A warning to all investors: “Cancel culture” is attacking Wall Street.
Nowadays, public opinion changes with the tide… and smart investors know to separate themselves from negativity and stick to their convictions. [00:30]
While most goldbugs are negative about anything but gold… Ed Karr, executive chairman of U.S. Gold Corp, is a fan of both the yellow metal and bitcoin. He shares his thoughts on bitcoin’s bull run… what’s behind the pullback in gold prices… and why he’s bullish on both assets long-term. [19:40]
Then, Daniel and I discuss the latest stimulus bill… why the market is rallying… and some ideas we like right now. I explain why interest rates won’t crash this market… and share a newly public stock I believe will hit $100 billion in valuation. [50:30]
Wall Street Unplugged | 764
Cancel culture has hit Wall Street
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 March 10th. I’m Frank Curzio, host of The Wall Street Unplugged podcast, where I break the headlines and tell you what’s really moving these markets.
Frank Curzio: We live in a funny world today, where the rules have changed. For example, if you resist arrest, attack a police officer, and try to grab their gun, and he shoots you to defend himself, that person who tried to take his gun is deemed a hero. His family will sue and get a fortune, and this is common now. These aren’t isolated events. It’s common, where we make martyrs out of criminals. Rules changed.
Frank Curzio: We get pissed off if someone uses an improper word, so many improper words now. The list changes every week, week by week. It’s like a new dictionary. Someone mentioned the word “colored” to describe a black person, and that was terrible. But you’re allowed to say “people of color,” and the person that said this is not racist. They made a mistake, but you have to say things properly, in the right terms now. So, say “people of color,” or the word “transsexual” is bad now. It wasn’t bad, I don’t think, a few years ago. It might have been, but I’ve seen it mentioned everywhere. Now, “transgender” is the term. That’s okay. It’s got to be “transgender.”
Frank Curzio: When you say the wrong words in public, even with zero intention of offending anyone, in today’s world, you don’t get a do-over. You’re not allowed to make a mistake. Nothing. You’re a racist. You’re a bigot. You’re a hater. And your career gets destroyed. Justin Thomas, a great young golfer, won several Majors, the most popular guy, based on the tour. A few weeks ago, he missed a short putt and said, “Oh, I’m a fag.” He used the word fag, as in called himself fag, and the microphone was on and it caught him. And the media crucified this guy. He had to apologize like 10 times. He’s still apologizing for calling himself a fag. Yet, 99% of gay people are not going to be offended by this word and they don’t lose sleep, like, “Oh my God, I cannot believe he said that.”
Frank Curzio: Twitter now thinks Justin Thomas hates the entire gay community. He’s terrible. But it’s the media that makes a really big deal of it. And also groups, those people who accomplish nothing in their lives who are trying to gain power, but it’s so amazing how careful we need to be. But Thomas had to apologize immediately, or he would have lost all of his sponsors. And those sponsors are big corporations, and these guys are the absolute worst.
Frank Curzio: Notice how after Biden got elected, and congratulations, but every company’s being forced… They’re being forced to mention ESG, environmental social governance, in their presentations. Every presentation that I go to, it’s four, five pages. “This is what we’re doing,” the environment, social, equality. You’re being forced but the pages that they devote to it, how they’re supporting that, every single thing. Amazing, amazing, how public they are about it. But they never gave a shit about the environment, anything social governance before Biden. They didn’t give a shit. They never mentioned it like they did. Now, at the same exact time, all companies, you look at any presentation at S&P 500 companies, and they’re all going to be talking about ESG in some form or another in their presentation, on their conference calls, and they’re going to be addressing this going forward.
Frank Curzio: Why? Well, they need to address it or they’re going to risk getting sued by these organizations. It’s not like they believe in this all of a sudden at the same time. No. It has nothing to do with that. It’s all corporate, it’s all, “Hey, it’s the way the world is now.” But there’s so much fakeness to it. Everything’s so fake now. I don’t know when that changed. I don’t know if it’s so recent. But man, it’s a different world now. And these people and companies aren’t being genuine. They’re not attacking people like Justin Thomas because they love the gay community, or are putting ESG in their presentation because they actually believe in it. No. They’re just following orders, checking off boxes so they don’t get their balls busted by these crazy organizations.
Frank Curzio: Canceling Dumbo now? Dumbo? Are you kidding? Dr. Seuss. Dr. Seuss is a racist now. He’s crazy racist, Dr. Seuss, but you’re canceling Dumbo? What’s next? Is the Road Runner next? Wile E. Coyote a terrorist and a murderer, bombing everything? He tried to kill the Road Runner, and you show… Are we going to go back to every single cartoon? Tom and Jerry? Everything? We should just cancel everything. It’s insane right now.
Frank Curzio: And look at the woman’s movement, another thing that suddenly being mandated by companies to address. Mandated. Why now? I don’t know. But now, every board of directors in fortune 500 companies must have a woman on it. They must have a woman on it. I want you to think about that for a minute, and I want you to think about how insulting that is for women. So, you’re not on a board because you busted your ass and you deserve it. No, no, no. You’re only on the board because it’s now mandated. To me, that’s not an achievement. It’s a setback.
Frank Curzio: If we’re going to have equality, we need to stop labeling shit. Like, calling Robert Johnson, who was the founder of BET, an entrepreneur, huge, successful central businessman, and then he described as the first black billionaire. How about just calling him a billionaire? Because now we’re placing a label on it. When you place a label on it, aren’t we trying to avoid that? Isn’t it weird when you think about it?
Frank Curzio: Well, the NBA referees, I don’t know if you saw the All-Star Game, a pretty good game. Actually, it wasn’t that good a game. LeBron James’ team kicked the crap out of Durant’s team, but they made it a big deal. Let’s say it’s a first time graduates of historically black colleges and university officiated in this All-Star Game, or in an All-Star Game. Now, I know basketball well. I was a licensed official, a referee. I’m familiar with the referees in the NBA. These are great referees. So, why do we have to label it though? Seriously, when trying to achieve equality, this isn’t the way to do it.
Frank Curzio: Hey, you look at Curzio Research, we have more women than men that we employ here. Our top position, the person who runs the company operations is a woman, outside of me being the CEO and co-founder, well, actually founder, not co-founder. Two of our four partners are women. And that’s not because I needed women as partners, I need to show this off to investors and the world. “Oh, look at our company and the way it’s structured.” No, they’re partners because they earned it. They were the best at their positions out of everyone I interviewed. I didn’t look at color, race. I don’t look at anything, gender. I looked at who could be the best and help this company grow to the next level, especially since we have shareholders now. We want to make everybody rich. Shouldn’t it be that way instead of mandating it?
Frank Curzio: I’m sure I’m going to be labeled a racist, a bigot, a chauvinistic pig if this intro goes viral. I’m terrible. I’m the worst person in the world. But it’s amazing how fake everyone is today: companies, people, celebrities, politicians. Nobody does what they say they’re going to do. They lie to you. They never admit when they’re wrong. There’s no humbleness anywhere. You can’t trust anyone. When things are good, everybody wants to be your friend and wants to know you. But once that tide turns, look out, because these same people who praise you and make sure they did it publicly suddenly become your enemy. They start talking shit behind your back as soon as the tide turns. You want proof of that? Look at Cathie Wood.
Frank Curzio: Cathie Wood is the founder, CEO and CIO, is the Chief Investment Officer of Ark Investment Management. She’s a good person, devout Christian, who named her company, Ark, after the Ark of the Covenant. So, she got it from reading the Bible, and she actively manages six ETFs. And these ETFs are really, really cool because they’re based on new technologies and innovation. And we know those that are names that went up tremendously since the credit crisis, and really tremendously since ’15, ’16, ’17, ’18, and have been going higher and higher and higher. And she says, I’m quoting her here, “Disruptive innovation is often not priced correctly by traditional investment strategies because people may not understand how big the ultimate opportunities are going to be. They aren’t sizing the opportunity, and they aren’t analyzing this disruption.”
Frank Curzio: She has six funds. The Ark Innovation Fund has $17 billion in assets under management, makes it the largest ETF. Autonomous Technology and Robotics Fund, that is a next generation internet fund, Genomic Revolution, and a FinTech Innovation Fund. So, over 30 billion assets under management just from these active funds, the largest active ETF for Ark is that innovation fund, the largest in the world. And it’s top holdings, what do you think they include? Tesla, Square, Roku, Teladoc, Zillow, Shopify, Spotify, Zoom, Crisper. So, all the super duper growth names. And since inception, she’s been killing it. Average analyzed returns of 36%, that’s 2015. That’s amazing. Amazing.
Frank Curzio: And she’s on top of the world. Everyone praising her; a great analyst, forward thinking, understands innovation. Bloomberg named her the best stock picker in 2020. Cramer praised her. Everyone. Everyone praised her. That was up to about February 15th. And about February 15th, all that stopped because the NASDAQ crashed over 10%, and most large cap, these super growth names, especially the ones in her portfolios, got hit by 30% plus in a couple of weeks. Jim Cramer comes on and say, “Cathie Wood needs to close the funds now. Needs to close it. Close it right now.”
