Wall Street Unplugged
Episode: 891May 10, 2022

A safe haven in this market

safe haven

I just got back from a surprise birthday trip to New York City… It was a great time seeing old friends and celebrating the big 5-0. I start today’s show with why people are leaving NYC in droves…  

I also cover which sector could provide a safe haven in this market… why the Federal Reserve is in for a rude awakening… what changing consumer spending habits say about inflation… and which sectors I’m personally looking to buy.

Inside this episode:
  • Why everybody is rushing out of New York [5:27]
  • A safe haven in this market [9:43]
  • What consumer habits tell us about inflation [18:04]
  • What I’m looking to buy now [21:15]
  • The Fed is a bunch of idiots [24:23]
  • I’m releasing Curzio Research Advisory later today [28:00]
Transcript

Wall Street Unplugged | 891

A safe haven in this market

Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on main street.

Frank Curzio: How’s it going out there? It’s Tuesday May 10th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down the headlines and tell you what’s really moving these markets. I just spent the weekend in New York, which is typical. Whenever I go away, the market usually crashes, or crashes further. My wife planned a quick trip for me for my 50th birthday, which is still about a week and a half away, but we had to do it this past weekend, because every single weekend that I have is booked for the next two months, with my daughters and playing sports and traveling, which I know a lot of you do as well. It’s insane now. My oldest plays basketball, and my youngest is a gymnast, and she only has another two tournaments left, but those are usually a little bit further. The rest are in Florida, when it comes to basketball for my eldest.

Frank Curzio: But I had no idea what my wife was planning, and we just went away. We had a babysitter for the kids. And she kept it a secret until Friday night, where she took me to the Nassau Coliseum, to the WWF Smackdown, which was absolutely amazing. Man, these guys put on a great show. It was incredible. It was sold out. The theatrics, the sound, the music blasting. People had earbuds in because it’s so loud. They had this canon that was blasting. Man, it is an amazing, amazing show. And yes, I know it’s fake, but it’s so cool. It was just amazing how packed it was, right? I couldn’t believe how popular wrestling still is. People were buying these big, expensive belts and wearing them, and dressing up like… I’m talking about adults were doing this, and they were bringing their kids and stuff.

Frank Curzio: I guess it makes sense when I think about it, because when I was a kid, I was a huge wrestling fan, so is my wife, and that’s why she took me. I grew up in Ridgewood, Queens, and they had this place call the Ridgewood Grove back then, which a few people I’m sure have heard of. But we used to go there all the time in Ridgewood, and they had some of the best matches and wrestles. They had Andre the Giant, George “Animal” Steele, the Wild Samoans. Jimmy “Superfly” Snuka was the most exciting… Still to this day, man, I think he’s just so exciting. Jumping off the top rope and just going crazy, and you see him do what he used to do on the top ropes, which was cool. And I was just a die-hard. That’s when the WrestleMania just started for WWF. They used to have them every month at Madison Square Garden, and I used to attend a lot of them.

Frank Curzio: So this was back in 1983, and I remember December 1983, Bob Backlund, he was champion, he lost the belt to The Iron Sheik. He was the biggest enemy in wrestling, and it was a massive story, because Bob Backlund didn’t lose a bout in six years. So people cried in the audience, “I can’t believe Bob…” They were so dramatic. Then the next month, I think Bob Backlund was no longer with WWF… I think that’s probably why he lost the match… and they said, “In a surprise showing, who’s going to fight The Iron Sheik?”

Frank Curzio: And this was WrestleMania VI. And Hulk Hogan came out, and the place erupted. And he beat The Iron Sheik, and won the belt. And that was it. That changed the face of wrestling forever. And for me, Hulk Hogan is my… Man, that’s the number one interview right there, that and Michael Jordan. Just a hero of mine when I was younger, and just watching him. But being there to see that, it just makes it so much more powerful, which is really cool. But he wasn’t even on the card, and for him to come out, and just really, really exciting. But it was awesome, entertaining as hell.

