Major corporations are more politically motivated than ever—and this dangerous trend will come back to bite many of these companies in the a**. Some blue chip names could get hurt the most as profits face pressure due to boycotts. [00:55]
Then, John Petrides, portfolio manager at Tocqueville Asset Management, highlights some of the biggest risks investors face in this bull market—including higher corporate taxes. He also breaks down first quarter earnings, and shares his favorite sectors and stocks to own over the next three to six months. [23:02]
Next, regulators in the U.S. have been slow to adapt to cryptocurrencies. Now, the U.S. is in a tough position as countries around the world are taking full advantage of this now $2 trillion market. This includes China, which just announced a new digital currency. Here’s why this will disrupt the world…
And finally, with Daniel out of town, I welcome my nephew, Joe Davide, back on the podcast. We discuss Joe’s portfolio… the mistakes he’s making… and how a few simple changes will maximize his profits and help him become a better investor. [54:33]
This episode of Wall Street Unplugged is sponsored by Blockchain.com… one of the most trusted cryptocurrency platforms in the world. Not only can you trade your favorite digital assets… you can earn up to 13% interest annually on your crypto.
To start your account, visit Blockchain.com.
Wall Street Unplugged | 768
China's new digital currency will disrupt the world
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 April 7th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down the headlines and tell you what’s really moving these markets. You know, I saw a few things that were really interesting this week, a few stories.
Frank Curzio: The first was a story on 60 Minutes about Florida’s vaccine rollout, which hits home because I’m from Florida, at least now I am, right? I consider myself Floridian. I’ve been here for over 10 years now. I’m from New York. 60 Minutes spotlighted a recent $100,000 donation that Publix, which if you’re in Florida you know what that is, if not it’s a big supermarket chain, that they made to the Sanders’ reelection bid, just like every single company in the world basically, major company does, that they support.
Frank Curzio: Usually, they donate to both parties a little bit, one, and more to the one they’re more favorable for, but that’s the way it works, lobbying. The story suggested that there was a possible link between that donation and the state’s partnership with Publix stores for vaccine distribution.
Frank Curzio: Now, if that’s true, that’s a major story. That’s a big deal. It’s about favoritism, and Publix making profits off of this because they know DeSantis, all this. If it was true. If it was true. Well, it turned out that the story was 100% false. It’s not just Republicans that are coming out on this. It’s Democrats as well.
Frank Curzio: As the director of Florida, the Division of Emergency Management tweeted after this 60 Minute hack job that… “I said this before and I’ll say it again, Publix was recommended by Florida Division of Emergency Management and Florida Department of Public Health, nothing about DeSantis or his office partnering with Publix.”
Frank Curzio: Now, a reporter from 60 Minutes… Stay with me here, this is not about politics. This is going to roll into why this is important to stocks. A reporter from 60 Minutes during that hit piece that everybody saw showed her asking a question during a press conference that DeSantis was holding, updating everyone in Florida about the vaccine rollout. How it’s going? What can we do to make it better?
Frank Curzio: Then after she asked a question about this, about what’s going on with Publix and the donation and all this crap, they immediately went to DeSantis where it looked like as if he completely cut off the reporter saying, “Look, I explained this already. You have a fake story you’re rolling out,” blah, blah, blah. That’s what it looked like on 60 Minutes.
Frank Curzio: Then the reporter continued to try to ask him questions, basically cutting off DeSantis as he was speaking. In short, the piece made DeSantis look terrible, and also Publix. This is why it’s a big deal. Publix is a very, very big company. 60 Minutes was accusing them of having special treatment, since they donated to DeSantis’ campaign.
Frank Curzio: Now, the full press conference, the full version of it, because it was a press conference, is being published everywhere. What really happened was the reporter asked a question about Publix and special treatment, and DeSantis took her question. He spoke, I’d say, for a few minutes, laying out how the rollout in Florida takes place, why the story is complete BS.
Frank Curzio: He actually answered in a very nice way. Of course, the reporter cut DeSantis off, and accused him again of giving Publix special treatment. That’s when DeSantis said, “Enough. Enough. This is a fake story. This is BS,” and went on to the next question from another reporter.
Frank Curzio: Now, why is this such a big deal, and how does it relate to your portfolio? 60 Minutes used to be the premier program. That’s where everyone turned to, breaking stories first. If you wanted to get a story, that’s where you went, 60 Minutes. The whole world tuned into them for their real stories, the honest story.
Frank Curzio: Now, we know that media, almost every media channel, has an agenda. Basically, they promote hate, make people angry, and support their own agendas or political parties. But 60 Minutes, I mean, they didn’t just get the story wrong or got burned by a source. The story didn’t even exist. They completely made it up to attack DeSantis, since he’s basically untouchable right now. Florida is a swing state.
Frank Curzio: I mean, what this guy did for Florida is incredible. Republicans and Democrats who are business owners, these are people that are thanking him up and down because compared to New York, California, I mean, some of you subscribers from New York and California that we have… I grew up in New York. I still have friends and family there. Even when I talk to them, they’re still scared to go…
Frank Curzio: “Oh, we got the vaccine but we’re still wearing a mask.” It’s crazy. They’re being conditioned a certain way. But this guy saved Florida’s economy, and he did it safely looking at the stats, where COVID cases crash here along with every other state over the past four or five months. Similar trends, yeah. We remained open.
Frank Curzio: Yes, you can look at some kids going a little crazy on beaches or whatever. And yes, that was taken care of. But the mask mandate, I don’t think, has been lifted here. You still have to wear a mask in most of the major places like Walmart, or Publix, or whatever. They make you wear a mask and stay six feet apart still.
Frank Curzio: It’s not like Texas or anything. It’s not like a reckless thing that he did. He was just looking at the stats and based it accordingly where, what’s the best outcome that we could have for businesses and keeping them open while safely protecting elders? He did a fantastic job with that.
Frank Curzio: We saw pictures of spring breakers. These are people that don’t live in Florida who are getting out, who were locked in their homes almost like handcuffs on, saying you can’t do anything. Don’t go anywhere at all, even though you’re under 18. And this disease… When it comes to COVID, you have a better chance of dying from the flu, now statistics are showing, than COVID if you’re under 18 years old.
Frank Curzio: Now, the bigger point here is the people, you and everyone, we’re being fed a complete line of bullshit. It’s not anyone’s fault. I mean, it’s not your fault. I shouldn’t say it’s not anyone’s fault, but it’s not your fault because we only know what we read and what we watch right? How else would we know what’s going on in another state or country? We’re not actually there. We’re reading stories all the time.
Frank Curzio: When you’re publishing things like this that have a political… It’s very, very, very, very dangerous. To be clear, this isn’t CNN or FOX news. They have their audience. They have their demographic that you know what those are. You know exactly what you’re going to get when you watch these channels. That’s fine. That’s what they do. Listen, they’re open about it. Fox targets conservatives, CNN targets liberals.
Frank Curzio: Those are those channels. I’m not talking about those channels. You know what you’re going to get when you watch them. This is supposed to be… We look at 60 Minutes as an unbiased news outlet that people can trust to not tell lies, and especially, especially, especially does not have a political agenda. But this was a complete disgrace.
Frank Curzio: I love the fact that the story is not going away. I love that both sides, Democrats and Republicans, in Florida came out against 60 Minutes, and came together and said, “Hey, you guys had no proof this story existed. More important, you did a piss poor job finding sources to support their lie.” They didn’t even find good sources.
Frank Curzio: None of it exists. What they showed everyone on 60 Minutes compared to what really happened, that’s a scary thought. Now, the next thing that happened this week, and again, I’m going to explain why both these stories are extremely important to anyone who owns stocks, a 401k, owns assets. Georgia passed a law where you must show your ID to vote.
Frank Curzio: I don’t get it. For some reason, this offended so many people. This is such a bad thing, even though we have to show our license to get on a plane, to get a job just about at any company, to buy a car, to purchase a home, to open a broker we have to show a license right? It makes sense. It makes sense.
Frank Curzio: Showing an ID reduces the risk of voter fraud dramatically, which every American should be in favor of because that’s our right to vote. We want to make sure those votes count, and they’re exactly right. No matter what side won, the other side was going to claim voter fraud. No matter what side.
Frank Curzio: If you think that’s crazy, look at when Hilary Clinton lost. They all claimed there was fraud. Just go back to the tape. Nobody really plays that in the media. Again, the media has an agenda, but it’s the same thing. They were like, “This is BS. This shouldn’t happen. It’s voter fraud.” That’s the way half the nation is.
Frank Curzio: How do we remove that? Well, you show ID. It’s a pretty good idea right? You’re going to reduce that risk, stop mail-in voting and stuff like that and certain things… Is that like a game changer? Is that where everyone wants to put their foot in the ground and fight? That’s it? That’s the fight?
Frank Curzio: Shortly after this passed, Major League Baseball came out and said, “We fundamentally support voting rights for all Americans but oppose restrictions to the ballot box,” like this is going to restrict people. Everyone has a license. They have ID. Why is that restricting? I don’t get it.
Frank Curzio: Therefore, Major League Baseball said, “We’re moving the All-Star game. We’re moving out of Atlanta, Georgia, to punish them.” You know where they’re going? To Colorado. Yeah, Major League Baseball having pressure from a small minority. These are the cancel culture people, and also its players. They decided to move the game out of Georgia.
Frank Curzio: Now, there’s a huge uproar by Georgia Democrats saying that maybe this wasn’t a good idea because this is going to crush small businesses in the Atlanta Metro area, which is over 50% African American. You talk about the ultimate backfire to try to make a statement, there it is. Even better, they moved the game to Colorado, which has the same laws in place for voters.
Frank Curzio: You have to show voter ID. You have to show ID to vote. Now, here’s where everything comes together, because we have corporations now, holy cow. We knew corporations, you should know they don’t really give a shit about voters. They don’t really care about you. They care about profits. I mean, Coke’s biggest market is in China, who they praised publicly, how well they handled the coronavirus.
Frank Curzio: I guess a newsflash, China killed 550,000 Americans because they did not close off their international borders when they knew how dangerous the virus was. They hid it. They didn’t let anyone in the country at all, not even the CDC… The CDC also came out and said, “Hey, China did a great job,” when they weren’t even allowed to go into China. Weren’t even allowed.
