Get ready for volatility in Q2

I’ve been pounding the table for a long time about digital securities. They’re one of the greatest opportunities I’ve ever seen… But if you’re not an accredited investor, you can’t participate—yet.

Over the next year… this sector will open up to everyone.

Also, I’m amazed at the positive feedback I’ve gotten from listeners and guests after I mentioned a potential Curzio Research conference. Stayed tuned for further updates…

A listener asks my thoughts on the markets from a macro level. Here are some countries I’m bullish on… and the effect a U.S.-China Trade deal might have.

And we’re going to see a lot of volatility this upcoming earnings season. This is why…

Transcript

Frankly Speaking | 55

Get ready for volatility in Q2

Announcer: 00:02 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: 00:13 What’s going on? It’s Friday, April 12th. I’m Frank Curzio, host of the Frankly Speaking podcast. I’m going to answer all your questions. [inaudible 00:00:22] sports. Anything else you want to throw at me? Greatest podcast, more of questions that you would send me to our Wall Street unplugged podcast, which I host every Wednesday.

Frank Curzio: 00:33 If you want any questions answered, just send me an email at Frank@curzioresearch.com. That’s Frank@curzioresearch.com. Be sure to put Frankly Speaking in the headline, and you never know. Your question may be the one I read on this podcast. Let’s jump right in with a question from John.

Frank Curzio: 00:52 It says, “Hey, Frank. I’ve been a longtime listener and a base level subscriber. I really appreciate you helping little guys like me navigate the investment world. I work at a boat yard and sometimes struggle to make ends meet and I’m constantly busy raising my two kids ages 10 and 13. I don’t always get to listen to all your podcasts and videos. There’s countless times I fall asleep, upright late at night with earbuds on and pen in hand. I’m very interested though in the security token trend that you’ve been talking about. But I’m not a current investor. I’m trying to binge listen to the last six months of episodes trying to find any publicly traded opportunities in this new trend or is it still too early? Congratulations on the growing business. Thanks, John.” John’s from Massachusetts.

Frank Curzio: 01:34 So John, I appreciate your listener and I can identify with that. I mean, having kids, I have young kids as well and the biggest struggle for me is trying to run a successful business and you also want to be there and be the father and be the good husband and stuff like that. It’s hard. It’s hard. I mean, it’s a struggle for everybody out there? But I hear you man, but I really appreciate you listening to the podcast and thank you. Thanks for being a listener. So I’m getting to your question about security tokens. Here’s the deal. Really exciting times.

Frank Curzio: 02:04 I mean, when we launched ours, Curzio Equity Owners, the timing was perfect. Again, we went out there, went out on a limb, did something different and it’s great. And now if you look at the statistics right now, it’s pretty amazing because last year there was, see here … about roughly 80 STOs launched the whole entire year. In the first quarter, there was 47 this year. 47, so that’s up 130% for the last quarter alone.

Frank Curzio: 02:41 And I’m proud to say I’m one of those 47 that launched RSTO. So now you’re saying, how could you get into these? Well, when it’s an STO, it’s security token offerings, it’s like an IPO type thing. Yeah. So the offering part, and you have to be a credit investor to get into these things, which are security token offerings. Right? They’re going to be called digital securities going forward. They’re going to lose the token part because they just want to separate themselves from ICOs.

Frank Curzio: 03:06 Which by the way, it’s kind of amazing when you think about it. Because when you look at the amount of money coming into this industry and how big it could be. If you look at last year 2018 for initial coin offerings, remember like 85% of these are garbage, right? There are some great ones, recommended in our newsletter, they do very well. But most they don’t give you an equity stake. They’re just, “Here, give me money and you can use our products and services.” And a lot of these guys didn’t even launch their business yet. They didn’t even launch their company, nothing. So you know, they gave them money, nothing in return. They didn’t offer equity or anything. And in 2018, they raised $7 billion.