Frank Curzio: And then on Saturday, which was the real surprise, she planned a surprise dinner with some of my closest friends, who I know basically all for 40 years. One of them I’ve been friends with since I’m three. I’m going to share on the podcast, I’m not kidding. And he was telling stories and stuff, saying that even at three and four, we weren’t allowed to cross the street in New York. And he was like, “Hey, do you want to play ball?” And we’d throw the ball across the street all the time. That’s how long it’s been. But these are guys that I’ve spent most of my life with. And then, we went to a local bar. My friend owns it, and we went there, and that’s where the major surprise came, because 25 of my friends I played basketball, guys I knew my whole life, were there.

Frank Curzio: And man, we had a great time. We just drank, laughed, sang karaoke, talked about old basketball stories, because we won lots of championships and leagues when we were young. We just had a really, really good team. And it was just amazing. It was amazing, and I always say life’s about moments, I tell me kids that as well. “Don’t worry about the test that you didn’t do good on,” and whatever. If you have that opportunity it is… What you remember today, your 40s, your 50s, there’s moments that you remember that are great. And a lot of them are irresponsible times where you had fun, and they just exciting. I mean, this is one of the moments that I’ll never forget for the rest of my life. That was amazing to see all of my friends from New York hanging out, just having fun.

Frank Curzio: We used to go to that bar a lot after the games, all sweaty, and just hang out, maybe play Texas hold ’em, and just drink and have fun, and then go home late, and get yelled at by our wives and stuff like that. But it was really touching. It was really cool, and I’ll remember that. So, my wife earned some massive points. I told her that she bought a month of me kissing her ass. I said that as a joke, but she actually did this on Mother’s Day weekend, right? So, that was unselfishness of unselfishness, and it was just really incredible that moment she created. So, I love her, and thank you so much. It was unbelievable, and it was something I’ll never forget. One of the best moments, man, so it was really, really cool.

Frank Curzio: Now, there’s several reasons why I’m telling you this story. Because the markets are in free fall, and this is a market podcast. There’s a reason why I’m bringing you this story. Several. So first, talking to my friends, every single one of them, I’m not saying every single one of them, they’re all like, “You’re so lucky to be in Florida. You’re so lucky to be in Florida.” Now, they’re saying it after COVID and after everything that’s happened, but they used to make fun of me. But every single one of them told me that they’re moving out of New York. It’s either once they retire, or their kids are out of high school and going to college. They’re gone. They’re out.

Frank Curzio: And they all say New York is a disaster now. And I wanted more details on it. And it was interesting, because I had Altucher on this podcast. He’s a close friend. Altucher’s really cool. And he wrote an article that New York is dead. And then Seinfeld came out and said, “You don’t know what you’re talking about,” and whatever, and tried to destroy him. New York’s dead. New York is dead. It is dead. You go to New York City, you’re going see it in a heartbeat. It’s more dangerous now than ever. It’s not going to change, right? Cops can’t police criminals, and criminals that get caught for felonies, are out the next day doing it again.

Frank Curzio: My wife actually went to a Walgreens, and it was a local Walgreens in Queens… We were staying at the hotel that we were at… To get hand cream for her hands. It was actually cold in New York. Wasn’t for me, even though it was my birthday, right? But I can picture the jokes coming in. But it was locked up… And it was just regular hand cream… It was locked up in a big case, along with tons of items. It took them 10 minutes to come with the key and open them. My wife’s like, “What’s going on? Why’s it locked up?” We don’t know, right? We don’t know. We live in Florida. Like, “Why’s it locked up?” And she said, “Well, people just come in and steal it and walk out. Come and steal it. They gone. That’s it.” Which is crazy.