Frank Curzio: This spread, and we’re just talking about the US. Two million, two and a half million, how many people died? Now, Coke praised them. “You guys did a great job with the coronavirus.” Why? Because that’s one of their biggest markets. It makes sense. While I’m bringing up Coke, because you have Coke, Delta, UPS, Home Depot, lots of other companies came out against Georgia and this law. Again, maybe it’s me and I don’t get it…
Frank Curzio: I mean, there’s much, much bigger and better fights to fight. This just makes sense from both sides. Anything that can reduce the risk of voter fraud makes sense on both sides, that reduces it… Shouldn’t you have to show your license to vote? I mean, if you don’t want that, think about it for a minute. What are you saying? I mean, you want people to be able to vote without even knowing who they are or if…
Frank Curzio: I mean, I don’t get it. How could you actually be against that? That’s insane. Then you have Delta, yeah, that argument is even greater because you need to show an ID to board a plane, but, “It’s terrible. ID voting is oppressing voters.” Again, not some crazy BS law here.
Frank Curzio: Something that’s going to drastically reduce the risk of voter fraud if every state would do this. Now, looking at the bigger picture here, I mean, this cancel culture garbage is becoming a joke. I could tell you people are absolutely sick of it. They can’t take it anymore on both sides.
Frank Curzio: Look at Major League Baseball, NBA, NFL, sports around the world. This is what we turn to. I played sports my entire life. I’m a massive sports fan, as you guys know, talking about the NCA basketball tournament, the NFL, everything… Just a huge fan of sports.
Frank Curzio: You turn to sports to get… I used to play basketball because it made me think of nothing. Just, I was in the zone, and that was it. I was able to forget everything, and it was awesome. That’s what people do, they turn to… You can’t have a better story line because everything on TV is predictable. Even a reality show is predictable, almost. It’s scripted.
Frank Curzio: Games like this and the NCA tournament, they’re not scripted. It’s amazing. It’s excitement. it’s a place you take your kids today. And now, it’s become a political platform that’s really destroying these sports. I mean, you want proof, look at the numbers of every major sport, how they’re down. They’re down incredibly across the board.
Frank Curzio: I have to tell you, I am definitely done listening to professional athletes with 200 to 300 million dollar contracts talk about how America is such an unfair country. I mean, are you sick of that? I’m kind of sick of that. If you really think it’s unfair, donate the 200 to 300 million to all of your charities. Don’t just donate the 1%, 2% that your accountant says to do just for the tax purposes. Donate it all. Or better yet, move to another country. Try to get that opportunity that you have, the money that you make.
Frank Curzio: Try to get that opportunity, because you worked hard to get that. It’s amazing that you got that, but to say America is unfair… These are the people that are speaking out saying America is unfair? Are you kidding me? I think it’s insane.
Frank Curzio: I said this earlier: This isn’t a Republican/Democratic thing, although, I am going to get negative responses from Democrats. That’s fine. But it’s not a Republican/Democrat thing when it comes to cancel culture. I mean, I have plenty of friends who are both, and most do not support this cancel culture BS. They’re hard working Americans. They love the country. We have different views on how to make America better.
Frank Curzio: In the end, we all want the best for our children, provide a safe environment for them. That’s what we all want right, all of our goals? But we just have different ways that we think we should get there, and that’s fine. That’s what debates are about, but cancel culture, cancel things? I mean, we learn from our mistakes in history.
Frank Curzio: We want to cancel all that stuff? That’s why we’re the nation we are today, where almost anybody can make it. It’s why everyone in every other country is dying to get into the US. Yet, we have these people complaining? I mean, I travel around the world.
Frank Curzio: You know what? You try traveling around the world. You’re going to realize how special, and how lucky you are, to live in America. But moving the All-Star game because of politics, and having 60 Minutes do a hack job story which, again 100% politically motivated, telling us how white people are privileged and should apologize for being privileged, I mean, what?
Frank Curzio: I mean, my dad should apologize for working three jobs, barely seeing his kids grow up for a good 7 to 10 years to make a better life for his children? Should I apologize for working my ass off to get to where I am, commuting two and a half hours to go to Wall Street, where I wasn’t making a lot of money at the time? Then, starting my own company, hiring great people, providing a service to help everyone out there make a better living for their families through investing, I have to apologize for this?
Frank Curzio: Really? I have to apologize for that? But the main point here is corporations. The fact that they’re making public statements about politics is really, really scary. We all know you can bribe politicians. Again, lobbying, both sides, and that’s acceptable. But companies usually do that for their own good, getting special incentives which will help them increase profits for their shareholders.
Frank Curzio: That’s the game everybody knows it. But to do something like this and speak out, politics, what a state is doing, is insane. It’s totally different, and it’s a big deal because now you’re seeing people boycotting these companies. You can say, “Well, it might not be a big deal. Coca-Cola and Delta, it’s not going to…”
Frank Curzio: Let me tell you something. What did we have, 75 million people vote for Trump and 80 million plus vote for Biden. I mean, the country is a dead split, and to piss off half of these people with a BS political agenda that really has nothing to do with your product, not to mention… I mean, look at the lawsuits that Coca-Cola has for discrimination, and gain, having their rollout in China.
Frank Curzio: The NBA, I mean that’s where the growth is in China. I mean, how come nobody is calling out China? Again, I’m not talking about 99% of the… I love China. It’s a place that I might even live one day. That’s how much I loved it when I visit it. And I visit a lot of different areas.
Frank Curzio: But we’re talking about their government is communist. It’s depressing. I mean that is crazy. They could have stopped this. They could have stopped this, and it spread around the world. How many people… You look at 550,000 died. You know how many people are depressed? I mean, kids in school, and you took a year away from learning.
Frank Curzio: This is stuff they won’t get back. It’s incredible, and they’re not being held accountable. They’re never going to be held accountable. No way. But it’s funny how all these companies are okay with that. Like, really? A law in Georgia that says show your ID, that’s the stand you’re going to be taking? I mean, you talk about that many people, and it’s depressing.
Frank Curzio: It could result in something pretty bad. You remember, these companies right now. This year, the S&P 500 is trading at a new high, NASDAQ, Russell, everything is at a new high. Markets got higher, and higher, and higher. These companies are trading at super high valuations. They’re priced for perfection, so any setback in earnings could push these things down considerably in the quarters ahead, and that’s a big risk.
Frank Curzio: Because some of these names you have in your 401k, which you probably don’t even know because they’re in an ETF, or maybe you own individually. Again, I know Coke, Delta, they’re huge companies, but if just 5% to 10% of people say, “You know what? I’m not buying their products because of this…” Which is happening. You’re seeing news stories out there.
Frank Curzio: You’re seeing both sides saying to boycott companies. Both sides are saying it now. Both sides, which means half of their business could be lost for some of these names at some of companies. If you just get 5%, 10% of people that say, “I’m done,” then these stocks are going to fall considerably. Be mindful of the stocks you have in your portfolio, which ones have a political agenda, because not all companies have spoken out against Georgia and the new law, and stuff like that.
Frank Curzio: As for major league sports, I mean, I have to be honest here, and sorry to use this language, but the commissioners of these leagues need to grow some balls. They really do. They need to keep these players in check. Of course, everyone has the right to express their view on social media, public platforms. That’s your right as an American, not on those platforms.
Frank Curzio: NBA, Major League Baseball, NFL, those are not public platforms. Those are businesses. They’re built for profits, and profits are getting hurt now because of these agendas. They’re going to continue to decline if you continue to mix politics with sports. It’s not what people want.
Frank Curzio: I’d go even further. No die-hard sports fan, not one of them wants this. They don’t want to think of politics when they’re watching sports. Be careful of the stocks in your portfolio. It’s a big deal. A lot of these companies aren’t reflecting a minimum 15% tax. A lot of large companies. I’ll cover that later on in the podcasts, made a couple videos on the Curzio Research YouTube page, of companies that it’s going to impact a lot of large companies.
Frank Curzio: It’s like 50 companies, industry leaders that it could hurt. Also, you’re going to see the tax rate be raised to 28%, the corporate tax rate. We saw that that was a boom to profits, regardless if you agree with it or not. But what you need to know as an investor is, that’s going to hurt profits. That’s going to result in less R&D.
Frank Curzio: That’s going to result in less marketing, fewer ad spends which results in lower revenue. Okay. We are priced for perfection, and if you throw those things in there. Which those taxes are coming. Nobody’s really talking about them, but they’re going to come pretty quick, and then you throw in 5%, 10% of people saying, “You know what? I’m not going to fly Delta…”
Frank Curzio: Do you need to fly Delta? I mean, Delta’s hub is in Atlanta, which is right by me, so I use them the most. I’m not boycotting anybody, but some people are. But I could fly any airline I want to go anywhere I want. I don’t need Delta. You don’t need Coca-Cola. I mean, you look at these competitors, they have great competitors that are big. UPS. We have FedEx, Coke, Pepsi, Delta. United Airlines, tons of different airlines.
Frank Curzio: I mean, there’s other places you can go. It’s not like the only show in town like Facebook is when it comes to advertising, and that ad spend, and return on ad spend is never greater than any other place ever. Maybe on Google. There’s other options. Just be careful if you own these companies in your portfolio because if they miss earnings estimates at these crazy valuations, these things will fall 10%, 15% in a day, and probably trend lower because everyone is going to get out of them.
Frank Curzio: Breaking through the 200 day moving average, and you’re going to see these things fall even further. Just be careful guys, because a lot of stuff that’s going on in the world you need to pay attention to because it’s going to impact your portfolio. Now, time to get to my interview, which is sponsored by blockchain.com, one of the most trusted cryptocurrency platforms in the world. Over 70 million wallets and over $800 billion in transactions since 2011. The site that I use.
Frank Curzio: Not only can you trade your fair cryptos on blockchain.com, but you can earn up to 13% interest annually on your cryptos like Bitcoin, Ethereum, or even stable coins like USD Tether. For more information start your account. Just visit blockchain.com. It’s blockchain.com.
Frank Curzio: Now, this week’s interview is with fan favorite John Petrides. John’s portfolio manager at Tocqueville Asset Management, great friend, super smart analyst. If you’re a Dollar Stock Club subscriber, we recommend a pick from our guest each week. We do like a one-page writeup, includes analysis, catalysts, buy up to price, stop-loss. It’s a really cool service. It’s like four dollars a month, and it’s one of our fastest growing services.
Frank Curzio: If you’re a subscriber today, you definitely love John because John is someone I have on every quarter, kind of like an Andrew Horowitz, I have guys on that could talk about numerous things, economy, markets, and stuff, and brilliant people. And I have a decent list of people that I like to put on every quarter. His picks have been on fire.
Frank Curzio: I mean he’s done an incredible job. So, I know you guys are in love with him. We talk about the last three years of picks that he’s given us, I mean I’ve been into him probably four or five years now he’s, again he’s a very, very good friend. That’s not why he’s on this podcast. He’s on the podcast because he’s very, very good, and he helps people make money.