Frank Curzio: I worked for Cramer. Cramer always panics during big sell offs, and that panic usually lasts about two weeks before it becomes bullish again. “You got to close the fund. Close it right now.” This was a couple of days… Look now. The NASDAQ went up by 4%. I think it’s up another percent, 4%, yesterday. It’s up today. I’m looking at my screen, almost 1%. Yeah, no one’s worried anymore, and it’s just like last week. “Close it. Close it,” even though he didn’t understand that this isn’t a mutual fund. You can’t close it. It’s an ETF. You don’t close ETFs.
Frank Curzio: And so looking at Cathie Wood, all of a sudden, going from a hero to so many people going out there and hating her. And she had to go on different outlets and say, “Look. These inflows come in and out.” She has nothing to do with this. They don’t have to raise money to satisfy redemptions like Melvin Capital had to do. When they shorted GameStop, they needed… What is it? Two and a half billion dollars injected… That’s not this. Why is he saying to close it for? Peter Schiff called her out… Didn’t say too many bad things about her. He said he has respect for her, but said the… Bitcoin, after she said Bitcoin’s the best hedge against inflation, people were just like, “That’s crazy. It’s gold.” And you know how gold, no matter what, no matter what facts change, a guy was born and he was like, “Gold, gold, gold!” And for whatever, how old he is, 60, whatever he is, “Gold, gold, gold,” no matter what. No matter what facts change, whatever. You’ve got to buy gold, no matter what. And you miss out on everything else.
Frank Curzio: But look where Bitcoin is. You’re saying Bitcoin is not the best hedge against inflation? Well, we have inflation right now. Most people will agree with that. We have inflation. We have higher interest rates. Interest rates surged, and Bitcoin’s trading near its all-time high today, over 55,000. Where’s gold trading? Gold’s been selling off during this time. Interesting. Why is he calling out for? But I watched numerous financial media hosts analysts just criticize her. Doug Kass said on February 23rd, “Over the last two weeks, I’ve cautioned about the risk that Ark’s virtuous cycle perpetuated by massive inflows runs the risk of being a vicious cycle. Should outflows commence as Cathie Wood runs a portfolio at 200 miles per hour?” Come on, Doug. I’ve had Doug on this podcast. I know him. Doug’s the first person to tell you how right he is, although he’s been bearish on the market since 2010, but give me a break. Really?
Frank Curzio: And it’s funny how in one week things change. Kass is ripping, ripping Berkshire Hathaway. They picked him as the speaker or the person who’s going to bait Warren Buffett at his annual meeting of why he doesn’t like Berkshire. And he’s like, “All these investments, they look like this…” And look where Berkshire is trading today, going through the roof. Just saying, if you’re going to criticize, at least have a decent performance. Be right more than Cathie Wood, because she’s been wrong for two weeks, and it’s barely two weeks. Two and a half weeks, and now, the NASDAQ’s popping back up and she put her money where her mouth is.
Frank Curzio: I came out and said, “Listen. I wasn’t too crazy about that buy in Tesla on the way down. I just felt like they’re more an ego thing.” It’s my opinion. It’s not that I don’t have respect for her. I think she’s amazing, what she accomplished. But some many people turned on Cathie, and the timing was great. They didn’t turn on her in 2015, ’16, ’17, ’18 through 2020 or in the first six weeks of 2021. No way. She’s a hero. She’s great because the innovation fund soared. It was at 37 at the March bomb, March 2020. It went to over 150 in mid-February, but when the market crashed and NASDAQ crashed, her fund fell, hit 30, 35%, and everyone turned on her.
Frank Curzio: Excuse my French here, but what the fuck is wrong with the world? Why do we hate so much? Why do we kick people when they’re down? We love doing that, right? And usually, the people doing the kicking are the ones who were doing the ass kissing when everything was going well for a certain person. But Cathie Wood? Really? She’s an amazing fund manager. Outside the past few weeks, she’s been dead, dead freaking right on everything. Dead right on everything. And yeah, calls for Tesla, and they’re going to have… Whatever, I think it was that $3,000 price tag or something she has on it where all autonomous vehicles and stuff like that. That could be out there a little bit, but who am I to disagree? She’s been right this whole entire time with the stock going higher and higher for Tesla being a large position. So, we had the NASDAQ surging over 4% on Tuesday up today, and I’m sure everyone’s going to go back to kissing her ass again as her portfolio bounces back. That’s the world we live in right now.
Frank Curzio: But I’m telling you, a lot of people email me about, “Hey Frank, I want to be an analyst. I want to be a newsletter writer.” If you want to be in this line of business, being an analyst, I can tell you with my profession, being someone that people turn to for advice on the markets, if you want to be super successful, and of course, you need to have driven, be competitive and all that stuff, work hard. Yes, I know. But even more important than that, you need to establish a great network and have access to information. Not inside information, but access to information when it’s happening, before these trends develop, before you see it on CNBC, where everybody’s talking about how great Tesla is at 400, 500, 600. Well, other people had it 40, 50, 60, barren.
Frank Curzio: But in order to have a great network, you have to be truthful. You have to be real. You can’t be fake. You have to treat people with respect, help them out. And don’t help them out when things are great and be their friend. Be there for them when shit is not so great for them because that’s what a true friend does. When things are really bad, that’s when you’re there for somebody. That’s your true friends. And I know there’s times all of us in our lives where we’ve been down. I’ve been fired, and the people who reached out to me during those times, those are the people that I trust the most.
Frank Curzio: Just having access to an enormous network and building that… The people you trust give you tons of access to information. And you guys see that through our newsletters and getting into trends, traveling the world, talking to the right people. It’s not because I’m a genius. It’s because I talk to people who are very, very smart in specific fields. That’s why we got ahead of COVID. It’s not personal. It’s not political. COVID, just looking at the stats, and I felt like we did a fantastic job. I’m not talking about stocks and getting out of them before the crash. But just telling people, “Hey, you know what? This doesn’t impact kids. We should open schools.” We’ve known this information, who it targets, who it impacts, who we need to protect, we’ve known this since April. Schools are still not open in some states. Are you kidding me? Are you kidding me? It’s a disgrace. It’s a disgrace. These are our kids. Why is politics involved?
Frank Curzio: But having that great network, learning to find those great ideas ahead of mainstream media, that’s how you become successful. The only way to achieve this is having that great network, being real, not fake. Not someone that’s going to kiss ass, someone that talks behind other people’s backs. You don’t ever do that. That’s the easiest way to separate yourself from so many people right now, and I just went through a whole bunch of different things. And I’m talking about the gender, I’m talking about the gay community, black, racist, and filtering down to corporations and businesses. Separate yourself from this garbage, people who just hate everything. They hate America. They hate successful people. They hate people who work hard. Don’t be like that, especially if you want to be great at this profession, at my profession. Don’t be fake. Just don’t be fake.
Frank Curzio: Now, my next guest is part of my network. He’s a good friend, someone I trust, someone’s who’s an investor in Curzio Research, the CEO token, bought into our offerings, and is a shareholder. Someone who probably made you a ton of money if you listened to him, and that’s Ed Karr.
Frank Curzio: So, Ed’s a successful entrepreneur. He’s been on this podcast numerous times, even back in 2017, telling you to buy Bitcoin when it was under $3,000. It’s over $55,000 as I speak. This is going to get published in a few hours. It could be 45,000 then, doesn’t matter. At 3,000, he made a fortune. And he came on in 2018, ’19, said the same thing. Buy Bitcoin, blockchains are real. Ed is now the executive chairman of a promising small cap gold company. He’s tried many businesses, successful businesses, and it’s a company I’m personally invested in and after this interview, you’re going to know why I have a big position in the stock. You’ll know why. You’ll know why right away.
Frank Curzio: So, I suggest listening up. Ed is one of the smartest guys I know, always straight up, always full of great ideas. So, let’s get to my interview with Ed Karr right now. Ed Karr, thanks so much for coming back on Wall Street Unplugged.
Ed Karr: Frank, great to be here. Thanks so much for having me again.
Frank Curzio: Well, I want to start out with Bitcoin, because I’ve had you on since 2017. You’re an investor in our CEO token. You’re very familiar with this industry. And just to bring everyone hearing you, Ed, June 2017 when I interviewed him, he said, and this is when Bitcoin was at 3,000, he said, “Demand’s now stronger than ever. Recent volumes are proving to be a massive hedge against potential macroeconomic events.” And then, in early 2019, when I interview you, you said, “One thing I can guarantee to you and your subscribers, Frank, is that blockchain technology, that’s here to stay. It’s going to revolutionize our lives probably the way that the internet did originally in the 90s.”
Frank Curzio: We’re looking at Bitcoin touching, getting close to all-time highs again. It’s over 55,000. What are your thoughts now? What an amazing call but is this just hysteria? You think it’s going a lot higher? We’re seeing more institutional adoption. I want to get your thoughts as someone who’s been commenting on this industry for a very, very long time.
Ed Karr: Yeah, yeah. Thanks, Frank. And certainly, a lot of interest in Bitcoin these days. Man, when I put on CNBC, they’ve now got the Bitcoin ticker and the GameStop ticker running in full time live stream, so just shows all the interest in it. And certainly, we’ve had this incredible move. You look at Bitcoin today at 56,000, I think, 200 this morning, incredible from the last time we spoke.