Frank Curzio: I mean, growing up in New York… I mean, one of the most important things, even in New York or everything, is safety, right? It’s the safety of your family. It’s more important than money. It’s more important that power. All of us, it’s the safety of your families. And if you can’t be someplace where you’re not safe, you going to be forced to leave. And I know a lot of my friends, especially hedge fund buddies that live in New York City, they gone. They’re out of there. They don’t go to New York City. And every one of them… Even my wife, she’s telling me to plan something in New York, I told her, I said, “Look, it can’t be in New York City. It can be in Queens, it can be in Long Island, wherever.” I just don’t want to New York City, because you don’t know. I don’t want to go there and… You don’t know what’s going to happen. It’s that crazy.

Frank Curzio: So, when I was asking them, “What do you want to do? Where do you want to go?” They all want to move to where the weather is nicer, right? Which is normal when you retire, right? So, you want to move to an area that’s nicer. That’s Florida, that’s Texas, Arizona. Florida’s a hotspot obviously, because it’s the East Coast, it’s closer, and they still feel like they’re close to family and everything. But that’s the spot, right? And especially with taxes. And if you look at Florida home prices. I know mortgage rates are surging, and I’ll cover that in a minute, but they’re not just going up, they’re going up gang-buster. There’s no inventory, everyone wants to move here, and that’s the option, again, for the people on the Northeast Coast.

Frank Curzio: Now why are they moving here? Not just the weather, it’s protecting their families. And they say, “Well, I can protect myself, and I can own a gun.” That was surprising. In New York, you can’t have guns ever, right? It’s like California. That’s why those areas are the worst, right? Because you can’t protect yourself, and there are limited police. The police can’t really get involved. They don’t want to get involved. And if they do get involved, they arrest the guy, the guy gets out even on a felony. Even the guy who attacked Chappell is out, right? With a weapon, attacked him, he’s out. He’s out, right? So, that’s the new system in these areas. I don’t give a shit if you’re Democratic or Republican or what, that’s the new system in these areas. That’s the new world we live in.

Frank Curzio: So people are leaving in droves. And when you’re looking at Florida and the prices, I mean, properties here are up 30% in the past few months. That’s on top of another 30% increase over the previous 12 months. Think about that. That’s 30% over the past few months. So in my neighborhood, people are listing their home price as 20% premiums to where they should be selling, if you see it on Zillow, or wherever you look at, all the websites. 20% premium. Now, this is two houses in a row. And I was like, “No freaking way.” Less than 24 hours, both of them, gone. In contract. Pretty close to those prices, I imagine, otherwise you wouldn’t be in contract in 24 hours.

Frank Curzio: So, if you looking at the market, you’re looking at… Regardless of how you feel about things, this is what’s happening. People are leaving New York in droves. They’re going to places like Florida, going to places like Texas, or whatever, but you seeing the home prices in those areas, even though rates are going higher, surge. Even though interest rates are going higher.

Frank Curzio: But there are REITs recently recommended. They have huge exposure to residential real estate in Florida, Texas, Arizona, right? Those are areas that are seeing huge population growth, and that will continue. That may be a safe haven in this market, right? The residential real estate? Yes, rates are going up, but when it comes to these homes, and you’re saying, “Well, what about the appraisal values,” because a lot of the real estate agents I know, say the appraisal values are coming in a lot less than what they’re paying. It doesn’t matter. They’re paying cash. These people are coming with cash. They have cash, and you might say, “Well, $1 million is a lot of money.” It’s not $1 million, because that’s a shack in New York.

Frank Curzio: So they’re like, “Okay, I can sell my house for a million and a half, pay no taxes on it, because I’m going to roll it over to a new house, and now live in a great area that I love, that’s safer for my family, that I can own a gun.” Where the cops encourage you, actually encourage you, the sheriffs or police encourage you and say, “If anyone comes in your home, you shoot them in the head.” They actually say that here. That’s why no one’s going into stores and stealing shit, right? You have to be able to protect yourself. The police aren’t allowed to do it. The police can’t do it, right?