Frank Curzio: This interview, John’s not going to disappoint. I tell you what, he’s still bullish on stocks although a little nervous that margins for companies will come down next quarter, something I haven’t heard. Interesting take. But he’s going to tell you exactly how to play that risk through his favorite sectors to own, and also, like always, he’s going to share his favorite individual names. Now, let’s get to that interview with John right now.
Frank Curzio: John Petrides, thanks so much for coming on Wall Street Unplugged again, right? Love having you on buddy.
John Petrides: Yeah, man. Thanks for having me on Frank. We’ve been doing this now for a while, and I appreciate you keep asking me to come back on the show.
Frank Curzio: No, I love it. I love it. We’ve been keeping doing this for a while, but I don’t know if we’re still going to have a job if the market keeps going up every single day. I don’t know if people are going to need us anymore, right?
Frank Curzio: Let’s get into that, because we’re talking about a market, John, that we have manufacturing at a 37-year high. We got trillions of dollars, if you want to say hundreds of billions actually given to people all at the same time. We’re seeing more people get vaccinated than ever where things are starting to open up when, after you lock people in their homes for a year, so everyone is dying to spend money.
Frank Curzio: We’re seeing the cyclicals come back, so also/ great unemployment numbers. Is all this being factored in? Because as market is moving higher I’m not sure we’re seeing those profits move higher right now. Maybe they will next year, but are we getting a little ahead of ourselves? Is it going to be like a rotation of capital?
Frank Curzio: Because right now, the risk-to-reward, you’re taking on a lot of risk for not as much reward right now. It’s a much different situation than it was in the middle of the year after COVID started. But what are your thoughts on the market right now? It’s something that keeps going up, and I don’t know if it can be justified with everything going on, or maybe it can?
John Petrides: I have a couple of thoughts on this. The first is basically because of what the Fed did from a quantitative easing standpoint, money printing standpoint, what the fiscal side did from a stimulus standpoint, and basically the way corporate America responded to doing more with less. Plugged the massive hole from an earning standpoint because of COVID.
John Petrides: For example, the S&P, I think was expected to do something like $168 a share entering 2020, and now we’re projected to do, the S&P is projected to do something like $183 by the end of 2021. If you look at that over a two year period that’s about a 5% earnings growth per year over that timeframe.
John Petrides: That’s kind of a normalized year, at least looking back historically over earnings growth period for the market. Part of the reason why the valuation multiples are higher, which I think is the tower in which your question is that interest rates have been so low, and it’s kind of like, where are you putting your money today if the bottom market is unattractive, and your cash is earning nothing?
John Petrides: You’re going to put your money into stocks. I think that’s part of the reason of why, or main reason of why stocks have caught a bid here. But I think it’s important for investors to… We’ve spoke about this about a million times over the years. You’ve spoken about this a million times over the years, is how concentrated the S&P 500 is to the five largest stocks, and to the tech sector in general.
John Petrides: Because the S&P 500 is a market cap weighted index, meaning the larger the size of the company the larger the weight in the index, that’s how it dominates. Because tech has been so dominant, and those five companies have been so dominant, the S&P 500 index has become vertical. It’s very concentrated in one sector and in five names.
John Petrides: What hurts growth stocks, which is tech? That’s higher interest rates. You’re seeing volatility within the tech sector, particularly within the NASDAQ. But if you look at the RSP that the Invesco S&P 500 equally weighted index, which basically disregards market cap, it says all 500 companies are the same weighted, that’s far outperforming the S&P 500 market cap weighted index.
John Petrides: To me, that’s a very healthy sign, because for the first time in a long time investors are getting rewarded for being diversified. You have not been rewarded for earning, for owning energy, financials, consumer staples. You have not. You basically have had to chase the market and pile into tech and growth in order to outperform the index, and have outside bets in order to outperform the index.
John Petrides: Now for the first time in quite some time, by being exposed to other sectors, investors are actually being rewarded for that, or those investors that are diversified are being rewarded. To me, that’s a very, very healthy sign for stocks.
Frank Curzio: Yeah. That’s a great point because the RSP is something I looked at just showing how the FAANG stocks started doing very, very well in 2020, a month or two after the bottom, so in the middle of the year. I always said if you look at the weight index for the S&P 500 you could see how terrible some of these stocks are doing.
Frank Curzio: I had no idea. I’m so glad you said that, that it’s outperforming the S&P 500 as a whole, which makes sense. Because if you’re looking at the FAANGs, they underperformed outside of the last couple days to start the year. I guess that leads to the next question. It seems like there’s different pockets, like that rotation where it’s cyclical. It’s the reopen trade. Yes, we know.
Frank Curzio: Like ESG companies have caught a bid; banks, cyclicals in terms of even energy stocks. Where do we look today? Because it seems like to me we have been looking, this is the last six months, we’re looking at, what’s the cheapest sector? Okay, three of these stocks haven’t done anything.
Frank Curzio: Let’s in throw in tech. ESG stocks, yeah, I mean we all knew you have to buy them when it was going to happen, but yeah they still took off. The marijuana stocks. What are some of these sectors that you’re looking at? Maybe it’s as simple as yield, because yields are going higher.
Frank Curzio: We’ve seen the 10-year go higher. 1.7 is a big difference from under 1% right? You have that risk-free rate, which means one of the things that you stated which I wanted to talk about, is are we seeing… A lot of these companies, are they going to raise their dividends?
Frank Curzio: No one’s really talked about buy backs which a lot of these guys are spending, but I mean, the amount of money that they’re generating, especially the FAANG names, I mean, they blew out those numbers last quarter, and the past two, three quarters. Are we going to see a return to that?
John Petrides: How about I answer this way? Yes.
Frank Curzio: Okay, cool. Let’s get on to the next question.
John Petrides: Yeah. Right. I think the way to answer your question is there’s a difference between factor investing, and there’s sector investing. You touched on a bunch of things. I do think that tech has got drubbed over the past six weeks, two months. That is purely based on valuation. I think the market got numb to seeing non-profitable companies with analysts out there saying, “Oh, you know the stock is trading at 20 times 2025 sales, but if you compare it to its growth rate it looks great,” and it’s not even growing earnings.
John Petrides: It’s not even profitable yet right? I think so many of those tech stocks existed that we just got numb to valuation. You’ve seen a massive drubbing in the tech sector. That is a big function of just simply valuation. When interest rates go up it makes the formula on a discounted cash flow analysis less for a stock price, and it means that if the cost to borrow money is higher it slows down potential growth rates.
John Petrides: Tech is getting drubbed recently, more so because of valuation, not because of fundamentals. I do think there’s value to be had in tech. I think there’s massive value to be had in healthcare. The healthcare sector is flush with cash. It has not participated in this rally probably out of fear of the Biden administration potential policy to restrict drug pricing, but the healthcare sector looks really interesting from a valuation standpoint.
John Petrides: The whole cyclical play still I think has room to run. Financials will benefit from the steepening of the yield curve. Industrials have multiple levels of playing there, not only valuation, but also the reopening trade, the global economy healing. I think there’s still a lot of plays out there for investors, again if you’re willing to diversify your portfolio and not be so concentrated to benefit from.
John Petrides: That’s the sector side. The factor side, I do think dividend yields… Our enhanced income strategy, we’re having a very strong year, or really back since Halloween of last year, right around when we got the Pfizer vaccine news and we saw that interest rates started to rise. Bonds sold off, and higher dividend producing stocks, which are in the strategy, had rallied very strongly.
John Petrides: The world is flush with cash, but looking for places to return on it, and looking for places to find yield. The whole yield story, and this is a topic that we can talk about in a bit, has switched from… This time last year everyone was worried about credit risk. Will people default?
John Petrides: Remember, the people were talking about 25% of the high yield bond market was going to default, and only so far you’ve had a 6% of the high yield bond market has defaulted. To now, the risk on the yield side has switched to interest rate risk because people are afraid that inflation is going to run rampant, and the Fed is acting as if it’s an ostrich and has its head stuck in the sand, and is going to have to slam on the brakes from a QE standpoint, from a stimulus standpoint, harder than what it may intend to do.
John Petrides: That’s why you’re seeing interest rates rise. From a factor standpoint dividend yields, and yield oriented securities are still attractive in our view.
Frank Curzio: No. I guess I’ll ask you to share some names at the end, but I wanted to talk a little bit more because one of the things that you said to me, because whenever I interview somebody, and you know this as well, I say, “Hey, what do you want to talk about, some of the things you’ve been talking about in the media and whatever?”
Frank Curzio: And you wrote down on one of these topics saying that next quarter it sounded like you’re a little concerned where margins could be pressured. But you’re saying long-term demand is going to be strong.
John Petrides: Right.
Frank Curzio: But do you think margins are going to be pressured this quarter? Because if you look at this quarter, and the next quarter, it feels like there’s an easy comparison right now, because that’s when everything started getting bad a year ago. I think the following quarters, and especially like when we compare the last two quarters, we call those comps, right?
Frank Curzio: Let’s bring everyone in here. You’re seeing year over year, what did you do for that quarter with the comps, and you see same store sales grow. You’re probably going to see pretty good numbers because this is when things are really terrible, like last year around this time, next three months on the report, but going forward, that’s when a lot of these companies really, really went nuts.
Frank Curzio: Again, I ask you about the rotation, because I look at the Pelotons and the Zooms where those numbers are going to be incredible, but then I look at some of the other names where maybe we don’t see margins being pressured because again, they were cutting back tremendously back then. But you think it’s going to be this quarter, or the next quarter, and how do you play that?
John Petrides: Yeah, that’s a good question. I think the common theme that I’m expecting to say is maybe you see… Now, remember the last two quarters of reporting companies in the S&P 500, 80% or more beat analyst expectations, 80%. Usually, the cadence is around 70%, so you’ve had massive blowouts.
John Petrides: When that happens over a couple of periods you get complacent and think that it’s going to be the same thing. The problem is that in the short-term, we’ve had a lot of strange one off incidences that have mucked up the supply chain. Clearly COVID, just the COVID issue, has created bottlenecks for most industries throughout the entire supply chain.
John Petrides: Commodity prices have really spiked over the past three months. Oil prices have gone up. We saw it impact shipping. Copper prices, wood, I mean, all of those things have just gone through the roof. You had this crazy storm in Texas, and chemicals… Texas is a big producer, has a lot of chemical plants that come out of Texas.
John Petrides: That threw off stuff for a day or two. You had really bad weather storms along the way here. You had the Suez Canal issue. All of these are one time in nature, but I do think in the short-term that it could distort earnings relative to expectations because there are so many factors. But I would expect management language to be, “Once we get through this, by the end of the year earnings…”
John Petrides: You’re going to see a lot more companies show more confidence in their end of 2021 number because they’ll have more visibility. I think all of these issues that I’m expressing regarding potential margin pressure are all short term, whether we see some of that now for this quarter, or we see some of it in July when the next quarter reports, it’s a matter of shifting the calendar dates.