Ed Karr: I’ll tell you, my general thought process is this move has been spectacular, but also justified. And I think what we’re really seeing is the institutionalization of blockchain, cryptocurrencies, and especially Bitcoin. So, as we see more institutions, more banks, more fortune 500 companies start to get involved, Wall Street, et cetera, and don’t forget back when we originally talked, Frank, in 2017 or so, people were thinking, “Oh, Bitcoin is just the Silk Road. Money launderers, criminals, sort of-“
Frank Curzio: Tulip mania?
Ed Karr: Currency. Yeah, Tulip mania, exactly. And then, we’ve gone from here from 3,000 to 56,000. So, it’s been an incredible run, but I do believe this is validation of the big institutions coming in now.
Frank Curzio: So what do you think now? There’s an interesting stat out there that I saw, I think it was yesterday or one of the, I think it might have been Cointelegraph, cited by saying that there’s more accounts that spent over $100,000 on Bitcoin in the past few weeks, and this is when prices, once they crashed and this because the crash isn’t really like a 15, 20% move in Bitcoin, which happens in weeks. But when it went down to below 40, 47, 45, a lot of people started adding, and it wasn’t those individual investors. These are young kids that understand Bitcoin; it’s digital, and this is wave of the future. This was institutional buying, and like you said, you’re seeing it.
Frank Curzio: It seems like with the adoption, and every time this thing goes down, people are buying and more and more companies are using their cash balances to do it. Do you see this going significantly higher from here, or will you be more inclined to take profits? The crazy bulls are just, “Buy. It’s going to 100.” If it goes to 100, they’re going to say it’s going to go to 300,000. I’m just curious. So, for someone that’s in it early like you, would you be just taking some profits here, or you’re just going to go a lot higher?
Ed Karr: Look, I tell you, as you know, Frank, I’ve been doing this for a while. So my spidey sense, the trader in me, says the short-term big money has been made. When we get something that goes from 3,000 to 56,000, that’s a big move. And a lot of people bought in Bitcoin, five to 10,000. Let’s say you even bought it at 10,000. It’s at 56, so you made 5x your money. Is Bitcoin now going to go to 250,000? It certainly could. It certainly could. But I don’t think the march from 56,000 here to 250,000 is going to be a straight up hockey stick. I really don’t. I think it’s going to take time, and we see it. Whether it’s a stock, a commodity, a cryptocurrency, they tend to have these big, massive rallies and spikes, and then they cool off.
Ed Karr: There might be institutions that come in and short this market via the futures. I think we need to consolidate for a while, and there are some significant risks, Frank, to the whole Bitcoin infrastructure out there. And I think the biggest risk that everyone has to be aware of is government. If the US government comes out, especially under the Biden administration, they just decide tomorrow to classify Bitcoin as a security, it could lose 50% overnight. You’d have to have FINRA regulated broker dealers clearing the trades, and that’s a major risk. That really is. And ultimately, at the end of the day, the government, the Federal Reserve, the regulators, I don’t think they’re going to let this thing just stay out there. Once you start approaching trillion dollar market caps and become a little competition to the global financial system, that’s when the government tends to step in and give you a little slap on the cheek.
Frank Curzio: Yeah. That definitely makes sense. It’s going to be interesting to see how this is regulated going forward, and that leads us to the Coinbase IPO. I think it’s going to be a game-changer because it forced them to really, I think it was 2018 or ’17, where I think it was 10, 20% of their accounts. Don’t quote me on that, but they didn’t have just whatever. They didn’t have all the proper checks. Most of them were okay, but they basically got rid of it and said, “You have to go through the AML KYC process,” because they knew they were going to go public.
Frank Curzio: Now, we’re looking at something that could go 80 billion, 100 billion valuation, which is insane, because that would make it a bigger market cap than every exchange, major exchange in the US, their market caps combined, which is insane. But what’s the next step here? Because you mentioned the word security, you know about security tokens, you’ve invested in our token, you see in NFTs, non-fungible tokens. What’s the next stage of this? Because I think you were talking Bitcoin when nobody was talking Bitcoin. The whole world’s talking Bitcoin. Like you said, you’re up 20x on it or whatever. What’s the next step here, and what are you looking at, and how this develops? Or is it just, “Hey, Ethereum and 2.0, is that something?”
Frank Curzio: What’s your view on other things outside of Bitcoin? Because you know that, just like the internet, social media didn’t come ’till a good 10, 12 years after. And then, well, you see these different industries get developed and created. And again, we had more high speed internet, but I think you know where I’m going with this. What’s the next step you think in this Bitcoin revolution?
Ed Karr: Look, I’ve always been extremely impressed, enthusiastic with blockchain. And the technology behind the blockchain, the architecture of that, is going to change the world, in my opinion, more than the dotcom and the internet revolution. And so probably just like the dotcom shakeout we had in the late 90s, there’ll be a couple companies left standing. So, you’ll probably have Bitcoin, Ethereum, but there are thousands of old cryptocurrencies that are going in the dustbin, and they will all be zeros.
Ed Karr: So, you’ll have a couple left, but blockchain is definitely here to stay. And the revolutionary implications when you look at this, to change society, things we can put on the blockchain from regular banking. I live, you know Frank, in Europe. And if I wanted to send you money on a Sunday night at 3:00 o’clock in the morning, and it’s my money, private transaction to you, why shouldn’t I be able to do that? The world is currently, right now, hostage to the global banking swift system. So, it’s only 9:00 to 5:00 and these international money center banks, they do a wire transfer, they sit on the float, they take interest off you, me and the little guys for three, four days, and they make billions and trillions of dollars. I think blockchain will change all that.
Ed Karr: I think blockchain will trade the commodity trading industry that is very, very paper heavy and archaic and deals with bills of lading. And when you look at supplies of physical commodities, rice, copper, gold, whatever, blockchain will change all that. I think blockchain will change the identification industry, driver’s license, passports, medical records, it’s all going on the blockchain. It’s going to be incredible, and they will tokenize and securitize everything in the next decades.
Frank Curzio: Yeah, it’s amazing. It’s amazing where it was just two, three years ago, and even for people who were in it five years ago. And just seeing the crash in 2018, for this to come back and getting it right, I think the crypto world and Wall Street are getting it. They’re starting to get together in order… I think that needs to happen in order for this thing. And obviously, that’s really what’s driving this, institutions, but you need a little bit of regulation.
Frank Curzio: Like with Coinbase, you need to know that your account is safe. I understand you’d have to centralize everything, but you need to make sure that everything is safe. And I think now that Coinbase is coming out with that, and people… It’s very easy to buy Bitcoin today than it ever was. It just adds to the possibility that this thing is really, really going to scale much more than already has.
Frank Curzio: I guess the last question on this would be, is there anything that you’re invested in terms of tokens, outside of Bitcoin? Or again, I know you have our CEO token, but is there anything else that interests you, or is it, “Hey, I’m a Bitcoin guy?”
Ed Karr: No, no, absolutely, and I look at a lot of different projects and securities and tokens, and it’s very, very interesting. And I’m constantly on the lookout for different opportunities and still very enthusiastic of this whole sector. And I think Frank, your listeners, all of us, we have to look. Why are cryptocurrencies running so much? Well, it’s a macro discussion. Why are SPACs so popular right now, and why is so much cash flowing into SPACs?
Ed Karr: Well, I’ll tell you what. The Biden Administration in Congress just passed a $1.9 trillion stimulus, and that money has not even flowed into the US economy yet. Probably next week or the week after, people will start getting their stimulus checks, and then this amount of money is unprecedented. The amount of money that Congress, the Federal Reserve, is spending to combat this COVID global pandemic, it’s unprecedented. So, we are awash globally in this tsunami of liquidity, and it is going into speculative assets.
Ed Karr: So, real estate’s going up, the stock market’s going up. You’ll get stocks like GameStop and Tesla that just go crazy. You have Bitcoin that goes crazy. Because ultimately, in my humble opinion, Frank, these are all inflationary forces. The global money supply is increasing. We’re seeing even lumber going up, some of the agricultural commodities going up. We’re seeing copper on a hell of a bull run. Everything is in a bull market, and it’s all due to liquidity. So, it’s an unprecedented time in human history.
Frank Curzio: Now, here’s the $64,000 question. So, inflation is creeping higher the past few months. We’re all aware interest rates they’ve gone higher, and the interesting thing for me is, we’re seeing Bitcoin near all-time highs. So, maybe you say it’s a hedge against inflation, but you have gold selling off here. Talk about gold. Is it this Bitcoin really taking the place of gold, maybe if it’s a store of value? And again, if you’re talking to the gold bugs are going to say, “That’s not a store of value.”
Frank Curzio: But still, there are people that, and especially the younger generation, when it comes to, “Hey. You know what? I want to own something outside of those assets that you just mentioned, even if it’s collectibles or stocks or real estate.” And if they have a choice between gold and Bitcoin, the younger generation is definitely picking Bitcoin right now. Is that taking the luster away from gold, or just creating a great opportunity for gold?
