The president and CEO of U.S. Gold Corp, Edward Karr, joins me today to break down his company’s projects… recent drilling results… and a new hire to its board of directors [16:16].
This new director has an incredible story you won’t believe—and you definitely won’t want to miss.
I know many of you enjoy trading stocks around earnings… So here’s how to put the odds in your favor—and make money around Q2 earnings volatility [44:55].
Wall Street Unplugged | 665
How to make money trading stocks during earnings season
Announcer: 00:00:02 Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media, to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on mainstream.
Frank Curzio: 00:00:16 How’s it going out there? It’s April 17th. 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.
Frank Curzio: 00:00:31 On Saturday, I took my kids to the Clay County Fair. It’s located in northern Florida, Jacksonville. Mostly a farm area, though. And I don’t know if you ever been to one of these big fairs. I’ve been going to them since I was a kid, where I used to spend every summer in a place called Stanford, New York, which is about 30 miles away from Oneonta. A lot of people from Oneonta College, one of the biggest party colleges. But every summer from the age, I’d say five or six to 17.
Frank Curzio: 00:01:01 So, we lived in Queens and my parents bought a upstate house. And we used to go there, my brother, my sisters, they grew up. They started staying in Queens, New York, when they were teenagers and stuff. But I was stuck there for a good 10 11 years. And every summer when we head off from school, that’s when we used to head up there. And we used to come back like a week before school started. So, it was a farm area, it’s really nice, it’s really cool. And they had two major fairs by us, and one was called Delaware County Fair, which is in Walton, New York. And the other was called a [inaudible 00:01:34] county fair, which is [inaudible 00:01:36], and not too far.
Frank Curzio: 00:01:39 These fairs are amazing. They had tons of games, rides, they had animals everywhere: pigs, rabbits, chickens, roosters, goats, horses, cows, everything. And yeah, they held contests like best in show. They had major events. There was a truck polls, and they had dog shows, talent shows.
Frank Curzio: 00:01:58 The greatest thing, and I don’t even know if they have these anymore, they were called demolition derbies. Where they would line up, they had cars that are basically stripped down, they paint numbers on the door, they had no glass in their windows or anything. And these cars would basically start on each side of the stadium, which cut down to a 100 yard field. And then, they would smash into each other as hard as they can. They keep banging against each other until the car was totally disabled and didn’t work anymore. And the winner was the one that the car that actually was functionable and still running. And they had 10 rounds, with the winners of each round competing against each other for the big trophy.
Frank Curzio: 00:02:36 It was pretty crazy. Cars used to go on fire, they had fire departments on standby. I’ve seen plenty of cars going far. They had ambulances there. I never saw anyone get hurt but I don’t know. I haven’t really seen these lately at any fairs. But man, demolition derbies, forget it. The amount of people that lined up, it was awesome.
Frank Curzio: 00:02:56 When I was a kid going to upstate house every summer, I would look forward to these fairs. It was the biggest thing in the world to me. So, I wanted to save up as much money as possible, this way I can go on all the rides and play all the games. So, my dad used to give me tons of chores to do at the start of the summer, and pay me five dollars an hour. And we had a six acre ranch upstate in the middle of nowhere, it was really nice. And we had our own pigs, chicken, roosters that we used to get from the farm every year. It was funny, since my dad used to feed these animals our leftovers every night. So, burgers, hot dogs, [inaudible 00:03:29] barbecues, macaroni and cheese, beans, every single night. So, the animals that we got for us, they ate like kings.
Frank Curzio: 00:03:36 And we used to get the animals from the same farm at the beginning of the summer. And by the end, we gave them back, and they were all fat and plumped up. They just ate everything. So, yeah, my dad was really into that stuff. And we did this for over 10 years to the point where, when we got to the farm, I’m sure the animals were like, “No. Pick me, pick me.” Usually, when you go to the farm and pick animals, you go home and you kill them, and you cook them. We used to take them and feed them and get fat. So, these animals loved us.
Frank Curzio: 00:04:01 But anyway, I would save a couple of hundred dollars doing all my chores, which was feeding a lot of these animals and mowing the lawn, chopping wood for our fireplace. And I’d take this money and go to these fairs at least twice, because they would go on for a week at a time. Yes, I attended at least twice a week and just have a ball, like, play games, win prizes, go on rides, meet friends. It was really the highlight of my summer as a kid.
Frank Curzio: 00:04:30 Well, when you look at the Clay County Fair in Florida I just went to, this is a really large fair. And this is more than 30 rides, and most of them adult rides. Tons of games, food, animals, tractor pulls, everything. And I had to tell you, the total attendance from last year, I looked it up. This is the amount of people who attended the fair for the full week, broke 300,000. I’m sure this year, it broke 500,000. I hear Saturday alone, the place was insane. I’ve never seen anything like this before, at least at a fair. Each person had paid $10 to get in. The kids over five years old I think, under five, they got in for free. Over five, for a five to 10 years old I think, was seven dollars each.
Frank Curzio: 00:05:12 And then you had to pay $25 to get a band that you’ll have access to all the rides. And we waited online, my wife and I and the kids, we waited online for 40 minutes just to get the bands for the kids. Not a ride, just to get the bands. Which by the way, these a-holes, sorry to curse, took a page from the health insurance companies, right. Where they give you a bracelet and you think you have access to every ride, but they actually did not give you access to every ride. They give you access to every single ride, except the three most popular ones. And those rides require you to pay in tickets and it was eight tickets per ride, and each ticket was a dollar. So, if you wanted to go on the other rides, you had to pay extra, almost double what the bracelet cost. And every single one of these rides, every one of them, had 40-minute plus waits, most of them over an hour. This is a fair, this isn’t Disney World.
Frank Curzio: 00:06:07 So, last year, Clay County said it generated 2.3 million, and this is just on food, beverage, specially concessions carnival rides. This number, I wouldn’t be surprised if it’s close to four million this year. I went to this event last year, it was nothing, nothing like this year. In fact, it was definitely the most crowded fair I ever saw, for someone who has been going to these things for 30 years practically. I mean, half an hour lines to get food? Lines to every ride.
Frank Curzio: 00:06:34 Every game was five dollars to play, five-dollar minimum. Remember when it used to be 50 cents and a dollar, or two dollars you get two balls. No, everything was five dollars. And every game was jam packed. And I tweeted this, @FrankCurzio, if you want to follow me or send a tweet a lot more. It’s my handle. So, I tweeted this when I was at the fair that, those who don’t believe the economy is on the brink of recession, you may want to take a look at this. And I provided pictures and a lot of data I just mentioned. And it was funny because, one person responded and they were like, “Really, Frank? This one data point makes you think the economy is fine.” No, it’s not one data point. Sorry. Sometimes I assume that everyone’s part of the whole system. The whole ecosystem we have here where [inaudible 00:07:17] listen to the podcast. And send newsletters, we have a massive network that goes up to 100 countries, which is incredible.
Frank Curzio: 00:07:23 Podcast’s been downloaded I believe, over eight million times, it’s even more than that, which is humbling and incredible. But a lot of people write in, so it’s not just one data point. The powerful network that we have here, I get dozens if not hundreds of emails from you guys every week. And I would say, over 90%, probably like 95%, of everyone emailing in, that’s email@example.com. I encourage you to email, right, we’re all together in this. We’re all a big network. But 95%, definitely over 90%, have been positive. And tell me that, “Hey, you know what, Frank? Business is still strong.” ‘Cause I ask a lot of business owners out there. So, it’s slowing from last year but it’s still solid, right. [inaudible 00:08:04] forms and stuff like that, we’re spending a little bit more money.
