With a short holiday week, we’re changing up the format a bit… so no monologue today. But I have an exciting—and controversial—interview for you tomorrow (hint: It’s one of our most downloaded guests of all time). [0:35]
I love this time of year… It means I get to look forward to the annual Consumer Electronics Show (CES), held in Las Vegas in January. Here’s how I’m preparing… [3:05]
Following another great quarter from Dick’s Sporting Goods, Daniel and I debate whether now is a good time to buy the stock. [3:55]
Best Buy also reported solid earnings… yet it’s trading over 10% lower. I share why, despite strong results, many retailers are in a tough position compared to this time last year. [6:35]
Keeping with retail, Daniel explains why he’s more bullish than ever on Amazon, Target, and Walmart… and why last week’s selloff in the latter two names isn’t anything to worry about. [12:20]
Markets are near all-time highs and many growth companies are sporting huge valuations (electric truck maker Rivian comes to mind)… But when it comes to growth stocks, you can’t just focus on valuation—I learned this lesson myself with Netflix and Tesla. [20:40]
Big news came out of the oil sector this week: The U.S. announced it would be releasing 50 million barrels of oil from its strategic petroleum reserves (SPR) to help fight higher prices.
Prepare for a rant: The Biden Administration is making a huge mistake in terms of national security… and it could lead to the destruction of the U.S. economy. [26:35]
That said, as we know… there’s a way to profit in any market. And Daniel shares two names set to benefit on the news. [34:50]
And finally, if you haven’t heard yet, Luke Downey’s Big Money Trader has officially launched. Here’s how Luke’s options strategy can help you make the most of the market’s sudden moves. [37:07]
- A controversial interview, out tomorrow [0:35]
- How I’m preparing for CES 2022 [3:05]
- Is now a good time to buy Dick’s Sporting Goods? [3:55]
- Retailers like Best Buy are in a tough position [6:35]
- A bullish take on Amazon, Target, and Walmart [12:20]
- Don’t just focus on valuation with growth stocks [20:40]
- Oil and the destruction of the American economy [26:35]
- 2 stocks set to benefit as Biden destroys America [34:50]
- Big Money Trader has officially launched [37:07]
Wall Street Unplugged | 823
How to profit from Biden’s destruction of America
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: How’s it going out there? It’s November 23rd. 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. We have a shortened weekend with Thanksgiving. I wanted to change up the format this week. I usually do my monologue today, but I’m going to bring in the one and only Daniel Creech in a second. And tomorrow, I have an amazing, amazing, amazing interview. This person was on my podcast in January and she, yes, she, we got the most downloads… I want to say the most downloads in a few years off of that podcast. Actually, I’m going to give it away. It’s Kristin Tate.
Frank Curzio: Exciting, exciting interview coming up, just talking about politics, what’s going on in the world, what to expect for the upcoming midterm elections. Really, really great interview. Controversial. It’s going to talk about Bitcoin and things like that, which she recommended that she was buying in January, and she’s done very good, saying she liked the theory of Bitcoin. That’s going to be a great interview. And then, when we look at Thursday, Thursday’s Thanksgiving, no podcasts. And then, I usually do Frankly Speaking on Friday, and there’s going to be no podcast then. I’m giving my staff off and enjoying the time and the weekend with their families. So, just giving you guys a quick update in the schedule. And today, I figured I’d bring in my buddy, Daniel Creech. Daniel, what’s going on, man? How’s everything?
Daniel Creech: Frank. How’s it going? Happy early Thanksgiving to you and everybody else. I like hearing that staff gets time off, that’s this guy. So, I always enjoy hearing that. Tell the truth, Frank is a big family guy, as you all know, and wanted to make sure I wasn’t going to be alone, so he always invites everybody over. Are you actually cooking? Are you picking up? Or what are you doing? You got a-
Frank Curzio: I do the same thing every year.
Daniel Creech: You got an apron? You put a good order into either Harris Teeter or Publix?
