Daniel and I kick things off by discussing the recent market volatility. While the quickness of the pullback is surprising… investors should expect the large market swings to continue. [1:45]
But market pullbacks create opportunities… and I’m seeing way more value in small caps than in large caps. [4:50]
Fed Chair Jerome Powell is holding a press conference later today following the January Fed meeting. Here’s what I think he’ll say about rate hikes and inflation. [8:00]
This week, Wisconsin Sen. Ron Johnson (R) held a hearing called COVID-19: A Second Opinion. Daniel and I share what stood out to us about the hearing… how it broke the mainstream narrative… and why the takeaway is bullish for the markets. [11:05]
As economies move past Omicron, Daniel names a few sectors he’s researching… and a stock that will benefit as interest rates and inflation continue higher. [19:35]
Microsoft (MSFT) just reported its latest earnings. I highlight the results… and why we’re entering a stock picker’s market. [27:45]
Volatility isn’t just in stocks but cryptocurrencies, as well—the price of Bitcoin has fallen about 40% from its all-time high just a couple months ago. But former Goldman Sachs CEO Lloyd Blankfein is still bullish on crypto… Daniel and I break down his recent comments. [30:50]
- Why large market swings will continue [1:45]
- Why I’m more excited about small caps than I’ve been in 10 years [4:50]
- What to expect from Powell after today’s Fed meeting [8:00]
- Breaking down Sen. Ron Johnson’s COVID-19: A Second Opinion [11:05]
- This stock will benefit as interest rates and inflation continue higher [19:35]
- MSFT’s latest results… and why we’re entering a stock picker’s market [27:45]
- Lloyd Blankfein’s bullish comments on crypto [30:50]
Wall Street Unplugged | 847
COVID lies are finally exposed… And that’s bullish for stocks
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 January 26th. 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. So, got to bring in your all time, favorite, best replacement ever for a podcast.
Daniel Creech: There you go.
Frank Curzio: I’m not talking about you, Daniel. I’m talking-
Daniel Creech: Who’s our guest?
Frank Curzio: Daniel Creech, senior research analyst. I was building him up, and he had to say you something. I would’ve kept going, if you didn’t interrupt me. But now, forget it. I’m not saying anything else.
Daniel Creech: We got important things to get to. We got a lot more.
Frank Curzio: Good job. Good job covering, man. I mean, I’ve been traveling a lot. Like I said, it sucked. I look forward to January and traveling because you find new ideas, meet lots of people, networking, great conferences. But then when the market sells off the way it did, it’s pretty crazy. And I guess we could start there, right? I mean, a lot of people asking, “Is it going to get worse? Is it crazy?” And yesterday, I covered this. We have the Fed meeting today. We’re having this before the Fed meeting. Right? So, they’re not supposed to do anything with interest rates. Supposed to, I don’t think they’re going to talk about even how many are possible, which I think would be a mistake, but they may be a little more dovish, because you don’t have to say, “Four or five rate hikes.”
Frank Curzio: I mean, it is going to depend, right? I mean, if we see inflation come down, which would going to see eventually, it’s not transitory, but it’s not going to be 7%. It will come down. Supply chain issues ease, and things like that, maybe we don’t get as many rate hikes. And… But right now, with the markets down where they were, and I know we’re up today, we finished up yesterday. We came back on Monday as well. Still, a lot of uncertainty out there. What do your thoughts?
Daniel Creech: Absolutely. It’s… I think it’s good to take vacation and just go hang out in Vegas and The Bahamas when markets are crashing, I guess. That’s good timing on your end.
Frank Curzio: I know. Thanks, man. I appreciate it.
Daniel Creech: It’s funny, it’s everybody’s going to be like, “Yeah, he was on,” no, he actually wasn’t on vacation, but yeah. Had a great time filling in, Markets, we’ve talked about this a lot behind the scenes when you, and we’ve beaten this drum, and you’ve done a very good job over the last several months. Or, even since the coronavirus and the vast of amounts of stimulus that have been injected. You don’t have those situations without having crazy volatility, “down river.” To your point on Monday, at one point, we kind of just laughed at each other. I mean, we have a little Kitchen area here in the office, and in my office is off that, as well as Frank’s. And, he was just kind of talking to me as he was getting tea. Frank’s a tea drinker, not a coffee drinker, like us normal people, but and we just kind of laughed.
Daniel Creech: I mean, the market was down. The Dow was down over a thousand points at that time, and it just comes roaring back. And we were just basically laughing like this doesn’t make sense, but it doesn’t have to. When you have so much money sloshing around, you’re going to have silly situations. I’ve joked about the Willy Wonka and the Wizard of Oz type deals. The volatility doesn’t shock me. The pullbacks and the quickness, or the timeframe does, as you’ve mentioned about that.
Daniel Creech: And again, I hate to be such a perma-bull, but you got to remember, over time, prices tend to move higher and you need to keep that in mind, especially when, like you highlighted yesterday in your monologue, how many stocks were down, how violent the indexes were down. The Russell, the S&P, the NAS, I mean, at some point you have to just say, “Hey, this is ridiculous. Here’s why.” And start building positions, or at least looking at watch lists, which we’ve done. Not ignoring any pain. You close out of some positions, you take some down hits. But overall, we’ve kind of been saying, “Hey, expect more volatility.” And, here we are.