Frank Curzio: And I don’t even know if it’s worth it for them, right? Because if someone pulls out a knife and they punch the guy in the face and he hits his head, they going to jail for life for murder, or whatever. That’s the new system, right? Blacks Live Matter’s going to be all over them, everybody’s going to be all over them. That’s the new system. And I had two friends that are cops there, that are actually going to retire pretty soon. They just can’t take it. It’s crazy. I mean, you’re risking your life, and then when you do the right thing, you could still get in trouble.

Frank Curzio: So, when you’re looking at REITs, that’s an area. When you’re looking at New York, and where people are moving. I mean, that’s an area, where people are going to Florida. Listen, that’s the way it is, but that’s one way to protect yourself. When we look at the market as a whole, I mean, the market selloff is unbelievable. And I want to put this perspective for you. They’re now down 25% on the Nasdaq, more than that. On Friday, one of the most ugly days that you’ll see, another mass selloff, where 90% of the stocks finished a day lower. That’s called a down day of nine to one. Whenever you have that, it’s usually capitulation, along with the VIX, which is the fear index. So that pushes higher as things get more crazier. It only pushes above 30 when it’s crazy, crazy, craziness. Sometimes it will go past 40, but over 30 is a signal that we’re close. It’s over 30.

Frank Curzio: So you would think, today you’d walk in and we’ll see a little bit of rebound. That didn’t happen. We’re seeing another selloff on Monday. So a Monday selloff, and this is following a big selloff on Friday, and you’re saying, “Okay, what am I going to do? This market is becoming uninvestible. Even the good names I’m buying are starting to get nailed.” You’re looking at companies like agriculture, energy, are getting nailed. Uranium looks great. That got nailed by 25% after going up a lot. I covered last week, the reason why things continue to selloff, is because of uncertainty. That uncertainty is coming from the Fed. And the Fed came out… And we covered this last week… last week they came out and said, “Look, 75 bps hike is off the table.”

Frank Curzio: And for some reason the market went up 1,000 points and saw that as a positive. I thought it was a negative. The Fed again, again… You’d think they would learn… Painted itself in a corner, and I think they made a huge mistake. And you’re seeing that. That’s why the 1,000 point rally lasted for what, a day? And every day since then, we’ve been getting crushed. Just about almost every single day. Now, when it comes to marketing, you never want to limit yourself in anything. The data changes, you’re going to get aggressive and change, right? So everything should be on the table. Everything in this type of market. The market’s crashing, everything should be on the table. You see inflation running wild.

Frank Curzio: Because if we still see inflation rising over the next few months, which is likely, and I covered that, especially with energy and agriculture, the Fed may have to raise by 75 bps or higher. And my take was last quarter, raise by 1%. Covered that even into the meeting. Raise by 1% now. We all know where you need to be. We all what where you need to be. It’s at least a 2.75%, it’s over 3% really. But where are you now? We’re at 1%. So, I guess the Fed’s like, “Hey, you know what? Let’s take our time getting there,” which is another 12 months. Do you want to endure 12 months of this shit, of what we’re going through right now, the uncertainty? Praying and hoping that inflation moderates? I mean, I’d rather we get there sooner to those rates, and inflation does moderate, the Fed now has more ammo to lower rates, right? Now, they’re in control of the market again, instead of the market controlling them.

Frank Curzio: Because the market is controlling their every move, and they’re at the mercy of the market, which is extremely dangerous, and that creates uncertainly, because no one knows what anyone’s going to do, because the market’s based on sentiment, and feelings. And where are people going to stop selling? We don’t know. But we have some certainty, like we did even in COVID, “Hey, we’ll lock down everything, but with spending trillions, and we’re going to give you loans, and we’re going to help you guys out.” And then, when did the certainty come during the credit crisis? Which was a great move by Bernanke. And I know people hate the Fed and everything, but I thought it was brilliant. “Hey, listen. We need stability. Let’s capitalize the banks and make sure everyone’s money is safe and you have nothing to worry about.” And that’s when the sentiment changed, and that’s when the market took off.