John Petrides: But I think long-term the fundamentals are actually quite strong, because as demand comes back, and once we work through these one-time supply chain issues, companies are doing more with less. We are all more efficient today than we were a year ago, and that’s all going to fall to the bottom line.
John Petrides: Then, if companies start buying back stock to the pact that they were doing pre-COVID, that’s going to ultimately help earn these growths going forward. I think the risks that I’m throwing at here are more for short-term investors, traders, people playing the quarterly number. But if you think longer term, to me, sell offs on companies that traders may sell off the news could become buying opportunities. I’m still in a buy the dip mentality here.
Frank Curzio: Let me ask you this, John. This is a tough question, but what are some of the things you maybe, analysts at your firm, performers at your firm, are worried about the most? Because it can’t be inflation right, because inflation we see coming. We know we see inflation even though, whatever the CPI number is, and what they believe it is.
Frank Curzio: We see, like you say, you just mentioned all the commodity prices, food prices, tuition prices, everything is up. We all know that we’re paying those bills. I wouldn’t say valuation, because everybody cites valuation as well because we have low interest rates, and it’s deserved a higher premium, but maybe… What are some of the things that maybe you don’t see that can actually be the biggest risk, I mean the risk that we don’t see. That could be…
Frank Curzio: That could be like when we’re looking at what just happened with another fund blowing up, the amount of leverage. We didn’t know how much leverage. These guys are still unwinding here. There could be six billion in losses. We don’t know. And they’re not the only firm like that. They had all their stuff off books. But what are some of the things that maybe worry you right now?
John Petrides: Sure. Let’s talk about those hedge funds with a lot of leverage that are blowing up. The only reason why I’m not as… People always go back to long-term capital management from 1998, when you had this hedge fund that blew up, and all the banks were tied into those trades, and the Federal Reserve had to bail out a lot of the banks.
John Petrides: The only reason why I’m not concerned about that is because the Fed is already at the table. We had Lehman Brothers. We had the debt bailout. I mean, the blueprint is set. Now, it’s a moral hazard, and it’s part of the reason of why hedge funds take on the risk that they do, because there is a bit of a backstop there.
John Petrides: I’m not overly worried about that because the Fed is already willing and able to protect the markets if something like that were to happen. Okay? I think the two bigger issues, that these are new risks, but I don’t know how much the market is appreciating them yet, is at what level do interest rates rise that stocks start to bend?
John Petrides: I think we saw in 2018 that when a 10 year crossed 3% and the Fed funds rate was around 2%, 2.25% percent, is when bonds started becoming more competitive relative to stocks as an asset class. At what point now does inflation rise enough, or interest rates rise enough, that investors start to bend from a stock standpoint. I don’t know really what the answer is to that yet. That’s a risk.
John Petrides: The second one is the Biden tax plan. The market really seems to be looking through that. Automatically, you’re increasing the corporate tax rate from 21%, 22% back to 28%. We’ve been there before by the way. Basically, most of the Obama Administration up until about 2015 or so we had a 28% corporate tax rate.
John Petrides: In the, I think it was late Carter, maybe early Reagan years, the corporate tax rate was like 35%. It’s not like this is uncharted territory, but how much of that is factored into earnings? Maybe that is the reason why the Fed continues to have the pedal on the metal, because they see this fiscal headwind coming and they don’t want to double dip from a… They don’t want to pull the carpet out all at once to investors.
John Petrides: I’m also concerned on the tax plan, what are some personal income tax issues that the Biden Administration plan may have. For example, if they remove the step up in cost basis for equity investors, so basically, that means… Right now, let’s say you bought shares of Apple at $10 in 1997. It’s now whatever Apple’s stock price is today, $120.
John Petrides: Frank, you die. You pass it on to your wife. Your wife’s inheritance on the cost basis would go to today’s price at $122. Okay? You wouldn’t pay the capital gains on anything that was there. That’s called a step up in cost basis.
John Petrides: There’s talk of removing that, where then your cost basis would go to your wife. That would be part of her… Then she would get stuck with a massive tax bill. There’s talk about obviously increasing the marginal tax rate on people making over $400,000. There’s talk on taxing capital gains.
John Petrides: You haven’t even sold it yet. All of those things. They talk about increasing taxes on dividends, increasing the capital tax rate, making it tied to your ordinary income tax rate. All of those things make it less attractive to own individual stocks. Those are structural issues that could take a little bit of wind out of the sales for equity investors.
John Petrides: Of course, the biggest elephant in the room is either an issue that we will deal with, or our kids will deal with, and that is the mounting debt that we all face, and how is it that we’re printing all of this money? We now have $25 trillion in debt and growing.
Frank Curzio: Insane.
John Petrides: In February of 2019, when there was a Democrat debate, and you had people like Elizabeth Warren, Bernie Sanders, and Andrew Yang talking about all of these very aggressive fiscal policies, Andrew Yang, “Yeah, we’ll send everybody a thousand dollar check per month in perpetuity.” And Elizabeth Warren saying, “We’re going to forgive student loan debt.”
John Petrides: And Bernie Sanders throwing out these massive trillion dollar stimulus packages. Wall Street capitalists were like, “No way. These are way to extreme.” Just what we’re doing now; we spend 25% of GDP… Now again, we’re in a pandemic, and you had to do this to a certain degree.
John Petrides: You got to stop the bleeding before you could fix the patient, but it kind of feels that people are so numb now to fiscal policy and stimulus that the gates are wide open to go out there and spend however much needs to be spent, and the Fed will just keep printing dollars in perpetuity, and will fund it.
John Petrides: I don’t know, Japan I guess is an example of that. We’ve all been waiting for Japan to blow up for 35 years now and it hasn’t. I mean, it’s been stuck in a deflation area, or it’s been stuck in a low inflation, low GDP growth, and they have structures of their own, so maybe they’re using that as a financial experiment, an economic experiment that yeah, you just print money forever.
John Petrides: But I don’t know what to make of that issue. I don’t know when that comes home to roost. I don’t know how you really prepare for that. Maybe that’s why Bitcoin captures a bid, or cryptos, or gold, or non-correlated assets, that sort of thing to help you deal with a long-term risk like that.
Frank Curzio: No makes… John, going back to taxes-
John Petrides: Those are the three things that-
Frank Curzio: Mm-hmm.
John Petrides: Yeah?
Frank Curzio: No, go ahead if you want to finish it. I mean the three things that you brought up…
John Petrides: Those are sort of-
Frank Curzio: Yeah.
John Petrides: Bigger picture, yeah, issues. Go ahead.
Frank Curzio: The corporate tax is a big deal. People forget in 2017, I mean, in 2017 and 2018, that’s when stocks started to move, but earnings growth had slowed to a crawl. I mean, there was no earnings growth. Then, when we had those tax cuts for corporations, they started giving checks to everybody.
Frank Curzio: Again, it benefited corporations. I’m not being political here, but you saw the drastic movement and double digit growth, massive earnings growth because of this. Now you’re taking that away at a time when we’re trading at extraordinary valuations, and yes I understand the underlying currents are fantastic right now, and they’re going the right way, and low interest rates, and money out there, but those are one of the things that can really derail it.
Frank Curzio: The 15% minimum tax is going to kill a lot of companies. I mean, not kill them, but it’s going to result in sharply lower earnings. There’s a lot of big names on that list including, Birkenstock. That’s a risk that hasn’t really been talked about, and again, we want to talk about the risks, John, you and I, because when stocks are all-time high, we want to talk about the risks.
Frank Curzio: When it was COVID and things are crazy risky we want to talk about the positives and what we have to invest. We want to be fair with everything. I guess that leads to the next question where, you covered a lot. You said healthcare looks interesting, financials, energy, infrastructure, you’ll see buy backs, dividends returning. What are some individual names you like or that will benefit the most from these underlying trends?
John Petrides: Yeah. A name we recently added to our enhanced income strategy, and it’s a name that I own personally, is Gilead, G-I-L-D. This is one of the largest biotech companies out there. Gilead has like over $10 billion of cash on its balance sheet. It’s the leading franchise in HIV.
John Petrides: Gilead popped maybe around May of last year when it came out with its treatments for COVID. You may remember Remdesivir. It caught a bid then, but it has come all the way back in. It’s now in the mid-60s. Dividend is over 4%. It’s trading at like 11 times earnings PE.
John Petrides: It’s trading at like eight times EBITDA earnings before interest, taxes, depreciation, amortization, which in today’s world, in a SPAC world that we live in, that is like, single digit EBITDA multiples is really hard to find.
Frank Curzio: Impossible, yeah.
John Petrides: Very high quality company. New management team, has spent a lot of money over the past couple of years buying companies to help them break into oncology and cancer, because they need to diversify away from their HIV portfolio.
John Petrides: To be honest with you Frank, Gilead reminds me of that brand new station wagon our parents bought in the late ’70s, early ’80s, the shiny wood paneling, all tricked out with the 8 track deck tape. Had ashtrays on the side. Even had electric windows instead of the cranks, but it would stall every couple of times.
John Petrides: Every now and again, along the road trip, the car would stall out regardless of how pretty it has been. That’s kind of how I think of Gilead over the last four or five years. They print a ton of money. They’ve done a lot of key acquisitions. They’ve diversified their portfolio.
John Petrides: They developed treatments for COVID. They have not participated in the rally, and it’s kind of had this stop and stall movement, but now they have actually… I think a lot of catalysts in place, or I think they’ve done a lot of heavy lifting over the past four or five years that to me makes the stock attractive.
John Petrides: Again, when you’re getting over a 4% dividend yield, one where they’ve grown at 11% annually over the past three years, and I think 10% annually over the past five years with more than ample enough room to protect that dividend and to grow it further in a low yield environment, Gilead looks attractive. That plays both themes that I mentioned of healthcare and high yield.
Frank Curzio: No, that’s great. That does play right in the middle of all that. Great pick. Love having you on. Let’s end with this, which is so important, is how did you do in your NCAA bracket, and did you think Baylor would blow out Gonzaga by the amount they did? Because man, watching them play that game… I never saw a great team so flustered and having no answers, and didn’t know what to do. It was amazing.
John Petrides: Totally. The answer is no. I had Gonzaga, Illinois final. I had Baylor in the final four. I finished, in my pool, I finished 40 out of 150-
Frank Curzio: Not bad.
