As you probably know, I just got back from the Crypto Connect & NFT Expo, where I interviewed attendees for The Metaverse Movie (soon to be released). Despite the crypto bear market, the energy was electric. I highlight the critical feature that has everybody excited about the metaverse’s game-changing potential.
On Friday, Fed Chair Jerome Powell will speak from Jackson Hole. Daniel shares what he expects to hear—and the major announcement he foresees from the Fed over the next few months.
I break down previous Fed speeches from Jackson Hole—and how investors should react to Friday’s updates.
Despite the economic uncertainty, several stocks are trading near 52-week highs. We discuss a handful of great stocks to consider… plus, what to pay attention to—and what to avoid—when shopping for stocks.
- Recapping the Crypto Connect & NFT Expo [3:55]
- The most game-changing factor of the metaverse [8:00]
- What to expect from Powell’s speech on Friday [13:20]
- A brief history of the Fed’s Jackson Hole speeches [19:15]
- A shopping list of great companies trading near 52-week highs [22:00]
Wall Street Unplugged | 937
A shopping list of great stocks for this economy
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 August 24th. I’m Frank Curzio, it’s the Wall Street Unplugged podcast, where I break down the headlines and tell you what’s really moving these markets. If you’re watching on our YouTube channel, you could see our new backdrops, which we displayed at our last conference, which is this past weekend. Nice light colors, instead of the dark colors. But Daniel Creech, who’s here with me, senior research analyst at Curzio Research, has a dark color behind him. So, we got to switch them out, we’ve seen.
Daniel Creech: I look good with dark colors, Frank. Happy Wednesday, sir, best day of the week.
Frank Curzio: Thank you very, very much. Sorry to say that I know, Daniel, that you have some back problems. And I said that, maybe that’s because you’ve been golfing four times a week and you got to stop. And, since I’ve been away at conferences a lot in the past month or so, so good… I don’t feel too bad for you, because you have these back problems, but maybe you should stop playing golf a little bit.
Daniel Creech: Well, I just need to stretch more. It is an undisclosed rumor that I do get to play a lot more golf when Frank’s out of town. I love covering the podcast and you doing boots-on-the-ground, so I can stay here and hold down the island. Yeah, I tweaked something. I don’t know, but I’m all right. Getting older, but I’m going to make it.
Frank Curzio: And the funny thing is, I have a membership over here, and so Dan goes and says, yeah. What’d they say to you? It’s so funny.
Daniel Creech: Well, when you make at tee time, Frank gets the email confirmation, not me. And so, Frank’s on the road. He’s like, “Hey, what are you doing? Did you get everything done?” It’s like, “Yep. Got everything done. Everything’s good at the office.” I’m on the golf course. And then they email Frank. “Oh, hey, your tee time is at,” whatever. Yeah. You can’t sneak around. Big brother’s always watching, Frank. It’s terrible.
Frank Curzio: Yeah. This way, and I make sure when he is on a golf course when I’m away, I’m going to make sure I call you a lot. So hey, what are you doing cutie? That’s great, though.
Daniel Creech: Anyway.
Frank Curzio: Anyway. Seriously, we work very, very hard here. It’s work hard, play hard, which is cool. That’s the environment. And I just want to thank my team, doing a fantastic job, which is really cool. So, Dan, what’s going on? How’s everything, man.
Daniel Creech: It’s good. Yeah. Some things are moving around. We got some things to talk about. I want to talk about the Fed a little bit. I don’t know if we need to talk about the meme stocks, but AMC’s going crazy, down to the downside. So, we have to take a victory lap. Last week, we told people in Bed, Bath & Beyond. Not AMC, but Bed, Bath & Beyond, we said to take profits, because it’s a trading game. I think we can lump AMC into that, personally. But it’s been in the news. Would you even trade that for fun or do you do other things for fun?
Frank Curzio: Man, I can’t tell you how many people came up to me and told me that they own those two stocks, especially at the conferences, and just people emailing me. “Oh, by the way, doing a great job. Plus, I own Bed, Bath & Beyond.” It’s trading. If you’re a trader, fine, do what you got to do. And who am I to tell you not to buy it or sell it, since they went up 300% in one week, and then it fell tremendously if you shorted it. But, just realize that there’s a very good shot that the Bed, Bath & Beyond, also AMC, Bed, Bath & Beyond is going to go out of business pretty soon. So, it just doesn’t look good. I know that it’s up today. They got a little bit of a lifeline thrown in terms of a little credit, but there’s a company that’s in trouble when you really look under the hood, but who knows?
Frank Curzio: I mean, it could push higher, but yeah, it is dangerous. I’m not, listen. It’s not going to, I’m not going to teach you how to be an investor. I know everyone that’s bought those stocks and almost everyone has gotten annihilated. You might have hit this up trend or whatever. But everyone that I’ve talked to in the past two years, with meme stocks going through the roof, and I own these, and all the speculative, and ESG names, and all the bullshit, and all the trading, and all the YouTube channels, they’ve gotten completely annihilated. Annihilated in this downturn, because those are the stocks that went down 80% plus, while the rest of the market right now is probably down around, NASDAQ is down about 20%. But yeah, it’s kind of crazy. And those are people I met at the conference, by the way, was yeah, I should go there. I said I would talk about it a little bit.
