Transcript was automatically generated.

0:00:02 – 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.

0:00:16 – Frank Curzio

How’s it going out there on September 3rd? I’m Frank Curzio. This is Wall Street Unplugged. I’ll tell you what’s really moving these markets. Trip on the podcast, break down headlines and Tell you what’s really moving these markets. Daniel Creech, nice to have you back from another vacation man. It is great to be back.

0:00:35 – Daniel Creech

Frank, how was it you had a good time. You can’t be missed if you never leave. You ever heard that?

0:00:41 – Frank Curzio

You had a good time with your family, or what?

0:00:43 – Daniel Creech

I did. Yeah, it was awesome. It was man. I had perfect weather. I’m biased. I love the Midwest. The whole drive up there was beautiful and yeah, it was a great trip. It’s fun to be on the road a little bit, so I had 13 hours each way of windshield time, nice Good yeah. Frank, did you see? The Powerball is over a billion dollars. It’s $1.3 billion actually. Are you buying tickets? Are you buying? I don’t know.

0:01:08 – Frank Curzio

Sometimes I buy them, maybe If I stop at the store and I just have to be there. I think it’s today, but I have to tell you I was looking at some statistics for this and I saw a TikTok video because that’s where I get all of my information now from TikTok and some guy was like an attorney for strictly for people who win these big lotteries and he was saying you know how much you get and everything. Do you know how much you get lump sum after taxes? So if it was 1.3. It’d be less than 50% right.

Yeah, you’re getting about, which is robbery. They’re taking about 70%, 70%. And people are going to say, well, Frank, you’re still getting $400 million. That’s ridiculous, it’s insane. It’s probably the biggest scam there is, if you think about it. I mean, you’re raising all this money, generating the money from mom and pops buying these tickets, creating this massive pool of money. You’re taking 70% of it. And what does the government do with that money? Well, they say they don’t even save it. It might go to education, it might go here or whatever.

But imagine if they did that with sports gambling. And every time you went on DraftKings, fanduel, wherever you bet, hard Rock, which is the monopoly they have here. The Indian Casino has a monopoly in Florida for sports betting. No one could open up apps except for the Hard Rock in Florida. Great job by those guys. No antitrust laws when it comes to Indians and stuff.

We all know that you can have your own casino. You own everything, everything. But imagine they took 70% of everything. That’s what they’re doing. They’re taking 70% and people, before you go crazy and say, well, Frank, I could defer it and get a 20-year annuity yeah, you could do that and you’ll get more money. You better not freaking die, because if you die the estate tax kicks in. They’re taking another 40% of that. So you can’t really do that over like a 20-year period. You can and you probably make a little bit more money, but the amount of money they take, they jump you up to what 35, 37% tax bracket right away. They take it like you know, just right out, right away. It’s insane. It’s insane, don’t get me wrong. It’s not that I don’t want to win it. I’m just saying it is pretty crazy. But I guess, if you want it, instead of saying what would you do with the money?

0:03:00 – Daniel Creech

Yeah, everybody always wants to talk about how, yeah, what not to do. What Daniel Creech would not do is get these extravagant excuse me trips to, say, the moon or go deep sea exploring, bang that. The worst thing in the world, in my opinion, would be go do something crazy like oh, I want to take up skydiving or I want to take up some extreme sport. Someone’s going to kill you and you’re a hundred millionaire or billionaire and you die. That’s the absolute worst thing you could do. And I’ll tell you, as a money saving thing, I would rent private jets, but only while my fleet was being customized.

There you go, I would definitely travel like the world would be very small for this young man.

0:03:37 – Frank Curzio

I mean I wouldn’t be buying like people get like yachts and stuff like that.

I don’t know, I don’t know I like to be on boats and stuff, but I don’t like to own them and I wouldn’t join these exclusive clubs either, because I hate people who think they’re privileged. I never base my relationships on how much money you have and what business and stuff like that, but to me it’s always based on character. And in this industry, Dan, you know, you meet a lot of people. You meet a lot of wealthy people, CEOs and stuff like that, and I’ve been around CEOs and things where they treat people like shit and it, it, it.

I’ll usually take the time to say something or put them an example of what they’re doing sometimes, Like sometimes I’ve been at restaurants and they’ve busted the waiter’s balls and I’ll be like, come on, you know, don’t be. And I’ll use the D word, Don’t be a D. I mean, come on, the guy’s cool, Don’t be. And I’ll use the D word Don’t be a D. I mean come on, the guy’s cool, Leave him alone. You know I can’t stand that and I see that because now when I golf and I go to some of these clubs, some of them are really cool, but some of them they just there’s just a lot of assholes there, A lot of assholes.

I don’t think got punched in the face. I always say this I mentioned this a lot of times that’s such a lost art, getting punched in the face, because it lets you it’s like you don’t have to get the cops involved, no one’s involved, and it lets you know your boundaries. That’s how you knew your boundaries growing up in New York. You got punched in the face when you said something wrong. But that’s what I wouldn’t do with the money. But good luck, I’ll probably play it, I think, if I go someplace.

0:05:05 – Daniel Creech

Last thing what I would do is I would buy flamingos, because I’d be white trash with money. I think that’s the best definition. Have flamingos in your art and I would also buy a hippopotamus. Yeah, good luck with that thing.

0:05:15 – Frank Curzio

I know, you know how crazy they are.

0:05:18 – Daniel Creech

Oh yeah, it’s like the most dangerous. I guess she wants to put in a moat around her property. Yeah, you know the Escobar thing that he did that over wherever. Yeah, he had his own zoo, everything.

0:05:28 – Frank Curzio

Yeah, they took it away after they found that after he tried to become president. Yeah, I appreciate that, and they was like, all right, and that zoo, by the way, yeah, he’s like I’m going to go to jail, but I’m going to build the jail and go in it. That was jail with all hookers and gate and that was his punishment. So holy, so much shit happens overseas. It’s crazy some of these countries. But anyway, let’s get to the markets. Have some fun here. Uh, we’re looking at September. Outside of today, the markets are up because mostly technology and google will get to the google news and the apple news in a minute. But you know, past few days we’ve seen weakness. We saw Jackson Hole and the fed pivot. We’ve given up almost all those gains as of this morning before the market opened. Mark’s doing good today.

What I don’t understand is I get the point when people say it’s September like it’s the worst month to invest in. And it is because if I pull up a picture here, I’ll actually show you guys, if you’re watching this on our YouTube channel. September by far is the worst month by far. Nothing is even close right. So February is another down month and May flips. I think this is from 1928, but I’m pretty sure every month is positive other than February, which is 0.1% loss for February, and then September is 1.1%, which is a lot.

But they always say sell in May and go away. And yet you look at the three months, even in May, may’s an up month. And then you look at June, July, August are all up months, with July being a great month. But you know why don’t you just say go away in September and come back the following month? Because after September, as bad as it is, and everyone says holy shit, September is so horrible, and usually sometimes you get those crashes in October or whatever. If you look at October as a decent month, up 0.5%, but November, December, January I mean those months, Danny you’re up over up 1% each in those months, on average dating back to 1928.

Again, I have it up here For me it’s the ultimate buying opportunity of a lifetime. Right when we see this pullback in stocks almost every single year, you could have done this and made money. Considering if you hold stocks until now, we’re near all-time highs. What I’m just saying is I don’t understand that the seller may go away. Compared to maybe sell like late August and go away, we’re probably better off? I don’t know. Based on the stats, just based on the stats. That’s what you’re looking at. I don’t know.

0:07:32 – Daniel Creech

It is funny with September. So chat, GPT has the 40 worst single-month declines on record. Nine of them are in September. So fun, you know. It kind of gets this own momentum in and of itself, I don’t know. But yeah, listen, unless you’re getting out, unless you need the money right away, then yeah, you want to look at it as opportunity. Remember, this game is fixed, Frank. It’s going up, not down. We got to talk bad about the Bears all there.