Frank Curzio: Every year, I go to Publix, and it’s not even that expensive. It’s not even going to be expensive, even for today’s times. It’s going to go up a lot. It used to be, I think, like, 40 bucks. Now, it might be like 50, 60 bucks, I’m not too sure. But just picking up everything at Publix and everything’s pre-cooked, and you just throw it in the oven and it’s perfect. So, it’s like an hour and a half, everything’s ready. And yeah, I usually have everyone over, even the people who are here, my staff, I make sure no one’s home alone for Thanksgiving, because we do have some workers that are here without their families. Last year, you joined us, also another one of our employees, joined u., But now, everyone’s gone. Everyone has their significant other that they’re spending time with, I should say, Daniel, which is pretty cool, and you have family coming in as well, right?
Daniel Creech: Yeah. And I got family coming into… That’ll be fun. They’re going to be in town for a few days. So yeah, it’ll be a Griswold Thanksgiving time of year.
Frank Curzio: No, that’s cool.
Daniel Creech: Too early for that. We’ll joke about Christmas Vacation, which is the best Christmas movie, but we’ll do that next month.
Frank Curzio: So, during this time of the year, and into December and into the holidays, I feel like investors take a step back, almost like you take a step back when you diet. And for me, I’ve always lost the most weight in December, because it’s easier for me to work out, I push harder, everyone’s like, “Oh, I’ve gained this weight,” and on January, you go on your big diet. But when it comes to stocks as well, for me, this is a critical time where I like to look at what’s going on next year. I’m attending Consumer Electronics Show, who’s positioning themselves perfectly.
Frank Curzio: Rivian, I think, is going to see an incredible bump because they’re going to be, just the auto shows and also Consumer Electronics Show, that’s going to be, first foremost on everyone’s list. The media’s going to be there, we’re going to be there. You’re going to see the new Rivian truck, which is incredible. But I try to position myself because there’s a lot going on right now, including going to the holiday season, and Best Buy and Dick’s Sporting Goods just reported, and Daniel, as you’re seeing, both of these stocks are down significantly at the reporting, right?
Daniel Creech: Yeah. Do you have it live up there? Is Dick’s still down eight-ish percent?
Frank Curzio: Yeah. It’s 8%, and I think Best Buy is down about 15%.
Daniel Creech: Now I can hear everybody yelling through their devices right now, because last quarter, when Dick’s reported great earnings, again, they’ve been on a run, just pull up a stock chart of that great company and they’re taking advantage of outdoor sports and basically, they’re doing everything right. So, you and I were both bullish on it going after reporting last quarter, and we talked about buying stocks at higher prices, how you can always feel like you missed it. Well, here we are again. If we would’ve bought in that day, the stock then immediately pulled back, then rallied basically back to 52-week highs, only to report and drop down. My thesis hasn’t changed, Frank. I’d like to know if yours has, because they reported really good earnings.
Daniel Creech: Remember everybody, they are comparing to last year’s results were phenomenal because the pull forward they got from the coronavirus. They beat guidance, they raised guidance by about 10% on the low end, meaning if you compare the low end of their guidance to the previous low end of their guidance, they bumped it about 10% for earnings per share for fiscal year 2022. This is one of those good lessons where I’m giving everybody a little bit of something here, Frank. If you’re bullish and you agree with me then, hey, life is still good, the thesis isn’t changing, only the price has, so continue to be patient, that’s just part of investing. If you are disagreeing with me, you’re saying, yeah, you bought it, you hit the top, it pulled back, now it’s barely getting back and dropping again. So, we’ll continue to see who’s right. Still down on paper, but I still think the thesis hasn’t changed and I’m still bullish on that name.
Frank Curzio: I may disagree with you here. So, I’m pulling up a chart to watch this on YouTube, and when I see Dick’s Sporting Goods, Dick’s Sporting Goods is up 150% year-to-date. That matters. Okay. We have to put that in perspective. And Best Buy, believe it or not, is only up 30% year-to-date, which is a lot different. I’m going to bring this up and I’m doing a comparison now, so let’s bring up Best Buy and throw it in here, because Best Buy isn’t really up that much year to date, but it has performed pretty well. So, when I look at Best Buy being up a little bit more than the S&P 500, so about 27% compared to 17%, but when I see these numbers, it makes you look, what has a stock done leading up to this point?