Ed Karr: Well, personally, I’ve always thought that they are mutually compatible, and investors and speculators should own both. For me, gold is my insurance policy. So, I want to have gold, I want to have physical, I also own the GLD and a lot of exposure to gold. Bitcoin, for me is much more of a speculative, fun, trading vehicle. Who knows if it’s going to be around in 10 or 20 years? We really don’t know.
Ed Karr: Not only is government a big risk to Bitcoin, look at quantum computing coming in the future and these evolutions in computing power. If China cracks the quantum computing before the United States, with quantum computer, you could literally hack a blockchain in a nanosecond. So, they could go in and steal everyone’s Bitcoin, and everyone who thinks it’s secure, good luck. Or maybe Google gets the first quantum computer, I don’t know. But that’s going to be a game changer as well.
Ed Karr: So, your quantum computer is not going to hack my gold coins. I guarantee you that, and you’re absolutely right, Frank. Gold has been languishing, and we have to look and think why, and they’re very, very different groups. The millennials love to speculate with their smartphones and their Robinhood accounts, and get in there and buy some cryptos and put 10, $20. Wow, and look at my game. Wonderful.
Ed Karr: Who are the big buyers of gold? Central banks around the world. They are the big buyers. They’re not out buying Bitcoin. They’re buying the 12 and a half kilo central bank bars. And there’s countries like China, like Russia, the Middle East, that are just hoovering up the gold supply at these lower levels. And gold tends to make a seasonal low around now actually, Frank. It tends to sell off February to early March, then kind of base… You got the big Canadian mining conference going on right now, the PBAC. And usually coming out of that, gold tends to go on a nice little run into the summer.
Ed Karr: So, I think gold is an incredible buy right here, especially due the fact you saw some of these Reddit traders want to get behind silver and light that up a little bit, and silver had a nice little pop. Nothing’s happened yet with gold. So, gold is an incredible buy right here when you look at it value-wise to compare it to everything else. At $17,015 an ounce, where we are today, I’ll tell you myself, I’m going to take a couple of my Bitcoin profits, and I’m going to start just deploying those into gold because I think the relative value of gold is much higher.
Ed Karr: And remember Frank, on the podcast back in whatever it was, 2017, I said and I still believe that at some point, gold has the potential to trade like Bitcoin. I think we can get a massive speculative blow up in gold, and what will really precipitate that will be the fear factor. If people believe that ultimately, with all of this quantitative easing and money printing from the Fed, from Congress, if ultimately people start to lose faith in the US dollar, and especially international investors, and they start dumping the dollar and the dollar declines, it could set off a cataclysmic global reaction like Zimbabwe, like Venezuela, leading to a currency meltdown. That’s when you would just see money pour into gold, because people would be scared. They would want to maintain their purchasing power parity, and we could see 3,000, 5,000, $10,000 gold very, very quickly.
Frank Curzio: Now, that’s interesting. And we talked a lot about Bitcoin, and it’s a good segue into gold here and… But you know what? Bitcoin and cryptos, that’s a side thing for you. So, for US Gold, let’s talk about US Gold. So, there’s a company that you’ve been a part of a very, very long time. You acquired the Copper King asset a while ago. Why don’t you bring us of the Copper King asset, US Gold? What makes this asset so special because this is something that I’m invested in personally, and I’m invested long-term because I saw this project personally. But why don’t you talk a little bit about that, and bring everybody in here on US Gold?
Ed Karr: Yeah, I’d be happy to Frank, and thanks for that. And when you look at the company, US Gold Corp, certainly the project is important, Copper King, but probably the most important thing, in my opinion, for companies is you got to look at the people, because projects are great. But if you don’t have the people and the management to move those projects forward, or that technology forward, you’re not getting anywhere. And that’s why companies like Tesla get a premium valuation because of Elon Musk.
Ed Karr: So, when you look at US Gold Corp, last August, we appointed George Bee as our president, CEO. And George, you’ve met him, Frank, an incredible guy. And what we’ve got in George Bee that I think is still underappreciated, we have the Tom Brady of mining. Tom Brady’s a winner. You’re down in Florida, he goes down to Tampa Bay there and bang, ends up winning the Super Bowl. And that’s like George Bee. George Bee is a winner. This is a guy who has been in the mining industry for 40 years. He spent 16 years with Barrick Gold as a senior executive, brought some of the biggest projects, biggest minds on this planet into production. He was the mining manager for Goldstrike in Nevada. That’s the mine that made Barrick.
Ed Karr: And so, George was living the good life in Park City, Utah, sitting there in semi-retirement, enjoying the powder skiing. And when we actually introduced him to our CK gold project in Wyoming as a consultant, he fell in love with it, Frank. And he said, “Wow guys. This is a project whose time has come. I know with my experience and my background and skill set, I can push this thing forward. And this is a big moneymaker for these shareholders.” And that’s when George came all in, and this is basically going to be his swan song. He’s in his early 60s. He knows that he can push this project forward into production, and we are extremely excited with the progress we’ve made so far.
Frank Curzio: Yeah, and I’ve met George personally, and I said this to you afterwards, where he was the one person or the one geologist/engineer that I met, and I’ve been on tons of projects over the past 15 years, where he didn’t say how great the project like, “This is a great project.” He was like, “This is what we need to do to develop. We’re going to do this, this, this, this, and this.”
Frank Curzio: And really early stage, a lot of people, junior miners, they don’t look to develop which I think puts you guys in an incredible position, because a lot of them are just, “Hey, let’s just stick a couple things in the ground, see what the asset’s all about,” and then the goal is to sell to somebody else. With this, he’s like, “I’m developing this.” And that’s not saying that you can’t get a takeover or get acquired at a higher price, and he’s going to do what’s in the best interest for the shareholders, you guys, but I love the fact that that’s the goal here, is we’re developing this thing.
Frank Curzio: Now, George could have worked any place and he could have stayed retired forever. So, that was one of the things that really attracted me to this. This is why I went out there to go see this project in Wyoming. Talk a little bit about more about the recent news, because you just came out with news and that’s why I wanted to have you on today, a couple days ago, which is fantastic. And something that I felt like just by seeing the project myself and seeing and the gold right on top of the surface and the copper, but the news that came out. Talk about the news that came out, and I believe just a couple days ago.
Ed Karr: Yeah. So this is game-changing, and we are moving the Copper King project right now. As you know, Frank, we have a preliminary economic assessment, was done in the past by Mine Development Associates. We’re moving the project right now to what’s called a pre-feasibility study. So, we’re doing a bunch of drilling, a bunch of geological work, reports, et cetera, to move this project forward. And on Monday, two days ago, March 8th, we put out a press release on metallurgy. And metallurgy is huge. This is game-changing for us.
Ed Karr: And I don’t want to get too, too technical, but basically, what the press release showed is that the top of this deposit of Copper King has an oxide zone that comes up to surface. That oxide zone has some of the highest grades in the deposit. We put out some press releases back in December talking about those high grade intercepts. These are snazzy, snazzy intercepts. And so the metallurgy that was done in the past, the group that did it, SGS out of Canada, they had pretty poor recoveries out of that top oxidized zone recoveries for copper and gold. In fact, on the copper, they were only getting about a 10% recovery.
Ed Karr: So, our recent work, not only do we have George Bee as our president and CEO, Frank, we have all of George’s experience, Rolodex, and relationships of people and consultants he has worked with for 30 or 40 years. So, one of our head metallurgists, John Wells, has been working with Capus Cassidy out of Reno, and KCA did the recent metallurgical testing. And we have now optimized the recoveries, and we’ve gotten the recovery of copper in that top oxidized zone up to 60%. So, from 10% to 60%, Frank, that’s a 500% increase in the recoveries. It’s huge. It’s absolutely huge. And those economics are going to flow right to the bottom line.
Ed Karr: Important to point out too, this is some of the very first material. It is the first material that will go to the mill. So this deposit, you were out there, Frank. You stood right on top of that. You saw those copper rocks filled with copper and gold. It comes right up to surface. So, when we put this into production in the future, that material, literally the first shovels in the ground, when that material goes to the mill, we will be producing revenues and cash flow from day one. So, this project becomes highly profitable. A lot of deposits, they might be 100 or 200 feet underground, so you have to do what’s called pre-stripping. You have to take all that overburden off before you get to the actual mineralized material. At Copper King, we are at mineralized material right away. We’re in the highest grade pay day material right away. So, it means our payback is going to be very quick. And we’ve now increased the recoveries in copper by 500% and gold increased by 27%.
Ed Karr: So, these are going to be super exciting. I think the economics on the PFS are going to be very, very robust. And as we release that, we believe we’re still on track for about mid-June this year to have this PFS document come out. This is the catalyst, Frank. This is what the institutions, the real big boys will start looking at. And I think right after this PFS comes out, our stock, our company will re-rate. You’ll look at our competition, they are trading at significant multiples higher than us with similar assets. So, we’ve got a real, real opportunity here to create a lot of shareholder value.