0:07:56 – Frank Curzio

Yeah, I know, but I will tell you this this month it happens to be in September, but when we’re really CPI PPI, which is coming out next week. We got the jobs report coming out on Friday. These are really important reports. We’re factoring in the Fed’s going to lower rates considerably now after the pivot and I just don’t think that Powell should have pivoted, because he would have been better off pivoting two months before that, three months before that, four months before that, which showed inflation crashing. And looking at the data, just to show you, Daniel, if you look at March, April, May of this year, the inflation rate, when you date back 12-month inflation rate, was 2.3% to 2.4%. Remember where we were? It’s 7%, 8%, 9%, right, and it came all the way down. It was crashing, absolutely crashing. So in March, april, may, powell was like nope, we’re not lowering rates, we don’t need to lower rates, even though inflation is going back to my 2% target, because we could see tariffs and all this shit, whatever. And we haven’t really seen that until this month. However, now he decides to pivot. Well, in June and July it rose to 2.7%. That’s massive, from 2.3, 2.4, 2.7, that’s a huge gain in an index like this. And now we’re expecting, for you know it’s going to come out this September, which is going to be the August number. It’s coming out on Friday, on that Friday. But next week the CPI it’s going to be 2.7, 2.8. You know. So now we’re creeping back up to 3%. And now you’re saying you want to cut rates and maybe that has to do with the unemployment picture. But you could see how all this data is factoring. Forget September. See how all this data is factoring, forget September.

But I could say, if we get a bad unemployment report and then we’re followed by two strong inflation reports, a CPI, a PPI, I’m lost. I mean, if the Fed’s going to cut when we’re seeing inflation start to rise and now it’s not just one month, it’s three months in a row, look out I mean we could see inflation really, really surge a lot faster and get maybe to 4% or 5% if the Fed starts aggressively cutting rates a lot sooner than expected. I just think you know as someone that I graded an A after the transparency bullshit right which we ripped him for right. We said inflation’s here, it’s going to stay. We really nailed that economically.

But you know, after that I thought Powell did a fantastic job keeping rates steady because everyone was like got to cut them, got to cut them and I never thought housing prices would grow, the economy would grow the way it is, where we didn’t lower interest rates considerably. And now I just think the past three months he’s done a bad job of saying why aren’t you lowering rates? You had much more evidence of lower rates a couple of months ago and now all of a sudden you’re lowering rates now where you have less evidence with inflation going higher. These are key reports. Forget September. If they come out bad, we could see a pullback in the market. Is there any hint that the Fed’s not going to cut as much as people believe, which is three cuts now at the end of the year and then a lot more cuts next year? Look out, because the market could pull back more than 5% if we see these reports and they’re coming guys over the next like 10 days or so.

0:10:46 – Daniel Creech

It would be a good. This is gearing up for a lot of excuses, because we haven’t even talked about the Fed shenanigans with the mortgage fraud. And isn’t it great to see everybody defend mortgage fraud Frank, hey well, we don’t know if it is, and it is a simple mistake.

But we’ll see. And it’s a tough process and there’s a lot of pages and all this. It clearly shows there’s rules for the and different ones for me. The other thing is we haven’t even talked about the tariffs and you know they have to go to the Supreme Court. So forget all that for a moment.

To your point, let’s talk about the clear as mud just from the Fed speaks, because today Waller was on CNBC and there’s several Fed members speaking across headlines and stuff. One is saying we’re one to one and a half percent above where we need to be, one or so. That means a percent to percent and a half rate cuts. The other one’s saying we might get one cut this year. Did you see that, bostic? He said maybe one cut and I think he was implying 25 basis points, not 50.

That all aside, job openings and jolts today pretty much in line, showed a little bit of weakness which I think favors the job worrisome act. But the balancing act of the Fed has is like Frank said. You have rising inflation and you have potential slowdown or weakness in the jobs data. And remember these clowns and I say that out of respect because their job is ridiculous and they lie to us all. The time is to try to keep full employment and low inflation.

Now, we were talking about this a long time ago. When you’re this early in our business, you’re wrong, but expect craziness to come out of this. Okay, yield curve control you’re starting to see some bigger names yell about that and also this whole 2% inflation that we’ve joked about before. That comes from Florida, New Zealand. If that doesn’t tell you anything, no offense to New Zealanders. They’re going to have to change all the rules and if it happens under Trump, then it’s just going to be volatile, but prices are going to have to go up higher because the currency is going to take a—Frank. Are you a high-rise diver or anything? No, it’s just going to plunge, which means all prices go up. I’m not trying to scare everybody, I’m just saying own assets, and the easiest way to do that is to own stocks.

0:12:43 – Frank Curzio

It’s crazy, I love the fact that you say these clowns. But no offense.

0:12:50 – Daniel Creech

I say it out of respect, like I say, the banksters, listen, it’s funny. These people are supposedly setting the interest rate, the most important funds rate for the world, and yet the hypocrisy and all this independence you know it gets me fired up. I just I’m glad that this all shows you what a silly BS game this is because the individual investor, you listening us doing this podcast, you can’t listen to just craziness all the time without saying, all right, I can tune this out. This is hilarious. Like you keep telling me, independent, these are the smartest people in the room. They, and it’s okay, you don’t have to be perfect, but quit representing yourself as perfect, because that’s insulting in and of itself. And all you got to do is look at the record. This acceleration and deceleration, these bubbles and bursts. That’s not investor exuberance, that’s not greed and leverage. That’s literally policy by policy by policy increase?

0:13:39 – Frank Curzio

Yeah, absolutely. But let me ask you this and this is why the job is tough okay, Would you say, based on a CPI? Ppi, is inflation good or bad? If you had to rate it good or bad, like, how would you describe it right now? I would say right now, it’s trending higher. It’s trending higher, okay, so that’s not good right?

0:13:54 – Daniel Creech

No, it’s trending higher. Okay, what about jobs? How would you describe jobs? Well, personally, because the revisions are absolutely ridiculous. I would agree with you, and you’re in front of one Friday.

0:14:06 – Frank Curzio

Yeah, so now you have all these negatives. However, and this is why their job is hard I’m going to say this too. I’m going to take their side a little bit here, but you know, they land at the Fed. They’re pretty much the most accurate part of the Fed that comes out with their and in second quarter we grew 3.3%. That went from like 2% 3.3%, and that’s from April to June, and maybe people might say, well, at 3.3%, it’s tainted. It’s tainted because you know we saw sharp declines in imports.

To get ahead of tariff risk and all this stuff and whatever, you have a little bit of an argument. Well, the Atlanta Fed just came out with their Q3 updated version of the Q3 GDP and it was to grow 2.2%. You know what? They just upgraded it to Higher 3.5%. You know how huge that is and it’s not being driven. It’s not. I looked at the data here. It’s not this. Let me get ahead of tariffs. No, we’ve been doing that already.

There’s huge money going into structures, equipment, intellectual property and, yes, consumer spending is very, very strong, even though it’s expected to decline for the first year since 2020 when it comes to the holiday spending part. We’ll see about that. That is a losing game. I forecasted probably my 30-year career five or six times when we were supposed to see a decline in spending for holiday, and I’m wrong. Every freaking time. Consumers are going to spend much more than you’ll ever believe ever. They’ll get access to money. They always have access to money, wherever it is their house they could tap whatever it is. I’m telling you, I’ve just been wrong every single time when I say, oh, consumers are going to pull back. They pull back for sentiment reasons and then, usually, when things are good or okay, they go back to just spending much more well beyond their means. It’s the American way. That’s what we do here.