Frank Curzio: 03:46 So now with security tokens, a lot of backed by equity, backed by assets, it’s getting bigger and bigger. But the question, STO security token offer, you have to be an accredited investor. But one year from now our token, Curzio Equity Owners, is going to trade to the general public and that’s on April 15th next year. That’s when it’s going to be available to everyone. So as you see this trend go more and more and more are going to be available to the public and they’re going to be trading on security token exchanges like T-Zero, Open Finance. Coinbase as well is going to have security tokens on it. And for us, which yeah, which is really great news. The fact that we used Securitize is there’s a good shot we’re going to be trading on a lot of these major exchanges and we’re in talks with them right now. So to be perfectly honest with you, on the institutional side, they like the deal. They like the offer, and you have to remember, right?

Frank Curzio: 04:35 This is different from the IPO where maybe you have to have millions and millions and millions of dollars in revenue, 10, 15, $20 million in revenues. But when you compare us to the ICO industry and a lot of security tokens, we have an existing business. We generated $6 million in our first two years in sales. We already have a management team in place, right? We have a great team in place, 17 employees. We’re generating money. We’re growing our business. We operate in one of the most scalable, high margin businesses on the planet. I mean, I am qualified to say that since I’ve analyzed tens of thousands of companies across numerous industries over my career and the margins are incredible. And again, this is an easily scalable business. If you have the right ideas, you can really scale it very, very quickly.

Frank Curzio: 05:17 And when we show this to people, compared to everything else that’s out there, it’s really appealing to them. But with crypto-funds, they want to really invest in, at the end of the day you’re investing in a financial newsletter publisher and they’re looking to invest in more blockchain related projects. So you know, for us we launched at a really good time. But for all investors out there who are not accredited, this market’s going to be huge. It’s going to start next year. Early next year you’re gonna have access to a lot of these things, because you see, like the 47 STOs that launched this quarter, they’re all going to be free trading to the public. You don’t have to be accredited investor at next, at first quarter 2020 and now you have 47. You’re going to see hundreds of these things coming out. I mean, it’s going to continue to grow, continue to grow because the law is getting better, right? We want more laws.

Frank Curzio: 06:08 If you’re doing the right thing, right? You want more regulation in this industry because you want to go to T Zero and OpenFinance just like you would go to your e-trade account, Ameritrade account, Fidelity account. You want to be able to buy these things. You want to be secure. You don’t want to have to worry about using an address and you’re sending it to the wrong place and you lose your tokens forever. No, it’s going to be a different industry. But that regulation’s more on the exchange and for us and the regulations in place, it’s great. If any of our investors are out there listening to this. Yeah, it was a process. It wasn’t that big of profit. We made it as easy as possible. That’s why we launched it a couple months later. We create a whole entire guide.

Frank Curzio: 06:47 We put everything in DocuSign, we made it very too easy transfer money. You had higher escrow accounts and then you’re getting the JYC AML checks, right? To make sure that, you know, every customer is legit, right? They’re not a criminal and also show proof of being an accredited investor and having those in there just from a compliance standpoint allows us to trade on the major platforms because that’s what they want. They want to make sure that all your customers, you know all your customers, all this documentation and now that we have all of this for our investors that came in, it’s pretty cool. We’ll be able to trade on these major exchanges. But again, if you’re an individual investor, you’re going to have access to a ton of these starting pretty much in a few months, I would say, maybe in a quarter or two because you know some of them launched … When I say some of them, we kind of launched really very early compared to everybody is only like a handful and I didn’t know it was 47 that launched in the first quarter, but it’s pretty cool.

Frank Curzio: 07:40 I like to say we’re ahead of the curve, but you’re seeing this momentum continue and you know there’s a good site called The Tokenist that outlines all of this. So if you put Tokenist and you just Google security token offerings increase by 130% in Q1 2019, just put some of those words in the search. But that’s the headline. They have some great charts here and it’s just showing how the top jurisdictions. The United States had 11 of these. United Kingdom with eight. [inaudible 00:08:07] That’s included in the 47.

Frank Curzio: 08:09 What was interesting is that they say despite leading the pack in STOs for US, only 2% of total funds raised were from the United States, which is interesting, right? Because we have institutions looking at us right now and you know, internationally that’s where the market’s really big.