John Petrides: Which is respectable. It’s not terrible but it’s not good either. I didn’t win. You know, I think it goes to show you when you’re in a physical game, if you push the other team back they crumble. What did the Tampa Bay Buccaneers do to the Chiefs?
Frank Curzio: It’s defense.
John Petrides: They pushed them right?
Frank Curzio: Yeah.
John Petrides: What did Baylor do to Gonzaga? They were all over these guys. As the Gonzaga guys said, “We got punched in the mouth right from the tip.” What did the Giants do to the Patriots when they won the Super Bowl back then? They pushed back and they got aggressive.
John Petrides: Those teams that feel like they’re untouchable, you get aggressive enough with them, they don’t know how to handle it, because no one’s ever done it before. It’s like that bully in your schoolyard. Just go up and clock him once, and he’s not going to be the bully anymore.
John Petrides: That was the game changer. And good for the Baylor coach and they, Baylor, the team to come in. “You’re not going to make history on our watch,” right? Good for them.
Frank Curzio: No. Really, really great stuff. It was good stuff.
John Petrides: Well, to be honest with you I would have liked to have seen a perfect season. I think it would have been cool to-
Frank Curzio: It would have been cool. I wish it was a… There wasn’t that many good… UCLA made up for that, and then after, but before-
John Petrides: Totally.
Frank Curzio: UCLA there was a lot, a lot of blowouts.
John Petrides: Totally.
Frank Curzio: The lead eight, and-
John Petrides: Strangest tournament I’ve ever seen.
Frank Curzio: Yeah.
John Petrides: The moment that Duke doesn’t make a tournament you know it’s going to be a weird one.
Frank Curzio: Yeah. North Carolina almost didn’t make it. Kansas had a struggle. I know it was pretty cool. All right, John, let’s finish with this. If someone wants to find out more information, learn more about you, how could they do that?
John Petrides: Yeah. Sure. I’m @JPetrides2 on Twitter. You can go to tocqueville.com, T-O-C-Q-U-E-V-I-L-L-E dot com. You can find our team there. We manage portfolios for individuals and high net worth individuals and families, and institutions. Tocqueville has been around since 1985. We’re fee only. We don’t sell products, or annuities, or anything like that.
John Petrides: We are straightly just a assets under management. We build wall only. There’s no leverage involved so none of these hedge fund issues. We work to customize portfolios to our clients. It’s plain and simple. Roll up your sleeves. Find out what the patient needs, and help them achieve their goal. That’s basically what we do.
Frank Curzio: Awesome stuff. Awesome stuff. Listen, John. You know. I don’t even have to tell you. I love having you on. We also get very, very positive comments because we can go anywhere with this. It’s always unscripted, basically. We just have a couple things that we hit on.
Frank Curzio: You always share ideas. I know how busy you are these days, and media appearances, so I appreciate you coming on. And hopefully, you join us again soon, buddy.
John Petrides: Will do. Thanks a lot, Frank. Appreciate it.
Frank Curzio: All right. Take care man. Okay, guys. Like always, great stuff from John. I love having him on. Also, I love that he’s a big sports fan. We always throw some kind of sports in there, which is really cool. We’re in fantasy leagues and stuff like that, which is awesome.
Frank Curzio: I want to mention something before we get to the rest of the podcast. You notice that we have a sponsor. It’s the first time we’ve done this on the podcast, which is a great thing, because for our podcast, we’ve never had sponsors or anything. Now, we have blockchain.com.
Frank Curzio: But I wanted to talk a little bit more about that, because we have Wall Street Unplugged, which is a free service. When I saw the numbers of people to pay to do a 30 second ad, to be honest with you, it’s amazing how much people are willing to pay, especially with our numbers because of you.
Frank Curzio: What we do is we use that money to either hire more people for the podcast, to market even more, which is going to result in more people listening to it, which results in us getting pretty much the biggest names in the world on this podcast, and the smartest people. That’s the goal here.
Frank Curzio: But for me when it comes to… This is my baby. This is like the whole company. This is very personal to me. We’ve done podcasts longer than almost anyone that you know for 14 years. To have sponsors on here, it’s companies that I only believe in, companies that I use.
Frank Curzio: What I notice in the crypto sector is they can’t really advertise a lot of places. Why? Because I research this industry. I do Crypto Intelligence, and 85% of the industry is BS. I know some of these names are going up. You can’t find financials on a lot of them.
Frank Curzio: You don’t know what’s going on, but in a bull market everything goes up. But a lot of these names are BS. However, there are a few of them that are doing the right thing. I mean, blockchain.com is one of them. But we wanted to provide a platform for this since this is the industry that we’re in, this is the industry that I believe in.
Frank Curzio: This is the industry that my subscribers of Crypto Intelligence have made life-changing money. We’re looking at a product that’s up over 700% annually. When we have sponsors, believe me I’m not going to throw 10 at you, and more than two, or whatever, maybe just one, but we have one sponsor and I just wanted to say, because that might have caught you off guard.
Frank Curzio: Say, “Wait a minute. I never heard that before.” But yeah, at the end of the day look, this is a free service. We provide a ton of information, more than any other podcast I know in the financial area. If you think that’s not true, please send me that podcast because I’ve listened to almost every one of them.
Frank Curzio: The fact that we’re doing it this long, it’s not 15, 20 minutes, and we cover everything: the guests we have, some of the greatest out there. The billionaires. The heads of state that we interviewed. This is a really, really good source guys, and I love that.
Frank Curzio: That’s why we have a lot of viewers. To advertise on that makes sense from our point of view. We are a corporation. We are a public company now through our CEO token, so for us, that’s the goal here. There’s not going to be advertisements everywhere like you’re looking at Forbes or something like that.
Frank Curzio: Not that I’m getting on Forbes, but Forbes, TheStreet.com, I can’t even get through that site without going to 75 ads on the front page. That’s okay. Not that they have bad content, but it’s hard to get through. It’s never going to be like that here.
Frank Curzio: But yeah, I wanted to really talk about that before I went further. Now, again great stuff from John. I love having him on the podcast. Again, this podcast is about you, not about me. Let me know what you thought at firstname.lastname@example.org. That’s email@example.com.
Frank Curzio: Now, Daniel is off this week. He had a personal matter to attend, which means I can make fun of him since he’s not here. Remember, Daniel is 6’6″ and could probably throw me across the office. He’s also a sharpshooter. Actually, maybe I won’t make fun of him.
Frank Curzio: But he’ll be back next week. However, I am bringing back my nephew, Joe Davide, who is 21 years old now, just turned 21. Loves to trade stocks. I think the last time I had him on, a couple months ago. And bring him on to share what he’s doing. There’s a lot of beginner investors out there.
Frank Curzio: How I could possibly make him a better investor, which is difficult to tell people in a bull market, when if you can make 8% to 10% annual returns, that’s considered great. But a lot of these stocks have gone up hundreds of percent, especially the crypto area. But ESG stocks, yes, they’ve come down to Earth, but a lot of these names have gone up so much where it’s hard to say, or to teach a young investor.
Frank Curzio: I’ve been there. I know. They just have this arrogance. “I’m smarter than everybody,” and you should when you’re young. You get slapped in the face when you’re 34 and you realize you don’t really know that much. There’s a lot of smart people out there, but when you’re young, you’re supposed to be like that.
Frank Curzio: You know, I want to go over some of the things that maybe I could help him out with, but it’s not easy to teach someone when it’s very easy to make gains in this market. But, it’s become difficult. A lot of these sectors have gotten hit, including Joe’s portfolio, and this is kind of like educational part.
Frank Curzio: I have to tell you, the emails coming in, people love this segment because they say, “Hey, you know I made that mistake, and I understand what you’re saying here.” It’s real-time portfolio, real-time everything. Anyway, Joe, I want to say thank you so much for coming back on man. I really-
Joe Davide: Yeah.
Frank Curzio: Appreciate it.
Joe Davide: I love coming on here. It’s great.
Frank Curzio: I’m going to start off with this, because we spent Easter together with my mom at my house. I have a basketball court in the back yard. We played one on one basketball. Who won that game? I forgot?
Joe Davide: Pretty close. It was a close game. It was great.
Frank Curzio: I’m double your age man. Come on. More than that. You got to be beating me. Actually, he had a shot to win and it just rolled of the rim and then, you know… Then it was done. But anyway, we still… I had to mention that. That’s the first thing. Sorry, man.
Frank Curzio: Anyway, if I would have lost I would have never mentioned it, guys. So, of course, that I won, I’m going to mention it. I want to talk about the last time you were here. Your portfolio was doing well the first time that you came on. I think this is like maybe the third time you came on if I’m not mistaken?
Joe Davide: Correct.
Frank Curzio: Then the last time you came on, you said a lot of these names are down. They got killed. I want to see where you are with your portfolio now. Again, you have to go through this process. If you look through every single investor who’s great you have the icons or whatever.
Frank Curzio: When they were young, they’ll tell stories how they got wrecked, and it’s good because getting wrecked makes you become more aware, makes you understand the risks, that it’s not that easy and what could happen when you lose money. I describe that as someone who ski’s for the first time.
Frank Curzio: They get it. They’re really good. They go fast, faster, faster, faster. Those are people who get hurt. It’s not the people who go really slow who are scared. No. Then once you get… Now, you’re like, “Whoa. Holy cow. I almost killed myself. I got to be careful.” That’s how it is with the market. You got to go through that process.
Frank Curzio: You can’t just start off and listen to some guy saying, “Okay…” You’re going to think you know more than that person all the time, especially if you’re young. It is a bull market, and everything is going higher. Joe, I wanted to bring up your portfolio and go over some of the things here, because last time we had you on, you said you had some losing in your portfolio.
Frank Curzio: Let me just bring this up really quick, and I can show everybody. But how are you doing today? Let’s talk about some of the stocks in your portfolio here.
Joe Davide: All right. Today, pretty red for another portfolio update. The last one we did was, was it March 3rd? It’s been a couple weeks, and we are in the same boat. We have not really moved at all. As of today, we have lost, at the moment another $140. I am currently down 1980, and around 60 cents total.
Frank Curzio: Your account value is 3,500 right?
Joe Davide: As of right now, yep.
Frank Curzio: What did you start out with?
Joe Davide: With 5,500 bucks.
Frank Curzio: 5,500. Now, you made a lot of money at the beginning?
Joe Davide: Yeah. This was… I’ve been on the same tank for, now a month or two. All the way back in the beginning, I was doing pretty well. Then, I just got too heavy into tech. I just see right now, it’s just bleeding.
Frank Curzio: Talk about some of these names. Why’d you buy some of them? It looks like you’re down a lot of them-
Joe Davide: Right.