Frank Curzio: And guys, just to bring you in here too, the pre-feasibility study too, I’ve had companies come to me and they tell you based on their own estimates, and they might get an independent study just showing this has two million ounces, and these are the grades. For institutions, they need to see the economic study. They really need to see that and once that, because it’s a stamp of approval, it’s done independent. And that put the economics on the project where now you can have analysts cover it and it gets throughout the industry like, “Holy cow. Did you see these results?” And that’s coming out.
Frank Curzio: I have your presentation up now just to show that, this is from 2012 guys, valuing the project at 178. Again, you just came out with news showing that it’s a much, much better project, high gold grades, even more copper, but it’s pricing gold at 1275. Gold is 1750. Today, you’re looking at copper price 2.80 there, around $4, almost 50% higher, a little bit more than that. And yet this is $180 million. And then you have on the next page where you guys actually said, “Hey. We just used a little bit lower.” You still have 2.80 copper here, but you have it at 321 million is before these results, and your market cap is at 70 million.
Frank Curzio: That’s something that attracted me where, here’s a catalyst coming up. It’s going to probably be pretty good, based on the news you already reported. They aren’t under estimating the potential here, but I guess that the biggest question is, you’re sitting on a great asset, it’s in a mine friendly district. You have the right people involved, everything’s perfect. What about the gold industry itself? Because we know it doesn’t even matter. I always used to think the most important thing for any gold company is people. But yet, I know a ton of projects with great, great people on it, and we have a five-year stretch where nothing in gold worked and everything crashed, didn’t matter who you were.
Frank Curzio: So, do you need gold prices to go higher here? Because if they stay the same, this seems like this is a layup, where this thing is going to skyrocket higher once you come out with that study. Or are people going to say, “Yeah, I don’t know. I just want to stay away from gold all together,” and come down. This thing could come down as gold prices come down, but how dependent is this on gold prices? You have it where you can produce this at very, very cheap gold prices and copper prices. But how important is that? Because I think that’s the biggest risk. You have the project, you have the company, and I feel like nobody really knows about this. But if the gold industry stays the way it is, or we see it pushed down to 1600 an ounce, I don’t think it’s going to matter for any gold company. Everything’s probably just going to sell off.
Ed Karr: Yeah, yeah. I think that’s a good point and observation, Frank. And certainly, an increasing bullion price, increasing copper price will help us in the entire industry longer term, and I am very bullish. But I’ll tell you the gold fund managers and the sophisticated specialists in the sector are a very small percentage of the overall investment universe. So, most people are generalists. And when you look at money managers or hedge fund managers, institutions, big guys like CalPERS, even retail, very few people actually specialize in gold and exploration and mining stocks. So, as long as the market is ripping, then your growth stocks are hitting new highs, your blue chips are doing exceedingly well, you’ll probably just have a small portion of overall investment capital allocated towards the sector.
Ed Karr: I think if the market were to sell off a little, we’d see tremendous inflows in here. And at some point, we will. We’re already starting to see now this rotation in the market. With interest rates increasing, people are starting to rotate. They look at these hyper growth stocks as very long duration that can get hit in a rising interest rate environment. And you look out there today, Frank, and people look, where’s the relative value? Do I go out, and do I buy stocks that are very, very extended, whether it’s a Zoom or a Netflix or a Tesla? Or, do I look at relative value, maybe from the mining sector? And I look at a company specifically like US Gold Corp, with a $70 million market cap, no debt, $15 million in cash on the balance sheet, so at $55 million enterprise value. We’ve got an asset Wyoming with a potential $321 million NPV or higher and two projects in Nevada and a project in Idaho that alone could all be company makers.
Ed Karr: So, I think that the interest in this sector will come, and there’s a lot of companies in the mining world that are highly profitable at $1,700 gold. And I’ll tell you, I just as I talked about, Frank, with this liquidity tsunami, I just do not believe gold is going to stay here at $1,700. I think we’re going to end this year with a two handle price on gold. We’ll be above $2,000 by the end of the year.
Frank Curzio: Yeah, and it’s tough. It’s a tough question because eventually, when I look at gold, I’m bullish on gold. I have a lot of money invested in gold in my portfolio. But in the Bitcoin craze, people think it’s either or. You’re one of the guys just like me, just like Frank Holmes, who I had on a couple weeks ago, you can buy both. And it makes sense for the current environment where everyone’s spending money like crazy, but I have a chart of your stock up here. It’s pulled back along with most gold stocks, but after the news right here, you see, it went higher.
Frank Curzio: But everything’s in place here. I love the excitement for you guys. I love the fact that George Bee is there. You guys have got a great management team and you’ve been a friend for a long time. Again, it means a lot that you invested in our company and I love having you on because we can go anywhere. We went Bitcoin, gold, you get everything with you. So, I just want to say thank you so much for coming on. Really, really great stuff, and you’re always welcome, man.
Ed Karr: Frank, I really appreciate that. And just from the bottom of my heart and everyone at the company, we really appreciate your support, all of your kind comments and just yeah, the support. You’ve been there. You’ve really believed in us and the entire team and that means a lot to us too. We want to make this work for everyone out there, for you personally, all your listeners. Management insiders of this company, as you know, are significant shareholders. We’re not just paycheck collectors. We’ve got a lot of our own money in this deal, and we want to make it work.
Frank Curzio: Now, that’s great. That’s great. And so Ed, as always, again, always an open invitation for you, and hopefully, you’ll join us again soon.
Ed Karr: Appreciate it, Frank. All the best.
Frank Curzio: All right, guys. Great stuff from Ed. He’s extremely smart. Someone I know for a long time, been on numerous trips with him. Someone who’s never BS’ed me, which is a rarity in the resource space. And for my resource contacts out there who are very, very good, they’ll agree with that in a heartbeat. But I really loved that Copper King project. I saw it myself. I think it’s being significantly undervalued. When that new PFS comes out, it’s going to show that this project’s worth well north of 300 million, maybe $400 million, and it has market cap of 70 million.
Frank Curzio: With that said, I did bring up that risk to him because if gold is really going to be out of favor going forward, you know what? This stock’s not going to do that well. But if we stay here at 1,700, go high 1,800, we push 2,000, you think gold’s going higher, this thing is going to skyrocket here, it presents a really great opportunity.
Frank Curzio: So, I’m glad having him on. I love that he shares ideas. Again, he’s a really good friend. And I love that interview, but this podcast is about you, not about me. So, tell me what you thought at email@example.com. It’s firstname.lastname@example.org. Now, I’m bringing in my buddy, one and only Daniel Creech, senior analyst at Curzio Research. How is it going man?
Daniel Creech: What’s up, Frank? Hey. Things are good. Another Wednesday. Happy Wednesday to everybody. Lots going on. Markets are crazy.
Frank Curzio: There’s so much going on, and it was nice that we got to sneak out on the golf course yesterday though, right?
Daniel Creech: It was. It was perfect. Yeah. The weather was great. And yeah, it was nice. Other than our golf games, it was perfect.
Frank Curzio: Yeah. We got out late afternoon, but yeah. We tried to practice a little bit more. So, we’ll see what happens there, but Dan’s an awesome, awesome golfer seriously. Actually, you weren’t too awesome yesterday, but you’re normally awesome.
Daniel Creech: I’m pretty sure I took a 13, if I counted all the legitimate strokes on one hole.
Frank Curzio: That was one hole. Talk about the-
Daniel Creech: Other golfers who know this, when you’re working on something and you’re trying to figure out a club, and it’s not working. And you get that Happy Gilmore or that John Daly effort mindset, that’s a good one.
Frank Curzio: No, it’s great. That’s great.
Daniel Creech: Buy cheap golf balls.
Frank Curzio: No, and it’s a good idea to get out late afternoon sometimes for a couple hours and come back to the office and then working to really late but just to… I always do that. I don’t know if you do that, but I always say… I know you do during the office, but I don’t know if everybody does it. But I worked on Wall Street for a very, very long time, and I used to leave at 5:30, 5:00, 5:30 AM, take the train, get there by… Actually 5:00 AM, get there by 6:00 AM. I used to read the whole Wall Street Journal on the train before I got to the office. I worked on Wall Street with Cramer. I had a podcast, where I did this podcast every day. I didn’t do it every week. I was doing it every day. And we had lots of guests there, lots of writers. So, it was easy to get guests and book guests. And the time I finished was 6:00, and I’d get home at 7:00, 7:00 PM.
Frank Curzio: And it was incredible. I knew everything about everything in the markets because I was just so engulfed. But I didn’t have kids at the time. But I have to tell you the way I work now, I’m probably putting in more hours to work with your own business. But being able to step away and go pick my daughters up, or jump in the pool with them in the afternoon and come back… I’m telling you, that is the most… Or, just work out in the middle of day and come back and yeah, that’s the most refreshing thing ever. And I’m sure a lot of people are experiencing that now, with COVID and people staying home, working from home, but man, what a difference just to refresh your mind. It’s like just pushing that refresh button, but I know you like to do that too.
