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Wall Street Unplugged
Episode: 825November 30, 2021

How to prepare for the Omicron circus

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So much for a relaxing Thanksgiving break…

Markets sold off on news of the new COVID variant, Omicron, and volatility is soaring.

I expect both the media and the government to overreact… But don’t worry: In today’s show, I lay out what you need to know—and do—in the coming weeks to prepare your portfolio. [0:30]

While we still don’t know much about Omicron, countries around the world are already restricting travel. I highlight the dangers of governments reacting prematurely… what we currently know about the new variant… and how the narrative has changed around vaccines. [7:25]

I also explain why the market selloff we’re seeing is illogical… and how the media and big business—especially Big Pharma—use fear to make profits. [13:00]

But volatility leads to opportunities… Here’s what investors should be focused on as we prepare for the Omicron circus. [21:30]

Fed Chair Jerome Powell testified on Capitol Hill today regarding the country’s economic outlook—including ongoing inflationary pressures. I break down the huge mistake the Fed continues to make… why inflation isn’t priced into this market… and why we need to be prepared for it to get much worse before it gets better. [31:40]

Finally, I explain why Genia Turanova’s Moneyflow Trader strategy is the perfect way to hedge today’s market risks—and why I personally follow it with my own money. [39:15]

Inside this episode:
  • Markets sell off on Omicron news [0:30]
  • The dangers of reacting prematurely to the new COVID variant [7:25]
  • Why the selloff is illogical… And how businesses profit from fear [13:00]
  • Volatility leads to opportunities: What investors should be focused on [21:30]
  • The Fed’s huge mistake… And why inflation will get much worse [31:40]
  • Why the Moneyflow Trader strategy is perfect for today’s market [39:15]
Transcript

Wall Street Unplugged | 825

How to prepare for the Omicron circus

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 on out there. It’s November 30th. I’m Frank Curzio, this is the Wall Street Unplugged Podcast. Where I break that headlines and tell you what’s really moving these markets. Wow. Last week was supposed to be relaxing. Thanksgiving, turkey, most had a four-day weekend. You hung out with your family. You ate a ton, watched some football, probably argued with one of those family members that you don’t like, which is normal. You woke up late on Friday after stuffing your face with turkey, and you put on the news and just realized, oh shit, the market’s open today? I thought it was closed on Friday. Then you take a closer look, and every stock on the screen is down 10% plus. Other, there are there some of the large caps, we said three, 4% declines in the major indices. And a lot of names got smoked. A lot of names got smoked much, much worse.

Frank Curzio: So, we wake up and we’re like, “What’s going on,” and “What is the news? What’s making the market go lower?” We’re looking at a new variant called, Omicron, which is spreading across Africa and starting to show up in other countries. And this really spooked the markets. Now, there’s very little information on it, other than the lead doctor in South Africa saying that the newly infected cases she’s seen thus far, and I’m quoting her, these people are showing, I’m quoting, “Are very mild.” She used the word very, very mild symptoms. Okay, very mild, doesn’t matter. Investors started running to the exits, triggered the algos, and holy cow, it’s a massive sell off. Everybody’s worried, it’s crazy, the market’s coming down, even though we’re about 4.5% off of our all-time highs. You wouldn’t think that, you would think we’re down 20, 30, 40%. A lot of names got killed, especially the re-open names, cruises, airlines, hotels.

Frank Curzio: Now, expect the media to play this up as the end of the world virus again, whether it’s Delta 2.0, it’s going to sweep across the US and result in further lockdowns. And they’re going to tell you, you better get vaccinated right away. Right away, you need to get vaccinated. If you got vaccinated, get the booster right now. You got to get it, you got to get it. Even though 85% of our population is vaccinated. They’re going to blame 15% of the people for causing whatever they cause. Again, I won’t really get into the politics on that part. I will get into politics today, but this is a response. This is a response we’re seeing. It’s like the craziness and the politicians, in fact the governor of New York, and this is the governor that took over for Cuomo, after he got thrown out of office, just declared a state of emergency. So, she’s cutting elective surgeries to basically, free up hospitals. To free up hospitals.

Frank Curzio: Even though, there’s not one person that has been infected with a new variant in the State of New York. That’s awesome if you think about it. Talk about preparation, holy cow. Now for me, as you know, and I think the reason why you listen to this podcast, I’d rather look at the facts and data. And I know this makes me an outcast, because once you believe something these days and you hear it on TV, you follow your favorite person, it’s fact, nobody’s going to change your mind, regardless if I’m providing facts. You listen to someone’s opinion, you think, “Wow, this is fact, this is factual. Oh my God, these people who didn’t get the vaccine are killing everybody.” Things that you hear in the media that are just hilarious. Get the vaccine, you’re supposed to be protected anyway.

Frank Curzio: That has nothing to do whether someone else’s vaccinated or not, but that’s okay. You’re going to believe what you want to believe. And I know that personally, from all the pushback I got during COVID and covering this, I want to say really deep, deep dive into this, because the more I dug in February, and then in March, when this hit, the more I was seeing data being reported on news stations that I trusted, which was absolutely false, from what I was hearing from leading doctors across the country, who listened to those podcasts, because most doctors love stocks and love investing. And they happen to listen to this podcast. I thought it was funny because the data coming from these doctors, this is through 2020, even before the vaccine was rolled out, even after the vaccine, but every one, every single one of them told me, don’t mention their name. I can’t mention their name.