Frank Curzio: 00:08:07 Listeners write in and tell me about the housing markets they live in, outside of very high end homes at these major metropolitan areas, are starting to come down in price. The housing market, it is pretty solid. Real estate agents are telling me there’s still very little inventory on the market, it’s hard to get houses to even sell. That’s what I’m hearing out there.
Frank Curzio: 00:08:26 Again, maybe if this is different, email me. I’m not biased. I’m not a permeable or a permabear. This is me reporting real time, real time data from you guys. This is what I’m hearing. Emails from people shopping at malls, traveling the world, talking to cab drivers, go on to tourist destinations, even taking cruises. And overwhelmingly, these emails are positive. You just tell me things are crowded, people continue to spend money.
Frank Curzio: 00:08:51 And look, we all know it’s not always gonna be this way. Maybe worry about a massive debt, a trade war with China, Brexit, slow down earnings growth, right. All those, those are on the table. So, right now, people are spending money. The sentiment is overwhelmingly positive. We all know this could change. But right now, things are pretty good. We’re seeing recent earnings from banks, where most saw declines in trading volumes, from January February. Mostly January. Of course, every management team said the economy is pretty strong and consumers continue to spend.
Frank Curzio: 00:09:26 As you’ll see personally, in almost every area you go to: malls, big fairs, car dealerships, vacations. We had a car dealership here, he’s selling a little bit. But still, people are buying cars like crazy. Everything’s crowded.
Frank Curzio: 00:09:39 And why am I going through this? Why am I telling you this story? Because it’s very important guys. ‘Cause when consumers decide to cut back on spending, when they start getting worried. When they are no longer traveling, buying homes, you know who’s gonna see it first? You, if you’re paying attention. Not the economists that stick their heads in books and look at bell curves. All those guys have been wrong, because most of those guys, and I’m not picking on all of them and not every one of them. But the people they talk to are usually rich people. They usually lock themselves in a room, they’re not socially inept. They’re looking at numbers and stuff like that. You are out there. You are seeing your neighbors; who’s buying cars, who’s spending money, the houses for sale, how much milk cost, how much gasoline cost. You’re it.
Frank Curzio: 00:10:25 The massive network we have and the real time data that we get, and indications of the economy. I can’t tell you, since I’ve been doing this podcast, how incredible that’s been. There’s a reason why I’ve been so bullish in the face of how many people telling us the market’s gonna crash, because I’m a data driven guy. I’m listening to my network, at least to the people I talk to. I travel like crazy. This is how you get a good indication.
Frank Curzio: 00:10:49 Look at the credit crisis, where home price started collapse, and tons of foreclosures hit the market. You guys knew about it. If you live in Florida, Southern California, Vegas, you saw this happening in late 2006. Nobody was talking about it. You saw it happening. The houses for sale, people … 2004 or five, people that you know are cops and firemen buying $800,000 houses with Mercedes in their driveways, you saw it. You saw it happening in 2006, how this started shrinking, people just leaving their house, and more foreclosures on the market. You definitely saw in 2007, the rest of the world pretty much found out about it in early 2008. The writing was on the wall, if you just looked. Tons of houses for sale. New homes that were just built, they’re on the market for six to nine months, even longer. Nobody buying them.
Frank Curzio: 00:11:40 So, right now, based on what I’m seeing from my [inaudible 00:11:42] or from my network, some of the trials like, the economy is fine. It’s not great, but it’s doing okay, at almost every economic data being reported. And by a much more important measure, the common sense point of view, from someone who travels a ton, talks to locals, talk to cab drivers, has a nice network of people spread out to 100 countries. As someone who just went to a local fair in the middle of nowhere in a farm town, where they’re gonna generate close to four million dollars in a week record sales, at a freaking fair. Are you kidding me? Economy looks pretty healthy right now. I expect to stay that way at least through the end of this year.
Frank Curzio: 00:12:18 Again, if you’re against this so you’re a permabear or, that’s fine. That’s okay. Make sure you have stop losses in your stock. I’m just telling you the data that’s reported. I’m not biased here. I look at data and that’s how I get to my investments, that’s how I recommend stocks in our newsletters.
Frank Curzio: 00:12:34 As for the economy, if you’re worried about it, it’s gonna be strong. At least the end of this year likely through 2020 as well. I can see us really falling into recession 2020 into election year. I think it’s gonna happen. Do everything we can to stimulate the economy.
Frank Curzio: 00:12:49 But that’s the basis for this whole story and telling you all this stuff, to keep your eyes out. You guys know more than most of the economists, most of the analysts out there. If you just look you’ll find great ideas. Listen to your kids, they know the biggest trends that are coming up. They know about the Instagrams and stuff, they know about all social media sites. They know about Fortnite and things that become billion dollar things that most people don’t have a clue about until it’s too late. So, these things are much, much bigger. These stocks go through the roof. But keep your eyes out, trust me. You’ll definitely become a better investor.
Frank Curzio: 00:13:19 So, the great interview I setup today it’s with Edward Karr. He was the president and CEO of a junior mining company called U.S. Gold Corp. This is a company where I did a lot of research on. I actually went to the site, saw the properties, met the whole management team, met the top geologists, recommend the stock. And we wind up stopping out, which happened with a lot of our mining pics. We’re very smart to stop out, a lot of these things got nailed much, much harder because it’s a cyclical downturn. It’s horrible right now. I miss time in the market.
Frank Curzio: 00:13:50 With the past couple of weeks in front of you, a lot of companies, a lot of good CEOs in the mining industry. Again, the industry has just been decimated, outside of a little stretch in 2016. But going back to 2012, especially junior miners, have gotten absolutely crushed. Names that I throw buys down 80%, a good management team, it was a good project. It went down another 20 30%. We stopped out at some of these names. But U.S. Gold, it’s a good company. I have done the research on it. Edward Karr’s here to give you an update, what’s going on. Talk about his recent hire to the board, it’s a big name. He’s in Trump’s cabinet, I believe he’s gonna be a game changer.
Frank Curzio: 00:14:36 I’m gonna highlight some of the short long term [inaudible 00:14:38] of the company. Edward’s been on before, he’s a sharp guy. He founded several investment management investment banking firms, he’s based in Switzerland. It’s gonna be a great interview, definitely listen up. He’s a name to put in your radar.
Frank Curzio: 00:14:49 And then my educational segment. I’m gonna teach you how to make money buying and selling stocks just before the report earnings. If you follow me @FrankCurzio, I said that this is a loser’s game, it’s a coin flip. But I know so many of you love to do it. And I’ve done it before too. Just gauge where you have a good idea of the companies that report strong earnings or weak earnings. But I’m gonna show you how to put those odds more in your favor. And it’s gonna be a cool segment because, I’m gonna provide a list of names, probably like, let’s say 20 plus, that are gonna report next week. And I’m gonna select a few of them, maybe five or six, and tell you which ones you should buy into the quarter, and which ones you should short to the quarter. Pretty crazy, but listen to what I have to say, it’s very important. Because again, you’re gonna push the odds in your favor if you engage this correctly.