Okay, we’re seeing inflation rising, clearly rising. 2.3%, 2.4%, 2.7%. Massive revisions in unemployment Holy shit. Okay, should we raise? Should we not raise? I don’t know, depending on inflation, how high it’s going to be. And then you come out with this GDP where last quarter we got 3.3% for Q2, from April to June, and now you just revised Q3 from 2.2% to 3.5%.

I mean, so what do you do? I could tell you these conditions are fantastic for stocks. This is a Goldilocks not too hot, not too cold. You know, you don’t have all these bullish indicators, this massive bubble growing. You could say, well, look at our valuations, we are cheaper in the market, with earnings growing 16% year over year from that last quarter. 16% Are you kidding me? That’s how much they’re growing. Okay, based on growth, we’re cheaper today than we were for the past three years. Okay, when you factor in growth. So you know, you can’t say, well, we’re in crazy bubble territory, because we’ve been in this bubble territory for what? Three, four years? We’ve seen the growth in earnings.

So when you have all these back and forths, the one thing it’s very confusing. That’s why the dot plot is shit. They’re like it’s four cuts, three cuts, two cuts, one cut, nine cuts, I think, eight cuts we’re supposed to get in 2025, one time, seven or eight cuts, right. What do we get? None, right. So now you’re looking at these cuts and what’s going to happen going forward, but just when you have this type of hey, lots of positive, lots of negatives, we don’t know what to do.

It’s usually the best conditions for stocks when everything’s really really, really shitty. Sometimes that’s a good buying opportunity because everything’s crashing. Sometimes everything’s great. It’s a good selling opportunity because you’re like, okay, we’re getting into bubble areas or some areas in the sectors are inflated. When you have this back and forth, where things are good and some other things are bad, I mean, how do you get GDP at 3.5%?

We’re talking recession. I mean, how many pundits are saying, well, we’re in a recession right now. We just grew 3.3% last quarter, now we’re going to go 3.5% this quarter. What are you talking about? Most of those pundits, by the way, are gold bugs, which I always say please change. Yeah, gold, all-time high man. I’m happy for them and it’s great. I mean, I’m so happy. Gold silver highest level since 2011,.

Daniel, I’m happy because the thesis for gold bugs is de-dollarization, which you know. Okay, if we lose our reserve currency status, it doesn’t matter how much gold, you won’t have access to it and you’ll die, probably because you know we’ll have countries taking us over, who everybody hates us because we’ve been the biggest and most powerful country in a long time and we kind of, you know, tell everyone what to do and piss everyone off. So, if that happens, forget about how much gold and money you happens, forget about how much gold and money you’re not going to have access to it. We hate Bitcoin. Right, it’s a gold, but we hate Bitcoin. It’s this whole. The world’s going to end. We hate it.

Like, get rid of that, please, because now you know you could have stocks right now doing well, gold’s doing well, bitcoin doing well. You have all three of them now going up. I’m just happy gold’s going up here, but kind of confusing as an economist. It’s like, wow, gdp is going through the roof, but we’re seeing inflation no question, much, much higher and rising here, and we see these massive revisions in unemployment right, we’re seeing constant. What’d you say before we came on? You said something about Chevron, right? Was it Chevron or was it?

0:18:39 – Daniel Creech

Canoco, Canoco Phillips. Yeah, the line just came across that they’re going to cut 20% to 25% of their workforce 25% of their workforce. The CEO did a video email and there is going to be a town hall. I apologize, I’m reading from briefing who we don’t get paid for and we should. On Thursday, town hall Thursday, cutting 20% to 25% of workforce that’s a big number, Frank 20%, 25%.

0:19:03 – Frank Curzio

They’re going to have a town hall. What If you’re an employee? You lose your job? You’re just going to show up and be like hey, what are they going to have?

0:19:08 – Daniel Creech

Well, I’m assuming it’s virtual town hall. It doesn’t say that the CEO is going to address the staff in a Thursday town hall.

0:19:12 – Frank Curzio

What do you have like a food, a dinner, a goodbye dinner when you do that, you know it’s sad, but it’s true to say. There’s people like there’s no way that they’re cutting me, but it just goes to show you again it’s going to be AI within these oil companies. It’s going to be AI across. We’re going to get to that in a minute and show you how won’t be forced to sell their browser. Who’s the company that’s going to buy them? Perplexity, perplexity. Right, well, they were going to buy Chrome. They were going to buy Chrome.

yeah, yeah, which I thought was funny For 30-some billion, if I remember right, yeah, so Google’s up big along with Apple, which they maintain their partnerships. Pretty big news, what you know? What are your thoughts?

0:20:02 – Daniel Creech

Well, I’m glad that you put this in CRA. So Google’s up about 77% since November of 2023. So that’s good. We’ve held it just about two years.

Listen, we’ve been saying this and I, this is an easy victory lap. So I don’t want to come across as condescending, but I’m not smart enough to prove it. But I’m smart enough and I’m a student of history to understand politics. And we were saying if you broke up Google, it would be a buy. And really this is kind of a win-win situation. Google wasn’t performing that great, it was underperforming its peers. I get all that. The risk of loss here is around a trade. You shouldn’t be worried about the business of Google so much. It’s just whether or not your timing is correct. We were more of buy and holders in this, Frank. I’ll let you go over some details. I’ll sprinkle some in, but I just think I guess I don’t know how Google isn’t a buy here. If you didn’t own any, you should, if you’ve been following us and I don’t know why. Apple, which I believe, Frank, didn’t you say that was one of your favorite big stocks to own right now.

Yeah, one of the be able to make money and when you get layups like this or more, I think, risk reward in your favor with big stocks like this we’ve done this before with Exxon and different stocks I think this is a layup.

0:21:23 – Frank Curzio

Yeah, and when I look at Apple too, their stock is significantly underperformed. The S&P is up like 12% over the past year and Apple’s up 3%. But I think the question was, Daniel, what was the best? It wasn’t just hyperscale, but the max seven companies to own, and I said Apple, apple by far. I love Apple here and I’m going to tell you so.

You know, it’s very big news for Apple, probably even bigger than Google, because they can continue to receive those payments from Google for being the default search engine on iPhones. I cannot tell you how huge that is for Google, given there’s 153 million iPhone users in America that are on their phone for hours and Google steals all of this and what you’re doing. You know it’s funny too, because I have the YouTube channel and that’s Google. Of this and what you’re doing, you know it’s funny too, because I have the YouTube channel and that’s Google. So I was in Dropbox and I have all of our services through Dropbox when it comes to the company, and I wanted to show someone. I have a file in there, a little file that I converted, which I’m going to show at our conference in November. You know, my dad used to do this for 30 years and he competed. I don’t know he competed against a monkey. Yeah, I don’t know if he competed against a monkey.

0:22:29 – Daniel Creech

He had a contest against a monkey and it was on Dateline.

0:22:32 – Frank Curzio

It was one of the number one shows on Dateline before they went into like all the craziness and murders and stuff in the 90s and they had like I think it was 10 or 12 episodes they had on it because the monkey actually picked five stocks from a roll of decks and my dad picks five stocks and I told my dad when he told me I said he’s like you think I should do it. I said it’s going to be huge publicity. I said just don’t freaking lose. And the monkey picked Kroger, which is bananas, and he picked the other side. That actually got taken over right away. So my dad was losing for like a year.

Anyway, I had a clip of that and I showed it on Dropbox right and it was an old clip from an old VHS that we put into like a DVD format that I put there right into like a DVD format that I put there right, and this was about four or five days ago. So I’m watching like old shows of old reruns of Yellowstone like the past couple of days and they’re telling me how I can get the DVD sets for like three different things. It wasn’t just Yellowstone, it was for other things. Like DVDs, you can get your DVD set and stuff like that. I’m like why would they be telling me about DVDs, since it’s technology that disappeared 10 years ago? And I wonder if that’s the case.