Frank Curzio: Yeah. I mean, I didn’t expect it to go down the way it did, and that’s on me. I mean, I said, it’s going to be volatile, a fundamental change in the marketplace. It was going to be incredibly volatile, but not… I didn’t think it would come down as much on a risk that we could all see. I could see if there’s a lot of uncertainty. We all know inflation. We’re all expecting inflation to go maybe a little bit higher before it eases a bit. You know a lot of the risks out there, but I’m just going to throw some things at you, because for me, looking at small caps, and I covered this, if you’re a CVO subscriber, you’ll see today with a great new pick. I covered this. I’m just going to give away a little bit here. Not about the pick, but about the markets.
Frank Curzio: And small caps were down, I think 21, 22% at their lows on Monday, which was insane. And it was a broad selloff. So, everything was selling off. There was no places that you could hide or places that you say, “Hey, maybe gold will do good in inflation, or financials.” Even financials got nailed, right? Everything was getting nailed, which means it’s the leveraging, it’s people, margin calls being for selling. Everybody’s selling everything at the same time, which I said is going to become a buying opportunity. Because when you look at some of these statistics, and I can’t take credit for this, I want to give credit to Bank of America here. And, we do this on a YouTube page, and I’m going to share something with you guys. And you should follow us on YouTube, it’s pretty cool. Not to follow my ugly face. Daniel’s a lot better looking than me, but we do provide charts, and figures, and stuff like that, and it’s really cool.
Frank Curzio: So, we tape all these. If you listen to it on iTunes, which most of you do, but you’re looking at small caps. Small caps are at their largest discount, compared to large caps, since 2000. Think about that. Bigger discount. It’s a 30% discount, and that was at the lows on Monday. Then, it was 27 before Monday. Compared to COVID, and compared to the credit crisis, I mean, we’re talking about a long time, and Bank of America does a good job. It says, “Relative multiple small, versus large, now trades below its history on every metric we track. Price to book, trailing PE prices, sales forward PE, PE to growth.” And you may think, “Well, these are small caps,” right? And you can’t lump them in with the SPACs, and the garbage names, and the crazy marijuana names, and space with no revenue, right? There’s a lot of great small caps.
Frank Curzio: And, just to put this in perspective, which I was surprised by this, because you’re like, “Well, these are the most risky stocks. They have a lot debt.” No, their net debt to market cap is now at historical low. Their leverage has fallen from five times to 3.3 times since late 2018, right? 3.3X. So these guys, Daniel, did a fantastic job of refinancing. Whether being able to refinance their debt at lower rates, take advantage of those lower rates, building up their cash positions, building cash flow. So, you’re looking at the Russell 2000 trading cheaper compared to large caps than they’ve ever been. And man, I’m seeing names that are down 30, 40% on no news, just because you got killed with the market. And, you don’t have opportunities like this that come along.
Frank Curzio: You’re going to need someone that knows what they’re doing, and you want to avoid a lot of bullshit, and the crazy, crazy growth. I don’t agree. They had Cathie Wood on this morning, on Squawk Box talking about this. I don’t agree with her. Just like, “The five year outlook, and we’re just going to keep buying and buying.” You have to be careful. Numbers eventually matter. And these things are, some of the names in her portfolio again and granted, I like her and she’s cool. And I get it. Manic investing. I get it. But, some of those names are forecasting massive revenue growth, massive earnings growth, five to 10 years from now. And now, what you have, a Fed that’s being aggressive though, that model has to change. It has to change. And I don’t know if she’s updated that model to change it, but you can’t just buy these things because they’re down 25%.
Frank Curzio: You have to look, it’s a different environment. You’re going to see higher rates. You’re going to see less leverage. You look at all the kids that are getting killed with the meme crowd, and the AMCs, the GameStops are getting destroyed. And some of these stocks are down 60, 70, 80%. That’s a lot of money not coming into the market. And that turned out to be a lot of money. Tens of millions, hundreds of millions of dollars. I mean, these kids are raising money like crazy, but overall, I’m seeing lots of ideas here. I really am.
Daniel Creech: Absolutely. I mean, that’s what bear markets, market pullbacks, market crashes, volatility creates. And, it’s very difficult. I mean, you shared that report with me. I know you did a good video on it or Curzio Venture Opportunities, but it’s still hard to look at those charts and see that data. And then, look at also, at the prices falling. That’s just the game we play in on the investing side. So, hopefully that comes across and we want to educate the people out there and investors like us, just to say, “Hey, yes, this is difficult, but this is where you want to rely on data and start building positions, building watch lists and things.” And no doubt, Frank, the bounce here that we’re seeing so far is ahead of the Fed meeting. So getting back to that, do you think… You don’t think he’s going to, Jerome Powell, Fed Chair Jerome Powell is going to mention the number of rate hikes? Do you think-
Frank Curzio: I don’t think he’ll mention it. I just spoke to this.
Daniel Creech: Obviously, the market is saying that he’s going to come out today and be less hawkish.
Frank Curzio: Yeah.
Daniel Creech: Do you agree with that?