Frank Curzio: 00:15:42 It’s a lot more than what the company does or what’s going on, or who the management team is. No. This is about trading, I get a lot of calls in and a lot of people, “Hey, Frank, you focus on trading segments?” This is gonna be a trading segment. I’m gonna highlight lots of stocks that are reporting next week, and which ones I think are gonna beat the quarter and go higher, and which ones report weak earnings and go lower. Definitely stay tuned for that list. And again, I’ll breakdown at least five companies, maybe seven or eight, depending on how much time I have. But definitely give the segment a listen.
Frank Curzio: 00:16:10 Before I share a list of stocks with you, let’s get to my interview with Edward Karr.
Frank Curzio: 00:16:16 Edward Karr, thanks so much for coming back on the podcast.
Edward Karr: 00:16:19 Hey, Frank, thanks so much for having me. It’s always great to be here.
Frank Curzio: 00:16:23 It’s cool. So, I want to start off talking about the macro, which I do with everyone in the mining space. Because it’s something that’s been absolutely horrible, it looks like things were gonna turn the past couple of years. We know that CAPEX spending has decreased significantly, there hasn’t been a lot of major discoveries. And some of these junior miners like yourself have tons of potential. But I want to hear from you as someone who travels the world, and you do this interview from Switzerland. What are you hearing out there in terms of investors? Are the institutions starting to get in? Is there still liquidation process going on? Because this is a cyclical industry, it’s supposed to be. But right now, the decline, this decline, talking to professionals, they haven’t seen anything like this for 30 40 years. What are you hearing out there to just say, “Hey, you know what? Maybe now’s the time to really at least start buying into some of these really great names.” Like, maybe your company.
Edward Karr: 00:17:15 Yeah. It’s been such a difficult time, Frank, over the last seven, eight years really, since the peaks of 2011. We’ve had multiple different headaches thinking that, gold’s gonna break out, here it goes, here it goes. What happens, since you well know it too, is that, a lot of us in the industry get pretty biased, because we really believe in gold. We believe it is a currency, it’s tangible. It’s got real, real purchasing power protection for the longer term. But it hasn’t broken out the metal yet the way a lot of people have thought.
Edward Karr: 00:17:51 And we’re sitting here today, on the 17th of April, 2019, with a 20.78 gold price. That’s down from 13.50 not too long ago. So, we’ve actually sold off. It seems like the equity markets in general are back in a risk-on atmosphere. There was a little nervousness from that big equity sell off back in December into January, and gold had a nice pop on the fear trade. But now it’s risk-on. We actually this morning, had a pretty decent GDP print out of China. So it seems like Chinese growth is coming back alive. Maybe the trade wars have not been that difficult for the Chinese and the Chinese economy. But at the same time, there’s other signs out there that not everything’s rosy.
Edward Karr: 00:18:40 We actually had German growth in Europe this morning, show one of the slowest pace in the last six, seven years. So, the European economy, the European ship is definitely taking on water. We got major issues there. We still have massive issues around the world as you know, Frank, with quantitative easing, central banks from the BOE, the BOJ, the European Central Bank, the US Fed. Even the Chinese central bank, printing currencies ad infinitum to try and fight economic downturns. And it’s just not gonna end well in the long term, it really won’t.
Edward Karr: 00:19:15 So, I think we’re getting close to an incredible buy again here, in gold, in the gold mining and exploration companies. There is the old saying in the old adage, “Sell in May and go away.” So, the equity markets, they’re up at about an all-time peak when you look at your big bank stocks. Again, as a contrarian, I think some of your subscribers and investors, they should probably be taking profits in some of the big large cap technology names. Some of their stocks that are up at 52 week highs. And you look at the mining and exploration sector, most of these companies have great fundamental value and are down near 52 week lows, including U.S. Gold Corp, by the way.
Frank Curzio: 00:19:57 Yeah. And it doesn’t even matter, right? At this point. Whether it’s a good project, if it’s a great management team in a mine-friendly jurisdiction. That’s why, for the past few months, I’ve been getting a lot of just CEOs from junior miners saying, “Hey, guys, make sure you put these companies on your list.” ‘Cause you don’t really need the cycle to change where it’s … You just need a little bit of positive sentiment. And where you guys are at and all these companies are at, you’ll see easily, doubles and triples from these levels. I mean, you see a lot more than that when the cycle turns.
Frank Curzio: 00:20:26 But I wanted to ask you this question. When it comes to gold, is it about the stock market? I mean, does the stock market need to crash or go a lot lower for gold to work? Because right now, that’s one of the catalysts for gold, right? You want to see inflation is a factor, depending on what pair you look at. Deflation could be a factor. But I know that is really a thesis for gold. When I look at it, just from a fundamental standpoint, it seems like there’s plenty of catalyst here, where the big guys need to find gold. They haven’t been able to find major projects. And there’s a lot of junior miners that are sitting on potential big projects here.
Frank Curzio: 00:21:02 Is it more about fundamentals? Or is it strictly like, “Hey, we really need stocks to go lower in order for gold to work.”
Edward Karr: 00:21:09 It’s a little bit of both. And there’ll be multiple catalysts out there that could ultimately ignite the bonfire for a big gold rally. If the global equity markets pulled back, certainly, that would cause a flight to safety and gold would catch a bid, and probably really start to take off. Geopolitical concerns, the Middle East is as crazy as ever. Something happens there and there could be a big flight to gold.
Edward Karr: 00:21:36 You look at some of the smart money out there in the world: the Chinese central bank, the Chinese government, the Russian central bank. They have just been hoovering up all of the gold ounces as they can, and they’ve been accumulating, accumulating, accumulating. The US dollar had a heck of a nice run because the Federal Reserve was typing interest rates, but now the fed’s done a complete 180. They stopped typing and they might even reduce their interest rates by the end of 2019. There is an election coming up in 2020, so not that the fed’s political, but they probably want the economy to be going pretty well. So, we’ll see what happens.
Edward Karr: 00:22:14 In that sort of environment, gold should do pretty well. And at some point probably, the US dollar would roll over. And if that happens, gold would look really, really good as well too. So, multiple different catalysts that can really put in place a prolonged bull market rally, which at some point, will be coming.
Frank Curzio: 00:22:34 Yeah. And there’s a reason [inaudible 00:22:35] Trump … Every other tweet is about the Fed. This isn’t about now, this is all strategy for next year where, hey, you better not raise rates during the election year. Because that’s one of the things with the economy. If the economy’s well, the incoming president almost gets elected. And all those tweets are more of a much bigger picture, it’s not just for today.
Frank Curzio: 00:22:53 All right. Let’s get to U.S. Gold Corp, ’cause this is a company that, you guys were nice enough to fly me down. I went down there to see the project. Tell me what’s going on with your company, and maybe start from the beginning. Because let’s assume that no one’s really familiar with this company, and they didn’t listen to your past interviews or anything like that on the podcast. Well, why don’t you start from the beginning with U.S. Gold Corp.