Daniel Creech: Oh, absolutely. And I, this is one thing that I’m going to pat myself on the back totally here because I actually stop and take the time to appreciate this because not everybody gets the option to do that. And if you’re one of those real optimistic son of a guns that thinks you can get something good from everything, that is one thing that COVID will bring forward. Let’s just say everything is cured, coronavirus is done. You’re still not going to have the typical back to work five days a week 9:00 to 5:00. You’re already seeing huge corporations all over the country.
Daniel Creech: I think Deutsche Bank announced that they’re going to do permanently options to work at least a couple days from home, and that is a good thing because when you have the ability to make your deadlines, set your schedule… If you go hit a bucket of golf balls at lunchtime, it feels like you’re gone for two and a half hours, you’re gone for 40 minutes. So, it is… It’s a refresh. People you got to get away, recharge your batteries. So yeah, take advantage of that. But I’m very grateful, and hopefully, everybody that doesn’t get to take advantage of that is doing something to get them in the position they can going forward.
Frank Curzio: Yeah. You just need to free your mind a little bit. So, let’s get to the markets here. A lot has happened over the past few days, even the past week where we saw the NASDAQ crash, and I had an opening about Cathie Wood. Everybody loved her from 2015 up to about two and a half weeks ago and now, they criticize her, but it’s funny because we see this in the market time and time again since 2010, where we see the pullbacks are quick, they’re rapid and it’s like, “Holy cow, man. I can’t believe this thing’s down 25, 30%.” It’s not like 2000 where the dotcom era, that bubble burst it and it was like two, three years, just an 80%, 75% decline at NASDAQ over a two-year, three-year period. It’s not fun.
Frank Curzio: This is like it happened so fast. Things get wrecked. The NASDAQ fell at the index. The NASDAQ fell more than 10%, but then it bounces back 4%. The Solar TAN ETF was down 6%, I believe, on Monday and then up 7% on Tuesday. How does that make any sense at all? Suddenly, all these people are like, “These are all gonna fall. We got to get out of them.” And the next day, the next day, “We got to get back in them.” The rotation is amazing.
Frank Curzio: And now that we have the stimulus passed, it seems like these catalysts, low interest rates. Yes, we’re seeing loan rates go higher, but it just seems like more catalysts, where people are more optimistic. But it’s funny how a couple of days makes where, I was watching a lot of the media and it just going crazy. The stocks are crashing. Now, everybody seems like, “Oh, everything’s okay, again.”
Daniel Creech: Yeah. That’s a great point. You hit the nail right on the head, because what we need to as investors and just individuals, is we have to train ourselves or condition ourselves to get in that mindset, because things are going to be pulled forward faster and more volatile going forward because of the actions by governments and central banks. And this is a tight spring being coiled for years and years and years, and I think that’s a great point. The reason those recessions and pullbacks don’t last as long now is because there’s so much more money. There’s so much more liquidity. There’s so much more hands in the pot going around, and I think that that’s going to be expected.
Daniel Creech: I didn’t even realize, because I don’t look at Tesla every day like everybody else in the financial media, but you pointed out, hell, it was down 36% from its highs up until yesterday, when it went up 15% in a day. Those moves, like you said, it’s amazing. It’s hilarious. So, keep in mind proper position sizing, and this all really started, Frank, on March 1st. That was when the big rally came, the 600 point in the Dow. That was when I was traveling back, and do you know why and what kicked off this massive market rally?
Frank Curzio: Tell me.
Daniel Creech: The Democrats threw the poor people under the bus again.
Frank Curzio: I knew that was coming.
Daniel Creech: Because what happened before the stimulus just got passed or was in the process of being passed, the Senate passed it, kicked it back to the house, I think they’re doing it literally right now. But on that Monday the 1st is when the Senate rejected the $15 minimum wage, and what happened? Markets rallied because, of course, markets are only for the rich people, which is why everybody needs to get in the market so you can be rich, duh.
Daniel Creech: But businesses saw all that, a huge cost from the government and even penalties. If the minimum wage wasn’t allowed in, Bernie Sanders and some others were going to try to pass a bill to penalize companies that didn’t pay up to $15 an hour. When you remove that massive risk off the table, that allows businesses to look forward a little bit more and keep the wolf away from the door for a little bit longer. So, that’s when this rally initially started. Interest rates, we can go there if you want to. But I had to point that out now that the stimulus has passed.
Frank Curzio: What’s interesting about it, the political. And I hate politics both sides, because usually when I talk about Democrats, people are like, “Oh, you’re super conservative and this.” And no, I call it how it is. I like real people and on both sides, they’re not real. A good example of this is how the Georgia run off, right? And that was controlled by the Senate. And all of a sudden, they took polls and said, “Okay. These people want that minimum wage higher.” And that was a big deal, and Democrats really pushed that, really pushed it. Then all of a sudden, Republicans are like, “Oh wow. These polls might be right.” And then they’re like, “All right, we got to push. No, no, we believe in that too, the 15. We believe.”
Frank Curzio: All of this is complete bullshit. All of it is bullshit. So they get the election, now they come down to it, and they’re not going to raise the minimum wage. Whether you agree with it or not, it’s just amazing how they used that as a tool to get elected on both sides. It didn’t work out because the Republicans were late to the party because they didn’t look at the right polls, and congratulation to Democrats. But now, congratulations, but you know what? Do what you freaking say what you’re going to do once, just once, once, you know what I mean?
Daniel Creech: No, no, no, no, no. That’s not the game Frank. Don’t do that.
Frank Curzio: Even if, again, it’s going to hurt a lot of businesses if you raise that minimum wage. I get it. I’m just saying, but just not that I agree with that specific policy, but I do like people who just whatever you say you’re going to do, just do it. Do it. Do it. We’re in a world where everything is tracked in media. We see who’s bullshitting. We see it and it’s just amazing. They don’t even care. It’s just… I don’t know.
Frank Curzio: But let’s get to interest rates. Interest rates are moving higher. People are worried about inflation, right, Daniel? And I explained this, and I did my newsletter, which is going out later today to Curzio Research Advisory members, these are two risks a lot of people are worried about. And I’m going to tell you, the market doesn’t crash if you could see those risks. We all see interest rates going higher, you have yield curve control that’s going to come if it goes higher. Just be saying it, you’ve seen the way they fixed the long-term rates. Is it Jeffrey Gundlach. The guy is unbelievably brilliant. One of the greatest bond guys. A lot of bond guys, big name bond guys are saying the same thing, that yes, that could definitely happen, hasn’t happened since World War Two, to fund that debt, or just to cap it. And now we have inflation going higher, which we all see.
Frank Curzio: Now, we didn’t see in 2008 the housing crisis. A few people saw it, and even the people who saw it didn’t understand the full extent that everything was on AIG, and they were insured. And yeah, AIG was like, “Sure. This is easy money.” They didn’t even know the whole system is going to collapse. They didn’t know how crazy it was. Nobody knew to the extent. People think subprime was the reason the market… It wasn’t subprime. It was a small part of the market. It was the leveraging, the huge amount of leveraging of these subprime assets, which means housing prices only had to go down a little bit for the whole entire market to crash, and then it was just a ripple effect all the way through.
Frank Curzio: Then, we see the pandemic, something that again, nobody really predicted how crazy it would be, and it spread in the US and how many deaths and things like that and the market fell sharply. That’s when you see markets crash, but you see interest rates ahead of you, you see inflation ahead of you. These are things we see guys. It’s not these risks that are going to bring down the market. What brought it down over the past couple of weeks was the massive surge immediately. We never see a move like that, 1%, 1.5, and it just crazy-
Frank Curzio: But I would think that there’s got to be other risks. If you really think this market is going to sell off with low interest rates, the new stimulus bill just passed, or basically passed, it’s hard to suggest that there’s money, it’s going to come out of… I guess, they can come out of technology stocks, and they’re going to be rotated, but they’re being rotated into cyclical names and travel-related names, which we’ve been well ahead of that trend, but I’m not seeing money. And even when you look at the inflows, outflows and things like the companies that we follow, like the Bank of America that attracts trillions in assets, you’re not seeing those outflows. You’re seeing it from different sectors, but not completely out of the market, but there’s going to be other risks that really crashes markets. That can be higher interest rates, or inflation, because we actually see that. We can see it coming.
Daniel Creech: Yeah, and it’s talked about all the time. I agree with you on that. I would take this opportunity to look to… The TLT is the symbol. It’s the iShares 20+ treasury bond ETF. It invests in longer term treasuries, 10, 20 years or more, just like the name implies. It’s down about 20% because interest rates have spiked quickly. And if you notice, a lot of people aren’t really talking about the yield 1.5, which is the same as the S&P 500 dividend rate, give or take. They’re talking about why and how quickly it rose.
Daniel Creech: So, if you keep things very simple, Frank, the government… The interesting thing to watch will be the reaction because money is emotional. So, the government literally is in a position where it cannot allow interest rates to go very high. Why? Because we’re running such massive deficits, you would have to borrow billions and billions and billions on top of additional money just to pay the interest as interest rates move up. If you think that’s going to happen willingly, then you’re not paying attention. But when they come out and they announce yield curve control, or they announce Operation QE, or twisting, or whatever the hell they’re going to call it this next time, the reaction will be what you have to pay attention to.