Frank Curzio: And Dick’s Sporting Goods has gotten the job done. If you just look at the year charted, it’s pretty amazing. But when it comes to Best Buy, two separate reports here. So, Best Buy declined in digital sales, which I guess was expected because they did fantastic during the pandemic. And again, we’re starting to get, this is called tough comps period, this is called tough comps going forward, means if you had a great year, to beat that year or to beat that quarter year over years, is going to get difficult because this time last year is when the vaccine was approved and everything started opening back up. And yes, we had another wave, but the comparisons are going to get tough. Just like right now, how earnings are exploded. Think a year from now what companies are going to have to do without the stimulus, without money coming in, it’s going to be hard to beat these estimates.
Frank Curzio: So, when you look at Best Buy, their sales are flat year over year. They did not significantly raise guidance, which I think TheStreet wanted to see. They would talk about appliance, home theaters, mobile phones, three things that did fantastic, but they said they had constraints in areas like appliances, gaming, mobile phones. So, if you’re having constraints, you’re not going to be able to sell as many products as you want. They have 50% more inventory year over year, which is good heading into the holiday season. But again, when you’re looking at Best Buy and comparing it to what they did last year, I could see people were expecting a much better report. Dick’s on the other hand, their sales rose 13% year over year. They blew out the earnings.
Frank Curzio: $3.19 they generated last quarter compared to $2.02. So, 50% plus beat on earnings. They raised guidance significantly, expects full year sales to be up 25% compared to 20%. But again, the stocks up 150% year-to-date compared to 27% for the S&P 500. So, where am I going with this, Daniel, is that you have to look at where this stock is and how these stocks have run up tremendously. It was almost guaranteed that no matter what these guys reported, because Dick’s blew out the numbers, Best Buy was okay, I would say they didn’t beat the whisper numbers, and you’re seeing a 15% sell-off in Best Buy, and you’re seeing an 8% sell-off in Dick’s, but these stocks have run up considerably. Best Buy, if you’re looking cyclically, has run up tremendously. In the last year-to-date, not as good, but they were one of the beneficiaries, they were one of the places that were allowed to stay open during the pandemic. They did fantastic, and their digital sales exploded.
Frank Curzio: But we have to look at these reopened stocks and see how much they went up and what’s going on now and what the future is, and we saw that with Zoom as well, pull back significantly. I think that stock was 400, it’s around 200 now, a little over 200, but you’re seeing a lot of these, players that were great during the pandemic, are really starting to pull back a little bit, but Dick’s Sporting Goods, look, those numbers are still there, they’re still right. I think Dick’s is a good buy off of this pullback. I wouldn’t say so much Best Buy because they are seeing constraints. That’s just my opinion. I think it’s two different situations, but it’s amazing that these companies, both quarter earnings… And you’re seeing a significant drop off, which, heading it to the holiday season, I don’t know. I don’t really know if it’s a buying opportunity for any of these guys. I’m not too sure.
Daniel Creech: I was going to say, I didn’t feel like you were disagreeing with me on Dick’s there. I’ll go with Best Buy for this report, even though it’s been basically flat since the last time we were excited about it.
Frank Curzio: Yeah. Listen-
Daniel Creech: That’s a fun game. I’ll buy going forward.
Frank Curzio: The one thing I like with Dick’s is that they did report those good numbers, so they reported amazing numbers. I would wait a little bit before I just decided to buy this thing in the pullback, because it’s been a buy on pullback market for 10 years. And every time we get to this point, I mean every single time we get to this point, all the bears come out and say, “You’re crazy.” Listen, we got overextended. The S&P went up how many days in a row? I think it was like 10, 12 days in a row or something they went up. We got really extended there. And now, we’re pulling back. You might not know because they’re saying the S&Ps closing at a record high, but underneath that, when you take out Apple, Microsoft, FAANG stocks, again, we got to think of a different name for the FAANG because Facebook changed its name to Meta and screwed up everything.
