Enough is enough.
Yes, change is desperately needed in our society. Yes, peaceful protest is our constitutional right.
But where’s the line?
Destroying private property and small businesses… toppling statues… taking over entire city blocks… The destruction has got to stop. [0:33]
Curzio analyst Daniel Creech sits down to discuss everything from to Fed Chair Jerome Powell’s latest press conference… to the COVID-19 market selloff… to some of his favorite ideas heading into the November election.
In particular, he breaks down one sector that hasn’t rebounded as much as the overall market… yet. [24:44]
Finally, you need exposure to both these industries—immediately. [51:34]
- Rant: Stop the destruction [0:33]
- Guest: Daniel Creech, Curzio Research analyst [24:44]
- Educational: You need exposure to these two sectors [51:34]
Wall Street Unplugged | 727
How can we change America if we destroy it?
Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on main street.
Frank Curzio: What’s going out there? It’s June 24th. I’m Frank Curzio, host of the Wall Street Unplugged Podcast where I break down the headlines and tell you what’s really moving these markets. What a world we live in where social media dominates our lives. It’s going to influence so many people now using the camera on your phone. Just hooked up on Facebook, Twitter, Instagram that provides tons of ammo especially fin media to further their agendas, which we all know, I don’t care who you listen to. Every major media company has an agenda. They don’t just report the news to report the news.
Frank Curzio: They have their spin on it, which goes towards their audience. But the anger this is creating right now in America is off the charts. It’s incredible. I’m sure you can agree with me at this point, and yes, this is a rant. Yes, I got to curse a little bit. If you want to fast forward this part, feel free but I ask you not to. I’m going to get deep into this right now. You know as well as I do people are nice. I’m sure you’re all great. Most people out there are nice. They’re cool. I don’t see racism where I am. Does it exist? Yes, it exists. People normally treat people good if you remove that social media component.
Frank Curzio: Seriously, most of us are nice out there, but the anger that we’re seeing is insane. Where people that I personally know, people who go to church twice a week. People I grew up are posting things like Trump is an effin idiot. Pelosi is an old hag. Biden is a senile piece of shit. Somebody actually said that. They would never ever say that in person. Never. These are such nice people. I don’t know what brings out that anger. The anger we’re seeing now, I don’t think I can compare it to anything I’ve seen in my life. How did this all start, with George Floyd? We all agree with it. We understand racial and equality.
Frank Curzio: We want to bring more attention, peaceful protests. That was over a month ago. It’s no longer about George Floyd. No way. That has nothing to do with that right now. We’re going on. People are ripping down statues of George Washington, Theodore Roosevelt, who invited Civil Rights leader Booker T. Washington, who’s the first black person ever to dine at The White House. Ulysses Grant, who’s a general who beat the Confederates and ended the Civil War before becoming our president. It’s a big difference from Jefferson Davis, Stonewall Jackson, but I’m condoning you ripping down statues at all.
Frank Curzio: Hey. Who cares about the history of this country? Let’s just erase everything. It doesn’t matter anymore. In Seattle, you see people occupying Capitol Hill, which is called shop. It’s all over the news. Every single channel you watch, Capitol Hill occupied protests. That’s what it stands for. Again, it’s okay to protest peacefully. None of us have a problem with that. I get it. Shout. Hold up signs. We get it. These guys shut down all the businesses in the area. They kicked the cops out. What happened? Shootings in the area resulting in the death of a 19-year-old.
Frank Curzio: A 17-year-old was shot and injured as well as other shootings. Finally, the mayor’s like, “After saying hey, these are great protests. Everything is fine. Don’t worry about it. You took over this area. You took over an area in a city.” Think about that. Just think about that for a minute, that we allowed that to happen. Now, he’s like, “We have to stop this.” Of course, it takes someone to get shot, someone to get killed, more violence. It’s like a traffic light. You don’t see a traffic light come up until there’s a car crashing, somebody dies. It could be 30 times you almost saw an accident screeching.
Frank Curzio: It’s not going to happen until somebody dies and then we react. That’s just the way of the world. Did the mayor think something like this wouldn’t happen? Whether these protesters are carrying weapons? Yelling in the faces of police officers to the point that police officer’s like, “All right. We’re done.” As they’re yelling at these police officers saying, “Hey. We should defund police departments.” What do you think was going to happen? You have a mob of people who obviously are not working. It’s been a month since George Floyd. Almost every state has opened back up. The biggest companies are bringing back employees.
Frank Curzio: A lot of people have no intentions of going back. Keep extending those unemployment benefits after July 31st. That day, you don’t want people protesting peacefully. There’s a lot of people, probably a good five to seven to 10% around there that have a total different agenda. What’s going on? Trying to almost erase history, which is crazy because a lot of these people, these are not adults. These are kids that don’t even understand our history, of how we got here, of how they’re living in the greatest country ever. If you don’t like it, get the fuck out. You could leave. Leave. Goodbye.
Frank Curzio: If you hate it so much, leave. You provide free transportation for anyone who wants to leave the country because they’re going to cause a hell of a lot less than keeping them here and being on unemployment forever. Living with everybody else. Violence. Get out of the country. You got an option. Go anywhere you want. Why do you choose to be here and complain about it? Things like this just don’t make sense. If it makes sense to you, I don’t know. It’s crazy. This mob of people, tearing down property, burning churches, which is ironic since our politicians are against you attending church because of coronavirus.
Frank Curzio: Burn down a church? Hey. No problem, man. You could do that. We’re not going to say anything. Isn’t it amazing when you think about it? Our politicians on both sides refuse to say anything about this. Because these crazy people get the same vote as you and me. Hardworking individuals that have families, respect the law. I’m not looting thousands of businesses. Most which are in low income neighborhoods. Irony in that, too. Wealth and equality. Why are you destroying these businesses? These businesses that people have worked their whole lives? It doesn’t matter.
Frank Curzio: If I were to say something right now, it’s probably going to offend people, because everyone gets offended these days. Everybody’s offended. Everybody’s so sensitive these days. It needs to be said. Because if we look back at history, we need to remember. Need to remember: Peace is only achieved by using force. Or threat of force. Many times, it results in violence. That’s the way it is. For example, America didn’t achieve their independence by telling the British in the 1700s. “Hey, guys. Is it okay if we don’t pay those huge taxes you just levied on us?”
Frank Curzio: “For the tea we drink, lead, gas, paper, to create additional revenue for royalty officials?” Also tell English troops, who were allowed to occupy in private homes, just storm through people’s homes and live there without their permission. You really think we’re just going to say, “Hey. You know what? Could you not please come at my house? Could you leave, please?” You really think that’s going to work? We had to fight for our independence. You have to fight for those freedoms. They don’t come for free. Unfortunately, it has to come to things like that. Evolution in a war. Everything.
Frank Curzio: We tell Hitler. “Hey, Mr. Hitler. Could you stop taking every Czechoslovakia, Austria, Poland, Denmark, Norway, France, so many other countries? Please, could you stop killing so many of the Jewish people because you know what? That’s really not right.” No fucking way. He needed to be stopped. It required a World War, violence, force. It was the only way to prevent Hitler from taking over the world. You can’t be nice about things like this. I love people who provide quotes, which I never understood. Social media, it provides a way for everyone to have a voice. Why are you quoting somebody else for?