Edward Karr: 00:23:13 Sure, I’d be happy to, Frank. So, U.S. Gold Corp, we are a publicly traded company on the NASDAQ. We’re one of the very few gold exploration companies listed on the NASDAQ. Our symbol is USAU, so, U.S. Gold. And that’s really our mission. We are going after high potential assets and properties in the United States. We currently today have two projects within U.S. Gold Corp, Copper King is our more advanced. And we know there’s an existing deposit, we know there’s an existing resource with Copper King.
Edward Karr: 00:23:49 We have a technical report called the PEA, Preliminary Economic Assessment, that shows our metal in the ground at Copper King. It’s about 1.1 million ounces of gold and 300 million pounds of copper, and that has $178 million net present value on the project at 12.75 gold and 280 copper. It’s the prices we’re at today.
Edward Karr: 00:24:12 And then we have this big massive exploration, what I call an exploration unicorn, because I believe that could really one day make us a unicorn. In Nevada, the project’s called Keystone. It is a district scale property, means it’s good size. 12,000 acres, about 20 square miles 650 mining claims on the Cortez Gold trend in north central Nevada. We are just 10 miles south of Barrick Gold’s [inaudible 00:24:42] complex at the Cortez mine, across the valley pipeline mine. Two of the biggest mines in North America.
Edward Karr: 00:24:49 Keystone’s been identified and consolidated by our head geologist, Dave Mathewson. He’s had a lot of success. He’s been on and off this project and property for the last 30 years. And he believes it’s the best exploration project he has seen in his career. We believe there are multiple world class discoveries at Keystone, like the Cortez Hills deposit just to the north of us. And we are out trying to ultimately prove up one of those discoveries with a big major drill hole discovery.
Frank Curzio: 00:25:24 Yeah. And even with Dave Matthewson, someone I know very well, and met personally on my trip there. When you say this is one of the biggest projects, he says this is one of the best exploration projects he has seen, we’re talking about a guy with 35 years of exploration experience. Former head of Dumont’s Nevada exploration team. I mean, this is a guy that’s credited for big discoveries in this area. So, it’s not just, “Hey, a guy that’s been a geologist for a couple of years.” Right? This is a guy that had a tremendous experience specifically, in Nevada.
Edward Karr: 00:25:55 That’s exactly it, Frank. I don’t want to brag or boast, but I think you’d be hard-pressed to find people more experienced than Dave Matthewson in Nevada. You could count them on your right hand. I mean, he’s one of five people with that level of experience, level of success. Dave has found multiple deposits in his career. He’s created tremendous shareholder value. Not only does he know Keystone, Dave is literally a walking encyclopedia of every project in Nevada. He lives, breathes, eats, sleeps gold exploration. Dave looks at all the other companies, all the other projects, watches them very closely, has tremendous knowledge, knows the history of probably every single project out there. And he is so impressed with Keystone.
Edward Karr: 00:26:45 I mean, we’ve been at it, Frank, and you know. You’ve been out on the project and you’ve seen the property. We’ve been added out there now going on three years. And gold exploration is a process. Your subscribers need to know and understand, this takes time. Okay, you could have a lottery ticket where you just go out and drill a hole and hit a major discovery. But that’s very unusual. What you have to do is find a perspective project like Keystone in a great neighborhood. And then we go out, we do a tremendous amount of field work through geology, through mapping, through geophysics, through geochemistry, to really understand, is this project viable?
Edward Karr: 00:27:27 And then we bring out the drills and we start drilling to understand, do we have the right host rocks? Because these big major gold deposits in Nevada, these Carlin-type deposits, they are hosted in very, very specific limestone carbonates. So, we drilled a grid pattern north south east west of Keystone, what Mathewson would call scalpel drilling. And sure enough, the results came back spectacular 2,000 feet of some of the best host rocks Dave Matthewson has seen in his career. Incredible upper plate lower plate [inaudible 00:28:04] primary hosts for the Cortez hills deposit. We have the exact same rocks at Keystone.
Edward Karr: 00:28:11 They’ve been incredibly altered. That alteration, Frank, it means the rock is like baked and busted up, and that happens from the heat engines. We know at Keystone, there are multiple intrusives. These were ancient volcanoes. We actually sponsored a master thesis study over two years to study these ancient volcanoes academically. We dated them, we counted them, and we know now specifically, they are the exact same age and from the exact same geological system as the intrusive at Cortez hills to the north. This is very positive for us.
Edward Karr: 00:28:49 Those ancient volcanoes on the Keystone project, they have erupted multiple times. And as they have, that eruption and pulsation has pushed the gold down into the host rocks. So, all of our drill holes have shown us anomalous gold. We know there’s gold in the rock, we know the rock has been really beat up. Now, the real goal in this business is to drill into one of those high grade feeder zones. Cortez hills deposit to our north, it is basically a really high grade brush or pipe. So it’s a very, very small narrow deposit, about a 500 foot signature at surface. And a 20 square mile property package. That’s like trying to put a shot on a target 1,000 yards down range. You got to be extremely accurate.
Edward Karr: 00:29:41 But we are narrowing in on that right now. We think we are extremely close. We had a couple of big events happen at Keystone last year. Number one, we got approval of our environmental assessment and plan of operations, that opened up the entire district for us for exploration. Before that, we were working off four very small permits called notices of intent. So we only had a freckle on a human body. We could only use a very, very small portion of our land package. Now, we can go anywhere.
Edward Karr: 00:30:12 We drilled six holes last fall, targeted holes. And then the snows came to Nevada. It’s up in the mountains at altitude, and we had to be mobilized, ’cause we got snowed out. And we are putting together our 2019 exploration program right now. We probably can get back out on the project in June. And we are at the point where it’s really an American football analogy, we’re first in goal. We believe we’re gonna have four downs to put the ball in the end zone, and we’re gonna win. We are very, very close. We believe to vector into a major discovery. So it’s an exciting time.
Frank Curzio: 00:30:53 So, you mentioned drilling results and stuff like that, and then but you gotta drill further, which costs money. How does that work where, you’re in an environment where it’s not the easiest to raise money. And talk about that, because sometimes, when I have CEOs come on, it’s, “Hey, everything’s great.” But when it comes to this industry, it’s not that easy to raise money unless you have good projects, and you guys have been successful.
Frank Curzio: 00:31:13 So, how are you on the money front in terms of having the money to drill these extra holes and really dig in further? ‘Cause like you said, if you hit one of these things, we’re not talking about something that’s gonna go up five x. We’re talking about something that’s gonna go 20x 30x 40x, if you guys do hit at Keystone.
Edward Karr: 00:31:27 Right, and you’re exactly right. This is one of the most challenging capital markets for all companies out there, very difficult to raise money. Most of the major institutional investors, the big gold funds and resource funds and the [inaudible 00:31:42], they’ve had redemptions. Because Fang stocks are running, marijuana stocks are running, whatever it is. Everything but gold’s running. So, the investors are throwing out the baby with the bathwater in the gold sector. So there’s not a lot of capital available from the institutional front.
Edward Karr: 00:31:57 However, there’s still plenty of pools of money out there. We had been successful so far at U.S. Gold Corp in our history. In funding this company, we’ve raised about 24 $25 million of capital in the last three years. And myself, my background, I’m not a geologist. I’m a finance guy. So, I really look very, very closely at our cap table and at our structure. Today, we only have about 19.3 million shares out, and it’s all plain vanilla. This is common stock. There’s no ratchets, there’s no resets. There’s no exploding warrants or any funny stuff in there. 19.3 million shares, our stock somewhere around a buck, so we have a $19 million market cap. We have over three million dollars in cash on our last filing. So a $16 million enterprise value.