Frank Curzio: But when you take out those stocks-
Daniel Creech: Man.
Frank Curzio: You can see the underlying trends that are worse, but I don’t know what the new acronym’s going to be anyway, but for Dick’s, I would wait here. I would definitely wait. At least they have that earnings where they blew out the earnings potential. You didn’t see that from Best Buy. Best Buy, I would avoid. I want to see another quarter first. Dick’s, I think it comes down a little bit more before you’re going to see that buying opportunity. But for me, you’re buying a name that’s up tremendously, tremendously, tremendously with anticipation that this quarter is going to be great. It was, and I’m not too sure if I’m a buyer on this pullback. I just want to see this stock a little bit because it’s up tremendously. I just think there’s other places to put your money right now. But again, we agree to disagree. Or do I agree with you, huh? Yeah, you’re saying Best-
Daniel Creech: No, you’re on the sidelines. I’m saying go ahead and buy here. You’re saying you’d wait. So, that’s a small disagreement.
Frank Curzio: Yeah, and if you own Dick’s, I’m not really saying that you should sell it if you’re a long-term holder, but for me, I could see this just drifting a little bit lower, especially with current market conditions, if that makes sense. But to the bigger point here, Daniel, Dollar Tree, you’re seeing that stock move incredibly higher, and I think you are finally going to see a transition where the big money is transitioned to, you would start with Macy’s and Kohl’s and stuff like that. But I put on Twitter of how I paid close to $8 for breakfast. And this wasn’t at a high resort, this was, we’re looking for Denny’s and it was an hour wait. We’re looking for Cracker Barrel, there was an hour wait. We look for Perkins and there was an hour wait. IHOP, an hour wait, and this is when we went to Orlando just to spend a day there for my family and my kids and stuff like that.
Frank Curzio: And this was a local place. This was a local place where pancakes, French toast, and omelets for my wife and myself and with coffee, and I drink tea, not coffee, but anyway. Yeah $80, that same breakfast was around $40, $45 a year ago. And I don’t know how long this could last, but I could tell you this: it’s not just the companies with pricing power, because you’re saying they’re going to be able to raise prices. They’re not going to be able to raise prices forever. But if you’re looking at places that you could eat that are cheaper, places like Dollar Tree, where you could shop that is cheaper. I think McDonald’s is a great buy here. I think Walmart’s an incredible buy here.
Frank Curzio: Dan, you mentioned it when these companies reported where it was Walmart and also Target that they got shit from people on CNBC because they said, “Listen, we’re not going to pass off all our costs to consumers because if we do, we’re going to lose a consumer.” So, they’re going to eat some of those costs, and that was a negative reaction, but I love that because long term, that’s a fantastic strategy, because if these companies think that they can continue to raise prices, and especially restaurants with labor shortages, and have worse service and removing stuff from their menu, and you’re still going to expect people to come there as you raise prices? You’re crazy. And that’s where we’re at right now. And I think you’re seeing that in some of these results, but the Dollar Trees, McDonald’s, Walmarts, these are places that people are going to start going to a lot, lot more because they’re affordable, it makes sense, and even though they’re raising prices, they’re not raising by as much as everyone else where everything’s still affordable at these places.
Daniel Creech: Absolutely. We were joking about this. Again, we are in the newsletter business, we want to entertain, we want to educate and help the individual investor. It’s just frustrating because we were talking in the office and I said, “Man, I’m finally bullish on Target and Walmart.” We got out of Walmart. We bought the same time in Curzio Research Advisory, we still have Target, it’s a great winner, it’s a great boring stock, but when you see the stocks pull back for what the CEO of both Target and Walmart said, and they pulled back what, 3%, 5% maybe. We’re not being drastic here. We’re not putting out headlines that’s saying the stock’s tanking when it’s down 3% like a lot of people do.
Daniel Creech: Yeah. As an investor, when you have the heads of these companies saying, “Hey, we’re not going to gouge people, we’re going to help them. We’re still going to manage the bottom line. We’re still going to focus on profits and rewarding shareholders, but we’re going to invest in the things going forward,” because you’re a grocery store business. You’re a services business. Of course, you want long-term customers coming back. And that’s how you keep customers and you gain more customers. This is an easy segue, Frank, to who got reappointed the other day?