Frank Curzio: So, let me just say that it was fantastic. I mean, for us, Daniel, we met a ton of influencers, great people creating interesting NFT projects, which are not just JPEGs. This is giving access. I hosted two panels with a lot of great entrepreneurs on them. But, what I’m seeing specifically is people between 25 and 40, and 40 or millennials, by the way, either creating great content, which is why they have hundreds of thousands, some of them, millions of followers. They’re developers creating incredible things, usually through Unreal and Uni-Engines, just so many cool ideas. Yet, they don’t know how to structure their company. They don’t know how to monetize it. They don’t know how to raise money that benefits investors, where when you do a capital raise, you got to get investors in, but they’re not structuring where it really benefits them. And then, finding difficulty in marketing themselves outside of their social media presence.
Frank Curzio: So, they’re coming to us and we’re partnering with a lot of these companies and people, which is really cool. And it’s leading to even more introductions, every time we go to another one of these crypto conferences. And these are real projects, people know in the Web3 space, which is big. What it’s doing for us, is this opened us our total addressable market to tens of millions of more people. And that’s what we want to do, because these are people that we could sell our products to. We have a lot of credibility in the space. They say, yes, they bought the real estate for five million, that are just a sale. So, it was a 254 by 254 plot for 7.5 million just sold. We owned 11 of those, and that was the virtual real estate, commercial virtual real estate bought at TCG. So, I’m glad a lot of the investors came in for that.
Frank Curzio: I don’t know where it’s going to be next week. I don’t know where it’s going to be next year. And, I’m hoping that these guys follow through and do what they’re going to do. And I’m on, I’m talking to them a lot and I’m very excited about this. But yeah, it’s just, what’s going on in this space, Daniel, is absolutely amazing. And I know it looks like, “Well, Frank, are you, a little detour here from?” We’re not. It is just a whole audience of brilliant people, of where the world is going, and you got to be a part of it, right? Someone’s followed so many different trends so long, it’s just these developers coming to us. Now, we could sell some of this land and take profits a little bit. We could work out an equity structure, revenue share model with developers and have them develop these properties. We could lease some of this, just really cool stuff that we could do. And the most important thing were the after parties.
Daniel Creech: Well, of course.
Frank Curzio: And one of the after parties, the after parties we went to were really cool. I mean, it was just, there’s a bunch of rappers that were performing that I know, that guy I had on last week was performing, which is great, in front of the whole club and it was going crazy. And another one where, it was a special event I was invited to, and it was just 40 people. It was like a speakeasy type place. And they had a presentation of LOUIS XIII. And they poured all these glasses for everybody. And they went through the whole history of it. It was amazing. We had gloves, it was beautiful. It was really great. And he gave us all some, and you had to sip it and all this. And it was amazing, but it was just, I mean, a bottle of that I think goes for minimum, $3,500.
Frank Curzio: But, more importantly is the people that I met there. These are a lot of Web3 people who are very successful, sold businesses, just a networking part where you’ll get tax consultants, lawyers, accountants, these are servicing some of the largest plays in Web3. And I have to tell you, when we went there, everyone was seeking us, which is really cool. So, we’re starting to get a big name in that space, starting to add names. But, it’s a lot of fun. That’s where the world is going. That’s where I think you’re going to make the most money, but still we do focus on stocks, and the Fed, and Jackson Hole, and stuff like that, because I get those questions sometimes. And like you said, a big meeting, that’s coming, Daniel, is Jackson Hole.
Daniel Creech: Yeah. If you don’t mind, before we get to that, and I’m not knee deep on the NFTs and a lot of that. I know a little bit to be dangerous, but from the conference, did you get the feeling, you hear the Bitcoin conferences in Miami, and things like that. The price of Bitcoin has always talked about. Would you feel or get the idea from the conference with the vibe, or the attitudes of people that, we’re in a “bear market,” or did people care, or did you see? I’m not doing a good job of asking this.
Frank Curzio: No, but I know what you’re, we’re not.
Daniel Creech: I guess, was the atmosphere upbeat, even though cryptos down from the highs, and all that?
Frank Curzio: It was incredibly upbeat, and the projects that these people have, and the excitement and the energy in the room’s incredible. But these aren’t, you’re not seeing people that are trading cryptos. These are guys that are going to NFTs and metaverse, and you’re seeing a lot of money in terms of funding, go flow hugely into this industry right now. I mean, massive. And, I talked about in the past of the 120 billion, but it’s coming from who? It’s coming from the biggest companies in the world, who are weird, who control the internet. So, this is where they know the metaverse is going. And these people understand that the metaverse is not a video game. NFTs are not about, “Oh, this young thing.” It’s about ownership. Locking in your intellectual property, owning it, your own ownership of your digital content, which we don’t have right now. A lot of people don’t have that. Most of us don’t, and this is going to have that, give you that opportunity.