Frank Curzio: With that with the market and the uncertainty, yes. I think he’s going to be less hawkish, definitely. I don’t think he’s going to say, “Hey, we’re looking at four times, five times.” I’d be surprised if he mentions that. I think there’s just going to be, “Hey, we have inflation. It’s higher than we thought. We want to see it come down. We expect it to come down, and that could result in more rate hikes in the future.” But I don’t think he’s going to give an amount, but we’ll see. Again, we’re doing this before. The time you listen to this, you’re probably going to, we’re either going to look like big idiots, which is funny, because we-
Daniel Creech: I mean, we’re playing that safe. Do you think you’ll mention inflation?
Frank Curzio: Yeah. But, yeah.
Daniel Creech: It’s subsiding, and stuff.
Frank Curzio: He’s going to mention inflation and probably saying that, over the next six months, I mean, we’re not going to see that in energy. But if you look at, you have to realize guys, it doesn’t. I don’t have a lot of like, I guess I have fans and stuff like that. But, I see cults around like the Peter Schiffs, and some perma-bears, and I get it. And, when the market crashes, they get even more bearish as it crashes. Look, we were bearish right at the beginning of the year, telling you to buy puts, and you had the Moneyflow Trader to where the hedge your portfolio. I didn’t think it’d come down this much. Now, they came down this much, and even though it’s three weeks into the year, and pretty much since the Fed made that change in November, you have to be willing to see this and be like, “Wow, there’s a lot of great opportunities.”
Frank Curzio: I mean, you can’t be stubborn and be like, “Hey, I told you so,” and keep pounding the table and going, “This.” A lot of times, when you see perma-bulls and perma-bears, it doesn’t matter what. They get bullish as it goes higher, which you should kind of be, “All right. My thesis is correct. I’m taking some off the table.” And when you’re bearish and you’re right, you should be buying. And a lot of times, they’re even more extreme. For me, look, I’m just following the markets right now. This is one of the biggest disconnects I’ve seen in over 10 years in the market, especially in small caps with some of these names. I mean, even the large caps. I mentioned Best Buy yesterday, 11 times forward earnings, down 30%. Great quarter the last two times. They’re selling all the products in so many of these secular growth trends. To me, that doesn’t make sense. They’re growing earnings 20%. Even if you cut that in half, it’s still great.
Frank Curzio: But again, if you’re looking at the surface where we know the risk coming down, we know the leveraging, we know it’s going to be tighter with the Fed. We see that risk, but I can tell you, you’re going to see supply chain bottlenecks ease, demand slowing, plus Omicron easing, which we’re seeing across the world right now in places that saw huge spikes over the past three, four months. Mask mandates are going to ease, which should happen since we now know masks really don’t work. You could look at so many test cases, Israel, most vaccinated country. Now, I think it’s like the fiftieths most, but they were first. Lockdown, mask mandates, and they saw the biggest spikes from Delta and then Omicron, right? Even though they had the most stringent rules in place for mask wearing, and mandates, and vaccine. They’re on their fourth dose right now.
Frank Curzio: They’re giving people over 60 a fourth dose, and next year’s going to be like the sixth or seventh dose. They keep going, and going, and going and, right? We were always told a different story. And yeah, that brings up something that you mentioned, that I actually spent time on watching, which is pretty freaking cool, man. I think we should actually talk about that.
Daniel Creech: Well, so when I filled in for you a couple weeks ago in Vegas, that was around the time where Joe Rogan on his podcast had Dr. McCullough and Dr. Malone on. Dr. Robert Malone and Dr. Peter McCullough. And I threw it out there and said, “Hey, if you’re thinking about this, and you want to see kind of both sides,” and you’ve talked about that, and I’ve explained that in the past, “Listen to the other side of the argument, no matter what it is.” I thought that those two interviews, because they’re a few hours long, are very good. I got a lot of good and bad feedback on that, about how Robert Malone’s a crazy guy, Peter McCullough’s crazy, blah, blah, blah, blah. Well, Senator Ron Johnson, who is from Wisconsin, right, Frank? Yes. From Wisconsin held a COVID-19: A Second Opinion hearing, yesterday. And you can DuckDuckGo this, or Google this. You like how I snuck that in there, Frank?
Frank Curzio: Yeah, definitely.
Daniel Creech: And, McCullough, Dr. Robert Malone, they’ve been in the headlines a lot lately. There’s several other doctors here, and this is a great back and forth. It wasn’t as timely as your typical committee hearings, where you only have five minutes and things. The format was much different. It was almost like a conversation, is the way it came across. I know you watched some of the highlights. I would encourage everybody, without getting too much into the weeds, I would just encourage everybody to listen to that. Look at the highlights, because you want to at least hear decorated professionals, doctors, respected people, they share their stories. They’re sharing personal stories. Some of them are just downright sad and heartbreaking, with people getting fired and, or feel like they’re losing control over their practice and their profession.
Daniel Creech: My takeaway there is, and you can hit some highlights that you saw. Again, I kind of want to tease this more and try to get everybody to go there, but it’s the exact opposite of the mainstream that you’re going to see. And the inclination or the knee jerk reaction typically is, “Oh, well this is a fringe, or this is goofy bunker builders or crazy people.” And it’s not. And, you have to look at that. And I think that everybody, and this type of conversation needs to be much, much more popular. And I thought it was a great hearing.