Frank Curzio: Mm-hmm.
Daniel Creech: So, the low-hanging fruit here is nothing is going to change as far as the direction of things that are going, and what direction do I mean? I mean, the richer getting richer, poorer getting poorer. Inflation hurts those at the bottom the most, when food prices and things go up. So, think if you had 15 to 20% of your wages going towards food, energy, and living, as that continues to increase for the bottom half, there has to be choices being made when people’s lives start to get affected. So, Dollar Tree, Frank, did you see this stock? It’s up over 50% from basically mid-September, Dollar Tree is.
Frank Curzio: No, I didn’t see. Was it that much?
Daniel Creech: It went from what, 80, and changed to damn near 140.
Frank Curzio: Wow.
Daniel Creech: 86 to 138. Right now, it’s up 4%.
Frank Curzio: Mm-hmm.
Daniel Creech: Dollar Tree is great. Yeah. Those are really solid areas. But I’m with you on Walmart and Target and also Amazon. Investing in the right things, your people, logistics, for the longer term, it’s not a big coincidence that Goldman Sachs, the most wonderful, awful people in the world, picked Amazon as their stock of the year next year.
Frank Curzio: Oh, did they really?
Daniel Creech: Yeah.
Frank Curzio: Yeah, I think Amazon-
Daniel Creech: Maybe one of them. I don’t want to exaggerate like crazy, but I believe it’s their top pick for 2022.
Frank Curzio: Oh. Yeah.
Daniel Creech: And it’s Amazon.
Frank Curzio: Yeah. Amazon is-
Daniel Creech: Listen to this. The smartest guys on Wall Street are telling everybody to buy Amazon.
Frank Curzio: Yeah. And nobody cares.
Daniel Creech: And just like us, nobody’s going to listen.
Frank Curzio: Nobody wants to buy Amazon. Especially young investors. You tell them, “Buy Amazon.” They’ll tell you, “Shut up. I will never listen to you again.” They don’t care if it goes up. Give me a story stock ESG, give me a crazy name, and that’s really what they like, which is funny. But I look at Amazon too; guys, it’s not just looking at earnings report by itself. You have to look at what the stock has done. And I pulled up a chart showing how Best Buy is not that far at year-to-date of the S&P 500, yet you’re seeing the pullback of 15%. But with that said, since October 1st, Dan, the stock is up 35% going into this quarter. 35% Best Buy is up going into this quarter. So now, you’ve seen a pullback and people taking profits.
Frank Curzio: So, again, you have to look at where these stocks were and where they’re going and is a lot of that priced in. It’s not just like, “Wow, this company blew out the earnings. How come it’s down so much?” Well, if it’s up 150% year to date or 35% leading into the quarter, it’s so much you can report anything there and the stock’s going to take a little bit of a hit. It’s going to be a little bit of selling news, which is common, but the more important theme here, I think overall, when we’re looking at earnings and stocks, it’s a dangerous, dangerous, dangerous environment. There’s a lot of stocks that are down 20% plus, and the Rus 2000 has really gotten hit. You’re not seeing it by just looking at the major indices, the way they’re trading, or even the Rus 2000, but the underlying trends and the stocks hanging new 52-week lows.
Frank Curzio: You’ve seen the VIX rise above 20. I can’t tell you how many stocks I’ve seen get hit. Snowflake got nailed out of nowhere, after making a nice move. So many names that I was like, “Holy shit. I can’t believe how much these are down.” Technology names. Again, I don’t know if it’s Powell and people believe we’re going to see more inflation on the Powell, which means if we’re going to see higher inflation, it’s not as good for technology companies. And people say, “Wow, that’s crazy.” Why? Their mortgages are already incredibly high, so they don’t have the benefit of cutting costs like cyclicals do. Also, when you see lower CapEx spending, that’s where these guys make their money. CapEx has to do with spending with companies, if it has to do with marketing. You’re going to cut your marketing budget.