Frank Curzio: And just to see what people think and the perception of the metaverse entities, compared to what I’m seeing and what I’m talking to on the ground. And guys, this is the research I’ve done in every single industry across the board. You’re going to conferences, you’re meeting people, you’re going out to dinners. You’re getting drunk. You’re hanging out with key players. You have to do this in every industry. That shows credibility. And also, you’re investing. I’m spending money in it. So, all these guys know that I’m serious. This isn’t some idiot from Wall Street’s, trying to get in. No. I’m learning from them as much as they’re learning from me. And it’s just incredible to see the excitement and the energy from these entrepreneurs.
Frank Curzio: And I used to think they used to structure their tokens, because when you start a company and you’re structuring a utility token, it has no utility. You don’t have a lot of clients, and you don’t have revenue coming in. So, the utility’s really useless, but I thought they were doing it on purpose. They’re not. They just don’t understand that. And coming to us and saying, “No, we want to, this is about our investors. This is about our following. That’s the responsibility of these people following us, and seeing how they really care.” And I’m like, “That’s your family.”
Frank Curzio: The people invested in Curzio Research are my family. I want them to participate in the growth. I’m not just saying that, I’m not just bullshitting. It’s true, because everybody’s helped me out and investors that made money for me, every time they, entrepreneurs or whatever, go to launch another company, I’m writing a check for them every single time, because they made me money. And I’m trying to tell them, “Don’t think short-term. Think long term.” And just, it’s really incredible being around younger folks that are that energetic. It makes you feel alive. It really makes you feel alive.
Daniel Creech: I have younger people around me every day. I understand that.
Frank Curzio: I mean, holy shit. It really is. It’s cool. I feel like a young kid until I get home, and then I have a couple beers and then I’m an old man again, obviously, but I’m like, “Holy shit.”
Daniel Creech: Then you go to bed at three and get up at seven, and feel terrible.
Frank Curzio: Yeah. I’m like a mess and I’m still recovering a little bit, but just hanging out with these guys and learned a lot, and seeing how they work hard and play hard. They’re some of them, bullshit projects and it’s easy to see that, based on my background and be doing this for a long time. But some of them are very interesting.
Daniel Creech: Yeah, but that’s part of it. I mean, I’m biased towards the space too, as well as wanting it to take off and everything. But I do think that there’s a lot to be said about the work ethic, and the atmosphere and the attitude, even when prices are suppressed or maybe volume is down or whatever. It doesn’t matter in the sense of, it’s not going away. And when, CZ from Binance is great, he always posts basically the same thing on, “Hey, you continue to build in down markets and you look ahead.” And I think that’s great, but I am glad you’re back.
Frank Curzio: And that’s one of the panels I was on. It was How To Build Your Business In A Bear Market.
Daniel Creech: Well, they were probably all ears and listening to you, until you told them to give away equity. Then they’re like, “Ooh, I don’t know about that.”
Frank Curzio: I didn’t, you know what? I was moderating it. And it’s funny because we had an investor who was there, one of our investors, one of our subscribers there, and his name’s Javier. Mentioned him yesterday, which is really cool of us to mention his name, but he sold his production company and he was showing me all the work that he did. ESPN was, it looked like there was a thousand people. He’s like, “Yeah, there we go.” Getting everybody up. A great MC and everything like that.
Daniel Creech: That’s awesome, yeah.
Frank Curzio: And he was like, “I’ll introduce you.” And I was like, “That’s a good idea because I’m a moderator,” and it was an unorganized conference where no one’s introducing me. And if you don’t, I don’t want to talk about, no, you don’t want to go up on stage and say, I did this or this. It just doesn’t look good. And he came out, he introduced me, and he introduced everybody else. And then I had the panel right after. But it was just weird, because there was a couple of young kids on that panel, and it’s about how to survive in a bear market. I’m like, “How many bear markets have these fucking guys been in?” And they’re like, “Whoa.” But I talked to everyone before the panel. They were like, “Well, we were in the last one.” I was like, “We weren’t in a bear market. We were in a bear market for a month.”
Frank Curzio: Seriously, it was a bear market for a month and a half. That was it. And then the government said, “Okay, we’re just going to spend an unlimited amount of money.” And they’re like, “Well, we helped these people. And we did this, and the stay at home, and businesses.” Everybody did good. I mean, you could have sold whatever you wanted and stayed home and everybody did good. I mean, so for me, I was asking tough questions and I’m like, “If you’re going to be in front of a crowd, you better know your shit.” And there was one person you call out and a couple of others were okay. But one of the guys who were on a panel, was a major influencer and huge sales, billions of real estate, sells luxury real estate. I think it was overseas. Nunez was his last name, Alfonzo or Alonzo Nunez.
Frank Curzio: I just met 80 people, and I didn’t realize who he was because he got thrown in the panel, Daniel, like one second. Like, “Oh, this other guy’s not going to make it. So here he is.” And I’m talking to him, I’m like, “Great.” I said, “I don’t even know this guy.” And then I went up there and I said, “By the way, this is one of Nunez.” And I said, “He just was added to the panel, and he said, he is going to give everyone who came to this conference, came to this session a million dollars to start their own real estate portfolio.” And he’s got to be laughing. I don’t even know anything about him. Then I found that afterwards. I’m like, “Wow, this guy’s a monster. He’s huge.” A big following. And it was just really cool, the conference all around.