Frank Curzio: 08:29 But I have to say probably 90% came in, I mean the funds that were raised, were based in the US 90%. We also have, it’s called a Reg S where we’re able to, you know, basically sell our offering internationally. But that is an interesting stat to me that it’s still a lot of funds and again, you have so many great places internationally that are really getting behind this and are getting ahead of us. And I just wish the regulation part, all this stuff would take place a lot quicker. But everything’s moving. Everything’s going to be deemed a security token in the future. And I’m glad we did what we did because I think, you know, we’re ahead of the curve here. It’s really exciting times. But anyone out there who was not able to invest as an accredited investor or even if you’re a credit investor, the offering’s still open if you want to come in.

Frank Curzio: 09:15 We do have institutions looking at it. That’s a process. Okay? It’s not where, hey, you guys came in and in a couple of days, you have to go, you have to make presentations. And I’ve been traveling a lot and you know, they want to see all your statistics. They want to see all the numbers. Remember they don’t know you from a hole in a wall, but their money, they’re representing other investors and it’s a process, a two to three month process. So while we’re talking to a lot of funds, it’s still a process. So the quicker we hit our max, our hard cap of $12 million. It’s over. You’re like, I don’t care who’s doing the due diligence on it then it’s going to be their problem if they waited too long. But that is a process right now. So we still have openings left if you’re still interested.

Frank Curzio: 09:49 If you’re not credited investor, one year from now you’re going to have access to this and we’re going to be reporting, our financials, our growth and you know, we’re going to be trading based on revenue growth, our sales growth, our earnings growth, just like a stock. And you know, we’re required to report once a year I believe, but we’re going to be doing it every six months. I don’t think anyone should ever report every quarter. You don’t need to. Just so many different things happen within a quarter. You know, a lot of that is just to collect lawyer fees and Wall Street garbage, but you really don’t need to report every single quarter. No company does.

Frank Curzio: 10:22 So for us, it doesn’t mean we’re not going to have lots of press releases for our investors out there publicly, but you know, you’re going to see us trade kind of like a publicly traded company. It’s going to be really cool. And you know, we passed our soft cap, passed $3 million and passed $4 million and you know, things are really exciting right now and a lot of projects and stuff. But anyway.

Frank Curzio: 10:39 To answer your question: guys, get familiar with this trend. I mean, pound it in your head and yes, I was talking about my STO but I say even if you’re not a credit investor, you’re not interested, to start learning about this because it’s going to give you access to so many great ideas and instead of buying like all the other, and I hate this, I don’t curse or anything and I won’t curse today at least, but you know, buying Lyft coming out and thinking you’re getting a deal when that’s a liquidity event, right? These guys are looking to sell out of this freaking thing and you’ve seen this thing crash. I mean individual investors only have access to these great ideas when they are multibillion dollar valuations and Lyft was a $15 billion valuation like four, five months ago.

Frank Curzio: 11:17 It came out of, what? As high as a $25 billion valuation? Really? Like, $10 billion. You increased for nothing over a couple months. What happened with Lyft to justify that kind of move in the stock and you’re seeing why it’s getting crushed right now. Again, I covered that on Wednesday. A lot of red flags and stuff.

Frank Curzio: 11:32 But even like the Alibabas and Facebooks and stuff like that, you always get access to these when they have billion-dollar evaluations. Now in this market, you’re going to have access to these things when they’re a lot smaller. I mean for us, doing $6 billion in sales, a lot of businesses would be like, “Wow, that’s amazing.” That’s a drop in the bucket compared to our competitors. And I’ve known four businesses in our industry that where we were, and within four to five years, I mean some of them … One company did it in four years, another one did it five years, I think other two did it in six years.

Frank Curzio: 12:04 But you know, we’re talking about going from where we were to $125 million in sales in five years. You know what? When we’re trading and we go free trading, you know you can have access to this and then like a stock. Maybe say we don’t execute. Maybe just we lose a lot of employees. People start hating me, whatever it is. But you could sell out of it, right? You’re not locked in, which is cool. But you’re able to gain access where if we do execute and we do turn us into $100, $200 $300 million business, you’re kind of getting in early still.