Frank Curzio: Think about that for a minute. And these are people that know the virus better than anyone. They’re treating tons of people. They care about your health. They don’t have politics involved. And their data was being suppressed to the point where they may get fired, if they speak out against the status quo, which is insane. It’s insane, when you think about it. Well, let’s take a closer look at what we know right now, and the first place to talk about this and this new variant, was South Africa. So, I mentioned that doctors discovering patients were infected, said that these symptoms are very mild and could be treated at home. And zero of these patients have been admitted to hospitals. That’s what she said. Also, this new variant does not result in a loss of smell or taste, like Delta, and there’s been no major drop in oxygen levels from the new variant. That’s pretty significant, since that’s really the cause of death, that’s why you needed so many ventilators and we ran out of ventilators.

Frank Curzio: Now, most of the people were infected were under 40. And I don’t know if that’s telling us much because you could say, well, maybe they weren’t… I would say a lot of those people were not vaccinated, but Africa’s among the lowest vaccinated, when you look at the percent of most countries. When compared to other countries, their rate is a lot lower. So, I’m sure a lot of those people under 40 who contracted this, were not vaccinated. But it’s good news that this variant, they haven’t really seen a big impact on older people yet, who most are vaccinated. I’m sure if you look at the vaccination rates in African and other places, the people that you’re going to see who vaccinated the most, are older. And they should be vaccinated because we know that COVID-19, specifically target older people with underlying conditions.

Frank Curzio: If you are under 50, you didn’t have anything to worry about, almost anything to worry about. So, at 99% survival rates, you had nothing to worry about for you under 50. So older people, yes, we knew who were targeted. So, the fact that you’re not seeing this spread to the older generation, maybe it’s because of the vaccine or whatever, was good news. Now, several countries reported that they detected Omicron in patients. And this includes now, outside of the country of Africa, but you have Canada, Austria, Portugal, Netherlands, and Austria. So now, people getting worried, holy shit, this thing’s spreading. And what are countries doing? Full blown crisis protocol, and Israel banned all foreigners from entry, not from Africa, all foreign. You can’t get in, you can’t get to Israel right now. Australia, US is restricting travel from several African countries. I still think that’s a little premature, UK reintroduced mass mandates.

Frank Curzio: And again, all this is being done when we don’t have clear data on this new variant, we just found out about it a couple days ago, we don’t know. Now, why is that a big deal that these guys are rushing, rushing to just protect you and, “Oh, you got to worry.” Why is this a big deal? Because lockdowns, restrictions, they’re not healthy. They’re not healthy. We now have data showing these measures cause massive harm to so many people. We saw massive increases in cancer rates, depression, suicide, childhood obesity, drug overdose. You look at the stats from 2019, for those things I just mentioned, compare them today. You’re going to be blown away. You got to be like, “Holy… I cannot believe that.”

Frank Curzio: You may be saying, “Well, Frank, we needed to do this. We needed to lock down until at least most of population was vaccinated.” Really? Did we? Again, I like facts. I don’t know if you like facts and numbers. I do, I’m a research analyst. I like it. This is going to be an interesting fact here. So, when we look at the numbers, in 2020, we saw 362,000 deaths, and most of our population was not vaccinated yet, since they just started rolling out the vaccine in December. So now, we roll out the vaccine, holy cow, 85% of our population is now vaccinated or close to that. But interesting, because when you look at this year’s stats and we still have one month left, by the way, remember 362,000 deaths in 2020. This year from COVID, we have 415,000 people that have died from COVID, even though we have most of our population vaccinated. I’d like to know why that is.

Frank Curzio: I think that’s worth researching a little bit. Do we have to lock down? Because it seems like we really didn’t need those measures and it’s not like, “Well, we’re protecting you, and it’s okay.” There’s consequences, there’s massive consequences. We’re seeing it throughout everything across the board. Even my kids are at least a half a year behind, they’re just catching up, and they’re in Florida. They were going to school the whole entire time. By the way, Florida’s rates are the lowest among any single state, which is amazing because we were told our governor is a killer and killing people and stuff like that. Again, interesting. So, we kept everything open. We were smart, masks indoors for most of the time. Then, we removed that pretty much, quick than everybody else. And now, we’re seeing some of the lowest infection rates of any state.

Frank Curzio: Why, don’t we answer that question? Because maybe we don’t need not lockdowns. Maybe we don’t need mass… That this is what we should be doing right now, studying this shit, but we’re not. Why aren’t we studying this. Again, those numbers open up the door to questions and we want to get this right, and at the end of the day, we don’t want cancer rates to surge, we don’t want the pressure to surge. We don’t want to be locked down unless we have to, unless we think we’re going to die if we get infected. It’s clearly not the case.