My point is when Google, when you have 153 million people and they’re searching for everything on their phone, they use their phone and Google’s taking that information, throwing them through that Gemini system 2.5, holy shit, I mean, they know every single thing about you. It’s huge. So it’s great for Google, it’s great for Apple. No-transcript. That doesn’t seem like a long-term positive for Google, because ChatGPT is taking market share from Google, right, and they’re saying, well, there’s a lot of competition now, so we’re okay with it. So you know, yes, it’s good, yes, google makes money, but Apple, I think, is a real winner. Why? Because they’re going to get it’s close to 25 billion. I think it’s 23, 24 billion plus, right, it’s over 20.

0:24:28 – Daniel Creech

Yeah, I’ve seen different, yeah that’s from google every year.

0:24:30 – Frank Curzio

So that’s 25 billion for basically adding something to an existing product or a platform. And I want you to think about that for a minute, because that means you’re generating massive, massive, massive margins on that. Okay, you’re not creating this whole new hardware device, right? It’s already created, it’s already there. You just signed a partnership, so the margins for this is huge.

And if you don’t think this is huge for Apple, apple’s growth model 100% is based on its services division. It’s not based on selling more iPhones a saturated market. You know it’s still generating. You know they did good last quarter iPhone sales. But that’s the hardware part, is the saturated market. It’s a services part. And when you look at how much 25 billion is, it’s a services part. And when you look at how much $25 billion is, which includes the licensing right, represents 20 to 25% of its services revenue. For Apple, that’s how big it is. To put it in earnings perspective, it’s $1.40 a share of the $7.30 a share that Apple is projected to earn in 2025, which represents 20% of its total projected earnings.

If you think this is big for Apple, this is massive for Apple. Apple should be up like 5%, 7%, not 3% or 2% on this news. This is huge for Apple. Apple listen. Once Apple starts incorporating and maybe it’s Gemini or whatever large language models and all this stuff into their phone, which they’re going to do and you’re probably going to see right away, because they messed up so bad last year, so bad with Apple intelligence. I do, and you’re probably going to see right away, because they messed up so bad last year, so bad with apple intelligence. I mean, the sky’s the limit for this company. Uh, the service revenue is going to explode, but now you’re constantly getting that check. You don’t have to negotiate with other partners or use other browsers and things like that, which is still open till you could do, but you’re still getting that nice check and that’s the growth model services revenue.

Imagine losing 20 of your services revenue. Don’t get me me wrong. You’ll get 7%, 10% of that back, pretty much most of it, but I don’t know about the whole 20%. Imagine your earnings go down 20%. What would happen to Apple stock? It’s $3.5 trillion. You’re looking at what $600 billion? I mean that’s bigger than $600 billion. Right, I’m throwing numbers at you, but 600 billion is probably bigger than the market cap, I would say, of 95 of the companies in asp 500 and we’re used to talking trillions. 600 billion is massive. It’s massive. It’s like eli lilly. Right now it’s a little bit above that market cap, but that’s insane.

So this is really big news that this came out. Uh, it was kind of expected. And you say it’s kind of expected because the analysts going on TV say it’s kind of expected. But when you see Google up 8% and Apple up 3%, maybe it wasn’t expected or factored in. So this is really good news for the stock and for both of these names, although you know, let’s see, I don’t think you’re going to see the company split.

But last thing you’re doing, I will say, splitting up the company, the value of this company would be worth even more. But why is it going up? Because it’s suggesting that you might not have to split a lot of stuff. It’s because when you split a stock, it creates uncertainty and nobody knows what the hell is going to go on, what they’re going to buy, what they’re going to spend off and that value. That’s probably why you’re seeing Google up a lot and we nailed this one where it’s in a portfolio. Listen, we just bought one of the biggest, greatest companies on earth. When did you say Like a year and a half ago.

0:27:37 – Daniel Creech

Two years ago, just under two years, it’d be two years on the 13th, and we’re up what Close to 80% Yep.

0:27:45 – Frank Curzio

77% has a little bit of a go. So 40% average annual returns maybe a little better than the overall market, buying pretty much one of the biggest companies in the world. Why take on any other risk if you could do that? And that’s why you’re wondering why they have such a huge concentration. These big companies, it’s not just a huge concentration. They’re growing earnings by 20%, 30% and they’re massive and they’re trillion-dollar companies. But as long as they’re growing like that, you’re going to see their stock price continue to go higher.

0:28:16 – Daniel Creech

And I don’t see that stopping anytime soon for a lot of these companies, including Google and Apple. So really good stuff there, yeah. One final thought this is clear as mud as everything else is, because the judge, Amit Mata or Meta, I don’t know how you say that actually ruled that they are a monopoly. So it’s kind of like a insider trading or the trading rules you know, the banksters. Again, out of respect, hey, we’re not doing any wrong, we’re just going to pay some fines, we’re going to keep doing what we’re doing. I love this, like, yeah, you’re not monopoly, but and like you said, I think it is cool Because of AI.

0:28:40 – Frank Curzio

There’s competition, but AI this is the thing. Hey, the free market is still alive and models, chat, GPT. So if you’re saying that you’re okay with this deal now because you see a lot of competition coming in from AI, those generative models and stuff like that large language models where the FYU for the 10 years before that, because what you’re saying is, this is the biggest monopoly we’ve ever seen and we did nothing about it, but now we’re not going to do anything about it because now, finally, there’s more competition coming into the market. So it’s kind of crazy that he phrased it that way, because where the hell were you for 10 years before AI came in?

0:29:22 – Daniel Creech

Oh, Frank, you don’t have to perceive to look out for individual investors. It’s not the actual goal, it’s the perception.

0:29:29 – Frank Curzio

You’ve got to remember that it’s all stage, speaking of AI, anthropic so Anthropic, I feel, is an under-the-radar large-language model than AI in terms of not getting a lot of attention over the past six to nine months. We hear about Gemini, we hear about ChatGPT, deepseek, grok Lama. You can look at the. They have these leaderboards that go from anything from math tool use, affordability, speed, the best overall, and it’s not on any of those lists, right? Not math best to use for math, tool use, affordability, speed, the best overall. It’s not on any of those lists. And, by the way, anthropic, their large language model is called Claude, so not on any of those lists. And you say, how could that be? Because the company just raised $13 billion in a Series F round, giving it a $183 billion valuation. And if you think about that $183 billion valuation, do you know how old Anthropic is? No, it’s less than two years old. Almost every model is less than two years old, pretty much. And in January that’s not that long ago in January, the company’s run rate for revenue was $1 billion and it was valued at $61 billion. We’re talking eight months later. That revenue run rate is now $5 billion and it’s being valued at $183 billion.

I don’t know of a tech company that’s ever grew that fast in terms of their revenue that quickly. I’m talking about a startup. I’m not talking about what NVIDIA did was the most remarkable thing I’ve ever seen. That was about two years ago, too, where, holy shit, they just came out with like hey, we’re going to generate from $5 billion to $25 billion a quarter. You’re like what is going on here? I’m not talking about that. That’s a mature company. It’s been around for a couple decades. This is a brand new company To see this kind of growth. I don’t think I’ve ever seen anything grow this fast before. What are your thoughts about this deal? Is it a game changer or whatever?

0:31:19 – Daniel Creech

I don’t know about a game changer. I’m not familiar with their product other than just seeing their valuations and kind of the leaderboards and stuff there. I do think that it’s a great snapshot from a macro perspective about how much money is still chasing this AI and, yes, at some point it will cool off. At some point spending or investment like this will cool off. Slow down doesn’t mean it’s going to be the end of the world. It’s just right now. It’s just not right now.