Frank Curzio: 12:35 You know, even if you’re waiting a year and you’re not, you know, you’re not a credit investor. So I’m giving you Curzio Research as an example, Curzio Equity Owners, what we’re launching is an example. Again, you get an equity stake directly in our business by doing this. And we intend on paying a dividend as well. 3% yield annually intend. I have to say intend. Can’t say we are. And that’s our deal, but you’re going to have access to allow these deals going forward and it’s going to give you access to these companies during the very early stages.

Frank Curzio: 13:01 And a lot of these things are going to be risky. A lot of these guys got to execute, but you’re going to have to do due diligence. See what companies coming out with this, see who’s full of shit. Who’s for real? Sorry. I said I wouldn’t curse, that’s the only time I’ll curse.

Frank Curzio: 13:14 But you’ll have access to all this and it’s going to be a major, major market five years from now, 10 years from now. I’m talking about 10 years from now there’s going to be a trillion dollar market. As crazy as that sounds.

Frank Curzio: 13:24 I mean you’re looking at the real estate market alone for assets that could be tokenized is 200. You’re looking at 200 trillion. I mean, these numbers are incredible when you look at them. So if you’re looking at just 1% of this getting tokenized and that’s just real estate. I mean you throw on everything else. There’s even companies on the NASDAQ and one company in particular that launched a security token offering as well. You’re going to see this happen throughout industries. It’s a different way to raise money. You’re just basically selling off a piece of an asset, kinda like you would do in stock, when you tokenize it and you sell that piece to individual investors.

Frank Curzio: 14:00 Everyone’s catching on. I think it’s gonna be a huge market. It’s a fair market. It’s safe as long as you have the right deals, but you’re going to have a lot of access to this going forward. Just be a little bit more patient, probably six months from now. Starting then, then you’re going to have a lot of selections and then going forward you’re really going to have a lot of different tokens to choose from. So it’s going to be really exciting. So yeah, John, thanks for writing in. I really appreciate it.

Frank Curzio: 14:23 Next one, not really a question, but David titles this “Conference” and says, “Make your conference in Florida and make it in the spring so it isn’t too hot.” He says, “Doesn’t Jacksonville have a venue that might work?”

Frank Curzio: 14:34 So this is a response to … It’s so funny because somebody asked a question about am I going to hold a conference? I said, I might do it next year. I can’t remember the last time I got so much feedback on something. And it’s not just from people listening to this. It’s from the two people who I interview because I named a whole bunch of people who I’d like to have and I want to make an entertaining if we do our first conference and I had a lot, at least four or five, people who I’ve interviewed, good friends with, that I’ve had on the podcast before saying, “Oh, what?” I didn’t mention them, so they’re like, “Oh, what? I’m not entertaining enough for you, Frank? You don’t want me to speak at your conference?”

Frank Curzio: 15:12 And another person texted me, haven’t talked to in a year who’s an amazing analyst, but the response of people who actually want to speak at the conference and the people who said they want to attend it, I was just blown away. I mean, I just took a random question and said, eh, you know, we’ll try to do it. Looks like I’m going to have to do it.

Frank Curzio: 15:27 So if we do, maybe I’ll do it … I mean, I live in Amelia Island, which is a beautiful place. There’s an Omni here. There’s a Ritz here as well that we could have that, hold the conference. That’d make sure there’s good weather. Again, first conference gonna be a lot of fun.

Frank Curzio: 15:44 I can promise you it’s going to be entertaining and I can make another promise. See if I do this, you’re going to have full access to me every single day. So, and I’ll promise, you know, when I sit at the table, we’re going to have great people in there. People that can educate you, people who are fun, great speakers. Again, I have a list. Thanks to you guys for listening to this podcast for so long.

Frank Curzio: 16:02 I’ve been interviewing guys for over 10 years almost. You know, most of the guys you’ve seen on CNBC, and I think they’d be more than happy to come here and speak at the event and have some fun and play golf with everybody. And yeah, just have a lot of fun with it. So, it looks like I’m going to have to do it. I gotta be careful of what questions I take some time going forward I guess. But I was just, yeah, I’m humbled and it’s cool. I just couldn’t believe the response of how many people would love to attend a conference that we host. And if we do it, we’ll do it right. We’ll make sure that it’s entertaining. It’s really good. And you know, you’ll have access to everybody there. I mean, that’s always important to me. I just hate when people speak and then they just sneak off the backstage and they’re gone.