Frank Curzio: But CCIV?
Joe Davide: Some of that? Like that one I’m not too concerned about because that’s pretty volatile. Last week, I was up like 100 bucks on it. It’s going to be shifting pretty rapidly. That one, I’m not too concerned about. I have a lot of hopes for that one.
Frank Curzio: Why did you buy that stock for?
Joe Davide: I actually bought that just because I thought it was a great price. I’ve been following that since the merger even really hit Main Street. It was 20 bucks and I was like, “You know what? Let’s follow it. Let’s follow it.” I was watching it. It went up to like $50. I was like, “Wow. That’s pretty crazy. Once Lucid Motor becomes… Cars are on the road, it’s going to skyrocket a little bit.”
Frank Curzio: What about a company like GSAT? What made you buy-
Joe Davide: GSAT, that was ridiculous. They do… It’s a satellite company. It’s supposed to be along with 5G for the future so I invested in that. HCMC, that was off Wall Street Bets. I saw that on Reddit. I was like, “You know what? That’s fine.”
Frank Curzio: Yeah. People get ideas.
Joe Davide: Yeah. I was like… It cost me 135 bucks.
Frank Curzio: Now, what did they say on Wall Street Bets? Are there people still involved in the stock, or-
Joe Davide: That one-
Frank Curzio: Do they tell you what to do when it goes down?
Joe Davide: I just saw it in the feed, like constantly in the feed. Mind you, this was like a month and a half ago, two months ago when I bought it. I saw that in the feed and I was like, “You know what? 135 bucks for 50k shares. It’s not going to go to a dollar or anything like that, but let’s see what happens,” because I just wanted to put my trust in there a little bit. You know. It’s only 80 bucks. That’s not-
Frank Curzio: You’re thinking right now that you could get more shares of it so you could make more money off of it?
Joe Davide: As of right now no. I’m leaving that one be. That’s fine. I’m not-
Frank Curzio: You have like a ton of shares-
Joe Davide: Yeah. Whenever… If it goes bankrupt or whatever I lost 135 bucks. I’m down $80, well now 85. That’s all right. That’s nothing. HOL, that’s another one I love. That’s going to be the merger with ASTRA. That one I’m down big on. That’s another 260 bucks. That’s still kind of in the SPAC stage though, so when that goes through.
Frank Curzio: Let’s talk about Plug Power, which a lot of people will be familiar with. You bought Plug Power. I think you were up on it at one time right?
Joe Davide: Yes, I was. Then I bought it back after the financial, when they messed up their auditing and they had to go back. I purchased it after that dip. As of right now it’s still dipping, because I was researching it and they actually are in a Five T Hydrogen fund, where they’re with a bunch of other companies like Baker Hughes.
Joe Davide: And they’re offering credit to customers which isn’t that great, because that means there’s not a lot of people interested in the company. With that information, that was after I bought it, and since then, it’s been pretty red after that.
Frank Curzio: UEC is another name on here, which-
Joe Davide: UEC was your recommendation. Yep.
Frank Curzio: That’s the one that’s green.
Joe Davide: Yep. That’s the only one that’s green.
Frank Curzio: That’s the only one that’s here that’s in our portfolios, and you recommended it. It’s nice you have access to me, but you don’t buy any of the stocks I say Joe, good for you. Again, at… It’s like your data is Alex Rodriguez and you’re just learning baseball from somebody else, which is fine.
Frank Curzio: If you’re on… You probably listen just to iTunes. That’s where we get most of our downloads, but we do have a Curzio Research YouTube page where I have Joe’s portfolio up that you can view, and that’s why we’re going through this, going through his stocks.
Frank Curzio: Let’s start here, Joe. Let me ask you a few questions here. You bought these stocks for a certain reason, and they’re down. Does that reason still exist? Because you can buy a stock and say, “Okay, here’s the reason I’m buying it,” but it seems like for some of these names that reason no longer exists. If it doesn’t, then why would you continue to own it?
Joe Davide: Right. You always talk about how you have to have a thesis for a stock. Most of these I have a thesis for, unlike say HCMC or SIRC, but that one… I’m owning just so that I don’t lose these gains at the moment. I still believe in them.
Frank Curzio: But they’re not gains. They’re losses.
Joe Davide: They’re losses, yeah, but I’m hoping they’re going to be gains soon. I still believe in them. Really I could sell because I’m missing a lot of opportunity right now, but that is a large percentage of my portfolio that I’m just not ready to throw away.
Frank Curzio: Now, I’m going to tell you something about stocks which you might not know, but they don’t care about you.
Joe Davide: I know. They don’t care about me at all.
Frank Curzio: They don’t care who you are, so there should never be an emotional attachment to this, but are you familiar with opportunity cost?
Joe Davide: Yes. Yep.
Frank Curzio: When I look at opportunity cost one of the biggest mistakes I make with portfolios is, when you’re losing money, there should be an exit strategy. Everyone has an exit strategy, and almost everyone has a thesis most of the time. If you’re a trader, it may be something like it broke the 200 day moving average, which means that if it goes high and then comes back below that, they’re going to sell it.
Frank Curzio: That’s their discipline. My discipline is, I always put stop-losses on a stock because you don’t know how high they can go and you don’t know how low they can go. For me, you want to protect your capital, Joe. The best thing is to protect your capital, because say if the market crashes from here, these things are going to get destroyed.
Frank Curzio: A lot of these things don’t have profits or anything. I mean, you think that they’re down a little bit. I mean, when you live through certain markets like the dot com crash… I mean, people got a little whiff of it during the pandemic in March, but even the credit crisis… Small caps were falling 80%, 85% from their highs. I mean it was insane, people were getting crushed.
Frank Curzio: Then you see the margin come down. Then you get nuts. But one of the things I could suggest is… Again, feel free to do whatever you want. I really appreciate you coming on and showing this. It’s a very big deal, Joe, really. But when I look at your portfolio, I would say don’t be afraid to get out of those stocks where your thesis doesn’t hold water.
Frank Curzio: Because one of the things you just said is, “Hey, you know what? I’m holding these names because I’m a believer in them and I think that they’re going to come back,” but in the meantime when you have these losses… It’s all about controlling your emotions and your psychology.
Frank Curzio: That is the most important thing, because sentiment really drives stocks. It’s how people feel about them. It’s the reason why Peloton is trading at whatever times a million times earnings, is because sentiment. People love the product. Sentiment has a lot to do with this.
Frank Curzio: When you’re sitting on losers, that’s what you focus on. Even if you had, like most of these were winners, people just tend to look at the loser and be like, “Ah, man. Should I buy more? Should I buy more? Should I buy more,” when in fact, if you had a stop-loss on this…
Frank Curzio: These are aggressive stocks so say 30% and you stopped out, it would have saved you a lot of money on these, but more important, now you have that cash in your liquid and you can buy… Because we can talk about other things. What are some of the other things? I think you said Facebook is amazing, right?
Joe Davide: Yep.
Frank Curzio: You could have bought Facebook. Facebook is at an all-time high. You could have bought that a couple months ago. That’s the biggest thing when you’re looking at these stocks where most people are going to hold their losers longer and sell their winners quicker, which is crazy because it’s one of the biggest mistakes people make. And I’m saying this because I’ve made this mistake.
Frank Curzio: I can’t tell you how many people I know that sold Amazon at like 300, 400. It would have been… Whatever it is, at 3,300. How many people sold Microsoft, who owned Microsoft who don’t own it anymore, or Netflix who don’t own it anymore? I mean once you get up a certain percentage of 100%, say if you put $1,000 into the stock and it doubles, if you sell half you cost basis is zero.
Frank Curzio: That means if that stock goes to zero, you still break even, so you get to hold it and you don’t really care if it goes down 10%, 15% here or there, or whatever. You get to look at it long-term. That’s how you have these monster life-changing winners.
Frank Curzio: Because if you sell too early, you’re not going to have those. But sitting on losers, right now, you’re doing nothing with your portfolio, where you’re seeing a lot of sectors do good. They’re hitting new highs as we speak. But that’s one of the things that I would suggest. I guess, let me ask you this question, Joe. What would make you sell one of these stocks?
Joe Davide: Pretty much sell, pretty much just emotion, or if really something tanked. But at the same time, if it tanks even farther, that would probably persuade me not to sell. But I mean, looking at it as of right now, I’m probably ready to let go GSAT and probably ABML. Those would probably be my top two, even though ABML is a significant loss. I would probably let go of those two and just use… At least have that capital.
Frank Curzio: What was the other one? ABML and-
Joe Davide: Yep. And GSAT. Then if I had to let go of three of them-
Frank Curzio: Those are two of your biggest losses right?
Joe Davide: GSAT is down… I’m down 121, and then ABML, I’m down 243.
Frank Curzio: Yeah. It seems like as they go down further, that’s when you make your mind to sell it, when in reality-
Joe Davide: But-
Frank Curzio: If you sold these like two months ago, and then say if you put it in Facebook… Again, people look at Facebook… They look at a stock that trades at 300 or 400. One of the stocks you own here you own 50,000 shares of and it’s cool.
Frank Curzio: You think that… Again, it’s all about percentages. If you buy Amazon, and you put in, again $1,000 and it goes up 20%, it’s… You made money, just like these stocks. If it goes up 20% and people say, “Well, it’s too high…” It has nothing to do with price of percentage gains. That’s the biggest thing, what you really need to focus on.
Frank Curzio: Think about that, because if you bought Netflix in the hundreds, if you bought whatever… I remember people buying at 70, 80, 90 Netflix, or Tesla at 150, 200. If it goes to 200, if it goes to 350, four, you’re like, “You know what? Wow. This valuation is crazy. I’m not going to sell my whole position because I don’t know how much higher it can go,” but you sell a portion of it.
Frank Curzio: But now you’re liquid and you can buy lots of things. Right now, you’re seeing a portfolio where you’re not liquid and you’re not taking advantage of the things you like. Since you have access to me, you’re going to find lots and lots of ideas that are really cool. That’s one of the things that I would definitely work on.
Frank Curzio: Guys, I want to hear from you too because I’m getting lots of positive responses on this and just people saying, “Hey, I make the same mistakes.” Again, I appreciate you coming on Joe. I really do. Because a lot of people won’t come on and be like… But this is how you learn.
Frank Curzio: The fact that you’re coming on makes me know that one, it is you’re coachable, which is great. You care about… Going through this process is a great deal because yeah, you’re going to lose some money, and you’re down a little bit, but that’s nothing compared to the amount of money you’re going to make in the future.
Frank Curzio: Again, you have a lot of working power where you’re going to generate a ton of money over whatever career you choose. But I appreciate you really coming on here man. It means a big deal. But those are some of the things I would recommend. Just remember that opportunity cost, where you’re sitting on this portfolio the last three times I came here.