And to your point, Frank, about being, it’s all about how you want to look at things. Because you mentioned earlier about how the market is cheaper relative to you know a little while ago. Because you’re looking at earnings growth Well, the Wall Street Journal over the weekend had an article about how the market’s more expensive than the dot-com bubble but they’re looking at price to sales or price to revenue or whatever. It’s all about what metrics you look at. Clearly, there is still money being poured into this. I mean your point. Okay, the run rate generating $1 billion in revenue to five. You said 1 billion to 5 billion. That’s what they’ve done in months.

Yeah, that’s incredible. It’ll be interesting to see how that continues to grow. But you can’t you can’t say that’s not incredible growth. You can attack and say, hey, the valuation is absurd, but people are going to invest after the next best thing. I think that’s a great snapshot that we are still in a risk on market. And when you couple that and the behind the scenes money on the private equity side and all the stuff about how that’ll get opened up to 401ks and things in the future, the takeaway is right now it is still a very risk on market, on the private sector especially. I don’t understand and don’t think that that spills over and hurts. I don’t think you have a booming private market and a lackluster public market at the same time. I could be wrong. I’m simply saying there’s a lot of worries and fears and hurdles to grow out there, but markets are going to continue to march higher in my opinion.

0:33:01 – Frank Curzio

Did you see a list of investors here who participate in this?

0:33:05 – Daniel Creech

No, I just saw the number and kind of chuckled.

0:33:08 – Frank Curzio

Fidelity, lightspeed Venture Partners they were the leaders followed by black rock, blackstone, d1 capital, goldman jane street, ontario teachers plan, which is interesting, right, some of these big companies investing in uh, you know these pension funds investing in private, in private companies t-roll price, tpg and qatar investment authority, and that’s just to name a few and you would say, well, why the hell? When you’re looking at this and you look at the leaderboard and I think I have a picture of this, when I look at this leaderboard, this way I could show you so these are really cool, these leaderboards. It’s a large language model leaderboard and this is done by programmers and stuff like that, so no bias here. And when you punch it up, you’ll see it because you’ll see the chat GPTs here you have. You’ll see the chat GPTs here. You have OpenAI here with different models, you have Grok, you have Gemini and all this stuff, and this is for reasoning and high school math and stuff. But I will say this because you’re looking at all these investors and you’re saying, well, why the hell do all these investors come in at this when they’re not a leader in math tool use, affordability, speed and best overall is because they are a leader in agentic coding. You need to get familiar with this. We’ve been telling you about this for a very long time. This is a next stage. This is a next area.

So this is autonomous AI agents that interact with a whole bunch of tools and services and stuff like that that help these agents AI agents through agentic coding. They help them read the files, write code, run commands. Through agentic coding. They help them read the files, write code, run commands, access databases, and then they gather all this information and then they execute the actions. And these agents have mechanisms for feedback and adaptation. What does that mean? It means that they’re learning from their mistakes every second of the day that they’re being used, making them the absolute, perfect digital worker. So, basically, when you look at these things and listen up because this is important, because we talk about jobs in past podcasts pay attention, these agents can do your entire CRM management for you. It’s why one of the early investors in this company is Salesforce and also Cisco. So that’s a hundred billion dollar market.

So if you look at Anthropic and you take out that stuff and let me bring up this chart again, again, if you’re watching this on our YouTube page look at best in agentic coding and you have Claude, Claude, 4claude. They’re all even with ChatGPT and Grok4, right, they’re all basically even here. So you know it’s listed as one of the best when it comes to agentic coding. When you take a look at this and here it is so when you have this model and you’re saying, ok, let’s look at the numbers and the run rate. Anthropic now is serving over 300,000 enterprise customers. Those customers who are spending more than $100,000 in annual services have grown sevenfold. That is the best indication.

So if you’re spending a lot of money, now you’re finding that the system is getting better and it’s working better, and now you’re integrating into your whole entire company and when you do that, it’s much harder to change. It’s kind of like NVIDIA. They built the foundations for all these AI infrastructure, for data centers, and it’s almost impossible to go to someplace else because you have to almost rebuild from the beginning, because it’s NVIDIA’s services that keep these people locked in. Right, that’s pretty much what Apple. It’s Apple services, not the iPhone. It’s the services, it’s the cloud. Once you buy an iPhone that you’re in, you’re like shit, do I have to transfer? They make it a little bit easier now to transfer if you want to go to Samsung or whatever, but that’s what you want to do as a company, where you’re locking these people in, you’re providing all the services around your hardware, but you look at this company. It’s no wonder Salesforce is struggling so much as an industry leader in CRM, not to mention you’re now competing against who? Microsoft and Oracle, which are much bigger companies with deeper pockets and much better AI and agentics, and now they’re huge competitors now, right.

So some quick stats, Daniel, for agentic AI, because this is the future of AI. Right, you say large language models, which the average retail customer I think consumer’s gotten used to. We all use these things all the time. We use these things all the time. Agendic AI is being used mostly enterprise. It cuts human test time by as much as 86% in complex workflows. This is data that I’m pulling. Almost all new enterprise AI deployments are going to include agendic capabilities. Agendic AI systems complete up to 12 times more multi-step tests than standard large language models. 12 times more multi-step tests than standard large language models.

So if you’re wondering why they’re raising so much money, why this company’s grown like a weed, because they specialize in pretty much the biggest growth area within AI, which is agentic AI. That’s why you’re seeing so many investors and the biggest winner in Anthropic you know who that is Amazon. Ooh, because Amazon invested $8 billion. I was going to guess something else $8 billion in this name early on, which, by the way, anthropic’s being run by ex-OpenAI executives, so they have a 33% stake in the company. Amazon does. Amazon does Good for them. So not only is that $8 billion stake from two years ago worth more than $60 billion now, which is great by itself, but Amazon is now generating billions in revenue since Anthropic is running its massive models on AWS and using Amazon’s chips to power it. Well, I wouldn’t say Amazon chips are not that great. Well, they must be great, because if they weren’t that great, you wouldn’t see this company raise $13 billion like that, pretty much from the 10 largest investment firms on the planet. So that should tell you something about Anthropic and why it’s such a big deal.

Pay attention to Agendic. Pay attention to that part of the market. This is a company that’s well-positioned. This is a great way to play through Amazon. I know Amazon is whatever. The market cap is $2 trillion, $3 trillion, I get it, but to me, when I look at what Amazon’s doing with AWS, along with Anthropic, I at what Amazon’s doing with AWS, along with Anthropic. I just feel like this is a name that’s underperformed and it has a good shot to really outperform a lot of the other companies, along with Apple, when it comes to those large companies in the Mac 7. So they’re well-positioned.

This is great news for Amazon. I mean, it just raised the value and, plus, they’re just generating revenue off of it and also generating their investments up, whatever it is eightfold, ninefold, whatever it’s up. I mean great job by them by far the most money they’ve ever invested in a startup in history, which makes sense, because who’s going to invest $8 billion in a freaking startup unless it has to do with AI? Usually, startups are $20 million $30 million seed capital. Let’s get it going $8 billion. I mean pretty much. In November 2024, they raised it $4 billion, but I think it was March 2023, I think, was the first investment in this. So good for them, very big deal to see that. But this is an under-radar play because they are heavily involved in the biggest growth area within AI and that’s agentics. So pretty good stuff for them.

0:39:44 – Daniel Creech

So, dumbing this down to my level, Frank, on this agentic stuff, this reminds me of the conversation you had with Horowitz Mr Horowitz, your friend, on his podcast or maybe it was yours about where, essentially, you’re going to say, for example, Frank’s going to send me back to Las Vegas for some boots on the ground research. You tell me to get on my computer and I start searching for it and the bots, the AI agents, are just going to take it from there and book everything. Right, and I’m not being funny. I’m being funny on the example, but that’s essentially what you’re talking about in a nutshell. Like that’s the example. Hey, I’m going to plan a trip. They kind of not do it, for they do do it for you. They kind of highlight and walk you through it. Right, it’s like a personal assistant, only it’s all AI.