Frank Curzio: So, you look at those stats of saying, how could that be? So many of us are vaccinated now, not to mention, we were told that after we got vaccinated, this what we were told, facts, would no longer need to wear masks. And these vaccines are whatever, 93, 94, 95% plus, effective. Which I said, that’s how high they would be because I have good contacts in biotech. And one great guy who said, this is going to be well above 90%, which we never, ever see with vaccines, in terms of effectiveness. I remember reporting that on Twitter and I got wrecked and it came out, and I got a lot of emails saying, “Holy shit.” That wasn’t me. That was because I had access to the right information, the right people, people that don’t have a political agenda. We were told, 95% effectiveness or it’s going to prevent you from getting COVID, you’re good.

Frank Curzio: Get it, get it. There’s no talk about other variants and how the vaccine won’t protect you against them. Nobody said that. I don’t remember our politicians, Pfizer, Moderna CEO coming out and saying that, when they first rolled out these vaccines. “You need it,” they didn’t say, “Well, after you get this, you’re probably going to need a booster.” Nobody said that, booster shot. But now, we’re talking boosters. Boosters here, boosters there, which is basically a flu shot that we’re going to need to take every year. Or basically, we will be forced to take them every year, unless we want our freedoms taken away from us, like eating out, if it’s indoors, or attending conferences, or actually going to work, where places mandating that you need a vaccine in order to show up to work. Now, they’re going to do that with boosters, forever. But it’s amazing how the narrative changed so much since we launched the vaccines a year ago, to how getting the vaccines going to prevent COVID, to getting the vaccine will result in you getting much milder symptoms, once you’re infected again.

Frank Curzio: So, they got to cover their asses. It’s interesting. And all we want is, the facts. We want information. We have access to so much data, yet there’s not enough data being released. We still don’t know how long natural immunity lasts. So, if you get COVID, we still don’t know. There’s not a doctor that would tell you because we still don’t know. But I know this, people who got COVID, it’s longer 12 months and it seems like it’s going 13, 14, 15 months now, because these aren’t the people that are getting infected with Delta. The people getting infected with Delta are people who haven’t had COVID. And again, you can look at studies in other countries, which they care about getting it right, and just presenting the data of what they’re finding.

Frank Curzio: But these aren’t people who had COVID and recovered and are getting Delta. These are people who have vaccinated that didn’t have those natural immunities or didn’t have COVID. And those are the people that are getting it. Anyway, as expected, so a major panic from some countries in terms of their quick response, and especially in the markets. Now, the market selloff is interesting and it did rebound Monday, only to go lower today. I think that’s mostly because Powell had testified at Congress about how this new variant could cause inflation to rise further. Don’t worry, I’m going to address that part later on. Because I like take questions. I’m going to take a couple questions after this.

Frank Curzio: But to me, the market sell off is interesting. It’s not Delta, Delta caught everyone by surprise. Why? Because our asshole politicians and health officials refused to publish data on Delta, showing that most people getting infected, were those who were vaccinated. Again, that didn’t have COVID. And you can look right now, professional athletes. You’re a Cowboy’s fan. How many Cowboys are infected right now, they’re probably not going to play. They’re not going to play this week. They’re vaccinated. It’s mandated that you have to be, if you’re a professional athlete like Kyrie Irving’s not playing, you have to get vaccinated. You have to get vaccinated. So now, you’re vaccinated and now, all of them are getting infected. They’re get infected with Delta, but how long did it take for that news to come out? And that’s pretty significant for elders. And now they’re like, “Well it does protect you against Delta, and you’re going to get mild symptoms.” But still, if I’m an older person with underlying conditions, that’s data that I wish I knew that they had access to, right away.

Frank Curzio: I’m might not have gone outside, thinking I’m protected. And remember, it’s not in their best interest to announce something like this right away, because that’s going to mean that they were wrong in telling us that Pfizer and Moderna vaccines were 95% effective in preventing coronavirus infection. So, instead of preparing us, they said little, and we saw Delta spread wildly. Many people who were vaccinated, wound up catching this new strand, which turned out to be again, much milder than the original COVID strain, especially for those got vaccine, which is good news.

Frank Curzio: But now, we fast forward to today, and we look at the new strand, we are fully prepared if this new variant comes to America and starts spreading. Again, this may not even happen. There’s not a case in America yet. Plus, there’s very, very little data out on this new strand. However, let’s say the new strand is worse than expected. It starts to travel from country to country. It comes to the US, goes through every single state, high infection rates, hospital rates surge, and people start becoming sick and we start seeing deaths. Hopefully, that’s not a case, but that’s the worst case scenario. There’s going to result in more lockdowns, mass mandates, lower GDP across the world. Again, that’s a worst case scenario. We’ll see, we didn’t see that with Delta. Delta didn’t cause more deaths, didn’t cause more hospitalizations. It caused hospitalization, but not more than COVID-19.

Frank Curzio: How are we already aware of this new variant? Healthcare companies like Moderna have already announced booster candidates that are targeting these new mutations, including the one president in Omicron. And of course the Moderna CEO, and he said this, this morning, said this strain could be very, very dangerous, very dangerous. He didn’t say that yesterday. Because he was on CNBC, I watched him on TV and did some interviews and saying, we can roll out if we need to or whatever. So, this is a person that doesn’t have access or anything. He knows nothing about the new strand. Almost none of us do right now. Well, all the scientists are working on it. He knows nothing from yesterday afternoon, to today, he knows nothing. But this morning, this is a guy that does an interview and he says, this string could be very, very dangerous. Out of nowhere, from yesterday to today.