Frank Curzio: The market’s at an all-time high. These stocks are still down. You want to take advantage of it. What’s your thesis for these names? “Well, I bought them because I saw it on a blog.” Well, did they follow up and tell you to sell it?
Joe Davide: On WallStreetBets, I actually did not see that, no, so I just did that-
Frank Curzio: Okay, so it’s up to you.
Joe Davide: Kind of blind. Yeah. Exactly.
Frank Curzio: Because that’s what they’re going to do on most-
Joe Davide: Due diligence. Yep.
Frank Curzio: Of these sites and YouTube channels is they’ll tell you, “Oh, we love this stock. We love this stock.” When it’s down, nobody tells you what to do.
Joe Davide: Exactly.
Frank Curzio: That’s what I like. In our portfolios is… Look, we archived all of our issues. You can go back. There’s things I got wrong, really wrong. You can go back. I’m right more than I’m wrong, but you can see what we’ve done, and being held accountable and seeing-
Joe Davide: Track record. Yeah.
Frank Curzio: What we recommended, if our thesis came true. How we handled the loser. How we stopped out and said, “Okay, let’s preserve our capital. We’ll try to make it up next position.” Where I see a lot of these YouTube channels and different people, they’ll recommend things. They don’t come back.
Frank Curzio: That happens even on TV, John, on CNBC, where you have people recommending some crazy stocks, and these things go down tremendously. They never go on CNBC again. The next time they go on CNBC, they’re like, “Oh, yeah. Yeah. I sold that when it went down to 5%.” It’s down like 40%.
Frank Curzio: Thanks for letting everybody know that you told to buy it. It is a crazy market out there, but we’re always learning, Joe.
Joe Davide: Exactly. Yeah.
Frank Curzio: I’m learning every single day. I cover all industries. I’m always learning about something new. That’s why I love this job, because I always say it’s like golf. If you shoot a 60, you’re going to be like, “I got to shoot a 59.” You can’t beat it, but you can consistently get better, and better, and better.
Frank Curzio: The way you get better, and better, and better is by making mistakes. When you make those mistakes the biggest thing I can tell you today is you want to limit those losses.
Joe Davide: Right.
Frank Curzio: Okay? Because you’re going to be wrong. Everybody is going to be wrong. Warren Buffett has been wrong on a lot of stocks, so has Icahn. Of course, these are legends that I’m bringing up that have amazing track records, but they’ve been wrong. But the best investors limit their losses when they’re wrong, and they maximize the gains when they’re right. That’s how you become a really, really good investor.
Frank Curzio: Because if you’re looking at your age at 21, you might be like, “30 years is a hell of a long time.” I’m there, bro. It’s not that long. It happens really freaking quickly and it’s not fun, but I wish… I was at your age at 21, and I had my dad who I didn’t lean on as much at that age.
Frank Curzio: I love the fact that you’re doing that now. If I did, just buying the S&P 500 and putting $1,000 starting. Then, as I got a job putting like $200 a month… I mean, you know what that would be worth right now, 30 years later? Holy cow.
Frank Curzio: I know it’s crazy to look at that. I’m not telling you, you should invest like that, but a portion of your portfolio should be invested like that. You should be more risky because you’re younger and taking on risks and stuff like that.
Frank Curzio: Also, be careful with margin, because when you’re wrong… You’ve seen it with the stories in the news. When you’re wrong, you’re wiped out. You’re gone. The biggest thing when it comes to the markets is, you want to see bear markets if you’re prepared, because that’s when the greatest investors make an absolute fortune, because everything goes on sale. It goes cheap, and everyone loses their money.
Frank Curzio: When you see things get discounted, like even during the credit crisis when the European banks were forced to sell a lot of their loans to lower their leverage, private equity funds were some of the only ones in America that were able to buy this stuff, and they made an absolute fortune on it.
Frank Curzio: An absolute fortune, because they’re the ones that had the cash to buy it at the absolute low. That’s how you make a killing, not buy buying these things really when everything is at all-time highs. It’s when the market crashes, how do you protect yourself? Because when everyone is selling, and you see the forced selling and what it does to some of these stocks…
Frank Curzio: We saw Discovery, and was it Viacom or whatever, when funds blow up, that’s the opportunity where you can buy a lot of this stuff, when it gets crushed. Again, that’s one of the things you really want to focus on instead of holding onto the losers.
Frank Curzio: Again, that’s one of the things you really want to focus on instead of holding onto the losers. Again, it’s up to you. Whatever you want to do. These are just some suggestions, and they’re suggestions-
Joe Davide: Exactly, yep.
Frank Curzio: From someone that’s made mistakes in the past. I’m not saying I know everything. Again, we’re always learning at this job. What do you think about that, Joe?
Joe Davide: I love the input. I think in a couple weeks from now, we’ll do another portfolio update. We’ll keep it rolling if people want to see it, and we’ll definitely switch everything around. We’ll update everything, and keep our audience updated.
Frank Curzio: No, it sounds good, and I really appreciate it. Because the feedback that we’ve gotten from this, Joe, is incredible. I didn’t think it would be that incredible. Let me know what you thought, guys, firstname.lastname@example.org.
Frank Curzio: Again, I say this… I don’t just say it. I mean, this podcast is not about me, so let me know what you guys want to hear, some of the guests. But I got a lot of positive comments on this sector because there’s a lot of people were learning a lot, and sitting in the same boat as Joe.
Frank Curzio: Again, we all want to be better investors. That’s the goal here, and that’s what we’re trying to do. Joe, I want to say thank you so much for coming on. I appreciate it, and yeah, you join us again soon all right buddy?
Joe Davide: Yep. Thanks for having me.
Frank Curzio: All right, guys. Let’s move on here to a few more things. There’s two big stories, and I want to talk about… There’s a lot of so called experts in the market who are predicting that Bitcoin is going to collapse. I’m not talking about people who said it was going to collapse and continue to say Bitcoin is worthless.
Frank Curzio: I’m not talking about those people. I’m talking about people who actually own Bitcoin who are selling a little bit of it, and saying, “Hey, we could see a nice pullback.” And why they’re saying this? Because we’re seeing worldwide adoption everywhere. We saw Goldman come out.
Frank Curzio: Coinbase IPO is next week. Goldman said they’re going to offer cryptocurrencies to their clients. Why are they doing that? Because cryptocurrencies… Maybe I can bring something up here if you’re watching on YouTube. This market, the entire market, hit $2 trillion.
Frank Curzio: I love doing this stuff on the fly. It hit $2 trillion. I’m going to share my screen. It’s like 1.9 trillion now. That’s the total market cap. Think about that for a minute. Now, you’re looking at Bitcoin… There’s 100 companies, close to 100 companies, or 100 tokens, coins, whatever you want to call them, these utility tokens, not security tokens like our CEO token, that are trading on a billion dollar valuation or more.
Frank Curzio: When you look at these, now you’re talking about liquidity. Liquidity is the biggest thing when it comes to institutions. Once they can get it and once they know they can make money off it they’ll get it. They don’t care what it is.
Frank Curzio: It’s not like they’re against Bitcoin or not. If the fundamentals suggest it, or if they check off the right boxes, and it’s a massive liquid market, we can get in and out of it, we can get arbitrage, they’re going to do it. That’s why they’ve been going back and forth.
Frank Curzio: Now that this market… And just to show you how crazy this is… You can go to coinmarketcap.com, if you look at the total market cap year-to-date, it started out at $770 billion, and it’s close to two trillion now. Guys, we’re in April, right? I mean, that’s crazy.
Frank Curzio: We’re talking about entire market. That’s how much demand was… Again, we’re seeing PayPal come out with announcements. We’re seeing more companies buy on their balance sheets. Again, crypto is near its all-time high. But Bitcoin has pulled back a little bit and some people are predicting that it could pull back even further.
Frank Curzio: I want to talk about one of the things that they’re talking about, because you don’t really see this. You’re not going to see this on CNBC. You’ll see this… The crypto enthusiasts, they know about it, but there’s something called the Kimchi Premium.
Frank Curzio: The Kimchi Premium is… By the way, that’s a Korean… It’s a pickled side dish. It’s basically the spread between Bitcoin in South Korea and Western exchanges. Right now, it’s trading at six and 66,000. As you know, we trend probably around 57,000, 58,000 in Bitcoin, so there’s a big premium.
Frank Curzio: Now, when you look at this premium, and hopefully, I can bring up a chart here and show you guys because I do have this some place. But when you bring up this premium, the last time we had such a big premium like this… It’s around 15%. It was at the end of 2017.
Frank Curzio: That’s when we saw crypto absolutely crash. That’s what’s spooking investors right now. Now, you can’t arbitrage the situation. It’s very, very, very difficult because… They say it’s because that premium is caused by just different economies, from regulation, regulatory environments. But again, the last time we saw this big of a spread was back in late 2017, right before the market crashed.
Frank Curzio: This is spooking investors. Look, it’s an indicator. I want to throw it out there for you guys and show you, but at the end of the day it is an indicator, and indicators work until they don’t work. Now, if I see Bitcoin pull back below 50,000, 45,000, I’m going to look at this and say I’m going to pay attention to Kimchi Premium.
Frank Curzio: You can Google it. You can see videos on the web. No one is really talking about it, but if you’re looking at so called people who have been in Bitcoin for a long time, this is the major reason. This is going on some of the crypto sites saying, “Look, the Kimchi Premium is back.”
Frank Curzio: Some people are saying that it’s bullshit. It’s not. It’s a bearish sign when you look at the numbers and the details, because the last time this happened the market crashed. Again, we’ve seen an amazing, unbelievable move in Bitcoin, so anything that could actually spook investors is going to spook them because things are at all-time highs and people are sitting on a ton, a ton of money.
Frank Curzio: Which two trillion dollars in assets which is up for grabs for anyone that’s accepting Bitcoin… I mean, you have this massive economy, massive market of billionaires and millionaires now because of this. You know the Goldman Sachs, the JP Morgans, and the Morgan Stanleys want to tap this. They want to tap it, and it makes sense because they’re going to make money off it.
Frank Curzio: That’s what they care about, making money off of it. Now that you have the volatility, you have this much adoption, it makes sense for them to get into this industry. That’s why you’re seeing Bitcoin move up higher.
Frank Curzio: But again, it feels a little toppy here. But that Kimchi Premium, let’s see. Let’s monitor it. Again, I’m just throwing it out there. I know it’s something that I might be educating you about. I know we have a lot of crypto investors.