Frank Curzio: It’s good that they’re allowed to express their thoughts and these aren’t anti-vaxxers, right? I mean, this isn’t like extreme. These were doctors, it’s five hours. I watched a 40-minute version on YouTube of the highlights of these doctors, dozens and dozens of them explaining how, these were people that were treating COVID, thousands of COVID people. Right? And they’re trying to tell everybody, “Hey, you know what? We gave them ivermectin. We gave them hydroxychloroquine. We gave them steroids, large dose of steroids.” And, they were explaining how they did a test of how steroids don’t help for COVID. But, they did such a low dose on purpose that it was ridiculous. And this is all early treatments. This isn’t like during, but early treatments where this significantly prevented death. Their death rates were extremely lower. But if you’re catching it within the first two to three days, that these worked, right? And not only they worked, they’re very cheap drugs, and they’re generics.
Frank Curzio: And yes, they have side effects like everything else, but you’re not seeing anybody dying of ivermectin or hydroxychloroquine. So now, you have this whole mandate, this whole labeling as this is an animal drug and suppressing them. Not letting these guys go into the hospitals to treat their patients. Them being sued by hospitals, threatening their license, where they’re doctors, they’re not looking at… I mean, one guy was like, “I’m being labeled this right, just right crazy maniac.” He goes, “I voted for Obama, and I voted for Biden.” He’s like, “I might change in the future.” He’s like, “But for me, I’m just reporting the data, and they labeled me as like an enemy.” And they suppressed these people. And that’s why, when I was reporting a lot of these stats, Daniel, getting from doctors, dozens of doctors were sending me shit that just wasn’t out there.
Frank Curzio: And I was blown away. I’m like, “Holy, this isn’t what I’m hearing in the media, what the frick’s going on?” I mean, if you look at all the drugs that they’re giving you and all the treatments they’re giving you, they’re all between 700 and like 3,000, 4,000. They cover this in that. Everything below that, they don’t want to give you. And, you’re looking at this stuff and being mandated, especially with kids, with mandating kids to get the vaccine is the most insane thing I think I’ve ever seen. I mean, I understand profits. I understand money. I understand Wall Street. I understand greed, right? Just working on Wall Street. I get it. I get it. I see it all the time. For me, I never make money. It’s never a decision in anything that I do. And it’s easy to read people, if you take money out of equation, because people act crazy with money.
Frank Curzio: But, I never thought money would trump the health of children. I never thought that it would be that bad, because when you have a 99.98 rate of kids that are perfectly okay that get COVID, their immune systems are great. They don’t spread it as much, nearly as much. You’re not seeing 10th, 11th, 12th graders, I have kids in school. Yes. A couple of them have COVID, they have to stay home for… It’s not the whole entire school gets it. And it’s… They have natural immune to this. And they brought up a case where there was a ninth grader that they get the vaccine to, the first dose, a terrible, terrible response to it. And then they decided to say, “Hey, all right, we’re going to give you the second dose. Doesn’t matter. Give her the second dose.” And the responses were, she wound up dying. She wound up dying in a ninth grade.
Frank Curzio: Why are you taking this? Why are you mandating this? But this is being mandated now, Right? I mean, if you are looking at how this information is suppressed from doctors who don’t care about politics. They just care about treating their patients, and not being allowed to treat their patients a certain way because of when they go to the hospital, they were talking how doctors don’t even go in there to see the patients. They’re looking at an iPad. They don’t check the lungs. They don’t check anything. They were just like, “Okay.” They’re not treating them at these hospitals. And a lot of them were dying when they have treatments that were working and saying, “Why don’t you give them this?” “Well, we’re not allowed to give them this.”
Frank Curzio: And, this is just the beginning, you’re going to see this come out, I’m telling you, from doctors everywhere, but man, it’s, you definitely have to take a look at it from both sides. It’s not even political. It just shows like, look, we want to get it right. Our whole lives, Daniel, are built, especially for me with having kids, is making the next generation better than us, right? I mean, how much have we changed in the past 20, 30, 40 years? We’re just, women’s rights, and racism, and everything, and how we progressed so much. And we still have a long way to go, but every generation should be better, and better, and better, and better. And now it looks like, “Wow, you know what? You don’t even give a shit.” Your profits are trumping the fact that the kids don’t need this.
Frank Curzio: They don’t need this. They should be building up their immune systems. Their immune systems are great for this. They’re not getting sick. They’re not dying. Very, very few kids are dying from COVID. More from the flu than COVID, based on the stats on the CDC. Don’t blame me. Don’t shoot the messenger. That’s the CDC, what everybody wants to listen to. But to see Dr. Gottlieb, who is former FDA commissioner, and now he’s on the Pfizer… He’s on the board of Pfizer, and he’s one of the biggest spokesmans out there. I mean, it doesn’t get more biased than that. And, I like the guy, I don’t hate him. I think he’s one of the better doctors out there, much better than Fauci. But just to see how this system is, where it’s money, it’s power, it’s profits. I never thought that would trump people’s lives and doing the right thing for people.