Frank Curzio: If your sales go down, usually your market is a percentage of sales, so marketing’s going to come down. That’s lowering your CapEx. Lower CapEx, that’s less money you’re going to spend in marketing when it comes on Facebook platform, or if you’re going to spend it on Google. So, a lot of these technology companies get hit and I feel like people don’t understand that, but they’re going to get hit more in an inflationary environment because they can’t really do anything other than raise prices, but they can’t really cut costs as much to get those margins higher, and that’s why they get hit. But overall, these trends are pretty crazy right now, when you’re seeing what’s going on with some of these stocks.
Frank Curzio: I’ve seen a lot get hit and I just feel like it’s misleading, because people are probably looking at their portfolios and saying, “Holy shit, I’m down,” but why is the S&P 500 near an all-time high, is because a lot of the underlying stocks are really getting nailed and money’s just flowing out of them like nothing on no news. Dan, earning season’s over. Lot of these companies reported and you’re seeing, holy shit, why is this stock down 15% and nothing’s going on? I can’t tell you how many emails I get, just, hey Frank, I own this stock or I own that stock, and why is it down 15… Not even in our portfolio whatever, but I can’t tell you how many times I’m seeing that, and it’s basically over the past two weeks.
Daniel Creech: Yeah. There’s a lot of volatility and that’s going to continue because you can’t have excess liquidity without things moving around large percentages. And to agree with you on the tech, markets are forward-looking, so hey, what about interest rates, they have to go up at some point, you’d been saying that, but one day doesn’t make a trend. With the reversal on the NASDAQ yesterday or earlier this week, basically Powell is saying he’s going to try and give you every little bit of information to have a soft landing, when it comes to inflation and higher prices and things. So, maybe the market tries to test him a little bit. We’ll see what happens there. But for the high flying tech, it’s interesting to me that Square, PayPal, that payment services are down a lot.
Frank Curzio: Cloud is down a lot.
Daniel Creech: I would definitely look at that. I think it’s a little early right now, but there’s nothing wrong with hiding out in big tech. You can’t buy enough Microsoft, in my opinion. I think that’s damn near 52-week high, if it’s not. I’ve been a big fan of Meta for a while. That’s not that kind of tech, but Google and Apple, Apple’s at an all-time high. So, hide out in the big dogs, if you want to play in the space and you should have exposure to that. There’s nothing wrong with that. Those are great companies.
Frank Curzio: Yeah, that’s safe havens, but you’re looking at Rivian down a lot too. Again, when I look at Rivian and I was doing some research on this, Daniel, and I’m going to spend just a couple minutes on this because I really want to get to very important news about the strategic oil reserves. But when I look at Rivian, and we set it to one million in sales and it has a hundred billion dollar valuation. This thing came out of the gate at a hundred, went to whatever it was 175, I don’t know. I think it’s like 115 today. I think it’s shortsighted the way some people look at these, and I could be blamed for this as well. I could be blamed… This is nothing, because when I look at some of these names or I looked at them in the past, I said, “You’re crazy to buy them.”
Frank Curzio: When we go back and we look at what people said in Netflix, like 2002, 3, 4, 5, 6, what people said at Tesla over the last like six, seven years, Chanos, David Einhorn, biggest fraud, all this stuff, going after these guys, I see it all the time with some of these growth companies, and I just think it’s misleading because when you look at Rivian, people say when compared to Ford and GM, that’s a joke. They’re not even producing yet. Okay, I get it. But I want to try to figure out what I got wrong on Netflix and what I got wrong in Tesla, and what I got wrong is I didn’t understand the TAM, the total addressable market. When you look at Netflix back then, how many people hated it and said it’s terrible, it’s going to get crushed, Netflix, Tesla, all of them.