Frank Curzio: You need that. We don’t have that right now. We don’t have any certainty. We’re still seeing all the same problems that exist, and the Fed has no fucking clue what it’s doing. And it’s frustrating as hell to see what’s going on, because even the nice names, the safe names, are getting wrecked. And it makes sense, because even during the credit crisis, what did we see? We saw sub-prime, and then the next level, and then the prime level started getting hit as well, right? Because then you start selling off, because it’s forced selling, there’s leverage in the market, it’s coming out, you’re selling everything and going to cash. You don’t even care what you own, because now even your good names are down 10, 15% all of a sudden. You’re like, “I’m out of here.” Because people are just selling and going to cash. They don’t care.

Frank Curzio: But we still have tones of uncertainty, as the Fed what, remains behind the curve. So, we have inflation continue to rise, the dollar continuing to move high, 10-year continuing to surge, and the Fed said they’re going to continue to raise rates through this firestorm, which is insane. It’s something that’s never happened in the history of this market. We are raising when the market’s getting absolutely destroyed. Now, let’s take a step back here and look what happened after the last Fed meeting. Actually, let’s look back after the last two Fed meetings. Because when we look back, the Fed decided to raise by 25 bps, and this was in March. And then 50 bps last week. So since March 22nd, since that 25 bps hike, the Nasdaq is down 22%. 22% we’re down. 22%. It’s a lot. This is March. I’m not talking about January. I’m not talking about November. I’m talking January.

Frank Curzio: Now, I know hindsight is 20/20, but hear me out, because this was some of the things I was suggesting. And again, I could be wrong on this. I have no idea. But I know what’s going on is definitely wrong, and it’s not going to work. But what if the Fed raised by 50 bps last time? Because they tried to say 25 bps, the market did the same thing. It went up a little bit, then came down, and then he did about-face, because all the governors came out, and this was in March, a couple days later after the weekend, and said, “Look, the Fed’s losing credibility. We’ve got to raise a lot faster.” Right? He tried to sugarcoat it, hoping that inflation came down. Hoping, and it’s not coming down, right? So, you should have did 50 bps. You didn’t.

Frank Curzio: And then this time around, I was like, “Raise by 1%.” Now if you did that, 100 bps hike, you’d be sitting at 1.75%, which is close to 2%. Again, still a little bit far, a point away from a 2.75, which you really need to be at, but not that far, because now you’re only at 1%. Now if the Fed did that and raised by those amounts, again what I was suggesting and pounding the table for, not saying I’m right or wrong, but do you think the Nasdaq would be down more than 22%? I don’t think so. I mean, 22% is massive. We probably would have been down a little bit quicker, but I think we’d probably be maybe around the same levels, and we would’ve got wrecked. 22% is a massive, massive pullback in any major anything. There’s the Dow, the S&P, even a regular stock at 22%.

Frank Curzio: I mean, holy cow. Do you think it will be… I don’t know. But I know that we’d be closer to the 2% level at least, instead of being at 1%, and now you’re saying, “Well, we’re not going to raise that aggressively. That’s what we see, 50 bps cut.” So you’re limiting yourself, because the Fed would be closer. And the closer they are at 2.75 or whatever, now as inflation moderates, now you have the power where you’re controlling the market, you could ease, hold up on selling bonds, on lowering your balance sheet, covering your balance sheet right now, and in a couple of months from now, when inflation eases, and then you could gradually start lowering your rates, which is going to be a positive. That creates certainty.