Frank Curzio: The last thing I wanted to talk about which I thought was a big deal was China is starting their own cryptocurrency. It’s a Cyber Yuan, basically gives Beijing power to track the spending in real-time, plus money that isn’t linked to the dollar, or the dollar dominated global financial system.
Frank Curzio: This is very big news. The Wall Street Journal, and a couple other companies have reported. This happened only a couple days ago. This makes sense from every level, because when you have this, they have more control over you.
Frank Curzio: They’re going to monitor everything. It’s not, “Hey, it’s going onto blockchain and no one’s going…” No. No. No. No. Not China’s government. No. They want to know everything about everyone, all the money, where it is, everything. This is going to help them.
Frank Curzio: Now, they want to make this international. What does that mean? The biggest advantage we have is the dollar. The whole entire world loves the dollar. Everybody… You don’t think so? Everybody wants dollars. I mean everybody.
Frank Curzio: Look at Coinbase. Coinbase cryptocurrency, they’re doing a IPO in dollars. They’re doing a fiat. They’re going on major exchange. They’re doing that next week. Even other countries the dollar is gold right now. People might say, “Well, it’s…”
Frank Curzio: It is. It is right now, and it’s going to be that way for a while, whether you like it or not. That’s the way it is. If not, if you don’t think so, give me all your dollars. I’ll take them. I’ll take everything if you really believe that. I mean, even the guys who love gold and, “You need to buy gold now, gold coins,” you’re paying in US dollars.
Frank Curzio: Well, they’re taking your US dollars and they’re giving you gold. It’s kind of funny when you think about it. But when I see this, it’s a way for… It’s a little bit scary. It’s not going to happen overnight, but the euro, I think 85% of transactions or something internationally through euro.
Frank Curzio: You want to be able to challenge the dollar. That’s the big advantage that the US has. For China to get into this, I will say the biggest story to me, again, you can find this looking at the Wall Street Journal. They have stories on this everywhere. This was announced this week, is the US is falling very, very far behind in crypto.
Frank Curzio: I get it, because I’ve researched a lot of these names, and coins and stuff, and you can’t find anything on them. You don’t know anything about them. You don’t know any fundamentals. These are billion dollar valuations. I would say 80% of those that have a billion dollar valuation or higher…
Frank Curzio: I mean, the ones that are lower than that, there’s so many crappy ones… But you can’t even find what their token represents. It’s a utility. You don’t have an equity stake. These companies get bought out for $50 billion. You get nothing. You don’t have equity in the company.
Frank Curzio: You’re just owning these tokens because of their utility feature maybe. What is that utility feature? For some of these companies that’s nothing. Red Bull, it’s nothing. Red Bull is a great company, but the token offers investors nothing.
Frank Curzio: But the US is falling behind because they need to regulate this industry, and they don’t really understand it. But other countries are really kicking our ass right now. Even security tokens who have Securitize, there are folks in Japan in that market, and overseas now because we’re waiting for this market to really fully develop.
Frank Curzio: But at the end of the day, it’s… We need more regulation. Again, people from crypto hate that, but that’s going to allow it to scale, especially in the security token market where we trade. We have to trade on foreign exchange because there’s no security token markets open. We’re hoping to change that by getting our financials audited, which is coming out.
Frank Curzio: We’re going to have our annual meeting for our token. If anyone’s interested it’s going to be May 13th. We’re going to send out an invitation for anyone on our list. Anyone can listen in. Go over company fundamentals, what we’re doing with the token, what we’re seeing. It’s going to be really, really cool putting everything together.
Frank Curzio: But we’re providing audited financials, which I don’t think any token in the industry has it on both sides. Nobody really has that. Because you need to have transparency. And you need to have liquidity. If we are able to do that, and then hopefully go to, like, a Coinbase, and there’s 10 to 20 exchanges ready to open up across the US, especially for debit trade security tokens, and even for retail investors, you’re going to see that really happen over the next few months and through this year.
Frank Curzio: When that happens, now we’re going to bring liquidity to our token. Now, it’s going to be based just like a stock on how we’re doing off fundamentals, how we’re growing the company. But when you see China doing this, and you see so many other countries just going all in, and we’re just sitting here… Guys, man, it’s killing us.
Frank Curzio: I mean this is a serious threat, not a threat right away, but in 7, 10 years. How long is it going to take for the US to really get off their ass and say, “Okay, let’s regulate this. There’s stuff that we don’t know, we can’t see. Get it out of the way. All right. These guys can’t free trade in the US.”
Frank Curzio: But it’s going to open a door to more companies, real companies that people can trust that trade here. You’re going to have investors that trust the system, which a lot of them trust Coinbase right now which is cool. They don’t trade a lot in them, but they trade some coins outside of Bitcoin or Litecoin on their site.
Frank Curzio: It’s going to open up the door to more innovation, more money coming into the market, which is the key because blockchain is in its infancy. We’re seeing that with NFTs, and next is going to be security tokens. Before that it was DeFi. This is like the internet.
Frank Curzio: Things get developed at different stages, and it’s going to disrupt more and more markets going forward. It’s here. Crypto is here. Blockchain is here. It’s not going away. It’s not a fad, as we can see now.
Frank Curzio: It is, when you see all these major companies jumping in, it’s pretty exciting, but the US has to get off their ass and really, really focus on regulating this industry because they’re falling way behind. I think this China announcement, their new digital currency, is going to be a wakeup call, and it should be a wakeup call. Hopefully it is.
Frank Curzio: Talked about a lot today. Great interview with John Petrides. Great stuff from Joe Davide. One note here: Getting lots of requests from our Crypto Intelligence newsletter. Again, I said our average is up over 750%, which is insane.
Frank Curzio: Of course, that doesn’t mean the situations that we recommend going forward are going to see those type of gains, but we’ve able to really spot and get into trends because of our position here. Because we’re right in the middle of this entire market, and we’re able to see a lot of trends.
Frank Curzio: I have great contacts in this industry. That Crypto Intelligence newsletter, we educate investors. We dial it down and make it real simple. We have videos and stuff like that, but right now, we’re sitting on to 20x winners in the portfolio, one 32x winner, and 11 out of 15 are up triple digits.
Frank Curzio: Now, two things. If you’re a subscriber my latest issue is coming out after the close today. Go take a look. Awesome, awesome name. Investors can now purchase this name on two different platforms, which they couldn’t purchase it.
Frank Curzio: This company, this crypto, is not a BS company. It’s doing over $6 billion a month in transactions. It’s numbers are going to explode in the years ahead. It has been running up because now it’s trading.
Frank Curzio: US investors can own it. You’re seeing volume up 80% over the past week because more and more people are able to purchase it. That’s probably why some of the biggest names in crypto funded this company back in December. Very, very exciting. It’s a name you definitely don’t know, if you’re not familiar with crypto.
Frank Curzio: Even if you are an experienced crypto trader, this is a name that’s kind of like off the radar a little bit, so I really think that that could be our next big winner. I’m very excited about that pick. I did a lot of research on it.
Frank Curzio: The second thing here, where we are offering a special discount, a 50% discount for anyone who wants to subscribe. That’s going to go on for a couple more days. I think there’s 10 days total. We’re at seven or eight now.
Frank Curzio: But yeah, I discounted the price of this newsletter by 50% which is huge. Usually, nobody in their right mind would do that with the performance that we have and the track record. The reason is I’m still finding incredible ideas in the space, including a lot of stock picks.
Frank Curzio: Some of the biggest winners in our portfolio are pure play stock picks that were trading over the counter that few people knew about, and now these are major corporations now. Silvergate is one of them. Voyager Digital is another, with 86 cents.
Frank Curzio: I mean this thing is 20… Whatever it is, I mean, we’re up tremendously on these names. These are names that anyone could buy in their portfolio through your eTrade account, Schwab account. If you’re not familiar with crypto and how to buy some of these cryptos on different exchanges, no worries, because I do a lot of videos, just like if you’re a subscriber to my other products.
Frank Curzio: You see me doing videos. I’m the one that’s actually doing the research on this and writing this. You’re not just getting an email from someone you think it is. It’s actually me. I teach you how to open accounts on Coinbase, Kraken, different exchanges, trade cryptos. Again, all this is through video, and I simplify it.
Frank Curzio: I like to say this, but this term I kind of hate using, when I say I dial it down so that a third grade or a fourth grader would be able to trade cryptos because it makes it sound like I’m dumbing it down. I’m not. I hate when people say, “Well, I’m dumbing it down because if you’re not familiar with crypto, it’s still going to…”
Frank Curzio: There’s a learning curve there. I don’t care how people say, “Oh, it’s easy to open a wallet.” Well, it’s not easy if you never did it before. We make sure we cover everything, exactly how to purchase, why we’re doing it, the research. We go over everything in these videos. Yeah.
Frank Curzio: That Crypto Intelligence newsletter being discounted by 50%. Again, this is something I want to do for you, guys. I like to discount newsletters when I’m finding really great ideas. The last two ideas in that newsletter I’m very, very, very excited about.
Frank Curzio: Yeah. If you’re interested in that offer you can go to our website at curzioresearch.com. If not, not worries. But I am getting a lot of emails on it, and we are starting to get a lot of new subscribers which is really, really cool. Guys, that’s it for me. Thanks so much for listening. March Madness is over.
Frank Curzio: Baylor, holy cow. That was amazing. I mean, they really punched Gonzaga right in the face. I’ve never seen such a great team get so flustered and have no idea what to do, like no idea what to do. Every facet of the game. Defense. They were hitting every shot.
Frank Curzio: They just were tougher than them. I mean it was over at half. It was over, even though they caught up to 10. But great job by Baylor. They were a great team all year other than like two or three weeks. They were in the hardest division, had the hardest road.
Frank Curzio: They played Wisconsin first. Remember, Wisconsin blew out North Carolina. Beat Villanova. They had to play the two, three, four seed. If you look at Gonzaga, I think the highest seed they had to play to get to that tournament was an eight seed. They played UCLA in the Final Four.
Frank Curzio: But what a fantastic job. Congratulations to Baylor, and again, what a great, great tournament. Yeah. That’s it for me, 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 host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.
- Rant: Why politically motivated corporations represent a dangerous trend [00:55]
- Interview: John Petrides of Tocqueville Asset Management [23:02]
- Educational: China’s new digital currency [54:33]
Digital assets are at the beginning of a massive bull market… and Crypto Intelligence members have the opportunity for life-changing gains. We’re talking FIVE 10-baggers so far.
And Frank thinks he’s spotted his SIXTH crypto 10-bagger…
To make sure everyone can get in, Frank’s currently offering this advisory for a staggering 50% off its usual price. But don’t wait: This offer is closing soon.