Frank Curzio: If he said that yesterday, the markets would’ve came down. He said this morning, and that’s being reported. It’s all over the media. But this makes sense from his perception. You’re pushing this agenda because it will result in massive, massive, massive sales to Moderna. They have to create a new vaccine. You might be saying, “Well really? It’s that big of a deal?” I think it’s a big deal. Someone that covers stocks, I don’t know if I’ve seen an explosion in sales in a two-year period, like this, in the history of companies. I don’t know, maybe I’m wrong. Maybe you could find something, do some research for me, do some homework and send it to me. I’ll announce your name and everything. But you let me know of a company that increased sales this fast. So, Moderna sales for this company went from $60 million in 2019, to $17 billion this year.

Frank Curzio: Believe me, it’s in Moderna’s, the CEO’s interest to say that this is very, very dangerous, and we’re going to have to roll out another vaccine because it’s going to result in another $17 billion in sales, because it’s going to be mandated that you have to take it. Of course he’s going to say it. He’s not going to say, “Listen, we’re good. You don’t need boosters. You don’t need anything.” No, Pfizer’s not going to say that. And you trust Pfizer? Look at the lawsuits on Pfizer over the past 20 years with the FDA and bribing stuff like that. Just look at that, it’s insane. And I like Gottlieb, but for him to be on the board of Pfizer, is kind of questionable.

Frank Curzio: Anyway, that’s another rant or story. But getting back to the prepared part, how we’re prepared. Pfizer said it can make a new vaccine inside of three months, target this, and that’s if needed. And the FDA is going to approve this almost immediately or grant the emergency use authorization, EUA. And then Pfizer said, it’ll take another six weeks to ship. So, we can roll out this new vaccine or booster out, in about four to five months. And again, that’s if we see the worst case scenario, that’s the worst case scenario. We’re going to know more in a few weeks, like, is the current vaccines effective against this new strand? Do we need a booster?

Frank Curzio: Is Omicron dangerous, or are most people still seeing very mild symptoms? We’re going to know more and more data. So, expect a lot of volatility over the next few weeks, as there would be a lot of shitty reporting from major news outlets, just like we saw with COVID-19 and Delta. For me, I care about you, your health, your family’s health, and making sure your position from an investment perspective, as this circus is going to make their rounds.

Frank Curzio: We see it coming. So, here’s what you need to know. We’re fully prepared to tackle this, especially since we went through the Delta crisis, which surprised the hell out everybody. This isn’t surprising us. We know about this new strand, scientists are all over it. We can quickly have vaccines ready, if needed. And we already have the supply chains in place for faster distribution, which was a problem, especially with Pfizer. Have to be lowered to a certain temperature. We’re worried, it takes a while. Getting vaccines to everybody and rolling them out, that’s a massive process. And how fast these guys do that is pretty incredible. It’s unbelievable actually, just to get the approval and a vaccine that’s effective and roll it out that quickly, is amazing. Inside seven, eight months, that’s pretty amazing. But we have the supply chain. We have the logistics set up already, again, If needed.

Frank Curzio: Now, from a stock perspective, I’ve read a lot of reports on this, because I like to hear other opinions. There’s Bank of America, Jefferies, JP Morgan, and Goldman had stuff that I have access to, and I’m going to cite Goldman here. I thought they came up with a good report, which came up with several different scenarios from this new variant. Including the worst case and best case for the new variant. But let’s focus on the worst case, where Omicron transmits more quickly than Delta and also evades immunity against infections, and also causes similarly, severe disease. It’s also where we’re going to see lockdowns around the world. Now under this, this is a worst case scenario, this is Goldman, has a chart showing that global GDP would fall 2.5%, in Q1, and then into Q2 this year. So, we’re looking at Q1 Q2.

Frank Curzio: So, global GDP is going to fall. Then they see GDP going up to 3% by Q4. Okay, we’re talking 2022, we’re talking about next year. So Q1, Q2 of next year, not this year, this year pretty much in Q4. So Q1, Q2, they’re seeing a 2.5% decline in global GDP, which is significant, but then they see GDP going up to 3% by Q4, 2022. So, that’s next time this year. Keep the timeframe. We’re only talking about a 12-month timeframe. First two quarters, significant decline. And then we’ve rebound significantly, back up to 3%. Now, what’s interesting here is, Goldman’s global GDP target without the new strand, is roughly 3% and that 3% is Q4. And that’s the downside scenario, the worst case scenario. But yet, their baseline without Omicron is the same exact thing. It’s around 3% in Q4.

Frank Curzio: Again, shouting a lot of numbers, I want to make sure you understand this. What is this telling you? That Omicron could cause disruption, however, like COVID, it’s going to be temporary. It’s going to be a temporary disruption. And you look at GDP forecasts, you’re going to have the same outcome by this time next year. However, it’s either going to be steady, if this variant doesn’t spread, or it’s going to be extremely volatile over the next two quarters and then go back to normal, by the end of 2022. Hopefully, I’m not losing you here, because the meaning of this is simple. If you are a long-term investor, you should be buying here, not selling, since this is a temporary setback. And again, that’s if the worst case scenario hits and it spreads through the US, and we see mandates and lockdowns. I don’t think we’re going to go to lockdowns too much.