Frank Curzio: It’s your voice. Say what you need to say. Anyway, that’s a personal pet peeve of mine. One of those is Albert Einstein who I admire very much. Where he says peace cannot be kept by force. It could only be achieved by understanding. An absence of a war based on force and military threat is not peace. Last time I checked, Einstein, pretty smart cookie. He was a scientist. Devices theory of relativity, which revolutionized the world’s understanding of space, gravity, time, universe, quantum theory. He’s credited for inventing paper towels? The adoption of solar power? Unbelievable history.
Frank Curzio: It’s a little ironic that Einstein, the person who said, “Peace cannot be kept by force, it can only be achieved by understanding,” is also the same person that wrote a letter to Franklin D. Roosevelt in 1939 urging the US to develop an atomic bomb before Nazi Germany did. Which the US said, “You know what? That’s a pretty good idea.” Which we used the bomb to shoot Hiroshima, Nagasaki to retaliate for the bombing of Pearl Harbor, which killed over 250,000 people. It’s safe to say Japan never fucked with us again. That doesn’t sound too peaceful to me. Again, you’re a fan of Einstein.
Frank Curzio: If you got to quote somebody, how about this quote? “Every book has been rewritten. Every picture has been repainted. Every statue and street and building has been renamed. Every data’s been altered. History has stopped. Nothing exists except an endless present in which the party is always right.” George Orwell, 1984. Pretty interesting. My point here, I know it’s a political year. I’m bringing this up because it matters to your life. It matters about your financials. It matters. It does. It needs to be said. We have our asshole politicians who don’t give a shit about you or me.
Frank Curzio: Racial injustice, wealth and equality. They don’t care. They don’t care. They got to dress up and kneel and take pictures. Whatever they need to do to get votes. They’re not going to do anything to stop these people from destroying public property, murdering police officers, tearing down statues, looting businesses. Why? Because these votes especially now are critical for both parties to gain power. That’s all they care about. They’re going to tell you everything you want to hear. They’re going to support anything that a poll tells them it’s going to result more votes. That’s politics. You would know.
Frank Curzio: I don’t care what side you are. I don’t care how far left, how far right. You know it’s true. These people don’t care about you. You go back and look at all these politicians, how many times they switch back and forth. It’s all based on polls to get votes. That’s why you’re not seeing anything being done in the middle of our streets. I got to tell you, these looters, people who are ripping down statues, these people need to get the shit kicked out of them for everyone to see. That way, they know what to expect. When you decide to take the law into your own hands, beat them down. People take pictures of it.
Frank Curzio: If that happens, you’re not going to see people ripping down statues anymore. What’s going on with the world? How did we let this happen, to where mobs control law-abiding citizens? Can control our politicians? Can take control of our streets and businesses without any repercussions? When did America become so soft? Even when it comes to when you discipline our kids. You got to use time out. You got to use a time out. Go on a corner. Use a time out. Imagine your parents. I’m 40. Let’s say you’re 40. Imagine your parents putting you on time out when you do something wrong as a kid.
Frank Curzio: Say, “Hey. You got to be punished for two or three days.” I grew up in Queens. I wasn’t the best kid. I got into a lot of trouble. Hung out with the wrong crowd. Did stupid things like steal cars for fun. Always brought them back. A ton of stupid things. My dad caught me stealing a car back then. He’ll be like, “Son, you know what? You’re not supposed to do that. That’s not nice. You know what? I’m going to punish you for a couple of days.” If he said that to me, three days later, I’m going sole another car. Picked up my friends and got some pizza if that was the punishment. Instead, I got up beaten.
Frank Curzio: You know what? I deserved it and I never stole a car again. That’s the past. Long, long past. The bad kid. I don’t regret anything I did because it builds the person you are, all the mistakes you made. I’m just proving a point here. Because how do we get so soft as a country? Where everyone is offended? Gays are offended. Blacks and Puerto Ricans are offended. Women are offended. Actors, actresses, everyone gets so offended now. They’re so sensitive. I’m not offended. Given that I’m a 40-year-old white man who works 15-hour plus days. Trying to be the best dad in the world to my two beautiful daughters.
Frank Curzio: Support my family. Run a business that I’m employing people. I’m helping investors make smart decisions so they could retire early. Provide a better foundation for their families and make a great living. You know what? I’m the enemy of America right now. I’m the one that’s privileged. Needs to pay more taxes. Need to give more money away to people who refuse to work. Some of those people who lost their jobs, I get it. That’s okay. You’re not the people I’m talking about. But I’m not privileged. I worked my ass off to get where I am today. It’s not one American that can’t do the same in our country.
Frank Curzio: That’s open to you right now. That motivation. Go out and grab it. Where else could you do that? What other country can you do that in? We’ve gotten to the point where we just blame everyone else. We have different beliefs than someone. That makes us total assholes, outcasts. We don’t bow down to the American flag, you’re a racist. Why did Drew Brees change his mind? It’s okay to not kneel, since that flag means something different to everyone. He has a military background. He said, “I’m not going to kneel. I have a military background. I’m not going to do it,” and got pressured to do it.
Frank Curzio: You should have the choice to kneel or not. There is no choice. It’s either you kneel or you’re racist. I’m not saying whether you should or shouldn’t. That’s your choice, but it’s your choice. If you want to wear a mask to prevent the spread of Coronavirus and you’re old and you want to wear a mask, don’t yell at people who don’t want to wear masks. Unless they’re really doing irresponsible stuff and getting up in your face. That’s different. As a nation, we’ve become so angry with someone that has a different opinion. If you like Trump or if you like Biden, we’re being forced to pick or choose or hate each other.
Frank Curzio: Where our foundation of this country was built on discussion. Listening to both sides and coming up with the best option. It’s not like that no more. It’s either this or that. There’s no middle ground, which is incredible. Because that’s how the major deals get done in the world. The deal isn’t going, “Hey. I’ve got to pay $20 billion for your company.” “Okay. That sounds good. Deal done.” No. All right. How about 17 billion? Okay. What if we do this? Okay. You’re bringing over executives, okay. Whatever.
Frank Curzio: It’s a negotiation then you come up with the best solution that works for two parties, or even more than two parties, who are involved. It’s not, “This is what I want, don’t forget it.” Our political world is both sides want an infrastructure package of a trillion to $2 trillion. Around a trillion until both of them want it for four to five years now and nothing has gotten done. Why? You both want it. We need it. Our bridges are falling down. War pipes are old. We need to update our infrastructure. It’s important. You see dams is being broken. This happens. This is real. There’s reports. Look at the things that I say.