Edward Karr: 00:32:49 I really believe, and I’ve been successful in getting investors to believe, that our NASDAQ listing, our Copper King asset Wyoming and our cash is worth more than our market cap today. And then, Keystone becomes the cherry on top of the ice cream sundae. You get that for free.
Edward Karr: 00:33:10 So, the institutions have been tough. We have some very, very supportive shareholders that had been along for the ride that know Dave Matthewson really well. You know several of them, Frank, they’re very committed to the company. Myself, I’m a significant investor. I participated personally in every placement we’ve done in a bought stock out of the market. So, even though it’s difficult, I still believe we will be able to raise the capital we need on some pretty decent terms.
Frank Curzio: 00:33:40 And because of the drilling results and everything that’s going on, one of the things I like to see, especially with small companies, right? Really small companies, is, get the management team who’s involved. And you guys just had a recent hire that we talked about. That’s amazing. Could you talk about that person? Because I think to me, it’s a game changer. It puts credibility on it in an industry where there’s not a lot of credibility in a lot of junior miner stocks, where we’ve seen that before. I’ve been lied to straight up by CEOs and things like that. But you really want to put together good companies in your portfolio. And I think this really helps with a small company like yours, because this hire was, again, I think it’s a game changer. Why don’t you talk a little bit about it?
Edward Karr: 00:34:20 Yeah. And we’re really excited. We announced yesterday that former Secretary of the Interior, Ryan Zinke, has joined U.S. Gold Corp as a director. So, former Secretary, Zinke, he’s got tremendous experience. His knowledge of mining and the resource industry in the United States is excellent. Also he has a degree in geology. He’s from Montana, so he understands the western American mindset. He was a former Navy SEAL for many, many years. So, he has tremendous leadership skills.
Edward Karr: 00:35:00 And as you point out, Frank, for a cabinet level secretary to join a $19 million nano cap company, we’re really proud of that. Because secretary Zinke also had to do his due diligence on us. He’s not just gonna go out and put his name on anything. And we think that he’ll be able to provide a lot of value, a lot of leadership. I really look forward to him giving me guidance as a board member for moving Copper King along towards a permitting decision. And yeah, we’re just so, so, so excited to have him join our team.
Frank Curzio: 00:35:41 Now, and I was doing some research on him, incredible background. And this is important because, I know you’re familiar with cryptos as well, we’ve talked about the crypto markets together. And when people just hire someone to be an advisor or something, it’s just a name. And you probably don’t have any contact with the person, it’s more to serve a deal or whatever. But he has, like you said, an extensive background.
Frank Curzio: 00:36:02 And then he served on the House Armed Services and natural resource committees. Like you said, geologist background. But Navy seal, acting command of the special forces at Iraq, awarded the Bronze Star for combat in Iraq. He’s credited with conducting 360 combat missions in the capture that killed 72 terrorists. That’s 72 terrorists. Retired active duty 2008, became a state senator of Montana. But this guy has a background in what you do. It’s not just, “Hey, we got someone from Trump’s cabinet, now he’s on the board.” I mean, this person has a lot of experience in this industry, doesn’t he?
Edward Karr: 00:36:33 He really does. He really does. Tremendous experience in the industry, knows it extremely well. There’s probably not many former Congressman, senators, that understand the mining industry as well as former Secretary Zinke does. So, we were so pleased to have him. And just his gravitas that he brings to the board, people look at us probably in a different light now and say, “Wow, look at this. He’s joining U.S. Gold Corp. What does he see? What should we be looking at here? And trust me, you know me, Frank, I’m not excited to be the CEO of a $19 million market cap company. I mean, we all want to really make something out of this. It’s a challenging industry, but we’re certainly putting together a team of accomplished operators, and we want to take this forward to the next level. And Secretary Zinke is gonna be a big part of that with us.
Frank Curzio: 00:37:28 All right. Let’s finish with this too. So, if an investor is looking to buy your stock today and you’re positive on it again, what are some of the catalyst that they can look forward to? Which is important because, in a market like this and say just, “Gold is weak for the next year or two.” When you have no news on your stock and [inaudible 00:37:45] catalyst, those are the stocks that get hit the hardest. What are some of the short term long term things that people can look forward to if they buy your stock today?
Edward Karr: 00:37:55 We’re gonna certainly move forward on our exploration plans, both for Copper King in Wyoming and Keystone in Nevada. All of your subscribers should watch for our news and our press releases coming out. We’ll put out press releases detailing exactly what we plan to do in 2019. They’ll be mapped, showing everyone where we plan to go and exactly where we think that X marks the spot on the treasure map. So, that is coming up in the next couple of months. You’ll see activity at both projects.
Edward Karr: 00:38:26 And we’re always on the lookout. We’re on the lookout for other opportunities. Since this industry is so beat up and so washed out, there’s a lot of other acquisition targets that are out there on our radar. And if we can do anything to add the shareholder value and really try and bring in additional assets to help the overall company in shareholder base, we are certainly gonna do that. So, it’s gonna be a very, very active late spring and summertime program for us, Frank.
Frank Curzio: 00:38:56 Now, it sounds great. And I want to finish with a question from out of left field, a little bit out of left field. ‘Cause I want to get your thoughts and … You travel the world and you are in Switzerland. And we love discussing cryptocurrency. So I always like to get one last question, and it has nothing to do with the company or anything, but more about personal.
Frank Curzio: 00:39:13 What do you see in cryptocurrencies? ‘Cause I know this is the market that you follow, I know this is the market that you invest in. In terms of international demand, where you know that we just launched a security token offering that’s still in the works. And so far, it’s [inaudible 00:39:25] very well, we raised over four million in capital. But what do you see in the industry compared to, you’ve been through this whole entire thing where 2018 was great through late 2017, and everything really crashed. But what are you seeing internationally? Because that’s where the demand is really continues to come from, and I just feel like the US is a little bit lagging in this area.
Edward Karr: 00:39:44 Yeah. And trust me, the one analogy I’d say is that, the crypto market will look very, very similar to the internet market from the 90s. We had this incredible boom in the 90s, anything with a dot com in its name just blew up and went up 10, 20, 30 times. And then 1999 bang, the big NASDAQ crash wipes out most of the companies, and you’re left with five or six major dominant players of the internet business. The Googles, the Amazons, the Facebook, the eBays, whatever of the world.
Edward Karr: 00:40:18 So, I think the crypto business is gonna be exactly the same. A lot of these ICOs just really leveraged off the success of the crypto industry. There was way too much hype, way too much speculation. A big massive washout is positive long term. But the one thing I can guarantee you and your subscribers, Frank, is that, blockchain technology, that is here to stay. And that is going to revolutionize our lives, probably the way that the internet did originally in the 90s. The applications on everything from trade finance to banking, to identity verification. To any paper document that can be tracked with blockchain technology is amazing.