Frank Curzio: Maybe in New York, California, those are like other countries right now. Maybe we see that, but we’re probably not going to go lockdown. But you’re going to see things close and maybe trial restrictions and stuff like that, worst case scenario. But by 2022, a year from now, we’re going to have the same outcome. It’s either going to be, hey, it’s going to chug along higher and higher, or we’re going to see a massive drop followed by a huge rise, as GDP comes back and everything reopens, same thing. So, if you’re looking at airlines, hotels, cruise lines, and these got nailed. If you didn’t get a chance to buy before the surge, here’s your opportunity. Because everything’s going to open up eventually. I don’t know when it would happen, but eventually it’s going to open. I’m not talking about five years from now. You’re investing in uranium, seven years ago and you’re like, “Well, seven years from now, we’re going to see prices start to go higher.”

Frank Curzio: No, this, this is 12 months away. It’s 12 months away. But here’s your opportunity, because everything’s going to open up and what it does, like we’ve seen with airlines and hotels, these companies have incredible pricing power and they just reported blockbuster earnings. And for airlines to be trading at the same levels as last year, at this time when nobody was flying and the vaccine was just being rolled out, that is insane, especially with the quarters that they have. There’s going to be restrictions in travel.

Frank Curzio: The international travel. Yes, they will hurt growth a little bit. But these guys, people are flying around the US. And again, this is premature, but buying these things at these levels, at these dirt cheap levels, if we go back and we’re closer, the US, to getting back to pre-pandemic levels. If we do that around the world, these things are doubles and triples from here, inside of 18 to 36 months. That might not be a lot of your crypto investors, because sometimes you get 10X returns in weeks, months, we saw that with Crypto Intelligence, for a lot of our picks, but that’s a massive, massive gain.

Frank Curzio: Here’s your opportunity to buy a lot of these names, but watching TV, reading the newspaper… Look just try not to get crazy. You’re looking at these news outlets, their job’s to scare the shit out of you. This way, you read more. Nobody wants to read a story that says, “Omicron, it’s mild and you have nothing to worry about.” That’s not exciting. What’s exciting to these news agencies, CNN having the COVID-19 death count on the screen every single day for six months, that gets people to watch. That’s why they do it. Let’s scare the shit out of you.

Frank Curzio: The recovery rate for COVID-19 is 97%, they’re not going to tell you that. They’re just going to put a death rate and showing all the people that are dying and scare the shit out of you. That’s how it makes you watch it. And that leads directly to profits, and don’t underestimate that for one freaking second, when it comes to Pfizer, Moderna, when it comes to these guys, you think they’re doing the right thing. You’re crazy. There’s a reason why we don’t have cures and only treatments for diseases. Because if there’s a cure, they can’t sell drugs anymore.

Frank Curzio: The massive incentive for these publicly traded companies is to continue to see those profits go higher and higher and higher and higher. Do not underestimate the importance of that. That’s worth seeing a few deaths here and there. We’ve seen that with auto companies when they refuse to recall things and they have data showing, okay, well, if this happens, this might result in this many deaths and then a lawsuit would be this much. Okay, let’s not recall right now because we’re going to make a ton of money. Just like Morgan Stanley and Henry Blodget, just keep making these stupid calls on all these freaking technology companies and to the tech bubble, who cares? What are we going to do? We get fined a few billion dollars. We made freaking 50 billion, who cares? We’ll throw out Henry Blodget for a couple years, we’ll start Business Insider.

Frank Curzio: He’ll be fined, whatever. Again, it’s all planned. There’s a reason why they have slush funds at these places, for when they’re going to get sued by the FCC or whatever, and admit no guilt, but there’s funds set up where they’re taking this money out of, because they expect it. They just expect it and say, “Oh, this could happen.” There’s all data analytics and numbers behind this, knowing what’s going to happen. The connections that they have or when they would come after what they’re going to come after for, they have this. Welcome to corporate America. Money talks, that’s the way it is.

Frank Curzio: But if you look at the facts, they’re just telling us right now, this variant is not deadly, and most who are getting it are young with mild symptoms, no hospitalizations. If it turns out to be worse, I suggest using a pullback as a monster buying opportunity. Because like I said, not only will the world open up again to travel, but more importantly, this scare and this new variant it going to influence the Fed, who now hold off on raising rates because they have to, they have to hold off. They really don’t have the data. If this turns out to be worse than expected, and you’re raising rates in this environment? Holy cow. A lot of these companies are going to lose pricing power, say if you have to lock down some of these places again, or just have restrictions, you already have labor shortages, supply chain constraints, which by the way, my data shows has been getting better over the past three weeks.

Frank Curzio: Even Walmart’s cited that it’s getting better, which is a positive, want to report the news, good, bad, whatever. Just again, it’s data. But now the Fed, it’s testified in Congress going, “Hey, we might have inflation and supply chain worries with this new strand.” Even though we have no data on it. You testify with Congress already? How about do it three weeks from now, when you actually find out if this hits the US, or if we need to worry about this. I’m saying buying back and using a pull back as a buying opportunity, I’m not saying that other factors can’t push down the markets, whether it’s geopolitical risk, higher taxes, terrible policies, but looking Omicron specifically, this should not be a reason to sell, but to buy on weakness, because this is a temporary problem. And it’s a good temporary problem, because it scares the shit out of people, that they run, and that usually results and stocks become very, very cheap.