Frank Curzio: Infrastructure reports. Which companies are going to benefit? They’re waiting. They know they need this. This is something that could result in a lot of people dying. You both want it. Why can’t we get it done? Why? You’re looking at everything going on, I don’t know how America, why America has gotten so soft. We should have simple laws in place. You destroy property, you get the crap kicked out of you. If you resist arrest, you go to jail. If you try to grab an officer’s weapon, you automatically get shot in the head. That should be a law.
Frank Curzio: What is your intention if you’re going to try to grab a police officer’s weapon? What is the intention? Why would you do that? I have no idea why you would do that. What’s the intention? To grab it and to kill somebody or shoot somebody. You’re grabbing a policeman’s weapon. I don’t know what the expected outcome of what you think it’s got to be. If you do, you have to think you got to die. Right? Yet we’re rewarding people for resisting arrest, stealing a weapon off a cop’s belt. Trying to shoot it at the cop and the cop gets charged with murder for shooting that person.
Frank Curzio: He tried to stole his weapon and shot him at. This isn’t a black or white thing. This has nothing to do with racism. Anyone grabbing a cop’s weapon should get shot in the head. Period. That’s it. That should be a law. Then nobody is going to grab a gun or try to grab whatever weapon that they have. Just to sit back and watch nobody do anything and the Democrats do nothing because they need the left vote. To see the President say, “Hey. You know what? Things are better in Seattle. All you need to do is ask for my help.” You’re the President. Isn’t it your job to keep the peace?
Frank Curzio: You have a governor who’s a plain asshole and loses total control of a city, which we’re starting to see to where innocent, hardworking people are scared to walk in their major cities at night. That’s why we’re having curfews. This change reckoning a reminder that there are laws that all of us need to abide by. You can’t sit back and watch people desecrate private property and statues no matter what side you’re on. They change our history. You want to rewrite history from 30-year-olds? Who knows if they read any book or anything? Maybe they’re older. Maybe they do know a little bit more about history.
Frank Curzio: If they knew about history, why are you tearing down statues of people who did not support slavery for? We have to have a reminder that we all need to abide by the rules. That’s how we have peace. That’s why we are the greatest country on earth that gives anyone, of any race, color, gender. You could succeed in this country. You can. You’re going to have to work at it. A million people are going to tell you no. Use it as motivation. Where else do you have that opportunity in another country? You let me know. Because I don’t. We’re going to lose it in here. Things are not getting better. They’re getting worse.
Frank Curzio: Americans are getting more angry and more angry. Every social media post, when I go on my social media profiles. It’s just scrolling down. A homeless man is set on fire. Someone bashing Trump. Someone bashing Pelosi. That’s all it is. It’s all being fueled by people that have an agenda. They want you to pick and choose. They want you to hate because you’re going to watch more TV. They’re going to make more money in advertising. The politicians want that because they’re going to get power. They don’t care about us. They don’t. Come on. You know that. I don’t have to tell you that.
Frank Curzio: You really think our politicians care about individuals? No way. They care about polls. They care about getting elected. Don’t fall into this trap. Hating someone that has opposing view than you. You know what I’m talking about. You’re on Facebook. You’re in a group. You see someone commenting whatever. Whatever side you’re on, they comment about the other side. It pisses you off to the point you really don’t want to talk to them anymore. Because of their political views? Because you’re disappointed of someone that really doesn’t care about you? Think about that. Because you talk to this personally.
Frank Curzio: Go over their house. He’s the nicest person in the world. They’re cool. It’s nice, fun. You fall into this trap. The politicians and the media are winning. It’s exactly what they want. That’s how they gain power. We need to smarten up here. This is getting worse, not better. Not being able to walk the streets in our own cities, the fears of getting beat up or hurt. It’s got to stop. We need to put our foot down. The consequences of this whether financially, it impacts all of us. All of us, it impacts. It’s important that this needs to be said.
Frank Curzio: I don’t care if you’re poor, middle class, rich, businesses or stock market, everything we do unless we take a stand. We need to take a stand. Watching all this shit takes place is not taking a stand. It promotes more violence but you’re not getting in trouble for it. It’s getting worse as each day goes by. Hopefully, we’ll see some change. End of rant. Can’t wait, firstname.lastname@example.org. Can’t wait for my email box to light up after that one. I want to hear it. Agree or disagree, whatever. It doesn’t matter, email@example.com. Now, moving on. Not easy to do after that.
Frank Curzio: I’m moving on. Great guest today. His name should be familiar with is Daniel Creech who’s Senior Research Analyst at Curzio Research. We made great interviews since. We’re going to talk about a brand new podcast format that we’ll bring into Wall Street Unplugged. Don’t get nervous. Have the same qualities. Just gotten a hand sit. A lot of cool things coming. I know you’re going to love it. Also, Dan’s going to share his opinion on the markets. Different opinion than I have. That’s being independent. That’s what Curzio Research is. I never tell any of my editors what to write. They have their own opinions.
Frank Curzio: I want to hear it, which is perfect. And that opinion is going to shock you because it could result in the stock market going a lot, lot higher from here. He makes a great case for it. Supported by good facts. He’s going to share that with you. Basically, it will be that one simple measure that few people are talking about that could drive the market a lot higher. Just going to share his favorite sectors and stocks with you, including one controversial name. It’s really out of favor. It’d be a cool idea, not seeing anyone recommend out there. Definitely an interview you don’t want to miss.
Frank Curzio: It’s really good stuff coming up. In my educational segment, I’m going to break down the two sectors I love most right now. One of them is going to surprise you. One of them is pretty obvious. Still, a lot of people are not pouring money into it. You should. Because after you hear the facts, after you hear my research on it, you should run. Hopefully, you’ll run to invest and get exposure to these sectors. Great educational segment coming up. Before we get to that, let’s bring in Senior Research Analyst, Daniel Creech.
Frank Curzio: Here’s that interview right now. Daniel Creech. Thanks so much for coming back on Wall Street Unplugged.
Daniel Creech: Hey, Frank. Great to be back.
A lot has changed, right? You’ve been working here I’d say close to three years now. You were here for two years. You moved back to Arizona and now, you’re back. I don’t know if that’s a good thing or bad thing that you’re working in the office with me again. I’m not too sure. I’m really glad to have you back, bud.
Daniel Creech: Yeah. Yeah. Time will tell. No. No. It’s good to be back. It’s good to be back in the office and back on the podcast. Yeah. I was here for almost two years. Did a big loop around the country, and now I’m back to Florida. Life is good, man.
Frank Curzio: Yeah. That’s cool. That’s cool. We’re going to get to the reason why you’re back in a minute. First, I want to go because we discuss the markets a lot. You follow all the stocks in my portfolio. Write the alerts for me for anyone who’s a subscriber, Daniel is the guy behind the scenes that does a ton of work. Listen to all conference calls. Just send me bullets on everything. Really keep me up-to-date with everything that’s going on in the portfolios. I want to get your opinion on the market. I don’t know if that’s a good thing or a bad thing that I charge into the stock market junkie.
Frank Curzio: I want to get your thoughts on the market, to someone that reads and listens to a lot of these conference calls, comes in during earning season, what’s going on in the market, understands the Fed. I want to get your opinions on the market. Where do you think we’re headed after this huge rally coming off that big crash? I want to see what your thoughts are on what’s the next step? That’s what everybody wants to know. What’s going to happen next? There’s a lot of opinions out there where we’re hearing everything.