Frank Curzio: But also, people are all worried though. I mean, we’re looking at, just the conference was sold out. They had a few thousand people there. It was a good crowd, again, a little bit unorganized, but those guys did a really good job and it was the first one. So, that’s what I expected. But overall, people were asking me about questions. What do you think about the Fed? Is that going to impact the markets and stuff like that? And for me, I think it is. That’s why people are paying attention to the Jackson Hole meeting, which I think is going to be a pretty big deal. And it should be a big deal, because the things are changing right now. A lot, Daniel. I know you’re seeing it at your end, too, but the demand cycle. I mean, you’re seeing demand absolutely fall off a cliff. I’ve never seen the housing market. I mean, holy shit, that happened so fast, so quickly.
Frank Curzio: And, it’s not just that. I’m hearing it from my network. And I want to hear from you guys. I report what I hear and what I see. I don’t care. It’s like COVID. I’m going to tell you what I see. Even though people had an agenda and yelled at me and said, “You’re full of shit. Kids need to wear mask all day.” Didn’t notice stats. We knew the stats. We knew a lot, great doctors that were emailing me from everywhere. But now I’m getting emails saying just, “Demand’s starting to fall.” It’s starting to fall. And it’s happening quick. Just like it happened with the retails, how fast that happened. Immediately. All of a sudden they went from booming times and solving their supply chain concerns to massive inventory.
Frank Curzio: And holy shit, we got to sell at huge discounts. You’re seeing the semiconductor sector. You’re seeing a home builders now, and all these suppliers and things like that. And there’s still a shortage of workers out there, which is a little weird, but it’s a crazy market where we’re going into a recession. It’s a guarantee. I mean, we’re going into it.
Frank Curzio: So the Fed, it’s going to be interesting, because if they’re really pedal to the metal, I know they got to say one thing and do another. But the Jackson Hole meeting, just I don’t know. What do you think they’re going to say? I mean, everybody thinks probably just exactly what they just said at the last meeting and say, “We’re not seeing any signs of inflation moderating,” which it’s moderating freaking everywhere, almost everywhere, but let’s see. I don’t know. What are your thoughts?
Daniel Creech: I think that they’re going to sound more hawkish. I mean, the futures fund rate, or the money betting on the next raise next month from the Fed, is basically split to 50 basis points or 75 basis points. They’ve done 75 back to back. They take August off because they work so hard, they need a vacation. And, I just don’t see how they can’t sound hawkish. And I don’t believe it’s going to happen in September, Frank. But I think October, the Fed is going to have to pivot and change their goal. Move the goal posts once again. And I’m going to do my best here, not to be just ranting on it, because I know you don’t like when people just blame the Fed, although you should, because they are the reason everything’s screwed up. But it’s the world we live in. Their goal right now, Frank, is to bring inflation to a target of what percentage?
Daniel Creech: Two, right? We’re at roughly eight, let’s call it. Let’s round down and say we’re at eight. There is no way possible that you can get inflation down to 2% without, A, demand falling off a cliff right now, and price is just plummeting from recent highs, much lower, or you have to raise interest rates several times in small increments or a few times in large chunks. I don’t think they can do that, as we’ve talked about. You’ve done a great job highlighting this in the past, the economy would just crater, if you really bump interest rates to 4%, let’s call it. However, you also have to worry about, and I know nobody likes to, you can rant about this for the last 40 years, but at some point government debt and the interest is going to come into play.
Daniel Creech: Because if the Fed fund rate gets real high, right now they’re getting an easy window. And I say, they, meaning the treasury. Because the Fed’s rolling off their balance sheets, they’re not buying as many bonds. However, you have huge tax revenue coming in right now, and that’s helping the treasury, and along with some cutting and spending from comparisons with COVID and stimulus checks. But, if you continue to raise interest rates, the government’s going to have to issue more debt just to pay the interest. At some point, that’s going to cause headlines to get investors to fear.
Daniel Creech: What the Fed will have to do soon is say, “Hey, our goal is no longer,” this is my opinion, of course. “Our goal is no longer 2%,” but they’re going to bump it up to that. Just like they said, with transitory, and all that. Well, it’s going to be higher for longer. The initial reaction is going to be a knee jerk reaction down, in my opinion, Frank. But not to make you take the other side, but how do you not change the goal post of 2% inflation without razing and stalling the economy? You’ve talked great about, just look at the housing market. The ripple effects from the recent interest rate rise is not into effect yet. The spill has not made it down river yet. They’re going to hike again in September, supposedly. That’s going to be baked in over the next couple months. How do they not change the 2% goal? Or maybe they just do want to rip the band-aid off and cause a recession?
Frank Curzio: I don’t know. It’s going to, inflation is going to fall a lot faster than anyone expects. And people are like, “Well, it just fell a little bit. We need it to fall more.” And then this order you’re going to see, okay, it’s starting to, we’re seeing numbers that are insanely crazy. And I know, yeah, you’re looking at the CPI and rental income’s going to be, people pay rental income and it’s not like it goes down month, over month, like home prices does. So that’s going to be a key, and you have higher food prices. And energy prices are probably still about 10% below than they were, I would say, last month. And I may be a little bit wrong on that, but I know they were above a hundred and they started really crashing in the beginning of, they were down like 15% when they hit 90, I think, so were they 94 or something?