Frank Curzio: And you say, “What about inflation?” Inflation’s definitely going to ease, guys. It’s not going to keep going up. I mean, people are cutting back right now. Their 401(k)s are down 30%. They’re cutting back. They’re going to stop paying for discretionary… You’re seeing that. Because the cure for higher prices is what? Higher prices. Demands going to start to wane. If you want to buy a car, a Mercedes, whatever, at 75,000… Or whatever the prices is… 75,000, and they’re like, “Well, it’s 85,000, 95. It’s 130.” Eventually you’re going to say, “F that. I’m not buying this thing,” right? That’s the cure. As prices go high, you’re going to be like, “It’s enough.” And you’re seeing that across several sectors. You really are. You’re seeing that in some areas in housing, which makes sense. Not in Florida, not in the areas where people want to move, and in Texas and stuff like that, But you are starting to see it.

Frank Curzio: Even the home builders talked about it, because monthly payments… This is insane. This stats insane. Monthly payments, just from the rise in interest rates at 5.5% now, from where they were at three. And this was six months ago. Monthly payments are close to $2,000 higher. Monthly payments of $2,000 higher. That’s money that comes directly out of your savings, paying the bills. Where else do you think that $2,000 going to fund. It’s going to go to a whole bunch of discretionary, so many companies benefit, it gets filtered through the economy. No, it’s just a payment I got to make. I got to take out of my savings.

Frank Curzio: So obviously, they’re going to cut back $2,000 some place, and that’s just on a monthly basis. $2,000. I mean, you got to make what, $50,000 just to cover those payments with taxes in most states? I mean, think about that. Just to cover the extra payment. Things are going to start slowing. They are. They’re seeing it in cars. They’re seeing it in streaming services. Electronics. When a company like Best Buy says, “Hey, we’re going to start selling patio furniture and beauty products,” you know that the electronic sales are starting to come down. It’s there. The writing’s on the wall.

Frank Curzio: But for me, when I look at that and say, “Okay, inflation’s going to moderate over the next six months,” I’d rather the Fed be at two and half percent or close to that, than one and quarter percent, or 1.5%. Why slow down the pace when the market’s getting crushed anyway. Just throw it out there. Will it disrupt markets? Yes. But aren’t the markets getting disrupted already? Again, hindsight is 20/20. If you knew the markets were going to crash the way it is, I’m sure the Fed might have thought about it, but for you to say, “That’s not on the table,” now you can’t do that. Because the Fed has a credibility problem, and the stubbornness of people, especially in power… I mean, you see it all the time, right? These assholes will never change their mind. He’s like, “I said it, and that’s it.”

Frank Curzio: The great leaders change their mind on a dime. When the data changes, you change. That’s it. That’s how you run great businesses. When you see things change, you need to change, or you’re AOL, or you’re Blackberry, and these stubborn CEOs who’re like, “No, no, no, no. It will be okay. It will come back.” Boom, you’re dead. You need to change. You need to go where the pucks coming. And you’re not going to see that. You’re not going to see a 75 bps hike next time, or the time after, even though we’re going to need that, even though as we get into that, inflation’s going to be higher, you’re going to see the dollar continue to rise. The 10-years what? 3.15 going higher. Remember 3%. It just hit 3% last week. Again, it’s starting to surge again. So, the market conditions are not great.

Frank Curzio: The uncertainty is still there. I wish I could tell you more, but if you look at the safety, cash is king. REITs, leveraged to residential housing, maybe even a little bit of commercial, but in the right areas where you’re seeing population growth. That’s going to continue, especially with low inventory. That’s a great investment to me, especially over the next 12 to 24 months. Energy and AG, I’d be buying on pullbacks. They’re pulling back. You’re looking at these sectors, prices are going to continue to rise no matter what. I mean, we have a massive shortage of fertilizer. We’re looking at energy, where if Russia decides to cut off natural gas, holy cow. Natural gas prices, again, that goes into chemicals.