Frank Curzio: We’re going to see another crash, too? We’re going to see stocks soar from here? Let’s get the Daniel Creech opinion. What do you think?
Daniel Creech: Yeah. What a time to be alive in an analyst and a stock market junkie like you said. You can’t talk about the markets in my opinion without talking about the goofy reality that we’re in. What I mean by that is financially, we are somewhere between a Willy Wonka movie and The Wizard of Oz. The gentleman that is having, I would argue probably the time of his life in a goofy sense, that is pulling all these financial levers, and basically has a giant soundboard of all kinds of craziness, is Jerome Powell, the Federal Chair.
Daniel Creech: If you think about where we’re at in the markets and then you think about, hey, the markets were always forward-looking. Public companies traded a premium. You have a lot of money sloshing around. That’s all great. A lot of people already know that. When you look at the discrepancy or the difference between the stock market being basically back to all-time highs, in main street and the economy still slowly reopening because of the coronavirus, the only reason you can connect where we’re at in reality in the stock market is because of the role the Federal Reserve is playing.
Daniel Creech: That role is simply that they are making the reaction to the 2008-2009 crisis look like nothing. They are basically back stopping. They’re printing. They are putting people money directly into people’s pockets. In the short-term, you can push water uphill all the way. Often in life, my family has told me. They’ve taught me a lot of great lessons. The thing that keeps coming back to me is often, the hard or difficult thing to do is the right thing. If you apply that to the financial markets, with everything else going on, again, with the election coming up in a minute.
Daniel Creech: It’s hard for me not to be optimistic and bullish. As goofy as that sounds because they’re going to continue to push tail winds to try to get asset prices higher. I do expect a lot of volatility going forward. Ultimately, I think the path of least resistance is higher.
Frank Curzio: It’s great. Great segway because you’re talking about the Fed here. You’re talking about Powell where June 10th, he had the Federal Market Committee. That was the meeting that they had. Everyone’s paying attention. Powell said, “Listen.” What I took from it was, the Fed’s not worried all about the balance sheet, which I thought was amazing. Since it’s over seven trillion now. More QEs likely on the way. We’ll continue to process it. In terms of ETFs and things like that in the credit markets. That made big headlines. There’s something that you’re covering that you talked to me about.
Frank Curzio: We talked about and it went under the radar. He said something significant. He said the Fed was considering yield curve control. It went under the radar because I bet most people are not familiar what that means. That was an addition to asset purchases or whatever. It basically pins the short end of the curve just above zero so it avoids a spiking yield, which we can have with how much that we have. Especially on a Fed’s balance sheet. The last time this was implemented, 1942, which allowed the US to keep rates low, which was 2.5% back then. It basically allowed the treasury to fund cheap debt during World War II.
Frank Curzio: It lasted nine years until 1951. Talk about that because Powell said we’re considering yield curve control. I know you’ve done research on this. What could that mean for the stock market?
Daniel Creech: In short, you could see a massive bubble at a huge skyrocketing stock market. Now, the old saying is history often repeats itself. It rhymes but it may not necessarily happen exactly the way it did in the past. A, you got to keep coming back to reality. It is scary that they’re talking about this, even discussing it. In reality, more than likely they’re probably going to do something like it. Even if they don’t do “yield curve control” they’re going to keep pulling levers and keep interest rates low.
Daniel Creech: Back to your point, the interesting thing was when this happened in the ’40s and that was because they wanted to keep cost low to borrow for World War II. From 1940 to 1951, the stock market had a massive run higher. It went up over 80%. Now, that’s after starting the early ’40s with negative years. The other interesting thing is the PE went from 7.7 times to 21.9 times price to earnings. Okay? That was from 1942 to 1946. That is a massive, massive increase. When you compare that to today and say, “Okay. What if we keep expanding things?” Not to mention yields.
Daniel Creech: The tenure treasury was over 2% back then. I believe they cap one of them at 2.5 and all that. Again, it doesn’t matter exactly the levers they’re pulling. They’re going to keep interest rates lower for long. As you said, it’s ridiculous that he’s so blatant about it. I guess you got to give him credit for being honest to an extent. Honest in quotations. They don’t care about the balance sheet. They also don’t care about how 0% interest rates hurts your mainstream people.
Daniel Creech: Because if you’ve been I would say a common sense person and putting a little bit of money away, you’re not earning anything on that savings. That forces you to put that in to risk your assets because you have to keep up with the cost of living. Going back into the ’40s, I’m not saying we’re going to have that type of expansion now. I know we’re always trying to give free sites and information to listeners. I know you talk about fact set a lot in the past. They just had a great report I believe last Friday on an earnings insight. They showed that right now, for the past 20 years, our PE ratio has been around 15 times.
Daniel Creech: 20 years is quite a bit. Let’s look a little closer. For the last five years, it’s averaged about 16.9 times. We’re at 21.9 right now, which is funny because that’s where we were back in ’46. We’re at 21.9 forward earnings right now. I’m not saying we’re going to 60 and have a huge jump like we did in the past. Like I said, the path that leads to resistance is continuing to be higher because of the financial levers they’re pulling just like they did back in the ’40s.
Frank Curzio: Yeah. Those rates at 2.5%, they’re zero now. If we look at the average PE, I think for the last 10 years, I think you mentioned 20, it’s been five years, around 15. That PE exploded over 150% higher. Not that it’s going to be 35, 40 but the new PE, that new norm, if they do this, which they’re implementing already. Right? They want to put the control. It’s a habit anyway making short rates or so as possible. Let’s look at more of these rates on the report across the board.
Frank Curzio: It’s something that people aren’t talking about where we always look traditionally at a PE ratio and look at a five-year, 10-year average and say, “Wow. This is so expensive.” If earnings do bounce back to the levels that everyone is expecting, Wall Street is expecting. This is why the market’s going higher. If it does, we could see this market continue to move higher. Because again, super low interest rates at no place to put your money. Look at the rest of the world globally. Daniel, where are they going to put their money? There’s ton of money in the sidelines right now.
Frank Curzio: When we look at everything together, it is a scary market. We’re doing this on a Wednesday. Watching and working and down 650 points. By the time people listen to this, it could be up 650 points. We don’t know, right?
Daniel Creech: Exactly.
Frank Curzio: This is a very, very big story that I feel like it was thrown under the radar. Thank Dave for bringing it to my attention. When you just compare it to the last time they did this and how stocks exploded and we’re seeing them go higher now. There could be a lot more room to run. It makes it a very dangerous market especially if COVID’s in there and China relations and stuff like that, which is pretty crazy. Let’s go into the next segment, which is how do we play this? If you think stocks are going high, you’re looking at sectors. You’re looking at stocks again. You’re doing it all day just like me. I know you love it.
Frank Curzio: We discussed the markets all the time now, especially we’re in your office together. What’s in the place on this to maybe some of the sectors that you like?