Daniel Creech: Short-term, it’ll be hard to believe that things don’t get back to normal as a status quo. Rates will stabilize or go down just like, who’s the Tepper? That was a great interview with Tepper or I guess it wasn’t an interview but they were given bullet points with CNBC. But this isn’t a situation where yields have spiked. It’s got everybody’s attention and made everybody nervous. Now, do the difficult thing and look to gain exposure on that and profit off of things getting back to the Willy Wonka.
Frank Curzio: Yeah. It is pretty crazy, and I’m not saying to go buy ESG companies that have gone up tremendously with no earnings power at all. Space companies as well, you’re going to see a lot of these things. They’ve come down a little bit, but there’s just so many good names, even in technology. If you look at the Evagos, you’re looking to Facebook, at the valuations of these things and how fast they’re growing, there’s a lot of names that just got thrown out with everybody else. And they’re not all the same, they’re really not. So, you’re going to see that separation. You always see that. Everything comes down, but that’s the best opportunity. You want to buy things that are cheaper. Now you can go and say, “Wow. They’re getting this thing done.” Nvidia, the chip shortage, the supply chain stuff, it didn’t impact it at all.
Frank Curzio: Not only that, you’re seeing massive crypto demand. You saw that story with the AntMiners, so you need these specific systems that are produced by Bitmain in order to mine for cryptocurrency, and they’re out of them. They’re completely out of them. They’re going to be out of them until August, probably later than that. And you’re looking at Taiwan Semiconductor, who makes the chips for those. Last time, they got caught up in this trend where they were generating $400 million just from this trend alone in 2017. So, they went on this massive supply, “We got to produce like crazy.” And then the market crashed, and they had all these orders, and they were like, “We’re not doing that again.”
Frank Curzio: Yeah, the demand supply is going to be out of balance for a while, but maybe you’ve seen that’s the reason why you see cryptocurrencies go higher. But Nvidia, getting back to that point, is they have the graphic cards, which is an alternative, not as good as the AntMiners, but now you’re seeing that business take off. They didn’t say they’re seeing that where, there’s other chip companies that said the supply chain is going to hurt us. You’ve seen the auto companies, they’re getting thrown out as well.
Frank Curzio: So, a lot of these names, yes, they’re expensive, but some of them are coming down to good valuations where it makes sense to buy. And let’s talk about this really quick, Daniel, because we’re looking at what’s the hedge against inflation and, okay, we’re seeing inflation rise. We’ll agree with that. We’re seeing interest rates rise long term. We all agree with that. So, what happens? What’s the best investment for that?
Frank Curzio: Isn’t it remarkable how Bitcoin is at its all-time high right now? And pretty close… It’s at 56,000 as I speak. Again, by the time this is produced just a couple hours from now, it could be 45,000 or 70,000. I don’t know. But right now, it’s gone higher, and gold has not been that, “Hey, let’s put money into gold.” Again, interest rates go high. It’s not as good as gold because people can pocket their interest rate and then people will say, “Well the real interest rate is all that matters.” So, that accounts for inflation and it’s still negative, but as that rate goes higher, gold loses the attraction of being a store of value of keeping your money in something when you could keep it in something else that’s, believe it or not, and everyone is going to go crazy when I say this, the dollar is perfectly safe. It’s not going anywhere. If it goes anywhere, you got more problems than being wrong in your investment. You’d probably have no house, there would be riots in the street, and the world’s going to end.
Frank Curzio: So, it’s a safe investment. It’s guaranteed by the government as the printing press and keep it all the time, and the whole entire world wants dollars. Even the guys in gold, who sell those gold coins, “Here’s these gold coins. You got to give me your dollars. I want your dollars. I’ll give you the gold coins,” because the dollar is great. It’s just so funny, but I don’t know. Just so much going on, but it is interesting. With Bitcoin, it’s still maintaining that strength and it makes me think that it’s going to go a lot higher.
Daniel Creech: Yeah. It’s got to reach a point to where you see a lot more headlines and governments want to outlaw it, and I think that six figures. We were talking about that a couple weeks ago. The biggest thing Bitcoin has versus gold is A, the excitement and the newness. And newness not just because it’s just over 10 years old, the newness and you have a whole new asset class and institutions and big money. Frank, I was talking to you about, and I don’t have it in front of me, I apologize, but Cointelegraph had a really cool article over the last couple days about how purchases of $100,000 or higher for Bitcoin was near an all-time high or getting the attention of a lot of people. The sum of that was just that the recent pullback in Bitcoin, which is like 26%, people were buying it.
Daniel Creech: That’s encouraging. It’s definitely you have more money flowing into it, which the odds of the price going much higher are still in your favor. So, that’s going to take a lot of the excitement out of gold, no doubt. I’m still stubborn enough to chip away at those, buy a little bit here, buy a little bit there or always look at options because I don’t think gold’s going anyway or anywhere, but I was surprised it went under 1700 an ounce. So, we’ll see about that going forward, but buy the best, Newmonts, Barrick, and then take some lottery picks. But hey, right now, Bitcoin’s working, so ride the train.
Frank Curzio: Yeah and so I’m not so much about the royalty companies. I’ve seen the royalty companies in gold, and it’s not a lot of royalties for them to buy. So, they’ve got to pay up. These guys are doing fantastic because when gold was really terrible, you had the largest mines in the world was so freaking leverage that they had to bring in cash. So, they partnered with the royalties or companies for some of their best projects. Now, it’s they’re keeping their best projects. Their balance sheets are amazing.
Frank Curzio: So, the royalty companies I’m not too crazy about right now, but I will say if you’re buying the Barricks and the Newmonts and things like that, even Equinox Gold’s another one that’s becoming a very big name, who was built by yeah. You have Ross Beaty in there, but that whole thing… I was there when that whole company was created with Marin Katusa, who did an amazing job with that and just bringing so many different people together. David Lowell together, the late David Lowell, one of the greatest geologists in the world that ever lived. But I would stick to those. You’re getting dividends on those stocks. Their production costs are below $1,000. So even if we go down to 1,600 or 1,750. And not only that, I don’t think people understand copper in that aspect. Copper is at $4 a pound. It was $2.80 a pound not long ago. So, you’re looking at more than $1. These guys produce hundreds of millions of pounds of copper. This is just massive free cash flow.
Frank Curzio: If you’re producing gold, it’s like natural gas and oil. It comes together. It’s byproduct. So, that’s being significantly underestimated with the copper price rising. It did pull back. I think was 4.30, 4.40. It pulled back to four. But man, those numbers are going to be fantastic, and they’re going to increase their dividend. They’re going to be buying back stock. So, if you want a safe haven to where this whole thing comes back, that’s it. But if you want to get more aggressive, there’s a lot of juniors that have gotten smoke. Just really, really good buys, and I had one on it hasn’t got smoke, but just really good fundamentals, really good project for the interview with Ed Karr.
Frank Curzio: So, let’s move on here, Daniel, and talk about, just the market, SPACs. We have another IPO coming out, which is amazing. And I’ll talk more about it, which is Roblox, which, man, every parent knows Roblox. Every parent, because my kids play it like crazy, like crazy. And the valuation’s incredible, but even that with the SPACs and the announcements coming out, I would think eventually that part of the market is going to slow because we’re talking about tens of billions of dollars in SPACs that are sitting on the market. I think there was like 100 or so, and they have to find a company. They have to find a company to buy. How many great companies are there that they’re going to buy and they’re going to inflate the valuation tremendously? I just see this like tailing off a little bit. I don’t know.
Daniel Creech: Yeah, you would hope so. I think it is because I’ve gotten several texts from friends and family members that have invested in some of them and then have gotten smacked. And when you look at the sheer number, man, the billions… It’s something ridiculous. We’re on pace in the first quarter of 2020 to raise more money than the entire 2019. I know 2020 got a big uptick too. But yeah, that’ll run its course. Chamath sold out of, he sold 200 and something million dollars out of, was it the Virgin Galactic or whatever?
Frank Curzio: Yeah. I think it’s-
Daniel Creech: I don’t know what he’s put in-
Frank Curzio: His company still owns it, but that’s what they are doing now.
Daniel Creech: Yeah, but I don’t know what he put in, but I would argue it may not have been quite 200 million.
Frank Curzio: Yeah.
Daniel Creech: That’s what I think.
Frank Curzio: I would say it’s more probably about 20 million.
Daniel Creech: But good for him. I’m a huge fan of his. I like his outspokenness. Yeah, so SPACs are… What about this… I’m not a parent, so I have no idea what you’re talking about with this IPO thing.
Frank Curzio: So Roblox, and I’m waiting for it to open. I don’t think it opened yet. So we’re doing this around-
Daniel Creech: What are you saying? Roadblock?
Frank Curzio: R-O-B-L-O-X, so Roblox. Yeah, it’s called. It’s an amazing game. I think it’s like a Minecraft but why this is special is one, there’s tons and tons of games that you could develop your own game. And there’s people that make $50,000 a month developing their own games on this platform that people will play and they pay money for it. My kids pay money to get different things. They’re on it all the time. They’re just communicating with everybody. It’s like Fortnite for kids without the crazy guns and stuff like that, but holy cow. They’re so addicted. I had no idea this was coming public until not long ago, and-
Daniel Creech: So, the difference maker there is… I am intrigued. Games are games to me. Everybody likes certain things. Like TikTok, when they do all the videos. Do you get paid on that?