Edward Karr: 00:41:08 And we’ve seen this industry evolve from just the creation of some crypto currencies, Bitcoin, the first one, to ICOs, initial coin offerings, and everyone got excited. And now it’s evolving more maturely towards STOs, that businesses like yours, Frank, are actually doing the security token offering. You’re allowing subscribers to become an equity shareholder in one of the most dynamic fast growing businesses out there. You can pay those investors a dividend, you allow them to have a portion of your capital and growth. I mean, this is fantastic. This is capitalism at its finest. It allows entrepreneurs like yourself, the ability to access money out there. It allows investors to invest in dynamic businesses. And ultimately, becomes a big competition to the Wall Street investment banks, because you can bypass the whole IPO process with an STO. So, I think it’s gonna have huge implications for all of society over the next 10 plus years.
Frank Curzio: 00:42:18 Now, and I appreciate that too. I obviously agree with you since we launched this thing. But since we’ve launched it, we’ve seen a lot more businesses doing the same thing. And what I love about this, Ed, really quick is, people think, “Oh, I can get into Lyft or Facebook, in Alibaba.” When you’re getting in these names, you’re getting in. And when the biggest growth of their companies already took place. And the liquidity event is the IPO which insiders are actually selling those shares to you, and people want to buy these things at multi-billion-dollar valuations. When STOs I think, give you an opportunity to really look. It’s more speculative, but you could really get into some cool businesses during this super early growth phases. And that’s how you could really make a fortune, by buying the Amazons very early on, which you did have a shot to do with Amazon. But not today. All these unicorns wait till they have multi-billion-dollar evaluations that go IPO. It’s crazy.
Edward Karr: 00:43:09 Right. I couldn’t agree more. You see, that happened with Lyft after their IPO, the stock trade’s down. And the investment banks are happy because they scooped the big bad bees, the DCs, the venture capitalists and the private equity guys. They’re happy because they’re getting a liquid exit. They’re selling stock to the sucker retail investor who’s going out and buying Lyft in the aftermarket. And I think you definitely have a lot more opportunities getting into these early stage entrepreneurial companies like yours, to get in on an STO there than some of these mega unicorn IPOs.
Frank Curzio: 00:43:45 Now, I appreciate that. And I love the fact that we did complete a 180 to cryptos, because this is something that I know you’re very familiar with. You’ve been in the investment banking industry for almost over two decades, and I know you’re very familiar with this entire sector. So, I appreciate you commenting on this.
Frank Curzio: 00:44:01 With that said, Ed, listen, you came on a short notice, which I really appreciate. I saw this news and said, “Hey, I think this is a good idea for you to come on.” And you came on right away since this announcement of Ryan Zinke, which was yesterday. And I really appreciate everyone who’ve given us an update. And hopefully, you’ll join us again soon, and things would be really, really great. And the next time you join us, that stock will be a lot higher. But I’d love to keep in touch. We have three, four, five months from now for you to come back and definitely give us an update on what’s going on with your company.
Edward Karr: 00:44:28 That’d be great. We really appreciate the interest. All your subscribers, if they want more information, they can go to our website anytime, Frank. It’s usgoldcorp.gold. I’d encourage everyone to sign up for the news releases right on there, and just continue to follow the story.
Frank Curzio: 00:44:45 Definitely makes sense, Ed. All right, buddy. So listen, I’ll definitely keep in touch with you, talk to you soon. And again, I appreciate you coming on in such short notice.
Edward Karr: 00:44:52 Sounds great. Thanks so much for the interest.
Frank Curzio: 00:44:55 All right, guys. Great stuff from Ed. And look, I mentioned probably about three months ago, that I’m gonna give you a list of names to put in your watch list of junior miners, just companies that are really beat up. Companies that I’m familiar with; great projects, mine-friendly projects, solid management teams. Because we know this is a cyclical industry, it’s been down for, man, six, seven years. We’re seeing gold right now, as I mentioned, pulling back a little with the rallying stocks. But still holding up well, and this cycle is poised to change. And when it does, the list of stocks we’re giving you are not gonna go up 100%, 200%. I mean, it doesn’t happen. These names go up several hundreds of thousands percent during bullish cycles.
Frank Curzio: 00:45:35 But from these levels, guys, you don’t need a bullish cycle. You just need stabilization, a little positive sentiment in the industry. And, it would push these names up by two x three x in the short term. And you may say, “Frank, come on, that’s a little crazy.” You go back to early 2016. You go back to my podcasts, okay? Everything’s recorded, everything’s archived. Even people that sign up for my newsletter, we give … Curzio Research Advisory, we give a 30-day money back guarantee. And I urge investors, “Hey, when you go in there, look at all of our past reports since I’ve been writing. Everything’s there. All of our archives and everything. There’s nothing to hide.” It’s not like, “Oh, we’re gonna get rid of this and you don’t know what’s going.” No.
Frank Curzio: 00:46:12 See all my recommendations, view the bad ones. Most of them are good. We’re doing well in both portfolios. But when you go back to 2016, even listen to the podcast, or look at some of the recommendations, and the stocks I told you to buy back then. Like, Nolan Dynasty, McEwen Mining, Sandstorm Gold, [Humana 00:46:28] Gold, and you’re talking about enormous, enormous gains in just a six seven month period.
Frank Curzio: 00:46:34 And the fact that every junior miner, even the ones that are getting management teams great projects. Again, in mine-friendly districts, are down 60, 70, 80% from their highs. At these levels, they offer an incredible risk-reward where you could risk 35%. That’d be a lot for some of you, so only put a little bit of money into it. Again, these things evolve still, but you’re risking 35% to make several hundreds of percent by buying some really good names right now.
Frank Curzio: 00:46:57 So, just another name I put in front of you, this is a smaller name. I do not have a position in it. So, right now, I don’t have a position in the stock at all. But again, this is a stock that’s on my watch list of companies that I like. And I love investing in junior miners where from a risk-reward basis. And Nevada exploration, I had talked to you about [inaudible 00:47:15] resources I had on. I mean, these are companies with, you risk a little bit to make a lot. And that’s what you want, when you invest in junior miners. It’s money that you should be able to afford to lose. But if you’re right, it could be life-changing. And that’s pretty cool. And this sector right now, offers that with how depressed it is. And maybe it takes a while and maybe you’ll stop out. We stopped out a couple of names.
Frank Curzio: 00:47:35 But if you look at what happened in 2016, I mean, easily cover the losses that we’ve taken in this sector over the past two years, trying to pick off a couple of really great names. And the sector’s in a decline, it’s not pretty right now. But these are names that I want you to put on your watch list, ’cause when gold does come back, and it will. It’s a cyclical industry, and man, it’s way past … You usually see cycles, three four years, not six seven years, especially on downturns. And when this thing turns, you have an opportunity to make a lot of money in many of these names. Now, I always say this podcast is about you, not about me, so let me know what you thought. But email me at firstname.lastname@example.org. That’s email@example.com.
Frank Curzio: 00:48:11 Now, let’s get some educational segment. First, we had Netflix report on Tuesday after the close, and the stock went down I think, four five six percent. And then it opened flat, where is at today. IBM went down three percent, and they never report solid numbers. They saw revenue growth, a little bit of margin, revenue decline, year over year. That’s not a big deal. People focus on that metric at IBM all the time, they’re getting out of their legacy businesses. I mean, their earnings and profits are going higher and higher, their revenues are going lower, but the businesses that they’re getting into are much, much higher margin so the profits are increasing.