Frank Curzio: And, you’re going to learn that by listening to this. And again, it doesn’t matter what side you’re on, but it is pretty amazing how these are just regular doctors. These are regular people on both sides. And this is a lot of information I was getting with doctors, every single doctor, 100%. Daniel, told me during COVID, when I was giving you a lot of this information, they’re showing me studies, peer studies that weren’t allowed to be published here or there. And saying, “Please don’t mention my name. You can’t mention my name.” It’s like, they feared the job for telling the truth, and trying to help, and try… That’s what you do, right? We want to give an opinion, say, “Hey, this might work. This might work. It might be a cheaper way.” It doesn’t matter.
Frank Curzio: Now you’re forced to take the vaccine. We know that the vaccine, we were told a totally different story, right? Of how it would work, and you don’t have to wear masks. You’re never going to get COVID again. We know that’s bullshit. Now, it’s a booster. Now, Israel, a fourth booster. We’re going to have five, six boosters. Right now, forcing this on the kids. Holy shit. I mean, the massive profits that Moderna and Pfizer are making are incredible. And those are two of the most corrupt companies you’ll ever see, but it’s not about them helping people. It’s about profits.
Frank Curzio: And holy cow, man, I just, I didn’t mean to go off that much on that, but wow. It was amazing. It’s powerful. This stuff is powerful, when you see it. It’s emotional. It’s powerful. And, it’s really cool just to see doctors speak their mind without anybody worrying about what you’re going to say, or towing the lines. And, I thank you for pointing me in that direction, but man, I just, I think it was like 4:35 in the morning, woke up, couldn’t sleep. And I watched for like a half an hour, and I was just blown away.
Daniel Creech: Yeah. There’s a lot of good information on there. And again, everybody should DuckDuckGo that, Google that, pay attention to it, watch the highlights. They got great features. You can speed it up, listen to it faster. You don’t have to take all the several hours. And why do we talk about this? And, Frank, I got to comment two things real quick. A, you think way too highly of your fellow man. We need to work on that for you, because you shouldn’t be shocked too much about profits over anything. And B, I can’t really comment on the children thing, because nor do I have any, nor would I be good with that situation. So, I’ll steer clear of that.
Daniel Creech: But the reason we bring this up now, between Frank and I, I love talking about politics much more than Frank. I think. I don’t, maybe that’s not true, but I really enjoy it. The reason we do is because overall, this is bullish. Frank mentioned this Scott Gottlieb, a former Food and Drug administrator. He’s constantly on CNBC. Don’t mean that as good or bad. He’s constantly on CNBC. He is on the board of Pfizer, but this is overall bullish. Seeing these doctors hold this hearing, the more encouragement and the more people can speak out and say their opinion without this fear of suppression is a good thing. Scott Gottlieb is out there. And then listen to this quote, Frank, this was just from the other day. “I think certainly on the East Coast where you see cases declining,” he’s referring to Omicron, “Dramatically, we need to be willing to lean in, and do what very soon, I think, our conditions improve. We have to be willing to relax some of the measures with the same speed that we put them in place.”
Daniel Creech: He’s talking about mask mandates. The overall, the reason we keep bringing this to your attention is that, the recovery trade, this get back to normal. As you see these mandates, as you see the fear, what’s that?
Frank Curzio: Huge. No, you’re right.
Daniel Creech: Oh yeah. As you see the fear go down, as you see the case count either stop being counted or go down, when people get over this idea of, “Hey, this is going to be terrible or worse than what that was originally feared.” That’s good for the economy. And when it’s good for the economy, that’s bullish for stocks in general. Yes, there’s a lot of fears still going on, but everybody needs to pay attention. If we can get past this and get back to the, “normal,” that will make life a lot easier, and a lot less volatile dealing with just the Fed, instead of the fed and the pandemic.
Frank Curzio: Yeah. And I told the story, bring a good point to a story yesterday, because the week before I had a business trip to The Bahamas. I mean, 50% unemployment. I mean, most of their revenue, it was relying on tourism, right? And even, US. And it’s hard to travel because it’s very easy to get Omicron, right? We know it doesn’t matter if you wear a mask, everybody’s getting it. And if you get it, you’re going to be stuck someplace for 10 days. But just the process of traveling, where you had to download an app, you have to take a test, and it’s not just taking a test. It’s which test do you have to take? Is it a PCR test, antigen test. You can take an antigen test, that’s going to give you a quicker result. And then you have to take a test from the hotel.
Frank Curzio: You got to see where they are, and get it like a day or two before you get on the plane. Then you have to download another app. I mean, it was a whole Bahamas Visa thing I had to do, and you have to show paperwork, and carry this around. And then, you had to download a special app for, and there’s two different apps, I think for, that I’ve downloaded so far, for two different airlines. Verify was one of them for American Airlines, and that whole process. So, the person I was with needed help with it, who’s very, very smart, who I took the trip with. And, if you’re older or you’re not tech savvy, it’s very difficult. So, when you’re reducing this, I mean, holy cow, the reopen trade is massive. When we go back to not wearing masks, which hopefully would be pretty soon within three months, we’re going to see numbers, Omicron ease tremendously, which is great for the market.