Frank Curzio: 16:39 No. You know, they should be able to mingle with the people, hang out with people, answer some questions. I just think that most analysts should do that. I mean, if you’re a billionaire hedge fund manager, yeah, I could see, you’re like, “I don’t care, doesn’t matter because I don’t care about individual investors,” because everyone who’s invested in my fund is an institution. But you know when it comes to the newsletter industry, more retail oriented, you know, you gotta be there for people and I think that’s important and I think it’d be cool. It’d be a great networking event, right? So, I’ll try to put that together. It’s not going to be in early 2020 if we do it, but I’ll try to see what we could do and get that and get the ball rolling on that. And you know, it’s gonna be pretty exciting.

Frank Curzio: 17:20 I’ll take one more question. It’s from Steve. He goes, “Hey, Frank got a good question that I think a lot of listeners will care about.” He goes, “Given Brexit now slated for October 31st and a trade deal on the horizon, how should we think about the next six months from a macro perspective? Rates and employment are low. Inflation numbers are healthy. Europe and Asia have likely bottomed. Should investors be risk on or risk off? If you’re risk off, what catalyst would you look out for that would change your mind? If you’re risk on how do you reassure yourself that markets will be okay moving forward? Thanks for all you do, Steve.”

Frank Curzio: 17:55 So Steve, you started off saying, I got a good question that I think listeners would care about. It’s not a good question. It’s a terrible question. I’m just kidding. Although when people say no question is never a bad question, there’s bad questions. I get some bad questions sometimes I have to say, which is cool, but I just don’t answer them. This is actually a good question. So you’re asking me to predict the future and I’m going to try.

Frank Curzio: 18:17 So when I look at the macro picture, I’m going to tell you something. When I find ideas for my newsletters, I have watch lists and I’ve covered so many stocks, so many industries. So I’m always doing research all the time and I kind of know there’s something I’m going to recommend, but you know, I really choose it a few days before it goes into the newsletter when I really start writing about it. It comes down to several stocks that I might pick. I’m looking at the right price point and seeing what catalysts and everything, and usually I find a lot of stock picks. At least over the last three, four years. You know, the last couple of issues, I have to tell you, it’s not easy to find stocks I want to buy right now. So when I look at the macro environment, you could say you’re right.

Frank Curzio: 19:01 I mean you’re looking Asia. There’s going to be a trade deal. It’s going to be great for, for China, I think China related stocks, you’re seeing them surge. I mean, Alibaba, I mean, holy cow. That thing will go through the roof from its lows. I think that’s a good place to invest. I don’t know if that’s going to be such a boom to the US. I think it’s factored into the trade deal is going to be done right here with stocks trading.

Frank Curzio: 19:20 Europe as well. You know, Asia. Again, you’re right. It seems like the market’s bottom, if you’re looking at inflation. There’s no inflation out there. You look at consumer spending, it’s still very, very strong. Are there risks? Yes. I mean we have high debt levels. I mean, you know, again, it hasn’t really been a factor for a very long time.

Frank Curzio: 19:39 I mean, everyone says, “Oh, debt. We’re going to be in so much trouble. The market’s gonna crash. Our kids are in trouble.” You know, we’ve been having that argument since the ’60s and you’ve seen the markets continue to hit new highs. I’m not making fun of it. You know, eventually it’ll come, you know, it’ll just run us over like a train. But you know, we’ll see that coming. If you have stops, you’ll be fine. But you know, you can worry about those for your guys. And there’s a million sites to follow about, you know, ATMs not working and stuff like that. But from my perspective when I looked at macro environment, I think it’s not too hot. Not too cold. I mean I explained that already. You know, just Goldilocks it and usually, stocks go higher. I’ve been saying that over the past few months, at least that’s what I said, especially in my quarterly podcast for lifetime members, for both of my newsletters, Curzio Research Advisors and Curzio Venture Opportunities.