Frank Curzio: You don’t realize when it comes to Netflix that they were looking at it saying, “How could they be as big? They’re streaming.” How could they be as big as some of the leading cable companies or directory TVs or whatever back then. But now, you’re looking at everyone in the world going into streaming, trying to catch up. Nobody really gets it outside of Netflix. Time Warner is starting to understand that it’s about new content and it’s about binging. People don’t want to just go streaming where they can only watch one thing. They love to binge. They love when that stuff comes out and they can watch all that stuff. Then you look at Tesla and you say, “Wow, look, this valuation is crazy. How can it be bigger than GM? How can it be bigger than Ford, that much bigger and bigger than all the companies together combined as a market cap?” Well, you notice how the entire world is trying to play catch up to them, because they have their EV. You see Teslas on the road all the time.
Frank Curzio: Do you see any electric vehicles on the… No. So now, they captured a market that the whole world is trying to get into. And if you look at the valuation or look at companies this way, maybe you’d invest in something like this, or Rivian, even at these levels, because Rivian right now, supposedly from the people I talk to, smart people in the industry, they had the best technology batteries. The Rivian truck is absolutely amazing. If you see it, look at videos, it blows out the Ford F-150 Lightning. And I have to tell you, when it comes to Ford, Daniel, Ford control that market. The largest selling vehicle, the biggest selling event, now they’re only going to be, when it comes to the electric vehicle, producing 10%, compared to the production that it produced when these things are gas vehicles.
Frank Curzio: And they don’t really have the technology for batteries yet. That’s why they’re spending 30 billion for. Again, it’s exciting and it’s 20, and, again, it’s going higher. But when I look at Ford and I look at Rivian, Rivian’s truck is a million times better, and now Ford just went from a market it dominates, which is the pickup truck, to now an EV truck, which you’re not going to dominate anymore because there’s better players in this industry that are going to be selling more trucks than you in this industry. So, it’s something to think about with Rivian. Yeah, it’s crazy. One million a set, but the orders are actually, they’re piling up like crazy. You have to put a thousand dollars down for this. I actually looked through this. I put a thousand dollars down and bought a Rivian. Did I tell you that? I did that yesterday.
Daniel Creech: No.
Frank Curzio: You could say you bought it. I put a thousand dollars just to go through. It’s fully refundable-
Daniel Creech: Is it refundable?
Frank Curzio: Process, but I can imagine how many people going through the process when you see this truck. This truck is absolutely amazing. If you go on YouTube and watch the Rivian R1, it’s really incredible-
Daniel Creech: I’m going to be rude and interrupt. When you say you see this truck, it’s all online though. You didn’t go anywhere to look at it?
Frank Curzio: No, but I am going to see Consumer Electronics Show and hopefully, I get the chance to drive it. If I do, I’m going to put it all over YouTube and everything and tell you guys, give you an update. But you see this truck, which is unbelievable. Starts shipping in January, it’s going to ship before the F-150, and they have the best technology in the space. So, it’s going to be interesting to see how this plays out, but just a different way to value companies where right away, we’re quick to judge and say, “Holy shit, look at these sales.” Yes, it has a massive market to grow into, but the whole entire world is going into EVs, just like the whole entire world is going into streaming. And if you are the number one player in that market, I mean, that total addressable market is fricking enormous.
Frank Curzio: So, it’s just something to think about when it comes to valuation. But I did want to bring that up because I get a lot of question on Rivian and even Netflix these days and look at Nvidia as well; valuation’s insane. Why, because they’re the nuts and bolts. They produce the parts for the highest growth industries in the world, whether it’s AI, whether it’s autonomous vehicles, whether it’s EVs, computing, just everything, that super-fast chips, the best in the world, and these guys they’re in it and that’s why they deserve that premium. Anyway, I don’t want to go that far into it, but valuations are a stretch here, but it might not be a stretch for some of these other companies that people think are absolutely crazy to purchase.
Daniel Creech: Right. It is difficult, and I’ll be honest, I’ve missed a lot of these high growth ones because you don’t want to be focused on just fundamentals because it’d be very difficult to grow anything if you didn’t take chances and do things like that. We were joking earlier, it’s not a price-to-earnings ratio anymore, it’s price-to-expectations. So, will these guys be able to execute? Nvidia is executing. Not to put words in your mouth there, but Rivian, if they start delivering trucks in January like they’re supposed to, they have huge backlog orders. Amazon alone, and you have tight stockholders. Amazon owns 20%, we talked about that a while ago. Ford owns, I think, 14%, off the top of my head. More than likely, those shares aren’t going anywhere.