Frank Curzio: That’s why you seeing with ag, where these fertilizer companies, they’re… There’s going to be less food. I mean, it’s a significant problem. I covered it last week. I actually did a TikTok video that’s actually has over 100,000 views on it, because it’s a problem that people aren’t seeing right now I guess. You don’t know what’s going to go viral and what’s not. But your energy, ag, on pullbacks, and you’re going to see pullbacks in every… Even the great sectors you’ll definitely see pullbacks. Be sure to follow your stops too. It’s ugly out there. There’s massive deleveraging taking place. Even the best names are selling off. But when I look at this market, it reminds be closer to, I would say January, during the credit crisis.

Frank Curzio: January 2009, when a lot of people were saying, “Well, the market’s a buy here. It’s a buy here.” And you were right, but you had to endure a lot of pain, because from January to March the S&P sold off… I think it hit the final of 666… It sold off close to 30% just over those three months. But you were right, because a couple of months later, you recouped those gains, and then boom, you were off to the races. You never going to pick the absolute bottom, and you’re never going to sell at the absolute top. That never, ever, ever happens, unless you’re very, very lucky, maybe in a situation, one or two, or whatever. But it almost never happens.

Frank Curzio: Even though all those charts and figures that you’re going to see, and all the promotions, “If you buy here and you sell here…” They have these little circles and all the bullshit, right? Just to try to get you to buy their products. It’s all bullshit. It’s not technical patterns, it’s not whatever. It doesn’t work that way. It’s never that easy. So for you, you want to be able to buy assets that are cheap and that are growing. Right now, the S&P 500 is trading at 15 times forward earnings. That’s the cheapest level it’s been, I want to say, in… I mean, the 10-year average I think is about 14. The five-year average is more like 18. So, we’re looking at an area where we’re becoming very cheap, and earnings are expected to grow over 10%. That’s why it’s cheap. If earnings are expected to grow 2% or negative, that’s not cheap, all right? And 9 P/E is not cheap. If you’re expecting to lose money, you’re not growing over the next few years. That’s not cheap, right?

Frank Curzio: So it’s cheap if you could be at 30 times forward earnings, and that’s not expensive if you’re growing those earnings by 60, 70% and expected to grow it over the next couple of years, right? So, you have to take one with the other. But when you’re looking at a 15 times forward earnings S&P 500, with earnings expected to grow more than 10%, that’s pretty cheap, And that means you’re going to find a lot of names that are trading at single-digit P/Es right now. And names that have got unfairly punished, along with a lot of the technology stocks and things like that, that have good growth profiles, that reported good earnings last two quarters, that are just get nailed because everyone’s still leveraging, and you’re seeing people on the wrong side. And that’s where you’re seeing this selloff in Bitcoin here. There’s just a lot of leverage in these markets that needs to come out still, and people are selling and waiting, but we need a catalyst, we need certainty, and unfortunately our Fed is just a bunch of idiots right now, and they don’t know what they’re doing.

Frank Curzio: And I hate to say that, because I know it’s common to just beat up the Fed, and that’s what everybody does, but man, when you limit yourself in everything, you just limit yourself, where we would have been so much better off if it were much higher. You should have started raising rates so much earlier than January, and you didn’t. January 2021, you didn’t, right? You waited over a year later to do it, which is fine, so why not do it quickly? It’s going to hurt. It’s going to be painful. We’re all hurting. We get it. We’re all fucking hurting, so just do it. Stop sugarcoating it and praying that inflation’s going to moderate sooner than later. Because if it doesn’t, nobody has certainty in this market, and you crushing this market right now, doing something that’s unprecedented, where you’re aggressively raising rates, shrinking your balance sheet at a time where the market’s getting destroyed, and the average American’s getting destroyed, and a lot of this was created by you.