Frank Curzio: Again, a lot of positives out there, where I think we’ll see conditions ease a little bit. Energy, of course, with the shit that we have in place to stop drilling, even though we could be energy independent and have more oil here than we’ve ever seen through the fracking. And we’re like, “Well, you can’t drill. And we have nothing to replace it with.” Now, you’re going to see oil go to one, 120. Some people are predicting a lot higher than that. And we’re seeing that. And, unfortunately, energy impacts all of us. You’re going to see inflation, no matter what. But, I think you’re going to see food prices come down. You’re going to see a lot of things come down, but that is a big deal. And that’s why we talk about it. It is related to stocks. It is important to understand that. And once that eases, and I think people are really sick of wearing masks, because it doesn’t make freaking sense.
Frank Curzio: It doesn’t make sense how you have to walk into a restaurant with a mask. But as soon as you sit down, everybody can take off their masks. It doesn’t make sense. It does not make sense at all. And then, the fact that you have, “Masks reducing,” everyone’s getting Omicron. They’re crazy, spring-like crazy, just shows you it. I don’t care what kind of mask it is. If you cover yourself up, and in a huge fricking whatever, hazmat suit, zipper, of course it’s going to be a little bit better, but you could see the masks have not worked with this. And yeah, hopefully, we’re going to build up an immune response to this, where we’re not going to have to take a fricking booster shot every single six months, seven months, eight months, whatever it is, just like it was a flu shot.
Frank Curzio: Because, if you look at this, and you know what, Daniel? I’m going to try to find this really quick, because this is important. And, it’s really cool. So, I saw this earlier and it was a comparison between Omicron and the flu. And this is from a very, very good source. So, that Omicron and the flu, the difference. The coughs is kind of the same. The runny nose, common Omicron, sometimes in the flu. Sneezing, Omicron, yes. Flu, not really, but sore throat is the same. Shortness of breath, no, this is Omicron, not Delta, right? So, and this is for the typical cold, too. So you almost, based on a fever, less common, and common with the flu, but still, night sweats. You get it from Omicron, not so much from the flu. But when you look at this, you really can’t tell the difference. How long symptoms take to show up? Two to three days. Omicron, two days, typical three for the flu.
Frank Curzio: I mean, you couldn’t tell the difference between Omicron and the flu, or even a cold. But yet, when we call it COVID, it scares the shit out of everyone. Right? But, I mean, this is seasonal. This is just something that’s going to happen. We’re probably going to get something like this every single year. Do we need to scare everyone and say, “COVID, COVID, COVID, COVID, COVID,” where we just went through a whole traumatic event where some people lost. People who were over 60, who should be vaccinated. I get it. But just to see this chart, and this is, again, this is from, tough to see. I mean, it was like, it’s on Fortune AAFA. So, this and also from the CDC. So, just to see how fatigue is the same. Loss of smell, you don’t really get lost of smell from Omicron, so you’re not getting that with flu either. Headache, common, common, chills, common.
Frank Curzio: It’s just funny how you can’t really tell the difference of this, but I think we’re starting to learn. We’re starting to live with less fear. And once that happens, you’re going to see more traveling. The reopen trade is going to be huge. There’s a lot of stocks. I mean, you’re looking at airlines are still at the levels they were in November 2020, when the vaccines just passed, which is insane to me. But you’re going to see this pick up tremendously, especially this year. And, I think it’s going to be a good opportunity there. So, just a long-winded answer. I know we covered that, but it is very, very important.
Daniel Creech: Absolutely. And if we can get to a point where we’re just focusing on the Fed and the interest rates, that’ll make it a lot easier to navigate that. And what I would mean by that is, moving out of not all tech is bad, but your high growth, no profit stocks, two things that actually transport and make things. So, AT&T had pretty positive results this morning, Frank. You want to look at 5G, the fiber build out there. Knight-Swift is a trucking company, logistics, they had solid earnings. You want to look at transportation there. The free, low hanging fruit is Berkshire Hathaway. No other company in my opinion is built for higher inflation, or higher inflationary times. Just focus on those type of businesses. There’s a handful I could rattle off here between food distribution. Have you ever heard of SpartanNash, Frank? You ever heard of that company?
Frank Curzio: No. Mm-mm.
Daniel Creech: They basically supply a lot of different grocery stores. During one of their conference calls, they were talking about how inflation is beneficial to them. Think about that. If inflation is beneficial to anybody, that’s worth going down that rabbit trail. That’s what we’ll be doing a lot. Yeah. Anybody with pricing power. We’ve beaten this drum over a lot the last several months, but now, we’re actually here to say, “Hey, rubber meets the road,” is really silly. But, to an extent, to get the point across, that’s a positive, because we’ve been warning about these situations. Now inflation is here, higher inflation is here. Yes, you make a good point, and it could subside. And it should in certain areas. But overall, this is the new normal. And that’s transitioning into how we think about stocks and how we’ll allocate investments.