Frank Curzio: So probably 10%. That’ll be, that’ll help. But the CPI, it’s going to fall. It’s going to fall fast, a lot faster than anybody thinks, but I will tell you this. So, let’s go a little history of Jackson Hole, because this is where you have 120 economists, investors, members of the US government, and journalists. All these people meet, right? It’s like a high profile, high society thing. Just everybody’s stroking everybody else at this thing, all the rich billionaires and stuff. And then you have the economists just following everybody around and trying to get in with everybody and saying, “I know this guy, I know this guy.” And then everybody has the same freaking opinion when you’re an economist. That’s why they’re economists, and not analysts and making a lot more money. Anyway. So, this started in 1978, in Missouri, and just conversations on economic policy with all these people.
Frank Curzio: And let’s go back a little history lesson, two years ago. This is why people are like, “This is so important. Jackson Hole, we got to pay attention. You got to pay attention.” I don’t know. I mean, you got to pay attention because maybe you should do the exact opposite of what Powell has been saying. Because, let’s go back two years. Because he announced the Fed has the new model, a brand new model for assessing how, when to raise interest rates saying, “I no longer do so, just because joblessness is falling and inflation was expected to heat up.” So basically, Powell’s like, “I’m not raising rates in the face of just, I’m not going to raise rates, but when we see higher inflation.” That was two years ago, he actually said that. And then last year comes along.
Frank Curzio: So now, inflation’s starting to heat up and Powell had this whole presentation, this whole thing. And people saying, “Okay, Jackson Hole.” And he laid out all the reasons and, “Inflation’s going to be a temporary phenomenon. It’s only going to come down really quick. A lot of this resulted in large part from the reopening of the global economy after the pandemic. It’s going to be transitory, you have nothing to worry about,” but those are the last two years. So, if you’re really concerned about what he’s going to say, you should be, but probably if he says and goes on there and says, “Listen, I’m not seeing any signs, inflation’s moderating, we’re pedal to the metal. We’re going to continue to raise interest rates.” After that initial reaction, which might be a little bit pullback in stocks, I think that’s expected. So, I don’t know. I think it was factored in while we’ve seen, three days.
Daniel Creech: Monday.
Frank Curzio: Yeah. Three straight days, down days after a nice run up since mid-July. But I’d probably do the opposite and buy stocks, because just do the opposite of what this guy says.
Frank Curzio: So, it’s important. But for me, I like credibility. You got to go back and look at what people said, and that’s what I freaking hate. Because all these economists that are saying, “We got to go to 4%, 4%.” They were saying that it was transitory. And they was saying, we’re going to rate. And this is February and March. This is February and March that we’re going to get three rate hikes. This is Goldman to four rate hikes. You had JP Morgan to rate, everyone three, no one had all these. And then three rate hikes is 325 basis point rate hikes, because that’s what it was. That’s what it was, Dan, back then. Like, “Oh, three rate hikes, four rate hikes.” When we talked about rate hikes, we talked about 25 basis point hikes. Nobody imagined, remember he’s like, “50 basis, 75 is off the table.” No, that’s what he originally said.
Frank Curzio: Then he went 50 basis points. Then it’s 75. And at 75, it’s never been done since 1994, there’s going to be a lot of shit going on. Okay. You’re going to see a lot of craziness and it happens quickly. The housing market does not go into recession this fast. It doesn’t happen with, unless you have something crazy happen. This is crazy. This is unprecedented. You’re spending $11 trillion. You are behind the curve. Now you’re trying to get ahead of the curve. You’re going to see these massive swings. With that said, talk about some of the things that you’ve been doing, because I thought that it was awesome when we talked about this offline. Let’s bring it, because of people are probably like, “How do we invest in this type of market?”
Daniel Creech: Right. And so, you must pay attention to things like this because it, as Frank said, it’s basically the Wizard of Oz behind the curtain. However, don’t let that scare you to the point where you’re on the sidelines. And I was doing some screens the other day, Frank, and I was looking at stocks. There’s a couple of caveats here because there’s a lot of acquisition companies, and kind of just holding companies that can mislead this. But I wanted to go over a list with you, and see if you’re surprised or not shocked about this. And this is just an easy shopping list for all investors out there. And warning, it’s a boring, this is going to be boring. But the big takeaway here is to focus on great businesses, and no matter what, economic conditions, because the odds of you making money are good.
Daniel Creech: Frank, if you look at companies that are within 5% of their 52-week highs, their market cap is at least 400 million. I just limited to major US exchanges, because you can get a lot of overseas listings and things like that. Not that they’re bad, just keeping things simple. And the only other thing I added to this screen was, in the last 12 months, you had basic EPS, earnings per share, excluding items. I know that’s a little bit of gray area, won’t get into that, of at least 10 cents, because I didn’t want a lot of growth companies and all that.
Daniel Creech: Here are our companies, Frank, trading below or within 5% of their 52-week highs. And now, remember why am I pointing this out? Because we’ve gone from 20 to 30% down to a rally of what, the S&P rallied 16% off its lows recently.