Frank Curzio: No.
Daniel Creech: Okay. So-
Frank Curzio: You get paid on YouTube-
Daniel Creech: But this, if you create this game, you could actually make money? Or is that through a YouTube or another platform?
Frank Curzio: No. You can make money off of that, then you’ll-
Daniel Creech: So, that’s the big difference maker, to me, it sounds like?
Frank Curzio: Yes.
Daniel Creech: Okay.
Frank Curzio: And then they have YouTube influencers that have, I’m not kidding you, 10, 20 million subscribers. I have a few thousand on my Curzio Research YouTube page. We try to find as much information as much in the podcast and all this has being done on video format, which is cool. Damn, these guys have 10 million, 20 million. It’s unbelievable, and that’s when you get paid through advertising. And there’s people that are making a living off of this and building a business off of it.
Frank Curzio: I do think with TikTok, you get paid because there’s advertising and stuff like that people go. I’m pretty sure yeah, you do get paid. But you choose where you get paid, but this is a specific site where you can create your own games. They come out a $30 billion valuation, I have to tell you something, this is $100 billion company. This is-
Daniel Creech: Well, look at you. My next question was, is this a gathering of assets, just info?
Frank Curzio: No-
Daniel Creech: Or is this a profitable… You think this is actually legit business and-
Frank Curzio: Oh, this is a legit company, yeah. This is legit. This is a legit company. I would put it in the class of social media, bringing people together. I don’t know. I’m going to try to look right now to see how many users that they have. So, they said more than 1250 developers made at least $10,000 last year through virtual sales in their Roblox games that they built. It’s coming out a $30 billion valuation. It’s going to come out higher than that when it opens. Probably, if I had to say like a $45 billion valuation.
Frank Curzio: I think this is, yeah, this company is incredible. The numbers, they’ve paid developers $320 million last year, almost up 200% from 2019. Sales growth of 82% last year, when it booked over 900 million in total revenue. This company is generating more than Coinbase, and Coinbase coming out a $80 billion valuation, but this is constant revenue, constant money coming in. You could say that for trading on Coinbase. But man, this-
Daniel Creech: Interesting. It’s direct listing today.
Frank Curzio: Yeah. I want to see how many people are actually on this. There you go. Daily active users jumped 85% in 2020. Now, how many users are on it? Take a guess.
Daniel Creech: 100 million.
Frank Curzio: Whoa, that’s a big number.
Daniel Creech: No, 10 million.
Frank Curzio: No, no. It’s 32.6 million. And the number of hours that players… This is important. This is the most important thing in social media. It’s not just going there. The reason why Facebook is great is because it’s not just, “Hey, we have two and a half billion people on it.” Is because they spend 20, 25 minutes, 30 minutes on it. So, you’re on it a lot, you’re going to see more ads. The number of hours that players spent on the app more than doubled to 30.6 billion.
Daniel Creech: Geez.
Frank Curzio: And my kids, I have to kick them off that game. And it’s not even bad like it’s Fortnite and they’re killing each other and stuff. It’s cool because as a parent, and it is COVID, you want your kids to leave you alone a little bit because they’re all over you. It’s like, “Go play Roblox for a little bit.” Next thing you know, three hours goes by. You’re like, “Give me the freaking game. You’ve been playing for too long. It’s too long.” But yeah.
Frank Curzio: This is a legit company. This is a really good company, good fundamentals behind it, and I think it’s going to go a lot higher. I don’t know if I’d buy it immediately on the IPO, which I hate doing because that’s usually a liquidity event for people, but this is something that has a numbers and these numbers are going to get bigger and bigger and man, it’s not just people using the platform like a social media company. It’s developers able to make money off of it and build their own games which is-
Daniel Creech: Yeah, that is awesome. That’s interesting to me. So yeah, that’ll be fun to maybe it’ll work its way into a portfolio or a fun pick.
Frank Curzio: Yeah, yeah. So, I guess Daniel, lets end it with this. Anything that you saw this week that interests you in terms of stocks, we’re always analyzing stocks all the time. I analyzed a stock in one of the most probably the most boring stock you’ll ever see. I know it’s going a lot higher and I tell everybody that, and that’s Curzio Research Advisory members, my subscribers to that newsletter. You’re going to get that later on today. And I made sure of that with the video because I do all video analysis and share my screens and teach you guys, try to educate you why I’m recommending something, not just giving it to you and saying, “Here you go. Buy this stock here and goodbye.” But I kept that short than usual because it is another… But what have you been seeing lately that you like, or any ideas you might want to share?
Daniel Creech: I’m praying for a pullback in energy with the oil. I’ve jokingly said how frustrated I am with not profiting or giving subscribers good picks while we’ve been behind the scenes kicking ourselves for the run we’ve missed so far in oil. I’ve been a fan of the Fox Corporation because you want to focus on, there’s so much silliness going out. Focus on great businesses with great management team.
Daniel Creech: Fox Corporation is basically a giant SPAC. They have a brilliant management team. Love them or hate them, they know how to make money. They have a ton of cash on their balance sheet, no debt to worry about. They just sold a bunch of assets to Disney over the last couple years, and they have a lot of options going forward. Their stock’s getting rewarded. It’s over $40 a share and the TLT. Watch interest rates I think that’s setting up for a trade and I’m in Tepper’s corner on thinking things will taper off, and we’ll buy in and drink the water and Kool Aid a little bit longer as investors.
Frank Curzio: You know you’re going to get shit for recommending Fox right?
Daniel Creech: Oh yeah. It’s okay. I’ll get shit about-
Frank Curzio: I’m just letting you know, okay?
Daniel Creech: I’ll get shit about a lot of things on this podcast. That’s-
Frank Curzio: I am forwarding you all the emails. Keep them coming. “Of course he’s recommended Fox.”
Daniel Creech: Yeah. I just said I like it. I’ve been right.
Frank Curzio: No, it’s a great stock. I know it’s just funny.
Daniel Creech: They’re moving up.
Frank Curzio: But so yeah. Great, great stuff. So, Daniel, listen, thanks for joining me. I love going over topics, things we talk about. We talk a lot in the office when we’re together and just it’s nice to just bring that to video and show you guys what we’re thinking, what we’re seeing in the markets and giving you an opinion, and yeah. It’s all really cool. So, thank you. Yeah, thanks bro. Thanks so much for coming on. I appreciate it.
Daniel Creech: Absolutely. See everybody next week.
Frank Curzio: All right. So guys, that’s it for me. One last thing here, getting a lot of interest in our Dollar Stock Club newsletter. We take a pick from our guests interviews for Wall Street Unplugged. And some of those picks do not come during the interview. Sometimes, I talk before and after, which I always do with my guests. I know a lot of them, and we’ll discuss different trends and ideas, and we’ll throw one of those ideas. So, you’re almost getting a pick a week and that’s called the Dollar Stock Club because it’s $4 a month. But sometimes, we have influencers on or we have different people on where they might not offer a pick. And so I would say it’s about 45 picks at least a year, and we provide by up to price stop loss, nice one, two-page write up, but it’s a great starter newsletter, especially we’re getting lots of more young people in who are traders.
Frank Curzio: I missed the energy movement. I missed it. I have a very small position in an energy company that did well. I bought low but I have a very low exposure to that, and I missed that, but I interviewed people like Chris MacIntosh, who’s coming on in a couple of weeks again. Listen to him. He’s been so right, telling you to buy Bitcoin for the longest time. Told you to buy the shippers for the longest time, and we make quick profits on that. And then he’s been… Last time, he was on, this is about nine months ago, he said to buy energy. He was a tiny bit early, but man, was he right on that. So, you get great ideas from a whole host of people where sometimes you can’t cover everything, you got to be right about everything, but this gives you great ideas from the greatest minds out there that I interview and it gives you a lot of trading ideas every week.
Frank Curzio: So, that’s $4 a month. Again, it’s $1 a pick. It ends up to be around there but it’s called Dollar Stock Club. And if you’re interested in signing up, you can go to our website, curzioresearch.com, and you can cancel that any time. You can get it for a month. Again, it’s not, “Hey, we want you in for 30 years. In order to cancel, you got to call this number.” And you call it and it’s a robo service that makes sure that you can’t cancel. No, it’s not like that. Just call, cancel, it’s two seconds and that’s it. But I’m sure, not sure, but most people that do subscribe to Dollar Stock Club, they keep it forever because it’s at a good price point, it’s very cheap, and they get lots and lots of good ideas and the performance is really good in that newsletter.
Frank Curzio: So, that’s it for me. Thank you so much for listening. As always, appreciate all of your support. Really mean that. It’s just amazing how many people are just listening, tuning in, a lot of fun right now, really cool business growing. And I just want to say thank you so much for all your support, and I’ll see you guys in seven days. 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 hosts and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.
- Rant: Cancel culture on Wall Street [00:30]
- Guest: Ed Karr, executive chairman of U.S. Gold Corp [19:40]
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