0:40:18 – Frank Curzio

It’s not even walk you through everything that you want to do. Instead of going to Expedia or whatever, all you have to do is talk to it and it’s going to book everything for you and do everything for you. Gotcha, It’ll book the trip. It’ll search 20 different sites to find out what’s the best prices. You tell them what type of hotel you want Okay, one bedroom king size hotel, maybe on the Strip.

0:40:44 – Daniel Creech

It’s going to go through every single process for you and book it for you and say here is your option, but it’ll book it through.

0:40:44 – Frank Curzio

Expedia, if that’s the best, or whatever. Well, hotel.com or kayak or whatever right, it’ll go to any one of them, which is really cool. But I think it was Mark Benioff that just came out. Let me see if I can find this really quick. That’s the CEO for Salesforce.

0:40:58 – Daniel Creech

He’s always taking shots at. Whenever I think of him, I think of an emoji, because he’s always making fun of is it Copilot Microsoft? Yeah, gotta love a little friendly competition.

0:41:06 – Frank Curzio

Especially when your stock’s doing shit, it’s so nice to talk about everybody, so they cut. I think they had 9,000 people in customer support roles and now, by using these agents, cut 4 000 of them. Wow, now it’s not transferring over to the rest of their business, and I get it because they’re seriously threatened with CRM. You have all these coders now. You don’t even need coders for a lot of this research and, okay, CRM systems. Basically, guys, they manage everything behind the scenes of a business, whether it’s you know, tracking and marketing, uh, credit card processing, like for us, like when someone subscri goes into. You know, different email lists and stuff like that. This way, you’re not part of all of our email lists because we have different email lists for different products, right? So all this stuff is automated and you have to use different CRM systems. It’s a pain in the ass, especially as you grow into a business, if you start doing over a million, two million, three million sales. You need this in order to grow, you need this in order to grow. You need these systems, right, that update and tighten. Now, a lot of this is AI, but it just goes to show you. You know, I think it was 9,000. Now they cut 4,000 of those customer support roles which they announced yesterday. So that’s how big of a deal this is and using it for your companies.

Remember, if you have these digital employees, what do you have? You don’t have to worry about sexual harassment in the workforce you don’t have to worry about, you know, benefits you don’t have to worry about. I mean so much BS that goes along with having employees right, and sometimes you get great employees. That’s fine, but a lot of times your businesses don’t have the best employees and all this stuff. And you’re going on, now that they’re working 24 hours a day, right, and they’re constantly learning and they’re getting better, better, better, better, better. And it’s just starting right. They’re getting better and better. It’s going to be perfected. I know it’s not perfected now. I know when you call customer service and you get these bots, I hate it too and they just keep asking you stuff and you’re like, listen, I just want to speak to someone. They’re getting better and better and better as it goes forward. And yeah, listen, anthropics is going to be one of the biggest winners.

0:42:57 – Daniel Creech

That we’re days away from the Terminator, at least. But did you see the video of Dana White, the UFC guy over in China? No, and he was videoing. He had his phone holding like this and he was videoing a little fighting robot and had gloves on and everything and he kicked it in the chest almost like you’d feel like to start it, and this thing was throwing kicks and punches. I mean, it looked as Terminator, as what you’d think. It was kind of wild. Yeah, you don’t want to piss one of those things off, right, but like you said, it’s not perfect yet. They still can’t even fix the drive-thru order, so we’re not there yet on the turn. Ah, chick-fil-a fixed it.

0:43:30 – Frank Curzio

That’s about it, humans, yeah, yeah, it’s true.

0:43:33 – Daniel Creech

That’s absolutely true, yeah that’s absolutely true, you see little robots walking around and taking your car.

0:43:39 – Frank Curzio

Whatever’s quicker, because so many of those outside of Chick-fil-A that drive-thru. The drive-thru is supposed to be experience that makes things easier and faster and it’s slow as shit for all these places. It’s unbelievable.

0:43:48 – Daniel Creech

Quick thing on a drive-thru fun fact. I’ve never seen this before, but the Chick-fil-A across from our office here in Florida has a drive-thru window that is literally a door. These doors part like sliding doors at a mall, like when you pull up. I’ve been there once just because when I saw it I was. I just had to go see it, honestly, and I eat their sandwiches every once in a while, but I did and the doors open and they walk out and hand it to you. It’s no window.

0:44:16 – Frank Curzio

There’s three or four people that are walking it out yeah, I mean it was and be like ah it’s happening everywhere.

0:44:20 – Daniel Creech

Check this out. It’s like yeah.

0:44:21 – Frank Curzio

It hasn’t happened everywhere, not here, no way, that’s not anywhere. They still have the window and they’ll have two windows and they make you pull up. You’ll order, like a burger and fries from McDonald’s. They’re like could you pull up please? How the hell is that? I mean that’s what all you sell burgers and fries. How is? The amount of salt they put on those freaking fries is insane.

0:44:41 – Daniel Creech

That’s why they’re the best fries ever yeah they’re delicious as hell they are.

0:44:44 – Frank Curzio

I love them. I’m not complaining. They still have the best fries ever. They do. They have the best fries. No one has better fries than McDonald’s. Yeah, again, it’s my opinion. Kraft Heinz came out and said look, this is what we’re going to do, guys. We are going to split our company right, split off this division, split off the two different divisions. And they announced this was it yesterday or the day before, and the stock got hammered on the news, so they had a new 52-week low of around 25 on this news. As Buffett, who owns a stock, said, he’s not happy with this decision. Daniel, your thoughts on Kraft Heinz and could we be buying the stock here?

0:45:26 – Daniel Creech

I don’t enjoy this section or sector, so I’m not going to make an opinion on buying the stock here right now. I would have to look into it. But I think the great lesson here is and we’ve talked about this because you want to look for acquisitions or sectors that are going to go on an acquisition spree and you can look at tech and roll-ups and stuff like that. Frank’s talked about how Oracle is such a great one about that. I’m looking at that in the terms of different services in the HVAC system, in different areas like that. But the point here is A you can’t just follow anybody into an idea. Buffett’s the greatest investor of his generation by far one of the greatest ever. I’m not taking anything away. I’m a huge fan, but this has been a colossal, horrible idea. On, just merging doesn’t fix your problems. You can’t just cut away synergies and expect for a strong performance. Now again, they’re up against some major headwinds in the consumer staples or consumer space, the snacks and all that kind of stuff. Consumer habits change, generational health concerns and all that. Frank, this happened 10 years ago. Finance, I guess the way I would dumb it down. Frank, this happened 10 years ago. Finance, I guess the way, I would dumb it down.

It’s ironic because I don’t think this deal. I don’t want to say that the deal got done because of Buffett and 3G Partners. They basically financed this merger. Then he steps down. They don’t even have voting rights, from my understanding, because the board of directors did the tax-free spinoff, so he can’t even stop it, even owning over 20% of the stock, which is huge. It’s been a not only dead money but loss for a decade when they did this merger and I was reading anywhere from 40 to 60% price depreciation. Stock is collapsing. Buffett and them took three plus billion dollar write down. That is softened, though, by dividends over that time. So I’m not I’m not trying to throw mud on him or kick him while he’s down. I’m just saying you don’t just merge your way to prosperity. You can’t just cut cost in a tough consumer changing. So I would just be leery of that Knee-jerk reaction. Absolutely not, I wouldn’t jump into this, but that’s probably a good reason too.

0:47:15 – Frank Curzio

I mean, you can merge your way into prosperity.

0:47:18 – Daniel Creech

Well, I guess you can.

