’s boyfriend is my girlfriend’s boyfriend. My girlfriend’s, yeah. So she’s with.

Daniel Creech 43:41

That would be you, Frank.

Frank Curzio 43:42

Yeah. My girlfriend’s.

Daniel Creech 43:44

Hopefully.

Frank Curzio 43:44

So anyway, he’s my girlfriend’s boyfriend. My daughter’s boyfriend. My daughter’s boyfriend is a big Bills fan. So I said, you know, why don’t you get him tickets? And he got tickets to a game in January, which is great. I forgot who they’re playing. Thank God we did it early because I’ll go over the stats in this thing, but they just built a new stadium, 2.1 billion. I think it’s the first stadium they built since the first one, right? It was a rich stadium of 52 years. Talk about the 70s. Do you know what the average ticket prices are for Buffalo with has a population of what? Just 275,000? You know what the, it’s the most, it’s the highest, most expensive in the whole entire league, the average ticket price. You want to guess what they are? Average? 700. 700 plus. They just had that, I think, in the Wall Street Journal and say, “700 plus.” That’s how much they are. Josh Allen should ask to restructure his comment, his contract to a billion dollars. I mean, immediately. Because that whole guy, I mean, Jim Kelly made what?

Frank Curzio 44:37

Four straight Super Bowls. Yes, they lost, but he wasn’t able to get them a new stadium and everything else and everybody’s ticket price. This guy is.

Daniel Creech 44:43

Well, Dove, Frank, why would you give him a new stadium to losers?

Frank Curzio 44:45

Yeah.

Daniel Creech 44:46

Just kidding.

Frank Curzio 44:46

I mean, losers. I said loser at the four freaking Super Bowls, man.

Daniel Creech 44:50

That would be tough.

Frank Curzio 44:51

But it is tough. But it should be a fun game. Joe, who do you got? And Daniel, you watching the game tonight? Four and a half Bills are favored by Detroit. It’s a very, very good team as well, even though they didn’t look good. Under over is 54 and a half. Joe, what do you think?

Daniel Creech 45:05

I like over and.

Frank Curzio 45:09

Is it five and a half? I saw four and a half last. Five and a half? The Bills five and a half. I mean, the way Detroit played, I could tell you that over, I’d be surprised if they didn’t hit that over. I mean, the last games they played, I mean, it was Houston against the Bills. Houston doesn’t have a great offense. And they just scored at will on the Bills. And then the Saints, I mean, holy cow, what they did to Detroit at the end of the game. I mean, that guy had 400 yards and that quarterback, most people never heard of in their life. Hoff, whatever it is. I have him in fantasy. I’m glad he killed it. But their defenses are not good. 54 and a half is definitely in play. It should be a pretty good game. But that’s a great game. New stadium. There’s a lot of people that commented on that new stadium. It’s in shit and it’s bad. And it’s got like a lot of blind spots or whatever. I mean, that’s what we heard on social media. We’ll see today. And I have a lot of big Buffalo fans, a lot of close friends that are going to that game that are season ticket holders and they’re excited.

Frank Curzio 45:55

So I’ll get the scoop from them. But I think it’s going to be a lot of fun tonight. They’re going to highlight that stadium. It should be really, really cool because that’s a new stadium in the NFL. And it’s a very, very good game to open it up with the Bills playing the Lions tonight. It should be really good. So guys, questions, comments. This is what we’re here for. Askkurzio.com. Again, have fun with the personal stuff and everything, but football, fantasy, but even stocks and the economy and different things that we’re seeing. Again, it’s unbiased, right? There’s nobody above us. We could say whatever we want. We could tell you the truth. And sometimes that pisses people off, which is fine. But we’re true to ourselves and we’re going to give you really truthful answers and answers that are based on how we invest, which is really cool. So again, questions comes, feel free to ask us at askkurzio.com. Just go there, ask your question, and you never know your question may be asked on this podcast. So that’s it for us. And we’ll see you next Thursday.

Frank Curzio 46:42

Take it easy.

Announcer 46:43

Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money, and your responsibility.