Frank Curzio: 00:48:46 Dividends say, very large dividend. I think this stock is a buy and a pullback since they’re acquiring Red Hat, which Red hat reported their numbers a couple of weeks ago, growing top and bottom line by double digits, increasing the amount of one million dollar plus orders by nearly 20%. The same time period from last year. So, I think I’d be able to say, buy here. But the purpose of this segment is, I know ’cause I get emails from you all the time. So many love betting on stocks ahead of earnings, whether it’s simply buying shares or short a stock, or using option strategies to try to make quick turns.
Frank Curzio: 00:49:24 Now, I always said that betting on a stock ahead of earnings and trying to predict which way the stocks are gonna move based on three months of data. You don’t know if they had a good three months or bad three months or whatever. It’s a fool’s game, because it’s basically a guess where you could be right on the company long term. It’s that long term catalyst come to fruition.
Frank Curzio: 00:49:41 But if you buy a stock at 50 and report terrible earnings and the stock goes to 40, it would be nice if you’re buying it for the average cost base, it was 42, 43, than being at 50. It’s a big differences if that stock goes to 60, which would be 50% gains buying at 40, compared to buying at 50 sitting on a losses. You know what I mean. You know where I’m going with this. Because you can get crushed early on if the company simply reports weak unexpected earnings and reduces guidance for next quarter. With that said, it is a fool’s game. But I’m going to try to put the odds in your favor when it comes to betting on stock just before the report. I know investors love the action, I’ve done it before. Investors love that game, one quick short term gains on a stock that’s definitely gonna have lots of volatility after the report earnings. And I want to try to help you out ’cause why I don’t do this often. The few times that I do go in and either buy or short a stock rather than using options or not, I’m bright most of the time. Not bragging here ’cause I cover my losers. But there’s certain things that you need to follow if you’re going to do that.
Frank Curzio: 00:50:44 It’s very, very important guys, especially in this market. Because in this market, expectations are high. And if you miss and report weak unexpected guidance, your stock gets nailed. IBM’s numbers are pretty solid and the stock’s down three percent. Yes, it’s run up tremendously, which is the point I’m gonna get to in a minute. But you have to be conscious of what that stock is doing ahead of the quarter. Has it run up tremendously? Are expectations sky high into the quarter? That’s a big deal. ‘Cause if the company reports pretty good numbers and increases their guidance a little bit, that stock could still take a hit because it’s up 20% heading into the tape, before report earnings. And vice versa, for companies down tremendously going into the quarter.
Frank Curzio: 00:51:24 And expectations are low. You just need a company to report in line numbers. I think maybe they report a little bit weaker guidance. And you can see that stock pop 10, 15%, especially if they announced a huge buyback, or the initiative to close stores if you’re a retailer and save money. I mean, you can see these things pop 10, 15% for those levels, even though earnings aren’t that good. And you need to know that before going into buying a stock before the report earnings. Because it makes all the difference. We’re talking about trading, guys, this is very, very important.
Frank Curzio: 00:51:54 And again, we looked at Netflix. If you look at Netflix specifically, the stock went from 366 344 after Disney announced their new streaming service last week. Even though Disney will not take any market share from Netflix at least for many, many years. Disney, they spend like a billion dollars in that platform compared to Netflix, who are just spending 10 times plus that amount. And even though Netflix has the best original content in the entertainment industry, and some of it hasn’t been that great lately, but people love watching that stuff.
Frank Curzio: 00:52:24 And if I look at Disney, you know what? Most of the people watching the superhero movies at the theaters, and that’s the content that’s gonna be online. But it’s the original content that people love. Start talking about [Ozark 00:52:37] and different … Orange is the New Black. Just different things like that. People love that stuff that you’re not gonna find any place else, and Netflix’s done a great job locking up some of the best directors, a lot of great actors. Getting to spending a lot more money on this platform. The stock I thought took a hit then, I really didn’t deserve. And the stock fell. All right.
Frank Curzio: 00:52:58 So you look at lower expectations into the quarter, right up a tiny bit, ’cause someone upgraded Netflix Deutsche bank on the day. That the report, which is surprising. But sentiment was overall negative for Netflix. They reported numbers that were not that great. I think they reported a big beat, they lowered their expectations. Their subscribers were in line a little bit lower than estimates. But they forward guidance to actually lower their earnings guidance significantly, which is surprising.
Frank Curzio: 00:53:27 So, the numbers weren’t that great, but Netflix held up pretty well. Now, if they beat the numbers, the stock would’ve went a lot higher, and that’s the point I’m trying to make here. When it comes to Netflix, it’s a stock that had just started declining sharply into the tape, which lowered expectations. The company didn’t really report great numbers, and you know what? You didn’t really lose any money. Because the stock’s flat today, on Wednesday. And you want to look at that. Because if Netflix is running up 20, 30% into the quarter and reported the same quarter, the stock would be down 10, 12, 15% today. So, know this going in. Now, how do we translate this into what we’re gonna do going forward? Well, next week is full blown earnings, and it’s gonna get pretty nuts. Probably over 100 companies reporting next week.
Frank Curzio: 00:54:14 So Halliburton, Coca Cola, Snap, eBay, Procter & Gamble, Lockheed, Verizon, AT&T, Biogen, Goodyear Tire, Thermo Fisher, Botley, Facebook, Microsoft, Visa, Bristol Myers, lots of home builders are reporting. Lots of oil companies, including Chevron Exxon. You have Alumina, Intel, UPS, Starbucks, Amazon Capital One. Again, just off the top of my head, just copy and paste that. But there’s a lot more companies reporting.
Frank Curzio: 00:54:40 Now, out of that whole entire list, which I promised to give you, I want to focus on a few of them. When I’m looking at Snap, which was six dollars in January, right? Social media. And I’ll bring it up right here. So, you’re looking at a company that is trading close to 12 bucks now. And again, everybody knows the IPO, it got crushed. And it’s at six dollars now. It was at six dollars I want to say how long ago? This is in January. So, you’re looking at six dollars in January, it’s now close to 12. On positive news, they’ve found ways to monetize that platform.
Frank Curzio: 00:55:26 You want to look at this stock and you think about buying ahead of the earnings. I’d be careful, because they need to report salaries and guidance, or this one gets nailed, right. Everyone’s on shaky ground with this company. They’re like, “Wow, they just started to get into it. Things might get better.” Maybe it’s Facebook buying it at 30 when it came out at IPO 50 went to 30, and now it’s 175. That’s what people are thinking, or investors are thinking. But since this will happen relatively quickly, I mean, this is a very important quarter for the company. And if they beat, I don’t know how much it’s gonna go up when you’re up 100% in three, four months. But if you miss, I mean, this is … And I can see them reporting in line earnings and in line guidance to the stock falling by five percent.
Frank Curzio: 00:56:04 I mean, that’s not what [inaudible 00:56:05] is looking for when your stock’s up 100% going into the quarter. They’re looking for something much, much more positive. Expectations are sky high right now.
Frank Curzio: 00:56:13 So, in line earnings in line guidance, which a lot of management teams right now, are reporting. When it comes to the guidance, they’re being conservative. Because you have Brexit, you have the trade test with China that’s going on, not too sure about economic growth ’cause China’s numbers are getting better. Is it for real? Could it stabilize? And that’s a growth engine of the world. So, there’s a lot of uncertainties out there, especially currencies and things like that if you operate overseas. So, they’ve been very conservative and not being rewarded for that, because we’re seeing the whole market go up into this earning season. Very important.