Frank Curzio: Yeah. And, guys, just for proof of this, we saw great quarters. I mean, we’ve seen lot. It’s a good separation, right? We’re seeing companies that aren’t getting it done, like the GEs and F5s, ones with supply chain issues and things like that. And also GE, one of inflation, right? So, but yet you saw Texas Instruments, amazing numbers. And then Microsoft, holy cow. And Microsoft comes out, ends 50 billion. 50 billion in, so they have 51 billion in sales. They beat the $50 billion estimate. But if you’re looking across the board, listen to these numbers guys. Across the board, so usually if you have lots of segments like Microsoft, whatever, you’re going to see some kind of maybe segment struggling, or whatever. So, Microsoft Cloud revenue, 22 billion, up 32%, and that’s in their productivity and business process segment, right?
Frank Curzio: So, they have three segments. That’s one of them. Revenue rose 19%. That includes LinkedIn. Revenue rose 37% for LinkedIn. 365 Dynamics, revenue rose 45%. Then, they have the other division, Intelligent Cloud and revenue rose 26%. You’re looking at Azure. That’s part of Azure, which is the revenue growth is 46%, which they said, “Well, it was growing at 50%. And this is the first time it’s under 50%.” That’s massive. That’s massive. That’s a percentage. I mean, to constantly grow, obviously as a percentage, your growth rate should be, it’s going to slow eventually. But to see those numbers are incredible. Windows revenue rose 25%. This is every segment I’m talking about. Xbox Content and Services, rose 10%. Search advertising revenue up 32%. Surface, the Surface up 8%. I mean, every single, you check off every single box for this company, and the recurring revenue coming in, holy cow.
Frank Curzio: And a discount as this thing is selling off. You could see why. It’s up 34% today, but this is a time where it’s going to be a stock picker’s market. You really have to look at a lot of these names. What’s good, what’s bad. You’re going to see a separation, but we didn’t see a separation on the way down. Everything got nailed. Everything. There was no place to hide. And that provides opportunity. You don’t see that a lot in a lot of markets. This is providing a big opportunity. Lot of great names out there, unfairly punished.
Frank Curzio: Now you have earnings season. A hundred companies out of the 500 reported. So far, they’ve been pretty good, still growing at 8% annually. That’s what they’re expected this year, which is great. But overall, we shouldn’t be down as much as we are. And I think we’re seeing that right now. There’s just too many missed pricings in the market. I think you’re going to see a lot of money go to that quality, guys with balance sheets, and paying dividends, and in the right growth areas. Make sure you’re buying companies, not just based on fundamentals and they’re cheap, because cheap companies get cheaper. Make sure they have a growth profile. Make sure they’re in the right markets, like a Microsoft, that’s actually a good value. Like a Best Buy that’s selling products across all, AR, VR, smart homes, which is going to take off now that they have a new connectivity, that a partnership and alliance, which I talked about the CES.
Frank Curzio: You watched the video where Samsung, Amazon signed up, you have Google. So, they’re all going to be connected using this one technology where you could buy almost any single device out there and it’s going to work. So, you don’t have to buy everything from the same company, which we know, you look at Samsung, their appliances suck, but the TVs are great. Just different products that work good for companies and others that don’t. But now, you could mix and match, and put the Ring Bell, and put Shades from Ikea, whatever you want. The lighting from Phillips, and use Alexa. And everything’s going to communicate with each other. But, you look at Best Buy selling all these products in growth markets. So, a lot of names out there that are cool.
Frank Curzio: One more thing I wanted to touch on, too, Daniel, is Bitcoin. The massive swing of Bitcoin, and we both saw this, and this is on CNBC. I’m a big fan of Blankfein. I like him a lot. Former CEO of Goldman Sachs. I think is, again, Goldman Sachs is the enemy, the evil empire, and I get it. But, he’s someone that I always felt like was a straight shooter and he was talking about Bitcoin very positively, which is surprising, right?
Daniel Creech: Yeah. I mean, well, yes and no. He’s been on the forefront. He’s been out of Goldman for a little bit now, but he understands markets, and the Ridge that I think you’ve talked about in the past, that crypto and Wall Street can kind of get together, to really grow adoption user rates in the market cap. I liked the timing of this, because just like you said, bulls and bears can get more bullish or bearish during good times and bad times. The timing on this is amazing, because Bitcoin crashed. Let’s call it what it is, from around 70,000, all the way down to 30-ish. Okay. In a matter of what, two months? It rallied hard off the 30 to basically around 40, as we tape right now. But I love seeing the market downturn prices going down and Blankfein was saying, “Hey, yes, the price is down. However, there’s a lot of adoption going on. There’s still this ecosystem. The environment is continuing to be invested in, to be built out.”
Daniel Creech: That’s what you want to see as an investor for the long term. Yeah, it sucks. I’ve talked about Galaxy Digital. I bought more Galaxy Digital this week, which is a hundred percent why it continued to fall. But my point is, is that you have to explain to yourself, and not put your head in the sand and ignore reality or volatility, but to say, “Hey, is the thesis still intact?” Yes. So, the timing of that with him on the interview was amazing, because he was talking about the bullish scenario, and he’s not paying attention to just the price. And I think there’s huge investor takeaway from that. And you need to kind of understand that and focus on that during down times.