Frank Curzio: Yeah, and now it’s down 20%.
Daniel Creech: And then, we go down 2% in a day to start the week. So, one of the best well run companies we’ve talked, AutoZone is on there. That probably doesn’t surprise you. Northrup Grumman defense. That doesn’t shock you either. Humana. Remember, Humana’s our old favorite. I think I talked to you to selling that. That was a mistake.
Frank Curzio: No, that actually-
Daniel Creech: That thing is amazing.
Frank Curzio: That crashed and stayed low. I think we bought it. I wanted to say at 250 and it was up to 400 and it fell. Really. It fell and stayed there and even, so when COVID really, the rebound in COVID, it never, it was one of the stocks, look, it never came back. But now, I don’t know. I haven’t looked at it the past few months.
Daniel Creech: Yeah, it’s been great.
Frank Curzio: So, healthcare.
Daniel Creech: A lot of energy companies, Murphy, Chesapeake, CHK Oil and Gas, Occidental Petroleum. We know Buffett is now going past 20%, filed to get 50%.
Frank Curzio: Oil companies are interesting. Right? Because, we saw oil at 130 and then fall a little bit below 90. It’s, what is it? 93, 94. Still near lower end of the trend. But we’ve seen an incredible rebound in oil stocks. Right? You can’t deny that.
Daniel Creech: I don’t know if you have charts up, but Devon Energy is, I think its recent highs where around $80 a share, if memory serves me correct. It’s still well off, but like ExxonMobil, it’s six, 7% off its recent highs, and oil is 95 instead of 130. Yeah. I mean, oil stocks are doing very well. Even as-
Frank Curzio: Devin has come back. I’m going to put up a chart here for you guys to see if you’re on our YouTube channel.
Daniel Creech: Was it 80? Am I way off, with recent highs around 80?
Frank Curzio: No, you’re not off. It was, yeah. Pretty close to 80. The highs like 78.
Daniel Creech: But it fell to like 50. Didn’t it?
Frank Curzio: So, it fell. This is only a six month chart. Wow. So in six months, let’s go back to March. It was 55 in March. Popped in, this is June, to close to 80. And this is June 8th. And then when you look, just less than a month later, it was 50. Holy cow. And now it’s back up to 71. I mean these, holy cow, just, I mean, you go to thunder.
Daniel Creech: Exxon is the same way. Not near as volatile, but ExxonMobil is, I think 7% below its recent highs. Again though, when you look at, even if you bought up the highs and oil tanks. Yeah, it’s painful for a short time, but those are coming back and the fundamentals are still there. Another one, Casey’s General Stores. Have you ever been to a Casey’s General Store, Frank?
Frank Curzio: No, no I haven’t.
Daniel Creech: They’re spread out in the Midwest, which I am a favor of, because I’m from there. I’ve not ever been to one, but it’s doing great. They sell pizza. It’s like a gas station looking place.
Frank Curzio: Eight billion dollar market cap. Wow.
Daniel Creech: They have like 2,400 stores. Are you on Casey?
Frank Curzio: Yeah.
Daniel Creech: I have 2,400 locations.
Frank Curzio: It’s $218 a share. I could see why no one hears of it, so.
Daniel Creech: What is it?
Frank Curzio: People hate buying stocks. They think that if they buy a stock at $218, they have less of a chance to make more money, if it’s a dollar stock, but it’s all about percentages.
Daniel Creech: Exactly.
Frank Curzio: One goes up 20%. The other goes up 20%. It’s fine. But I can’t buy, it’s too expensive to buy the $218 stock. That’s okay though.
Daniel Creech: Do any of these stocks shock you? McDonald’s, Pepsi, Campbell’s Soup, Hershey’s?
Frank Curzio: No. No, because especially, McDonald’s, Pepsi. No, that doesn’t.
Daniel Creech: C.H. Robinson, Worldwide.
Frank Curzio: If you’re looking at McDonald’s, too. I mean, McDonald’s is just yeah. When you’re in a recession, people are going to go to McDonald’s. So, that doesn’t surprise me.
Daniel Creech: I was surprised about C.H. Robinson, great trucking company. We’ve done Knight Swift in the past. Just because at first thought, hey, trucking is going crazy. You had this huge supply chain crunch. You had a lot of people doing that, but then you have a lot higher cost with wages and oil. I was actually surprised to see that’s still up there. The main takeaway here is, we can go on and on and on. Waste Management, that probably doesn’t shock you. The point is that, these are great businesses. And in the last three months, you’ve seen extreme volatility. But the point is, I’m not saying put your head in the sand and I’m a permeable. But the point is, when we talk about meme stocks, AMC, we have fun with that, but that’s not investing. That’s just simply gambling. And I think you’d agree with me, Frank, if you want to gamble, you should go to Vegas. You can have a hell of a lot more time and a lot better scenery.
Frank Curzio: Yeah, definitely.
Daniel Creech: If you want gamble in the stocks, you can, that’s fine. But this just proves that as long as you are not going to be trading, you can buy great, well-run companies like this and for a three month period and even seeing crazy market moves, the odds are still well in your favor to hold onto these stocks because these are investments. You are investing in great businesses with solid management teams, that actually make money, that provide good and services to people. They may fluctuate with macroeconomics, but hell, there’s 250 to 300 names I could go over on this.