Frank Curzio: 20:22 But when I’m looking at these numbers, what makes me nervous is earnings because we’ve got a huge earnings boost for tax reforms, which is fine. So even though tariffs hurt us a little bit, you really didn’t see that. And that’s why I was so bullish on US stocks and said don’t worry about tariffs even though there’s 25 million stories about how tariffs, we’re in trouble. Trade war. First time. The US is going to end. On a scale of one to 10, due to the tax reforms and the amount, I mean we’re looking at earnings exploding higher because of tax reforms. I mean, you’re looking at it on a risk meter of a two, because yes, if we didn’t have tax reforms we would’ve felt the tariffs a lot more. But earnings were going to explode higher and surge. So even the effects of tariffs didn’t really make a difference.

Frank Curzio: 21:07 And I outlined that in my tariff report, a free report and it just showed you like even from steel and cars and how much money these automakers are really making even if tariffs were increased by 30%, they were still making a fortune due to tax reforms. But that’s over. Right?

Frank Curzio: 21:21 Now, you have to adjust going forward and how are you going to do that? And when I’m looking at these companies, they’re kind of scared to offer guidance, at least positive guidance or you know, just raise those expectations because when you raise those expectations and you miss, your stock gets destroyed. So it’s an earning story. I think that’s the biggest thing. As we’re heading into earnings, let’s see what these companies do. But right now, I’m not seeing a ton of great ideas. I’m not seeing things that are just no brainers. There’s a few here. Again, we’re talking about all different kinds of sectors.

Frank Curzio: 21:55 Of course, everything, you know, people are starting to jump into gold a little bit and junior minors. You know, you’ve seen a little bit of a move there and, and you know, oil prices are going higher and oil stocks, but look, a lot of these things are filled with debt. If oil prices start coming down again, these things are gonna get destroyed.

Frank Curzio: 22:11 So, looking at the overall markets and the macro, I think, you know, I’m not worried, but I’m not excited. And I know you hate that, right? Everybody hates that. You don’t want to hear that. Right? But you know, I’m going to tell you the truth. Sorry. I mean, I’d like to say, “Oh, just pedal to the metal. Risk on baby. Go nuts. Take your house, throw it on a stock. You’re fine,” I’d love to say that.

Frank Curzio: 22:31 Or, you know, “The market’s going to crash.” Those are the best stories, right? Those are great. Those are entertaining. You could find them every place, but I think you listen to this podcast to avoid the bullshit and get to the real stuff. I just think right now I’m not worried about a 15% market pullback and I don’t see stock surging like 15% right away. I kind of see them just like, you know, tracking along and you know, let’s see what happens with Brexit. Let’s see what happens with trade. I think, you know, a positive trade deal is already on a table. I think that does factor into stocks, but I’m not too sure how earnings are going to be. I really don’t. I mean it’s kind of a coin flip and even analysts, you’re looking, you know, for someone who looks at sell side reports, it’s so important, right?

Frank Curzio: 23:10 Like Goldman Sachs and Morgan Stanleys and stuff like that and JP Morgans, those are the numbers that show up on your screen and take the average, throw it on CNBC. If the company beat earnings estimates or they miss earnings estimates, but that earnings estimates from these guys. I’ve never seen such a big discrepancy. And then when people think of stock say … I mean throw any name out there, I think it was Tesla. I mean Tesla is a good name to throw out there. Some people think it’s, you know, it’s like 260 whatever it is, around 265? You have estimates of 350. You have estimates of 175. It’s just when I’m looking at the estimates from analysts, I’ve never seen this much of a gap. Usually, they’re on the same page cause I listen to management, they all have access to management.

Frank Curzio: 23:52 Management every quarter highlight what they’re probably going to do the following quarter and for the year and net margins and stuff like that. And you base your model on that. But I don’t know if some analysts don’t believe it and some analysts are just more optimistic but there’s a shot we’re going to see more volatility in the coming earning seasons than we’ve seen in the past because some companies have super high expectations like Boeing and I covered that in my Wednesday podcast. I can’t see Boeing meeting their estimates. I mean, they’re cutting their growth like crazy. They’re cutting everything. You know, 80% is from the 737 Max. And you know, they’re cutting production of it. They’re just cutting. And people are canceling orders. Yet these analyst estimates have not come down enough. And even on the other side, I’m seeing things that are kind of like conservative, but I’m just a little worried.