Frank Curzio: But it’s probably not going to be a big deal in terms of deaths and hospitalizations. We’re prepared. The Fed’s going to have to keep rates on hold probably longer than they want, which is… Sorry for cursing here, fucking insane. I have no idea why you didn’t start raising rates two quarters ago, when every single asset class, every single asset class, not only rebounded since COVID, but traded… There’s still trading there, at their all-time highs. Be at pedal to the metal? Now look, this comes and you’re like, whoa. Now, you can’t raise rates. Are you going to taper? Probably even less than you planned on. There’s not going to be buying bonds, keeping rates low. But again, this signals, it’s a buying opportunity. I don’t want you to go in and buy all at once, because if Omicron turns out to be worse than expected, we could see stocks pull back further, on emotions.

Frank Curzio: That’s going to create even better buying opportunity for those who intend on holding positions longer than 12 months. If you’re looking for trading opportunities, it’s different. If you’re a long-term holder, you should be ignoring this event. Almost all the studies I see and it makes sense, and we even saw it with the playbook with COVID. Massive decline followed by huge positive. But if you went to sleep in 2019 and you woke up today, you wouldn’t really notice anything, in terms of earnings are growing, head of household wealth’s at an all-time high, all asset classes are higher. Things are cool, yet living through those two years, you saw a massive decline in the markets followed by gradual steady rise, and then some companies exploded. But if you take out all those emotions and you just say, “Hey, I’m holding this stock to 24 months,” you’re doing pretty well, and you’re sleeping good at night by not watching the news.

Frank Curzio: But anyway, if you’re still nervous about this new variant, that’s okay, it’s fine. But just remember COVID-19, the recovery rate is above 97% for the entire population and over 99% for those under 50 years old, that was COVID-19. If you told anyone that is risking anything, that there’s a 97% chance that you’re going to be okay if you take this risk, almost 100% of the people would take the risk since those odds are insane. But yet, you would think they’re a lot worse than that, and the recovery rates are a lot worse than that. And why is that? Thank the media, thank the news source, and thank them for scaring the shit out of you. Anyway, from a health standpoint, I wouldn’t worry. From investor standpoint, an economic fallout is going to be brought on, not by Omicron itself, but by our government and politicians. It’s how crazy are they going to get this time around restrictions that clearly didn’t work, based on the number of deaths which are higher in 2021, despite most of the population being vaccinated. Mind boggling to me.

Frank Curzio: And also, those consequences from being isolated, which I talked about earlier and locked down. Cancer rates, suicide rates, depression, obesity rates has surged enormously, especially in children when it comes to obesity rates and these are the hidden consequences of locking down, which now, we have stats on this and it’s everywhere. So, that’s my take on this, getting lots of emails. And I want to take a few questions. I usually like to keep this to 30 minutes, it’s going to go a little bit long because I want to take a couple questions because they were good this week. First ones from RP goes, “Frank, Powell is scheduled to meet with Congress tomorrow morning,” which is today, “And warning that inflating can go higher due to further supply constraints brought on by the new variant. Is this factored into the market? Does this mean they would change their transitory stance on inflation?”

Frank Curzio: I love Powell. So, Powell’s been saying that inflation is transitory. We were very early to this, and I’m proud to be early to this, to talk about inflation. Something I really, rarely talked about, that we’re going to have runaway inflation. And when you look at some of these scholars, economists, award winning whatever, that study this data, and this is important for every young investor out there. Because older investors are usually set in their ways. And I’ve learned this, which is important is, a lot of these people look the past analyze data to dictate the future or to try to predict the future, or come up with the right outcomes. And that’s where they made a massive mistake, when it comes to so many different things, with the market going higher with… People comparing P ratios today to P ratios peaking and other times and other market crash, nonsense, bullshit.

Frank Curzio: Because right now, we are in unprecedented times, this never existed before, we never had interest rates at zero, which the Fed was supposed to keep at zero or close to zero for a couple of years and decided, hey, stock market’s good. Everything’s fine. Everyone’s happy. Let’s keep them near zero for 11 years. What? Then COVID hits. And we look at COVID and we say, okay, we’re injecting $10.5 trillion into the economy, handing checks directly to people. And what do we do? Well we compare it to the last time this happened, and we had all the stimulus, which was supposed to be over $100 billion dollars, and it turned out to be around $470 billion. That was top, the full amount when all was said and done. And that was to backstop the banks and stop the world, the financial markets from absolutely crashing.

Frank Curzio: So backstop all the markets. So, we compare and say, “Hey, we did it last time. We didn’t see inflation.” Total different scenario. Again, you’re looking at the past, but what happened in the past? Well, we didn’t give money directly to people, handing them checks, even when they were sitting at home. What we did is, we put a ton of this money in banks to shore up the system. And a lot of this money was not lent out. There was still major restrictions. Even today, there’s major restrictions on banks to lend money, still from those laws passed in 2009, 2010. So, they weren’t given direct to people. They were there to backstop the system that people know, okay, the banks are safe, we’re okay, we can operate. And then we all know what happens with stress assets and the Fed took and made an absolute fortune on it.