Frank Curzio: This Waste Management, too, you’re looking at a year out. Just, and yeah, you got a little volatility from 170 to 140, but this thing was 140 just for those traders out there. That people who, I mean, it was 140. Yeah, June 20th. And now, it’s 173. And it was just a lot of volatility within these names because the market’s all over place. You got to see this, even big names, especially small names, guys.
Daniel Creech: Absolutely.
Frank Curzio: The volatility right now with the Fed, no clue what the hell they’re doing. I mean, they’re catching up and they want to catch up to the point where, they’re trying to raise rates more aggressively than almost any time in the history of this country. And they’re like, “But, we’re cool. We’re not going to see a recession though. We’re going to be fine.” I’m like, these guys have no clue.
Frank Curzio: I understand the message. I understand you don’t want to create panic, and you don’t, but just being so wrong on the other end and having to catch up right now, it’s just for anyone out there, you’re looking at the Fed and going, “Holy shit.” I mean, I wasn’t worried, but now I’m a little worried that they’re going to really push past three and a half percent. And I think you’re already seeing the effects of it, and just demand is falling off a cliff. And just talk, you got to talk to people. Guys, if you’re not seeing in certain industries, say Philip Ball just went on and said how auto, they’re just seeing massive orders. And these are orders, I place orders for a hundred bucks, 200 bucks for EVs and stuff like that. These guys have massive amount of EVs that are now 25%, 30% more expensive. And that those prices are going higher.
Frank Curzio: And, don’t worry about whatever. Just passing the inflation reduction bill. We’re going to spend more money. Inflation reduction bill. So, they’re increasing the amount of tax credits, but already Ford and GM already raised prices. They’re expected in place on these prices, the next month or two, just to account for those. So the expenses, and if Ford comes out and says, “We can’t make money on EVs right now.” And you’re just spending 50 billion over the next few years, to go all in the EVs. You better hope there’s freaking demand, and it’s not going to come if we’re in a recession, I don’t give a shit who you are. It’s not going to come. I know that, believe me. I’m in the market for cars and I had to buy a car that was fully loaded. That half the stuff I didn’t want, or I wasn’t getting a car, right?
Frank Curzio: I mean, there’s nothing on the lots. I get it. I’m in the industry. I understand. But holy cow, you think people are going to pay that much more? And I know EVs are the future and stuff like that. And I get it, but man, I could see them purchasing the gas guzzling vehicles and just saying, “Okay, I’m going to do this instead of the whole learning curve,” or whatever. But yeah, it was worth it. But now with the prices skyrocketing, I don’t know. I don’t see the demand that they’re seeing, based on $200, putting $200 down, 300, maybe a thousand dollars down on the car that you were going to buy for $45,000, that was supposed to be available a year ago. And now, it’s not even available yet, but now that car is $66,000, some of these things. That’s how much, they went from 45 to 50, 55. I mean, the prices are unbelievable and they keep going higher and higher.
Frank Curzio: So, you’re going to see demand fall off. I want to hear from you guys, firstname.lastname@example.org because a lot of people here, and it’s not just here. I’m hearing from people in Europe that listen to this podcast. I’m hearing from people in China, the podcast, in the past few months. But they’re just saying immediately, everything was booming, and holy shit, it was like a light switch, and it just got turned off. That’s what you’re going to see. I don’t know if the Fed gets that, Daniel. I don’t think they do. I don’t think they see real people or look at it in that terms. I think they’re all looking at data that is usually lagging. And they’re going to maybe focus on that, but holy cow, I’m just worried that they’re going to get a little out of control.
Daniel Creech: Yeah, well of course they will. Last one here, this is kind of fun. I can’t resist myself, Frank. You think H&R Block is near a 52-week high, because of the 80,000 IRS agents coming to look for us.
Frank Curzio: Maybe. Maybe, but then again, those guys.
Daniel Creech: All right, I’m sorry. I should not go there.
Frank Curzio: Yeah, I know. But the IRS agents aren’t targeting the people that go to H&R Block, so I could tell you that right now.
Daniel Creech: Well, no I’m saying people are going to go to tax services because now they don’t want to do it themselves, because now that you got to have somebody to hide behind.
Frank Curzio: Well, I mean they’re hiring big accountants. That’s the people that they going after, where all those loopholes and stuff like that. And they’re going after the high-end, middle class, and high-end and all loopholes that are, and there’s so many loopholes because of the government. Because of the way it is. I love what, yeah. I got to-
Daniel Creech: Oh, see. I got you, see I started something here. I like that.
Frank Curzio: I got to give Donald Trump some credit here. I love when he said this, because he was on stage and they would say, “Well, look at you and your businesses, and you take advantage of it.” And he goes, “Yes, I’m taking advantage of the laws that you guys created. I’m a businessman. That’s what I do.” And he goes, “That’s how I know how to change them, because I know every loophole.” And I appreciated that. Because he’s like, “If you own a business, that’s kind of what you’re supposed to. You’re doing it legally.” So, you get the best freaking tax people, tax accountants, everything. And it’s going to be interesting that, I think there’s what, 75,000? And now, you’re going to have another 82,000 on top. By the way, I think they’re armed now. They’re armed, allowed to shoot people and stuff.