Daniel Creech: I’ll give you a longer term idea, that I’m still digging into and then a shorter term play. I’ll start with the long. Comparing back to the ’40s, during that time when the stock market performed well and they were doing that yield curve control, it shouldn’t shock anybody that housing prices did very well. You want to look at housing and housing related stocks. You can start digging into home builders, CRA members. Maybe seeing something like that soon. You got to look at home builders. Anything that will benefit off of low interest rates. Your huge companies that can borrow money easily.
Daniel Creech: Your fame stocks, your stay at home place, the world capitalized stocks are going to continue to do well on a 0% environment. If you have a little risk and appetite and you want to mix Vegas with the stock market, 0% interest rates, access to capital markets. Your zombie companies and your high bets have a potential to continue higher, although with a lot of volatility. I would look at home builders. I would also look to hedge that because I do think you should be long because of the tail winds we have. If you’re long, I think you have to be hedged. I don’t mean hedged with just cash.
Daniel Creech: I mean, hedge with gold exposures or silver exposure. We can get into that if you want to in a minute. Switching to short-term, because of all the fear and uncertainty surrounded by the coronavirus right now and the shutdown, we’ve had an excellent recovery in a lot of different stocks and sectors. What’s really got my attention right now and full disclosure, you’re unbiased towards the sector anyway is the insurance sector. I’m looking at both property and casualty companies and life insurance companies. Obviously, the big difference there is everybody dies on the life insurance stocks.
Daniel Creech: You have to run your business to a certain extent to keep those reserves and protect them because you’re always going to have to plan on payouts. On the property and casualty side, you have to pay for things like renter’s insurance and auto insurance and different things like that. You always don’t have a claim. You can take in a lot of capital. Invest that and not pay a lot of claims out. The business model on the property and casualty side is tremendous just as is.
Daniel Creech: Now, a lot of those stocks and I’m talking about WR Berkley and Travelers, Chubb branching over to life insurance side, Brighthouse Financial, a lot of these stocks have not come back to where they were trading before the coronavirus hit. Several of them are between 30 and 50% still off their previous highs. When I was digging through the conference call transcripts, the interesting thing to me is that the market is pricing in. The insurance companies are going to be on the hook for business interruption. What do we have? We have the coronavirus outbreak.
Daniel Creech: We had a lot which go off on a little rabbit trail here. I still can’t believe and I know it’s easy to play money more than quarterback. I cannot believe. I remember talking to you several times. We literally try to stop the world from spinning. I know it’s a pandemic. People are dying. I don’t want to make light of that. Trying to pause the economy, I think everybody has come to the conclusion that that was a mistake. You’ve seen even people down here in Florida and Texas. Hey, I know cases are spiking for coronavirus. Hospitalizations are going higher.
Daniel Creech: That’s one of the reasons for the markets off today. I really don’t think that we’re getting to the point to totally shut down the economy. I think the market is going to price that yet. Getting back to the insurance side, sorry about the rabbit trail there. Getting back to the insurance side, a lot of people are fearing that insurance companies are going to be on the hook. Because when companies have business interruption, a policy, they have to have physical vantage. The government telling you in this office building, “Hey. You got to shut down. You can’t go to work.”
Daniel Creech: If you think you can go to your Travelers or whoever insurance company without proof of physical damage that you shutdown, they’re not on the hook for that. I don’t want to sound rash because I know insurance companies aren’t the greatest businesses. Everybody has some bad say about insurance companies like everybody else. You can’t sign a contract with somebody and then have them go back and say, “Oh, well. Even though this isn’t covered, you owe us all these billions.” I think that risk is being priced into a lot of these stocks.
Daniel Creech: The easy way to get out of that is because of the world we live in is, let’s say Trump or whoever in Congress comes out says, “Yeah. The terrible insurance companies are just like big oil, big banks, etc.” They are going to be on the hook. I don’t think it’d be a week later that you have Jerome Powell come out say that you would back-stop insurances just like he back-stops everybody else. Insurance is a life blood of financial plumbing in the economy. It’s going to be around for a long time. I think you ought to look at the property and casualty very, very hard right now.
Frank Curzio: What are some of the names you like? You mentioned a few but maybe one, two. What are some of the ones that you like there? There’s one or two I think that are doing okay. A lot of this industry has sold off. It hasn’t even come close to coming back yet.
Daniel Creech: Right. Yeah. Progressive Group is doing well as far as stock price rebounding. I don’t have it in front of me. Again, they might be way down today. It’s very good back to its 52-week highs. A couple really well-run companies are WR Berkley. The ticker there is WRB. Chubb Insurance, CB. Big, well-capitalized, strong ballot sheet property and casualty. Like I said, life insurance. Brighthouse Financials Company. That’s more of a life insurance play in that side of things.
Frank Curzio: I’m going to give people a little insight to Daniel personally here because Dan’s the person that’s always worried that someone’s listening when it comes to Alexa. Because I have an Alexa in the office. He’s always like, “I hate that thing.” I’m going to say something because you’re right. Before you went on, you’re in the office. You stepped away this week to take the call so we’re not right next to each other doing this interview. I said, “Okay. We’re going to talk about this.” Just bullets.
Frank Curzio: Even with all my guests, I never give them everything we’re going to talk about because they seem to answer everything right up front. I like to just what topics you want to talk about? I just said, “Insurance. What do you like?” You said Brighthouse Financial. Right before I pull this up, we actually went on air, I just checked my email really quick. I looked in the website. It came up to CNN or whatever because there’s an article opposed. The ad on there was Brighthouse Financial. It was right after you mentioned it. I never mentioned it ever. Literally, that ad for Brighthouse Financial came on. I don’t know.
Frank Curzio: You mentioned in my office. I do have Alexa in here. I just thought that was funny. I’m like, “Wait a minute. I’ve never heard of this company.” It’s the first time you mentioned. I heard of the company before but it’s the first time we talked about it. You said, “Yeah. I like this company.” Anyway, I know how you feel about that.
Daniel Creech: Yeah. It’s terrible. I think our next product ought to be tinfoil hats with the Curzio Research logo. That’s our next product.
Frank Curzio: No. No. Let’s get into another topic here which you’re very passionate about, which is politics. We have an election coming up. We’ve seen a lot of crazy stuff out there. We’re seeing politicians on both sides kind of watch what’s happening. There are peaceful protests out there. We all see it. I just had a nice rant on it. This election is going to have serious implications for investors. Serious implications for investors. How do you play this? What are your thoughts on it? I know that you’re really passionate about this. Yeah. The stage is all yours, bud.
Daniel Creech: Yeah. We’ll talk a lot more politics in the future. I want to warn everybody. It’s not that I follow politics because I enjoy it and I think highly of it. I absolutely don’t. I follow them because in my opinion, you have to. Because what they do and what they affect, affects you directly. It’s affecting your money. If you put your head in the sand and ignore politics or take them for as their word instead of really what they do, I think it’s a big mistake. What do I mean by that? Going into what they say and what they do?