Frank Curzio: It could have been prevented if you started raising just a year ago from now, or 18 months ago, which you were supposed to do when prices hit record highs. That’s the past. Let’s not look at the past. Let’s look forward. Stop sugarcoating this. This is shitty conditions, you need to raise aggressively. This way you have the power. You’ll be more in control of the markets, and you can assimilate the markets when inflation moderates, which it will. It will moderate. It will moderate. We’re seeing it. We’re seeing those cracks in the foundation… It’s more than just cracks now… Across a lot of different industries. You’re going to see it in unemployment, you’re going to see it when we hit a recession, but let’s just get up there. This way you have more power to control it, because we know what happens with the markets, guys. We know what happens.

Frank Curzio: If you pull up a chart of the S&P 500, even of today, and pull it up since it become 500 companies, just pull it up on CNBC, long-term chart, you’re going to see a chart that starts low on the bottom and goes almost all the way up. Over time, stocks do great. Over time. You need to limit this shit, and you have the power to limit this shit if you do the right thing. You’re not doing the right thing. You have to be smart here. I know it’s a situation a lot of these guys haven’t been in. It’s been the eighties, and people have forgot. It’s not pretty. But buying stocks at this level, you’re going to endure some pain, but 18 months, that’s when you’re going to see the benefit. Because you’re going to be like, “Holy shit.” It’s just like when you look, and you circle the March 2020 lows, and you’re like, “Holy shit, this stock was trading at $5 and it’s now 180.”

Frank Curzio: I mean, that’s where you make fortunes. People make fortunes, life changing gains, when they’re buying shit dirt cheap, not when they’re at all-time highs and they continue to go higher for a couple of years. It’s the smart people that buy the assets when they’re dirt cheap during times like this, using the stupidity of the Fed and our government, to buy asset prices dirt cheap that are really good. You’re going to endure a little bit of pain. If you’re going to invest, a little bit here, a little bit there. Don’t take full positions right now. Again, there’s a lot of uncertainty. But you’re going to look back 18 months ago, when inflation moderated, the Fed finally had the rates where they’re supposed to be, where the balance sheet will be shrunk… It will be ugly. We might be down a little bit more, but it’s going to be a time when you’re going to look back and you’re going to say, “Holy shit.”

Frank Curzio: This is one of those times where if you’re sitting on cash… Which you should have cash on the sidelines… This is one of those times that makes a lot of sense to start picking away what everybody wants to sell, and you feel like, “Hey, I got to get the hell out of the market,” it’s usually the time that you should be buying. We’re close. We’re almost there. We just need some kind of catalyst, some kind of certainty. It could be provided by the Fed. It hasn’t been. Hopefully, we’ll see more aggressive rate hikes going forward, and it won’t just limit it to 50 bps hikes. Because, you might get away with that. You need inflation to moderate. I just don’t see inflation moderating over the next three months. I hope, I hope, I hope I’m wrong on that, because if I’m wrong on that, that means everybody’s going to be okay. That means everybody’s going to make a lot of money. I hope I’m wrong on that. What I’m seeing with the data doesn’t suggest that.

Frank Curzio: So anyway, if you’re a Curzio Research Advisory member, today, Tuesday, you’re going to get your issue today. It usually comes out on Wednesday, but I’m going to do it a day early. Just want to provide more timely updates. We did sell out of some of the positions. One, where things were really, really looking bad last month, we sold out of those positions. Good thing we did. However, we still have position in the portfolio, and they’re getting hit like a lot of the other stuff’s getting hit. So, I’m going to update all those and tell you want I see in much, much more details than this podcast, which goes out to a free audience, which is on all platforms. It’s for the paid subscribers, Curzio Research Advisory. So, expect to see that issue later today. And any questions or comments guys, I’m here for you, frank@curzioresearch.com. That’s frank@curzioresearch.com, and I’ll see you guys tomorrow. Take care.

Announcer: 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.

Frank Curzio
Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 12 million times.

Editor’s note:

The market is crushing investors left and right…

Yet, Genia Turanova is locking in gains like 110%… 165%… even 218%—in just a few short weeks.

Here’s how she’s doing it.

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