Frank Curzio: So, the Fed’s happy that they did this because they took over a lot of distress assets that happened to probably increase four to 10 X in value. They even took positions in banks, put warrants and stuff like that, made a fortune off it. So now, they get to this stage and they’re like, “Let’s just keep spending money.” However, it’s a lot different because you’re handing people checks directly, which is going to lead to massive, massive inflation, which we’re seeing. Now, Powell goes on everywhere the last two quarters, three quarters. It’s going to be brief. It’s going to be transitory. Inflation is going to come down. Now, we get news of this new variant. And what does Powell do? Use this as an excuse, without knowing any data on this new variant. He knows nothing. Nobody knows nothing about it, very little. And he’s testifying in front of Congress today, to tell them to warn them that inflation is probably going to be higher than expected.

Frank Curzio: Think about that for a minute. What a way to not admit that you were wrong, which we told you all along. So, we are going to see massive inflation. We’re going to continue to see it. If you look at companies, you look at labor shortages, you look at supply constraints. You look at the costs, raw material costs. Companies are going to have to… Wage increases are going to be necessary, because the cost of living is rising tremendously. Home prices are up 17% year over year. It’s insane. You think this is just going to end? Hey, we live in a world where you have to grow every fricking year, every single year. If not, your stock, we’re going to push it down 30, 40%. Look at Peloton.

Frank Curzio: Look at Zoom. We want to see that massive growth continue, continue. There’s the reason why the Moderna CEO’s like, “Oh wait, we might need a whole new vaccine. I don’t know anything about this variant yet, but we might need a whole new vaccine and we could do it. And it’s going to be mandated.” Makes sense. Another $17 billion in sales the next two years. That’s pretty good, good for them. So, I don’t think that this is factored in. I think it’s factored in that inflation’s going to subside. I look at surveys that great companies take of CEOs in Fortune 500, the largest companies. Most of them are increasing wages. I think it’s 40, 50%, I think we’re increasing wages, but that is from several studies around, it’s not exact amounts because I’m just giving a ballpark average here.

Frank Curzio: But a lot of these CEOs expect inflation to subside, to ease a little bit. I don’t see that, especially with the supply chain constraints we still have, which is easing up. That’s fine. But now, we just passed the infrastructure package. How the hell are we going to get all these materials? We have no logistics. We don’t have enough truck drivers, a hundred thousand short, a million over the next 10 years they’re saying. Ports are still backed up, even though it’s a little bit better. And now, we’re throwing all the infrastructure at shipping and everything. And we had some former Fed governors say, “Oh well, we should ease restrictions on China and tariff. And that’ll help lower inflation.” Right, that’s the answer. We’re going to have a beautiful Olympics there, for a country that started this virus that killed millions and millions of people, that the WHO does not want to hold them accounted.

Frank Curzio: They won’t account them for doing it. They weren’t allowed in the country. WHO, World Health Organization. Wow. Wuhan? What’s going on there? Let us… Well, nope. You can’t come in. Other scientists from other country, “Hey, let us help.” Nope. You can’t come in. Why not? Why can’t we help you? And then what does the WHO do? Turn around and goes, China deserves credit for handling this the best out of any country, are you kidding me? It’s even more political than that. But you’re asking about Powell, is this factored in? Look, transitory or a little bit of ease inflation is factored in, but we’re going to see inflation continue to rise. Companies are going to continue to raise prices until they can’t, right now, they can. They raised prices by 10, 20, 30% and people are still paying them. So, if I’m a company I’m like, “Let’s try to raise them 40%. Let’s go 50. How high are they going to pay?”

Frank Curzio: Eventually, they’re not going to pay that. Eventually, they’re going to say, “Okay, enough of this.” Especially at restaurants and stuff with services, you’re getting worse service because there’s a labor shortage. Not enough people there. Half of the items on the menu are still not freaking there. You go to Starbucks and half the things are still not there, at least Starbucks around here. But yet, you’re going to go there, wait longer, pay more for worse service and for something on the menu that you like, that’s no longer there? How long are people going to do that for? Not every company has pricing power. Everybody does now because we’re handing out free money like crazy. That’s going to change over next 12 months, going to be seeing a big separation you see in our companies. So no, I don’t think that, that’s factored in.

Frank Curzio: And I think you have to position your portfolio accordingly. Inflation, oil has taken a hit, might be a good opportunity to get into oil on this hit, three month low, prices got wrecked. You’re looking at banks do very, very good inflationary environments and companies that have pricing power, they continue to have pricing power. You’re seeing companies that don’t like Clorox and some others do. So, very good opportunity there. Let me take one more question here. And this is from Matt. He goes, “Long-term follower. I want to say thanks to educating me and being the voice of reason during these volatile times. My question, I’m a subscriber to Curzio Research Advisory and Crypto Intelligence and looking to purchase another one of your premium newsletters. I’m leaning towards Curzio Venture, but also considering Moneyflow Trader. Any advice would be appreciated.”