Frank Curzio: 00:56:43 So, taking a few names off that list, Snap’s one of them. Let’s go with Bristol Myers. It was 55 six months ago, and reported really bad earnings, I think it was last quarter, a quarter before. Now it’s at 45. And so, it’s trending lower into the tape, expectations are super low. Again, a company if you’re gonna bet, I bet that, hey, just figure that they’re gonna report in line guidance and in line numbers. Because if it’s really bad, usually companies come out, maybe a couple of weeks before. And they’ll say, “Hey, we’re not gonna make the quarter. It looks bad for the quarter, it’s not gonna work out.” The numbers are gonna be horrible. And a lot of companies do that two, three weeks before the report, and that’s fine. You’ll see the stock fall.
Frank Curzio: 00:57:22 The fact that they didn’t do that gives you an indication that it should be in line and the guidance should be okay. And if Bristol Myers reports in line guidance and in line numbers, you can see the stock pop more than five percent. If they report great numbers, this thing will really pop higher. And that’s where you can make a lot of money. Again, you want to look at this stuff into the quarter. I say it’s a fool’s game, but you want to put the odds in your favor. You want to have the best risk-reward returns for your investment. And if you’re buying something that’s going higher into the quarter tremendously, expectations are high. And even if that means I got to report better than in line numbers, better than in line guidance, [inaudible 00:57:56] stock’s gonna get hit a little bit, like IBM did, which is fine. IBM is gonna come back and go a lot higher.
Frank Curzio: 00:58:01 Looking at Microsoft, a company that was 100 in January to 120, I think it’s a large cap of the world based on market cap right now, maybe close with Apple, back and forth. But there’s another one where I see a small beat in line guidance quarter, and the stock may fall by three four percent. ‘Cause expectations are so high [inaudible 00:58:19] went up tremendously. So, let’s see how that cloud business is doing and how everything’s going. But man, they really have to report blow out numbers for this thing to blow past this.
Frank Curzio: 00:58:29 With that said, and I’m gonna bring up Amazon, so I’m taking some of these stocks off the list. This is a pretty amazing free educational segment here, ’cause I’m giving you lots of names and what they’re gonna do next week, when they report. So, I could be wrong and I love doing this, because at frankcuziorresearch.com, you can send me emails and see which ones I’m writing wrong on. But Amazon’s another name that I think you need to stay away from, because it’s a company that could really pair their earnings and blow out earnings, which we’ve seen in the past. ‘Cause they’re not used to reporting earnings, this is very easy financial engineering and stuff like that. They could report blockbuster numbers, and if the stock does rise to its 52 week high, which is around 20 50, it’s not too far away from there now. I mean, you could see the stock run tremendously higher. Right?
Frank Curzio: 00:59:11 We saw the same thing with Disney after it broke through its levels, that it hasn’t broke through in years. That thing really took off to another level. So, you want to be careful because, if they don’t report those numbers, the stock’s gonna get hit. But this is one where if I’m betting against it, and the stock has run up into the quarter. If I’m wrong in this thing, and that’s what you want to look for in a lot of these stocks. Are they trading close to their highs? Their all-time highs. ‘Cause if they surpass that, they report blockbuster numbers, a new deal. They announced this major buyback or a major increase in their dividend, and special dividend pay. You could see these things really take off through their highs and then you get mail. So, I’d be careful with that one.
Frank Curzio: 00:59:48 One more name I want to give you is, Goodyear Tire. Goodyear Tire, if you’re not familiar with it, Mike [inaudible 00:59:54] can nail this one. One of his first recommendation is too short through using conservative option strategies in his money flow trader newsletter. He was dead right. And this stock is trading over 30 at the time, fell to 17 within a year. And the stock has a little momentum heading into the quarter. It’s up about 15% from its lows over the past month. But the expectations on this name are incredibly low now. And they reported I want to say, three bad quarters in a row. It was just all over the place.
Frank Curzio: 01:00:22 And Mike really nailed it. Because the numbers that they were reporting were showing numbers in Venezuela, where inflation was just crazy stupid. And they were reporting how they’re showing growth in certain areas. He’s a forensic accountant, really broke this name down and did an incredible job. But when I look at this name, expectations are super low on Goodyear Tire. So, a name that if they just report in line guidance, and assume that ’cause they didn’t come out before the quarter, and tell you they were missing guidance or anything like that. Or we’re not gonna make the quarter.
Frank Curzio: 01:00:50 But when they do report, if they submitted their in line, and they have conservative guidance and just say, “Hey, you know what? This is in line with [inaudible 01:00:58] estimates. I can see this stock going up over five percent. Maybe 10%.” If they report good numbers, you can see it go up even further. Again, this is a company I was trading in its 30s, it fell to 17, and it’s 20 bucks right now. So, these are the companies that are gonna report next week. I know a lot of you love buying this stuff, and sometimes I do it too. I did it with Tesla a couple of quarters ago, everybody hated the company. I knew or I just had a good indication that Elon Musk wasn’t gonna tell everyone what they wanted to hear. This is two quarters ago, maybe three quarters ago. And the stock surged and I did very well playing options.
Frank Curzio: 01:01:30 But sometimes I see ideas where everyone’s just leaning to one side, like a Goodyear Tire, where everybody hates the stock. And they should, it performed terrible. And all the investors who sold it, they probably had to stop. They hate it. They don’t want to know anything about it, which means this company only has to go from bad to less bad. And you could see a 10, 15% pop in the stock.
Frank Curzio: 01:01:52 So, that’s how we’ll play going into earning season. Just know that most companies are gonna report their guidance, they’re gonna be conservative. I don’t see anyone really raising their guidance like crazy, because of a lot of uncertainties. And we’ve seen companies get a little punished for being conservative, because they’ve run up since January. So, just be conscious of all these things, a lot of different factors. Hopefully, I didn’t lose you going through a lot of things, again, we’ve just covered a lot of names. But I wanted to show you how I play earning season. Again, it’s a dangerous game, only do what money you can afford to lose, it’s more of a trading strategy. But if you’re gonna do it, I’d rather explain to you how I do it. And how I’ve done very well by being smart, be very selective. I don’t do it all the time.
Frank Curzio: 01:02:30 But if I’m gonna do it, you have to pay attention to that sentiment going into the quarter, and how the expectations; is the stock up? [inaudible 01:02:37] bullish on it. ‘Cause almost no matter what the report, that stock could take a hit of five percent, because it’s run up tremendously into the quarter and vice versa. The expectations are low. Usually that company report in line earnings in line guidance, and you could see that company take off five 10%, because it’s down so much and expectations are low heading into the quarter.
Frank Curzio: 01:02:56 Whoo. That’s a pretty long and detailed educational segment, with lots of ideas, which I know you guys like. But let me know what you thought about that one at firstname.lastname@example.org. And guys, that’s it from me. Thank you so much for listening. I always say this, I always mean it. I really appreciate all your support. Continue to email me, send me emails whenever you guys want. Love you guys. I really appreciate again, all that support, and I’ll see you in seven days. Take care.
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