Daniel Creech: When the first CARES Act passed and the relief fund of two to $3 trillion was passed, they have these bonuses in place. You have a situation where a lot of people are getting more money not to go to work right now. I know everybody’s scared. There’s a lot of uncertainty around the coronavirus going. That supposedly runs out at the end of July. Anybody that doesn’t think going into election year, there’s going to be more stimulus. More money printing and more injection of that money directly into consumers’ pockets or votes. In my opinion, it’s just not paying attention. I don’t care if you’re right or left.
Daniel Creech: It doesn’t matter. Whatever stimulus that is coming out in rumors, there will be another stimulus package in my opinion very soon before the end of July. Because if you’re Donald Trump, you can’t afford to tell people. “Hey, even if you’re not back at work, your unemployment bonuses and your money is going out.” There’s no way they would ever vote for you. Right, wrong or indifferent, that’s the way that game is played in my opinion. We have a lot of tail winds going. The other thing that’s going to be, you have people with money in their pocket.
Daniel Creech: Even if they have to stay home or if people get nervous because of the recent spikes in cases. We have to continue to watch the deaths too, as well, and see if that spikes. Even if people calm down and say, “All right. You know what? I’m going to back off. Nothing’s shut down. I’m just going to stay home for a week. I’m going to back off some things because I’m nervous.” Human nature. You’re not going to stay home for the rest of your life. You’re going to get pent up. You’re going to say, “All right. Screw it. I’m going to go out now and spend money and do this or that.”
Daniel Creech: You have this self-assurance. Hey, you got money coming in even if you don’t have a job in the short-term. The economy is going to survive regardless. You have a lot of money in the short-term going into it. You’re also going to have another stimulus in the form of some type of infrastructure bid. How do you make money off all this? You want to put your money into some infrastructure place or other related elections. We can joke around about this but why do you always joke about that you should buy coming on during election year? You want to buy marijuana stocks. I would start digging into those.
Daniel Creech: Because every state is basically as broke as broke gets. They need revenue. Over the next two to three years, the things that are going to be legal for state revenue I think are going to expand dramatically. Everybody’s going to be Vegas soon, Frank. In some ways, that will be all right.
Frank Curzio: It is pretty crazy times and what’s going on. Again, I just had a long rant about it. The reason why I wanted to bring it to the political front, the real reason you have come back is you’re going to be part of this podcast now. Where we’re going video. We’re going to have segments. Maybe the rant getting and then segment it into three different podcasts. You can listen to the whole thing at once. We’re going to be doing videos of this. Setting up a studio up here. We’re going to be setting it up to where you can watch to the podcast. Do the interviews as well where we have technology, great, great technology.
Frank Curzio: Quality that’s better than the CNBC and the videos that you’re seeing now through our technology that we’re using. Thanks for the person who’s taping this right now to help me with all of that. Really exciting stuff coming up. I really appreciate you making the move because it was a conversation we had. I said, “Hey. You know what? Why don’t you become part of this podcast? We’ll be able to talk more about the news back and forth. Bring on different guests. Even politics.” Everything that’s going to relate to money still, but we’re used to having analysts on here and stock picks.
Frank Curzio: We’re going to continue that especially putting those things in our Dollar Stock Club and things like that. I’m really excited about it, Daniel. I want to get your thoughts. Because I know you came back. We’re all going to be talking about a lot of cool stuff. It’s going to be edgy. The video component I think is really going to be cool and draw a much bigger audience. I really hope that you’re excited about that, bud.
Daniel Creech: Yeah. Yeah. I couldn’t be more excited to tell you the truth. When you mentioned that a couple of months ago, I thought, “Yeah. That’d be really exciting.” Personally, I’ve always been a huge fan of radio and broadcasting. I’m a huge fan of Rush Limbaugh. I’m a huge fan of Howard Stern. Just the way they deliver. I love paying attention to stand-up comedians and the audio version. Yeah. I couldn’t be more excited about getting to share thoughts and ideas and interview different people and play a bigger part. Yeah. It’s no big deal. It’s just 30 hours on Interstate 10 and here I am.
Frank Curzio: I can’t believe you made that drive, man. I don’t know. I would have someone else drive the car. Maybe it’s definitely safer. Maybe that’s why cars are flying out over the lots right now because nobody’s going to take public trans. That’s one thing. We’re talking about the coronavirus. For me, if I get it, I’m not as worried. If you’re older, you should be wearing masks and I get that point. Practice social distancing. I could tell you someone who’s like, “Hey. If I get it, I’ll be okay.” It doesn’t mean I’m going to be irresponsible. There’s no way I’m taking public transportation.
Frank Curzio: If you take a plane, at least they wipe down the plane afterwards. People constantly getting off buses and trains. You don’t know where they’ve been. I don’t think they’re taking a temperature before and after. I don’t know. That’s pretty crazy. It’s probably safer that you did drive the car here.
Daniel Creech: Yeah, absolutely. Yeah. Not a big deal.
Frank Curzio: All right, Daniel. Great stuff. Talked about a lot. Even sharing ideas, and I know that people listening to this are going to see how far you’ve come. Because I had you on a podcast numerous times since you’ve been working for us for three years. It’s good to see how far you’ve come and what we’re talking about, the Fed policy and everything. It’s really cool. It’s really, really cool. I think everyone’s going to be really happy that they’re going to hear more from you especially on Wall Street Unplugged. Thanks for coming on, bud. I appreciate it.
Daniel Creech: Absolutely, man. Thanks and looking forward to more. Take care.
Frank Curzio: You guys, great stuff from Daniel. You’ll hear a lot more from him. He does a lot of stuff behind the scenes. He knows every stock that we have in the portfolios. Covers them with me. Helps out tremendously but just listening to that interview, it makes me proud. I talked about having a clinic, starting a clinic. If I do, it’d probably be two months from now. I’m getting lots of emails. Keep them coming in. Even from millennials where there’s five or 10 that have a class a couple of times a week. Hard core. It’s going to be tough. I’m going to be all over you, guys.
Frank Curzio: If you listen to Daniel two years ago compared to now, it really is amazing. It makes me proud how much you learn when you really engulf. That’s what happened, too when I was just throwing to Kramer having to reach, which has expanded everything. Because I was a value guy from my dad, just going to Kramer. I don’t know about everything. Learn about growth and that’s why I always say don’t be fixed on one investment style. Even if it’s technical investing, technical analysis, fundamentals, value, whatever. Top down, whatever approach. Any way that you can make money because there’s different market conditions.
Frank Curzio: This time it’s by growth. This time, it’s about value. The more you know, better the chance you could have great returns. You could have great returns while limiting your risk. He’s biased about insurance because before he worked here, he worked in insurance for a long time. For me, it makes me proud. With that clinic, that’s what I want to do. Three years, guys. I put him up against most of the guys you see on CNBC. I’m not kidding. That’s how good he is. Because he’s motivated. That’s what you have to be. If you’re looking to sign up to that program, again, we’ve got a lot of stuff coming out.