0:47:19 – Frank Curzio

I mean, you know with Oracle and you look at AutoZone and stuff like that, I will say this my first reaction to this was, hey, it’s probably not a good idea or maybe not a good idea, but it’s probably a good idea to talk to your biggest investor, who happens to be the greatest investor the world has ever seen in 50 years, who owns 27% of your company it’s Warren Buffett before making a decision like this, like that’s the first reaction and I get it like this, like that’s the first reaction and I get it. Then again and this is what you’re not hearing in the news this stock is like a $25, $26. It’s trading at its 2020 COVID lows. This company and stock has been the biggest piece of shit. I mean, I didn’t realize how horrible it was.

I mean since 2020, the stock is down 5% and I have a chart here. The stock’s down 5% and the S&P 500 is up 117%. I’m taking 2020 January right Even take the lows. It’s worse than that. But when you look back and you look at a chart of this stock, Daniel, I mean I went back pretty freaking far on this too, because I couldn’t go back any further, but this is in him since 2012. You haven’t the stock at, really at these. I was at 24 in 2019 to 25.

0:48:28 – Daniel Creech

26 right now, yeah, but what’s the dividend?

0:48:29 – Frank Curzio

pay Frank, you go okay, so here’s the deal, right. So this is start. So, basically, you’re looking at not even a lost decade, almost like a lost two decades. Uh, this stock was at 90 in 2017. Right, so I’ll say that it’s at 90, 2017, but as it went to 90, you could have took your profits or whatever. But I mean really it’s been. You know, at the levels that you’re at right now is pretty insane. So you have to shake something up. You have to do something different, because whatever you’re doing hasn’t worked since 2020. Every single company stock price is higher since 2020, except for these guys. I mean, you don’t see too many stocks like that, especially on the large cap companies in the S&P 500. How many stocks are you going to see have much lower levels than you that went out of business Now, with that said, if I was part of this company, here’s what I would do.

They have a 6% yield right now. I would cut that dividend to 3% right now. Cut it to 3%, that stock’s going to fall probably to 23, 22, and I would probably put $250,000 into this stock and hold it for three years and I think that could easily double, if not triple, from those levels, this would be a $60 stock. And I’ll tell you why. Because if they do, this is probably going to be really good for the company. And you got to shake things up. I don’t care if Buffett doesn’t like it what the hell is he like? This stock is a piece of garbage for freaking 20 years, especially since it’s been done nothing, right. So what’s the point? Well, you got to do something. Shake something up. Try to extract value that you’re not seeing from this, right, whatever it is. But you’re looking at the stats here. This company is doing $25 billion in sales and has a $30 billion market cap. Are you kidding me? It’s trading at 10 times forward earnings. And that 6% yield you cut it to 3%. It’s still going to be able to be in funds at 3%. It’s going to be one of the highest yielding consumer stocks. At 3%, right, but at 6% dividend yield do you need that much? Because people aren’t even buying it. And again, that yield goes higher. It’s a percentage of your stock. Your stock goes lower. That yield is going to go higher, right, because it’s the amount of money that you’re paying to it. Right, it’s based on the price of your stock.

But, man, because it is a consumer staple and when consumer staples is cyclical right now, you see a lot of these companies do shit, and when they do shit for a long time, they’re usually good buying opportunities. I mean you could say, not just consumer staples, you’re gonna look at IBM how terrible IBM. Or Microsoft, how terrible Microsoft was for 10, 12 years. I mean, these stocks eventually figure it out, these companies figure it out, they’re trying to figure it out. So, while Buffett doesn’t like this, I like to know what Buffett likes Because I love him. I think he’s the greatest investor ever.

But right now, with this investment, I have no idea why you wouldn’t like this, because the status quo and what the company’s doing is clearly not working. Why not do something else? If it’s not this, what is it? What’s the plan to come up with it? I mean, you own a huge portion of this stock that’s done nothing. So you know we’re not hearing that, we’re just hearing. Oh well, Buffett’s pissed, so the stock’s getting killed. He doesn’t agree with this.

Well, for me, when I look at investments, Daniel, I look at the people and their track record and the track record within a particular stock. I think Apple. We own Chipotle. Great, we’ve done a great job at Chipotle. There’s other stocks that I’ve done shit with that I stay away from. There’s other stocks that I’ve done shit with that I stay away from. Like GE, I stay away from that.

This is a stock that I wouldn’t be listening to Buffett on because it owns him. It’s like if you’re at a poker table, I don’t care if that guy’s an amateur or if he’s freaking great. If that guy keeps beating me, I don’t, you know, with my ego, I’m not like, oh, I’m going to beat him, I’m going to kill him. I kind of stay a little while this stock owns Buffett. Buffett doesn’t own this stock in that way, right, and it’s kicking his ass and he’s making decisions which I don’t think he has the right to do, considering you’ve been in this stock so long and it hasn’t done anything.

While I listen to Buffett on this particular stock, I feel like I’m listening to an economist talk about the stock market what has nothing to do with him. I feel like I’m listening to Michael Jordan with baseball when he’s the greatest basketball player ever. So I just feel like you’re out of your zone right here because you haven’t done well, and I understand you say well. Buffett doesn’t like it and that’s the headline. But you’ve got to tell the whole story because Buffett has been more wrong on this stock than almost any other stock. He’s been Pretty much in the past. I would say at least 15 years that I could trace back to right now, probably even longer. So say at least 15 years that I could trace back to right now, probably even longer. So they have to do something and maybe this is it, but Buffett being pissed or whatever, I don’t, I don’t know why he’s pissed. They have to do something. I mean, they’ve been such a company for such a long time. I didn’t realize the performance is that bad in the stock? I really had no idea.

0:52:33 – Daniel Creech

Yeah, I probably. I mean it probably won’t be very beneficial to him. We’ll see what happens. Capital IQ Q has the earnings for this year on a gap. They must be taking some large write downs because they have them losing $4 a share. I don’t know what’s up with that. Yeah, probably. Eps normalized is coming in at 260. Put that in perspective, the dividend is about $1.60 right now, so if you cut that, you’d save a lot of money. You got to get consumers back, though, and we’ll see how they split off their they’re generating revenue.

0:53:00 – Frank Curzio

Right, they’re generating $25 billion in revenue. It should come at a much higher price than that $25 billion in revenue, but yeah, $25.3 billion in revenue, $30 billion market cap right now. To me this just makes a lot of sense. And yeah, look, just to show you how terrible it’s been, this is the longest. The chart goes back on a CNBC site that I just pulled up and it goes back to 2015. And look, pulled up and it goes back to 2015 and look where the stock is. I mean, the stock is right here at 26, 50 and just in 2020, briefly, it was at 24, almost 25. Every other time period it’s been much higher. Like I said, it’s been 90 bucks in like 2016, 17, uh, but man, it’s been really, really bad for this company. Just surprising to see.

0:53:39 – Daniel Creech

I’m glad we don’t surprise the same.

0:53:41 – Frank Curzio

Yeah, I know, and I don’t want to cherry pick here either, there’s just too much going on. But I could tell you I would love to see, like this capitulation, like and you might’ve got it, cause it’s up today, maybe you got it, you know the past couple of days, so it’s up today. But you know, for this company and that is a big story here I just listen, we got to call it how it is. You know Buffett been a good investor in this stock. He’s been terrible, uh. So I don’t know if I want to listen to Buffett about, hey, you shouldn’t split, because if you tell me they shouldn’t split, give me something else of a reason I should own this stock. Because as of right now, you sh, it’s un, you can’t own this name. You can’t own this name unless they’re doing something.