Frank Curzio: This is cool. He goes, “Look, my view of crypto, Bitcoin,” he’s like, “Is it’s evolving.” He goes, “I can’t predict the future, but what I think, it’s a big thing to be able to predict the present, like what is happening.” And he goes, “I look at crypto and it’s happening.” And when I see that, this is Goldman Sachs, who’s partnered with Galaxy Digital. A lot of these companies are partnering, even Morgan Stanley’s partnering with Galaxy Digital to get to a lot of these. There’s a lot of great projects. That’s where the innovation’s going to come from, but there’s also a lot of garbage in it, which you’re starting to see get cleaned up, which is cool. And just a lot of projects that don’t, they have no value, no utility, no anything. You’re going to see a little more regulation come.
Frank Curzio: A lot of these things are securities and where they are securities, you’re going to see, Coinbase base is at significant risk. You’re going to see a lot of these names come off. They’re not going to disclose their financials. They’re not going to disclose. They can’t disclose their financials, because they’ll all get arrested, because a lot of these guys just took money and spent there, right? So, they got to disclose their financials. They’re going to disclose everything if it’s a security, and which means they’re going to de-list from Coinbase, and they’re going to go to Binance, or whatever in international. That’s going to happen because these are securities. So, you’re going to, you’re seeing a lot of leverage in that market. A lot of companies, a lot of projects got funded, where it’s because we have super easy rates, and money’s been handed out to us, and trillions in dollars and stuff like that, in monetary fiscal stimulus. Now, you’re seeing some of that leverage come out of the market, which is a good thing, but there are great projects in there.
Frank Curzio: I think, from what I understand, even listened to Novogratz, I mean 37, 38 was a big level where institutions were looking to buy. It held that level. Then it broke through, and the whole damn market crashed. But if you notice on Monday before the market at the bottom came back, Bitcoin was down five, 6%. And it was immediately, it was only down like 2%, 1%, it came, it was the first thing to come back. And then, it really, really came back. I think it might have went down to 32,000, 31,000, whatever it went down. Now, it’s like 37, 38 today. But you saw that massive wave. And when you have Lloyd Blankfein, who’s got his finger on the pulse. And, I understand that even though he’s the former CEO, but knows the biggest institutions of the world, trillions of dollars saying that Bitcoin’s a real thing.
Frank Curzio: You could see institutions were slow to get in it. They’re getting in it now. They want to get in at a cheaper price. And if you look at all the hiring boards, Daniel, this is where all the banks are hiring the most, through crypto. So, try to learn as much as you can. If you’re a developer, programmer, you’re going to be making a lot of money, because these banks are looking for you. They’re looking to build out their operations through blockchain. And, it’s good to see this. We’ve seen this every time with Bitcoin, Daniel, every single time. We’ve seen it guys, where we’ve seen it go from 400 to a hundred, go to 19,000, to six, 5,000. I mean, one of these pullbacks and people go crazy. But man, we’re still at the levels with Bitcoin is, holy cow, at 37, 38, 39,000.
Frank Curzio: Limited supply and institutions who have trillions of dollars are just starting getting in, because their clients want this. They’re mandated to have asset allocations to alternative asset classes. This is one of them, and now you’re seeing money coming in. So, I don’t know what it’s going to be next month. Like I said, I don’t know what it’s going to be next year. People had hundred thousand dollars forecast on it. I didn’t, but I know it’s going to be a hundred grand three years from now. So, when you see stuff like this, you want to ease into this market and it’s going to provide great opportunities for you. But the metaverse, Dow, AR, VR, you’re looking at just so many trends, security tokens, DeFi, and centralized, finance. All these new innovations, and DeFi’s a little bit old now, in crypto terms.
Frank Curzio: They’re all flowing through crypto. That’s where the new innovation’s coming. There’s going to be great projects. I’m seeing great projects, which are great for our subscribers for Crypto Intelligence. But, it’s nice to see a guy like that really say, “Hey, you know what? This thing’s for real.” And you’re going to see that across the board with a lot of institutions. That’s why they’re hiring people like crazy.
Daniel Creech: Definitely, definitely bullish comments. And like I said, I just, I enjoy the timing of that more than anything. There’s probably some luck there, but that’s just, it is great. So, hey, the takeaway is gain exposure to this. You got to have some exposure to this, even if it’s a very small percentage of your asset allocation.
Frank Curzio: Yes. And don’t go all in. Scale in over time. I know it’s not easy to do, but scale in over time, because it is volatile, but you got to get into good projects. We have a lot of good products that we see, and even some security token offerings, ICOs that we’re going to be able to get into that I’m looking at right now, that are really attractive, if you are a Crypto Intelligence subscriber. So guys, and Daniel, I want to say, thank you so much for coming on. It’s nice to be back in the saddle with you, talking stocks. I got to be here for a little bit, got a couple of trips coming up to Miami, but those are going to be day trips and stuff on business, which is really cool. But other than that, yeah. Thank you so much for taking over.
Daniel Creech: Yeah, absolutely. Glad to do it.
Frank Curzio: Kicking ass. Got some really good comments there, and yeah. Guys, thanks so much for listening. Really appreciate all the support, and I’ll see you guys tomorrow with a fantastic, fantastic interview, with lots of new ideas. I’ll see you then. Take care.
Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.
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