Frank Curzio: I’ve got my security token going to launch as well. Very exciting stuff, news to share with you. Where it goes free trading a couple of months. Launching a new product. A lot going on right now. I would say in about two months, I’d like to start that. The one thing you need to be is motivated. I could teach you anything about the stock market. I want you to have a little knowledge of it of course but you have to be willing to put in the work. If you don’t, you’re going to be tested. You’re going to be thrown out of that class. This is for someone that wants to be a research analyst.
Frank Curzio: That wants to learn how to become a better investor. That understands risk. Understands you’re going to make mistakes. How do you handle those mistakes? That’s the biggest lesson when it comes out being a research analyst. Because we’re all going to be wrong from time to time. I don’t care who you are. Every great investor, we’re wrong. Unless you’re a high frequency firm front running the markets and being allowed to do that. That’s different. Some of us don’t access to that. That’s what this class is going to be designed for. I want to hear from you again. Getting a lot of millennials emailing in, saying you want to be a part of it.
Frank Curzio: Try to start that up in about two months. I got a lot on my plate before that. A lot going on. A lot of great stuff, initiatives. Again, when you listen to the podcast and what we’re doing, it’s going to be really cool video formats. You’re going to see everything on YouTube now. It’s still going to be on iTunes. We’re going to have one long podcast and also separate maybe the rant and educational segments from the interviews where you can just listen to those if you want. It’s going to be really, really cool. You’re going to see us in the studio doing this. Yeah. I’m really excited to bring this to you.
Frank Curzio: Just the whole media aspect, and we have a studio set up already. Just have to add to it. Dan’s going to be a big part of that. Having his own opinion. Having his own agenda. It’s going to be really, really cool. I hope you guys are excited. I’m excited. I want to bring you so much more, so many more guests. Now because of you where we’re seeing so many downloads this podcast, we could get on almost any guest. Especially if they have a book or whatever. Really, really cool stuff. I want to thank you guys for listening. It’s going to get better and better and better here at Curzio Research. Really excited.
Frank Curzio: Hopefully, you are, too. Let me know, firstname.lastname@example.org. Send me an email. Let me know your thoughts on it. Let’s move on to my educational segment, which is about two sectors that I like right now. Daniel mentioned one of the obvious ones, which is housing. If you’re looking at mortgage rates, do the homework yourself. What does 3% out of 30-year mortgage rate mean? I shot a video of this, you can find it on Twitter, YouTube, a live video just showing a calculation. Simple. I’m using this for big figures. Not that everyone could afford a million dollar house.
Frank Curzio: If you put a million dollars in a home price, down payment is 200,000. You’re looking at 4.5% on a 30-year and with taxes, other fees, home insurance, it comes out to $4,900. Pretty close to that. 4.5% those were rates for what? 2018? Not long ago? Now they’re pushing 3%. You put 3% in that mortgage calculator, that results in a $4,200 payment. Less than that. $700 you’re going to save a month on your mortgage. Put that in a calculator. 700. Doing that right now. Times that by 12. You get 8,400. Times that by 30. It’s $252,000 without even saying you’re taking that money and compounding it and growing it.
Frank Curzio: Buy a house. The market is ripe right now. There’s very little supply on the market. I talked to real estate agents everywhere. If you’re a real estate agent, please. I probably have at least four dozen, maybe more real estate agents. For me, I started looking for a house. We’ve been in the same house for 10, 11 years now. My daughters are getting big. Got more stuff. We’ll get a little bit of a bigger house. Nothing crazy. We started looking, I don’t even know if we’re going to buy a new house yet. I’m not sure, but we’re looking.
Frank Curzio: Every real estate agent I spoke to, every one, every single one, it’s about six or seven not including real estate agents or builders and different areas and stuff. Every one of them, COVID-19 slowed it down. May is okay. May started really coming back. This month, it’s exploding. You say, “It’s pent up demand.” There’s not a lot of supply in the market. They’re building everywhere. Interest rates are low. They’re going to stay low forever. Not just for mortgage rates, which makes sense. But we’re in a market where assets are going to be incredibly inflated. That’s what the Fed is doing.
Frank Curzio: They’re going to do it long-term. Join it. You can hold up a sign and say, “Can’t believe the Fed’s spent this much money. They’re crazy. They’re destroying everything.” You could get wealthy from it. It’s up to you. You make the choice. Do whatever you want. I don’t care. I’m just telling you. If you can’t afford a house, buy a couple of home builders. Because man, they are on fire. I’m talking about demand. Demand I’m seeing in real-time and it’s not really factored in. These stocks are not trading. You have Holley, I think is off its highs. You have Lennar about 10%, 15% off its highs. Toll Brothers is I want to say 20, 25% off its highs.
Frank Curzio: They’ve come back. They’ve gotten crushed in COVID-19 and come back. Not anywhere near their 52-week highs. Aside from maybe one or two of them but get exposure to this industry. Look at what Sherwin-Williams did. The Home Depot, we had it on portfolio. We sold it. It made a very nice profit in a short time. The whole crap’s going on with coronavirus. It’s still gotten a little bit higher since then. I just think it’s incredibly expected. Very, very expected. Get exposure to the housing market. It’s going to continue to explode.
Frank Curzio: The conditions right now in the housing market, I’ve never seen this good in my 25-year career. Ever. Low supply. People want a house. Every house in my neighborhood goes up for sale. You better bid on it and bid the ask or you’re done. It’s gone the next day. I’m seeing that. I’m hearing that from so many different places. It’s the reason why you’re seeing so many more real estate agents out there. I probably have 10 friends that are real estate agents now. I live in a small town. Let me know. If you’re a real estate agent, let me hear from you.
Frank Curzio: I’ve never heard one person tell me that the market’s not doing great right now. Maybe I’m wrong. There’s no bias to this podcast, guys. Whatever I hear from you, I’ve asked people all across the country, all across the world. This goes global. I love you guys. So many people email me from outside of the US overseas. Awesome. My job is to report back. This is a network. This is how we make money together. By emailing me, email@example.com. It gives real time access to what’s going on because a lot of these numbers are always delayed by three months. Looking at the housing data is from May.
Frank Curzio: New home sales great number that came out. That’s May. What’s going to happen in June? Because the economy get weaker? Yes. You look at Wednesday, the market’s down 700 right now. We have a Fed that said, “Hey. We’re going to continue to print money. We’re not even worried about the balance sheet.” Who knows how long they’ll extend unemployment benefits for? We’ll see. The buying an asset. Buying a home, never been better. I’ve never seen better conditions to buy a home than right now. If you can’t afford to buy a home, that’s cool. Buy a couple home builders. Do your research on them.
Frank Curzio: If you want to buy an ETF, which again, if you’re going to buy an ETF, you don’t need me. Because I like to buy which one of those stocks. Which ones in those areas are going to do the best? Start doing your research. Get exposure to that and the other sector. It’s interesting because what we see in the market where we have record amount of cash on the sidelines, a lot of people don’t know that. Record amount of cash. More cash on the sidelines and money market counts at any time in history. I think it’s 1992 since they started keeping track of this, which is basically in history.