They have to change that trajectory. They have to find growth. Usually you find it. I can understand a year or two. You know a little bit of a setback, but after that with these big companies, usually they figure them out maybe two years, two and a half years, three years, it could take five years, seven years. I mean, they haven’t figured it out. There’s nothing there. I don’t know what they’re going to do, but I was just interested to see that. That was surprising to me. Yeah, but one last thing here before we go.

I like to on CNBC. That was pretty good. Did you see that interview a couple days ago? I did, I, yeah, I did. No, just the stats that he was talking about, like, like I didn’t know, linear was losing first of all, did you?

0:54:49 – Daniel Creech

see the title of his new book. No, I don’t know. The worst title in the world. What is it? Oh, I don’t even remember. It was like a paragraph, I’m not kidding you.

0:54:55 – Frank Curzio

They read the title and it was like, oh, how I’m richer than you and how I’m better than you.

0:54:59 – Daniel Creech

Yeah, it’s like born to be wired, and how I’m better than you. Yeah, it’s like born to be wired and how I wired. The world is ridiculous. I’m sorry, I don’t want to break that.

0:55:06 – Frank Curzio

The one thing I say when he was talking about, you know, to subscribers and linear losing 8%. They’re losing 8% of their subscribers every year, linear 8%, right. So that’s why you’re seeing like everybody needs to go into streaming and I get it, even for Disney. He was talking about Disney and ESPN. He was bringing up stuff like now they have all these sports, they don’t have all the sports. And I heard from a lot of sources not even sources If you go on Reddit, you go on these chat boards because they just launched a service.

It was a nightmare, like it was a nightmare to navigate. A lot of shit didn’t work, the services didn’t work. I’ve got like two or three emails on too. Live is the biggest, it’s the most important thing and even said like CNBC exists. But you know the live content that they provide is great along with, you know, a CNBC. But just a live content in sports is everybody’s going to always pay for that right you have. You have this secular growing market forever, along with understanding that content consumption and how they consume it.

And you know, with Disney, let’s see what the ESPN brand they did get wrestling, they lost baseball. They have a little bit of football, but let’s see how that works out, but you’re going to have to subscribe to like three or four platforms. Now. I mean Prime, I think, has a Thursday night. You have Google YouTube TV for Google and you know there’s just different services. What is it? Is it Paramount or Peacock has another game that you have to subscribe to Peacock. You have to subscribe to Peacock to get it. I mean holy shit. But I was just interested to see some of the stats.

0:56:28 – Daniel Creech

Who just got the UFC Paramount? Yeah, because Oracle’s son is running it. Yeah, they just signed the big deal they bought the rights for that?

0:56:34 – Frank Curzio

Yeah, which is insane. But, yeah, many implications when you’re looking at the rest of the market and so many companies. And that’s what I like. When I look at interviews like that, it’s like how do you look at these interviews where it doesn’t pertain to, like, yes, certain companies, or you see where the company, the CEO, is talking about? It’s just like when you look at the industry and you get really good statistics and numbers. You could really figure out who the winners, who the losers are.

And I still think disney’s a big loser when it comes to streaming, because they’re competing against the biggest companies in the world who barely pay attention to that part of the like prime for amazon, apple tv for apple. I mean, you know, these are big divisions for any other company in the world except for them. It’s like the second, it’s like the third or fourth biggest division within their company. Disney’s going all in competing against them directly, cutting their content expense, raising prices and throwing commercials all over it. So it works now where you’re seeing okay, now they’re starting to generate money and they did a great job. But how do you sustain this? How do you keep these customers when you’re raising prices, providing commercials and giving them less content, which is what he spoke about, Malone.

He said you know you have to understand the content consumption. I mean these platforms are based on new content, not just content, not your library. I always joke around and say you’re not going to see. You know, people aren’t getting this to watch Dumbo 40 times. It’s a new content. Stranger Things is coming out. You have what’s the one with the Landman is coming out with a new season in November as well. I mean, that’s what people are going to sign up to, whether it’s Netflix, right, because there’s new content coming out. When Disney’s best new content comes out in the movies, that’s their growth model and I just don’t get that. That’s their growth model instead of opening up tons and tons of new parks. But he said a lot of interesting things, a lot of points that I was like whoa, I didn’t know Lenny was losing 8% of that subscriber base every year 8%. Imagine that you want to talk about secular declining industry 8%.

0:58:20 – Daniel Creech

Holy shit, I saw stats from is it Nielsen that were awful today and I didn’t. I mean I trust him. But hey, I found this book. Title you ready for this? Go ahead, born to be Wired Lessons from a Lifetime Transforming Television, wiring America for the Internet and Growing Formula One, discovery, Sirius XM and the Atlanta Braves. John Malone, holy hell, I’m sorry.

0:58:42 – Frank Curzio

Good luck, he’s rich, that’s fine, he’s someone in the entertainment industry. I’m very surprised.

0:58:46 – Daniel Creech

You can wear anything you want when you’re rich. You can be 74 years old and have a 24-year-old young lady that loves you for your personality. It’s an amazing world we live in, absolutely.

0:58:54 – Frank Curzio

All right, guys, so covered a lot. We’re going to be at Wall Street Premium. We’ll have a new recommendation for you as well. For those paid subscribers. You can find out that offer and how we manage that, which is really cool. Find all the statistics. We have a great portfolio for that and we come out with a stock pick almost once a week, definitely every two weeks, but mostly every week. We’ll show you unplugged that premium version. So if you want to learn more, go to curzioresearch.com and how you can subscribe.

It’s an hour podcast. It’s really really good, but we really go into the details and numbers and give lots and lots of stock ideas. We’ll have that tomorrow. Also, last week, which was weird I said I can’t wait for the Eagles. It’s Thursday. I was a week off because I always have my fantasy football draft, like that week, and we had it on Wednesday and I just thought it was Thursday, but it’s this Thursday, so that’s how busy I’ve been. I couldn’t even look at the schedule, but you know, with football coming around, I also wanted to say congrats to Lee Corso.

I thought NFL game day was awesome, just to see how long he’s been there and for anyone starting a business, you should pay close attention, because the reason why that was so big is because everybody was focusing on numbers and stats and stuff like that. And he said no, we are in the entertainment industry People. It’s not that they want to be entertained. We need, it’s a necessity for people to be entertained, we need to branch off. I mean just with all anxiety, everything going on, you need to just step away and watch sports and not worry about anything. You know, hang out, go on vacation and not worry about anything. And it’s such a necessity right now. When it comes to the entertainment factor and he was talking about that they all talked about it and that’s why that show is so huge because it’s entertaining. People love it. They talk about it all the time. It’s more than just seeing stats on football and picking who’s going to win and lose. It’s entertainment. So if you have a business, you have to have that interest, especially if it’s content creation, if it’s social media, whatever you do, make sure you have that entertainment factor, make it fun, make it interesting.

You hear on this podcast different takes than you’re hearing every place else. We don’t be different just to be different. That’s how we feel and that’s why we have this podcast because I just think it’s real. You’re not hearing the real stories with saying Buffett’s wrong. Who’s going to say Buffett’s wrong? He’s the greatest investor ever, he’s awesome, but he’s wrong. Kraft Heinz saying that he doesn’t believe in this measure when that stock has done shit. That’s what you’re successful, especially using AI, which Altman said. I don’t know if I said this on a podcast. Did you hear what he said the other day? He’s going to do all the podcasts and doing all kinds of interviews. He said this is the first time in history that you’ll see people start a billion-dollar company and run a billion-dollar company with one employee. If you think AI is not changing the world, there it is, anyway. Questions, comments. Frank@curzioresearch.com. Daniel.

1:01:29 – Daniel Creech

Daniel@curzioresearch.com.

1:01:31 – Frank Curzio

All right, guys, we’ll see you tomorrow. It’s from us and we’ll have a nice pick for you tomorrow, already picked out and we’ll see that. Take care.

1:01:40 – 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.