Frank Curzio: 24:41 I’m like, wow. They seems so conservative right now, especially the company that Curzio Research Advisory members are going to get today, which is the most hated company on the planet that I just recommended. Interesting. I’m going to get a lot of feedback for it, but it’s a pretty cool issue. Just read it first because if you read the headline, you’ll probably be like, “Frank, you’re an idiot.” And by the end of it you’re going to be like, “Whoa, you know what? This kind of makes sense.” Trust me on that. But when see the stock market, everybody heard this stock, everybody knows it, but estimates are just so low on this company, which is good. But I’m not really finding a ton of those.

Frank Curzio: 25:13 So going into earning season, not to beat this to death, that’s the biggest key here. And you know, I don’t know if you would include that in macro. I guess you can. But that’s going to be the driver of stocks going forward and I have to get a look at earning season. I really think it’s a coin flip. I think it’s going to be pretty good. But for companies that miss, you’re going to see a lot of big name companies and mark my words on this, you’re going to see a lot of big name S&P 500 companies, you’re going to see a lot of them fall more than 10% when they miss earnings, because expectations are really high in a lot of these names. I know. This is what I look at.

Frank Curzio: 25:51 And maybe they meet estimates and that’s fine, but you’re always to have some that miss and the ones that miss are trading at valuations where they’re going to get nailed. And talking about big companies, Dow components, you’re going to see these things swing eight, 10% which if you’re a retiree and you’re supposed to have a 401K, you don’t want to see those major swings.

Frank Curzio: 26:08 But the way the market’s setting up right now in earning season, I really think you’re gonna see more misses and you’re going to see a lot of these companies fall. I’m a little bit worried. But for me, that’s going to create lots of opportunities for us to get into some of these names because those falls because of algorithms, you know when an earning season if a company beats expectations and the stock’s up three, 4% and finishes up 15% and if a stock goes down three, four, 5% if they’re missing, it usually falls 15%, right? So those are the things I’m looking at.

Frank Curzio: 26:37 Earning season. Where we might be able to pick up something where maybe they miss because of something temporary and I’ll have to listen to the conference call. And if they do, you know, we’ll be able to pick this up at a significant discount because these things sell off and everybody runs to the exit and asks questions later. But that’s how I’m looking at it.

Frank Curzio: 26:52 That was a really long answer, but hopefully I answered your question because there’s a lot of factors there. I know you have international factors. Asia, Europe is good. Inflation’s basically nonexistent, which means the Fed is gonna try to put the pedal to the metal. It doesn’t mean that they’re going to ease, even if they lower rates guys, cause I’m hearing that, wow. They have like, you know, easy monetary policy now and they said they’re not going to raise rates. You’re right. They’re not gonna raise rates this year.

Frank Curzio: 27:19 And people are saying, “Well, with inflation numbers where they are, which is nonexistent that maybe they’ll lower rates again.” But remember the Fed is still deleveraging their balance sheet. So don’t think like it’s 2011, 12. Lower rates and the markets will go crazy. No, I don’t think you’re gonna see that, that same reaction on a macro front, but there’s a lot of things to look at. And we’re going to get more answers after earning season.

Frank Curzio: 27:46 So guys, thanks so much for listening. Thank you for all your support. Feel free to send in questions. Frank@CurzioResearch.com. Again, I always say, you never know, your question may be the one to read on this podcast. But I love getting questions. I love you guys and again, I really appreciate you listening. I’ll see you in seven days. Take care.

Announcer: 28:06 The information presented on Wall Street Unplugged is the opinion of its hosts and guests. You should not base your investment decisions solely on this broadcast. Remember: it’s your money and your responsibility.

Announcer: 28:19 Wall Street Unplugged, produced by the Choose Yourself podcast network. The leader in podcasts produced to help you choose yourself.


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