Frank Curzio: When you look at the money flows, what do we see in the market when it came out? We saw technology lead the way. Made sense. Coronavirus. People staying from home. The Zooms that did well. Software companies did well. Microsoft did well. It’s going to be still generating revenue. Amazon stores were allowed to stay open and everybody else is closed. That’s pretty cool to run one of those companies. You could stay open but nobody else can. It’s great. They did well. What do we see? We started seeing a rotation into super depressed value names. The cruise lines, casinos, airlines, they surged. We saw that.
Frank Curzio: We saw money being pulled out of tax. It’s not a ton of more money coming into this market. It’s a rotation of capital. What you want to do is find where the next rotation is going to be. One of the laggers, the biggest laggers was real estate. Now you’re seeing a lot of money get pumped into real estate. Oil as well. Look at those oil stocks where they came off their lows. They’re tremendously off their lows. They’re still well off their highs but these things crashed by 70%. Devon was what? 40? It went to five? It sure is double digits again.
Frank Curzio: A lot of these names were up 100% from their lowest but they have come back. You’ve got to see a rotation to capital. For those of you who were thinking you missed a boat on airline surging or rental cars, cruise lines, casinos, one sector that had seen tons of outflows. The biggest outflow is the longest outflows. I think it was seven straight weeks of outflows. It has been infrastructure companies. Horrible, right? Business has stopped. These companies have a lot of debt. It’s a horrible industry to invest in. It’s interesting because last week was the first week that I saw a rotation of capital.
Frank Curzio: Thanks to Bank of America. Received all these reports. The first time that we’ve seen in pretty much two months money flowing into infrastructure companies. Individual names. These names are cheap. These names have a lot of debt. What I want you to do is look at their debt schedule. See when that’s due. Because a smart management teams push out their debt. If you see a company that has 100 million in cash and a billion in debt, if they’re not generating a lot of cash flow right now and they have 400 billion in debt due over the next two years, that’s not a company you want to buy.
Frank Curzio: If they have 20, $30 million in debt, due the next three or four years, no maturity. No real maturities. You don’t have to worry about that. Because now, projects are coming back up a lot. They left their equipment at these sites and said, okay. We’ll halt it right now, coronavirus. Now, they’re getting a call saying, okay, continue. When I bought in a value industry without any catalyst, which I never suggest you do ever. Don’t buy a value stock just based on value because you’re going to get smoked. Buy a company of 20 that went down from 50 and say, it’s a good value right now.
Frank Curzio: There’s no catalyst and no growth catalyst, it’s going to go to 10. Trust me. I’m speaking of experience. I’ve made that mistake plenty of times. Now, you have business coming back online. Some of these companies have restructured their debt. Now, you have an infrastructure bill which both parties are talking about, which is likely going to get passed over the next couple of months. These are so depressed, these names that all you need for them to do is go from bad to less bad. They got to pop 25, 30% in a month or two. If you’re a Curzio Venture Opportunity subscriber, I just came out with my newsletter today.
Frank Curzio: A new recommendation. Whatever billion dollar company I’m saying, whatever because I don’t want you to dial in and see what company I’m recommending. It’s in the infrastructure space. It’s a small cap. It’s gotten crushed. Amazing balance sheet. You’re going to see earnings explode because all the cost cuts they’re doing. They set up for that infrastructure plan. They have a great back log of business, which has been halted due to coronavirus but now you’re seeing all the stuff come back online. That’s the next sector where you’re going to see rotation coming. You’re starting to see it now.
Frank Curzio: What you want to do is get in ahead of that big rotation. For me, I made a mistake recommending Delta in Curzio Research Advisory. I got so many negative emails. I said, “Look, airlines are going to explode high. It’s ridiculous. Because someone told me I was crazy.” Wind up stopping out because I was a little early and then Delta exploded higher. I do that every single time and stop out. My job is to protect you on the risk side. If you listen to my webinar, I also recommended Southwest. You’re doing fantastic on. A lot of those names exploded higher.
Frank Curzio: This time, looking at the flows and seeing what I did wrong and seeing the flows finally start to turn into this sector, what you’re going to see a lot of hedge fund money getting in here. A lot of institution money falling in here. Get ahead of this. Because if I’m wrong, you’re not going to see these things fall a lot from where they are now. They haven’t really participated in a rally higher. It’s still down tremendously off their highs. Even if you’re wrong, you take a little bit of a loss. If you’re right, you got to see an easy double. Maybe a triple. That’s how depressed these names are in the sector.
Frank Curzio: They have a lot of growth catalyst. You have a lot of value in this sector. Nobody’s really talking about infrastructure right now. That’s why I love it. We’ll start to talk about home builders and seeing promotions all over the place and the newsletter industry but still, very early to party. Definitely get exposure to the housing industry. Start to get exposure to the infrastructure industry. If you’re a CVO subscriber, Curzio Venture Opportunity, you’re going to get a great pick today. I do a fantastic video explaining exactly why I came to this decision.
Frank Curzio: If you’re a subscriber now to my newsletters, guys, this is video newsletters that are 25 minutes long. It seems long. I break down the markets but I show you exactly what I’m looking at through my research engines, which cost a lot of money, of how I’m picking these stocks. You learn from the research that I’m doing, which is awesome. Getting fantastic feedback, and for people who are like, “Frank, I want to see your ugly face on a video.” We all send a PDF of the recommendation. You just got to click that and read it. It’s about 3% of our audience.
Frank Curzio: CVO members that pick is now available by the time you’re listening to this. Be sure to get answered. Name that I really like. Long podcast today. Thank you to Daniel. Big rant. I know I’m going to get some cool feedback from that, firstname.lastname@example.org. Guys, feel free. Other outlets, if you want to see me more, or you could tweet me, @FrankCurzio. Twitter or Curzio Research YouTube page. It’s starting to explode now. Getting a lot of people doing more video formats. I do live videos a couple of times a week, just quick clips, three minutes or so. Where I’ll just tell you things that I’m seeing.
Frank Curzio: Again, it’s 100% live. It’s fun. I don’t care if I make a mistake or whatever. The technology we have is where I could share my screen and show you everything I’m doing. It’s really a lot of fun. Be sure to go there. Subscribe to the YouTube page. Really, really cool stuff. You’re going to see all of our podcasts probably starting next month. Trying to get everything ready that you’re going to see all of our podcasts. Go on YouTube, and you’re going to see video versions, including video versions of the people that I’m interviewing, which is going to be a lot of fun. Questions, comments, get them here.
Frank Curzio: Frank@curzioresearch.com. Thanks so much for listening. Really appreciate all your support. I’ll see you guys in seven days. Take care.
Announcer: 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. Wall Street Unplugged produced by the Choose Yourself Podcast Network, the leader in podcasts produced to help you choose yourself.
Editor’s note: As the world reopens, Big Money is starting to pour money back into a left-for-dead sector Frank mentions on today’s show…
At 5:30 pm (ET), he’ll release the perfect way to play this coming boom to Curzio Venture Opportunity members. If you’re not yet a subscriber, I urge you to become one today.