Daniel Creech: Oh yeah. That’s crazy. The job description. Holy hell.
Frank Curzio: This is crazy. What country, holy cow.
Daniel Creech: To your point, I listened to a great guy. I know his name, and I can’t think of it right now. And, I apologize, but I listened to, he just made the most simplest point when it came to taxes and he said, “Listen, the tax code, essentially, is a roadmap or a treasure map. They tell you what they will give you the biggest discounts on and things like that. You just have to follow it.” And I remember that guy, big CPA, I just remember thinking, “Wow, that is the most wonderful, simplistic way to look at taxes,” instead of just dreading it, and hating it and worrying about it like all us do. And that’s why a lot of people do real estate and different things. And anyway, when you look at it like that, “Hey, this is what they tell you to do and how to manage things, and what big write offs you get.” So anyway, I had to have some fun with that, I guess.
Frank Curzio: Wait until you see the write offs that you going to get with solar.
Daniel Creech: I was surprised. I know we’re past tax season, and I know people got to do quarterly and all that, but I was surprised to see H&R Block up there. You have a lot of utilities and things like that. The big takeaway here is, people, we are in an environment where you want to be boring. And the easy money is, just growth to the moon is over, as long as the Fed is going to raise rates or rates stay high. So, keep that in the back of your mind, but do not defer to just sitting on the sidelines because as we’ve just gone through a handful of great companies, well-run companies, they’re doing very well. Even amidst all the economic uncertainty.
Frank Curzio: And good job on that, Dan, because you don’t realize that when you’re watching TV, right? When you’re watching, it’s just like, holy cow. I mean, right now, the rise of the key risks ahead, the fall.
Daniel Creech: Hell no, all they do is about Apple and Microsoft.
Frank Curzio: Then they’re talking about Jackson Hole. Everything is just conditioning you. Remember, these are daily services. And even when there’s no news, they got to give you news. And now that it’s not really earning season, there’s not a lot of news. Just, we’re not really used to talking about Jackson Hole three, four days before it happens, but it’s constantly filtered. And what you got to pay attention to is the shit that fears you the most. And when you turn this stuff off, and you wouldn’t know that many companies are doing that well, that are just, especially with the ups and downs of the market, especially with the recent downturn the past three days. Again, it seems like the markets are down 10, 15% in the past three days. Doesn’t it. It feels like it’s a lot more than that.
Daniel Creech: Absolutely.
Frank Curzio: I recall if the S&P 500 didn’t break through its 200 day moving average, it came from within the handle. Guys, if you’re looking at that data, that rarely, rarely ever happens with the S&P 500, but there was great data, and this is done by a guy at Jeffrey’s. And he showed that when that happens and you come off, the gains of the next three months and six months are pretty significant. You would think that’s crazy. It came off. Now it’s going to crash. But just, you got to look at the data. You can’t just listen to anybody and say, “Holy shit, technicals. It hit the 200 and came right off. That’s a negative side and we’re all going to crash.” If you’re looking at the data when that happened, the next three months and six-month period, the S&P usually breaks through that and does well.
Frank Curzio: So, I’m not saying it’s going to happen. I’m just saying just, there’s two sides to every story. It depends who you want to listen to and hopefully, that’s why you guys listen to the podcast. We tell it straight whether people like it or not, but we tell the truth and try to get an edge on a lot of the idiots, that are pointing people in the wrong direction. Because that results in pretty good trades of, we’re taking the other end, if people really don’t get the true stories and kind of how I made my living in this market for over 30 years. So, hopefully that continues, but, Daniel, great stuff in your research today. Awesome. Hopefully, your back feels better. Maybe just go golfing three times a week, instead of four times a week. That usually helps.
Daniel Creech: It’s great you’re back. Glad to see you back in the office.
Frank Curzio: Yeah. Right. I see. I’m glad you’re back in the office anyway, but thanks so much for coming on, Dan. I really appreciate it.
Daniel Creech: Cheers.
Frank Curzio: And guys, questions, comments, Daniel?
Daniel Creech: email@example.com.
Frank Curzio: And, my email’s firstname.lastname@example.org. Really appreciate all the support. And, I’ll see you guys tomorrow with a fantastic, fantastic interview. He did the conference. Someone who has been featured pretty much everywhere, like FOX, NBC, ABC News, Inside Edition, tons of media outlets, magazines. One of the most sought after marketers with a massive social media following. Also, TED Talk speaker. I’ll leave it there. I’ll let you guys try to figure it out, but really a great guy. And I had a fantastic interview with him, which you’re going to see for the first time tomorrow. So, make sure you tune it. I’ll see you then. 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 podcast. Remember, it’s your money and your responsibility.
P.S. Longtime listeners know I’ve been pounding the table on metaverse investing…
If you’re still on the fence, the ultimate validation is this: Investment banks have been quietly pouring billions into this tech—during a bear market. They predict it will be the biggest tech trend we’ve seen yet.