Frank Curzio: Right now, Moneyflow Trader is one of the best newsletters that you could have. I created it for this environment. This is a newsletter that uses options to hedge against the markets. So, if I put a ton on ETF’s individual names, where a 20% fall in a stock, which we’re seeing a lot these days, could result in a three X to five X gain, using these options trades that Genia provides. And it’s not just options. She also has a couple long positions. Doesn’t go blindly short, where you’re going to get wrecked, she teaches you exactly how to do this, on your E-Trade account or whatever Robinhood, whoever use for options.

Frank Curzio: But these returns are amazing in a down volatile market. However, it’s been a bull market for freaking 11 straight years. We’re still less than 5% off for all-time highs, even with this pullback. But Genia had killed it when COVID hit during that time. Several positions generate three X to five X returns while the market was crashing. So I always say, with this newsletter, it’s a hedging product. That’s why I created it. It’s a great hedging product, where you take two, 3% of your portfolio and you invest in some of these names. And if it doesn’t work out, chances are, a lot of your stocks are going to go higher and it easily covers that 3%, which is fine. You look at the last year, where S&P’s up 20 something percent, big deal. You risk 3% of your portfolio.

Frank Curzio: That’s a, what if right? That’s an insurance, big deal. You’re still up. But what happens when stuff like this happens and your portfolio goes down 10%? Now, you have positions that have gone on three X, four X, five X, seven X. And these are option positions that see massive, massive gains if this happens. And you have a year, they’re long dated. So, they’re out of money right away. And you’re going to see loss in it either way. But when you see a market like this and you protect yourself, it’s awesome because that 3% of your portfolio, this market really comes down. Those positions could inflate to more than the entire value of your portfolio. So, we have Curzio One members that own all of our products. This is for you, pay attention to this product, especially during these volatile times where we don’t know what’s going to happen over the next couple weeks.

Frank Curzio: And it’s going to be lots of bullshit news stories to scared of crap out of you. You’re going to see lots of volatility, stay at home names. Are they back? The re-open names, are they going to come down further? Is it a buying opportunity? You’re going to see massive opportunities throughout the market, but this volatility is going to be crazy and Moneyflow Trader takes full advantage of that. So, it’s a newsletter, I love this product. Again, it’s been a bull market for a while and I get it. So, you’ll see losses, but it’s protection. Because the bottom line is, you want to be in this game for 20, 30 years. You don’t want to be in for two, three years and lose all your money. And when you see things like this, a lot of people get wrecked. They don’t have stop losses.

Frank Curzio: But with this, not only are you not getting wrecked and we do have stops on our positions, in our portfolios, but you’re making money when the market comes down, which means you have more money to invest in companies that are down 20, 30%. And a lot of these names get unfairly punished. That’s how you become a great investor, by buying stuff as it comes down, when it gets dirt cheap, because that’s when you can accelerate your gains. Yes, you can buy momentum names and then go higher and higher, that’s Luke’s product. But there’s different products for different times. Right now, low Crypto Intelligence sold that, love the activity going on, seeing lots of new ideas, that issue is coming out tomorrow, excited. Really, really good pick, got a lot of new subscribers into Crypto Intelligence, but Moneyflow Trader right now, listen, Curzio Venture‘s my product, I love small caps right now, but just that’s a newsletter right now in this environment.

Frank Curzio: That makes a lot of sense. So guys, questions, comments, feel free to email me, frank@curzioresearch.com. I’m sure I’ll get lots of emails from this, which I always do. Because you talk about COVID and politics and stuff like that, it’s always fun. But again, I have your best interest at heart. I don’t have a political agenda here. For me, it’s making you money, making sure my family’s healthy, reporting the facts and hopefully this doesn’t turn out to be as bad as a few people are projecting. And right now it’s not that bad, but again, we want to protect ourselves, we want to look at the data and the sources that I have, including doctors around the world and stuff, is fantastic. And that’s the data I’m going to present with you and even show the data and say, “Hey, here’s the studies. This is it, here it is.”

Frank Curzio: So, that can result in a lot of great investment decisions, which we did incredibly well as the market really surged after COVID and getting in it. We got out before the crash and then we got in, pretty much a month or two later, a little bit late, but still, some of the gains that we’ve seen are incredible from those times. The hotel companies, Avis Rent a Car, whatever, it was a 10 X winner for us. So, you want to be smart, want to play it right.

Frank Curzio: And again, we want to follow the data and be smart about it and stop watching crazy stuff where a lot of people have an agenda and are forced to cover that network’s agenda. Otherwise, they could lose their job. Same with Hollywood: Better be liberal or you’re done. And Hollywood’s crazy right now. You have to have… You want to get a job, that’s it. If not, if you’re talking out, if you’re conservative, it results in you not getting called for jobs right now. It’s crazy, it’s insane. It’s just the way it is. For me, let’s look at the facts, stay safe and invest accordingly. Once again, questions, comments, frank@curzioresearch.com. That’s it for me. I’ll see you guys tomorrow. Take care.

Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decision solely on this broadcast. Remember, it’s your money and your responsibility.

Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His weekly Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 9 million times.

Editor’s note:

In Moneyflow Trader, Genia just closed out a 119% winner… in 13 days.

That’s because her unique hedging system thrives in a volatile market.

And Frank predicts this strategy will continue to pay out big in the coming months as the Omicron variant leads to more volatility…

Go here to learn how you can start profiting from today’s risky market conditions.

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