Daniel Creech: You have a smaller float that can help control the price. Yeah. It’s just an execution story. As an investor, if you want to play in that game and play those high growth ones, great. Just know they’re going to be volatile. If not, it’s not going to ruin your retirement if you miss out on one or anything like that. So, I’m on the sidelines with that just because it doesn’t interest me, to tell you the truth, in a whole lot. I do want to get your review on the truck and all that kind of thing though. That’s pretty funny.
Frank Curzio: No, that’s cool.
Daniel Creech: And I love the fact that you ordered one and put down a thousand dollars for it.
Frank Curzio: Yeah. Yeah. So, I’m going to get one, and we’ll see. I really like it. It looked really cool, but I just wanted to see the process, how everything worked and it was pretty cool. You built your own car and everything. It was awesome. So, big news too, we’re releasing oil from the strategic reserve. President Biden, was it two, three weeks ago, said that the planet’s warming is a threat to the human existence as we know it. So, that’s why he is drastically cutting oil production in the US, to save the world. While we cut, OPEC is assigned to produce more. So now, what do we have? We have massive inflation in energy, prices out of control.
Frank Curzio: You’re making our enemies stronger in the Middle East. And now, the icing on the cake, to combat the inflation that this administration created, you’re releasing oil from the strategic oil reserves as if this oil has less CO2 than the oil you cut from our producers or something. But I guess that the threat to human existence as we know it, we can hold off of that for a little while, while we do this. But there’s just so many storylines and so much irony here. Even about the amount that they’re releasing from the oil reserves, right?
Daniel Creech: Yeah. We’re doing 50 million barrels. This isn’t apples to apples, but we were joking about this earlier. Basically, the US uses around 20 million a day, so that’s a few days’ worth. The globe uses about a hundred, give or take, and I’m rounding there so don’t email. Well, email us even if you’re pissed: email@example.com, but don’t hold our feet to the fire on those stats. Yeah. This is just a Band-Aid. It’s a good chess match. I give him credit. I give the administration credit for what they’re trying to do because they want a short-term pullback in prices around the holidays, in my opinion, to help that consumer confidence, help polling, help all that kind of things. But when you think of this as a chess match, it was already yesterday before this announcement, Bloomberg reported that OPEC was saying, hey, they’re essentially going to retaliate.
Daniel Creech: The big headline here is, hey, look at the deal making done by President Biden because he convinced, through his leadership, to get China, India, and I think there’s a handful of others that are going to release this to try to lower the price of oil. In reality, I think the market is looking through that. I think this has been priced in. I think Goldman put out a good note about it’s already priced in. Oil is up over a percent and a half today. It’s damn near 52-week highs, marching towards $80 a barrel. We’ve been bullish on these names. I recommended ExxonMobil in our Dollar Stock Club. It’s not done great, but it’s positive now. There’s no way that this makes me less bullish. It makes me a lot more bullish on energy, especially going into next year, because this is foreshadowing that they’re not doing anything about the core problem, which is production and drilling, they’re just playing politics with it, and that’s a result in higher prices.
Frank Curzio: So, I’m going to say, is that right, and here come the emails. Okay. So, out of all the things I’ve seen from this administration and what they’ve done to weaken our country. Leaving troops in Afghanistan, illegal immigrants running wild at a 60-year high. I’m not going to say deficits, because you could blame that on every single president. So, even the infrastructure bill, whatever, I won’t even put that on Biden, but defund the police, influencing racism, allowing critical race theory to be taught in our schools while creating a white supremacist theme that doesn’t exist. Forget all that shit, Daniel. Meaningless. Having the US no longer be energy independent has the biggest long-term consequences than any of the things that I’ve mentioned. Affordable energy is a requirement. You need it to have strong economic growth. It’s no coincidence that the strongest countries in the world, most powerful countries of the world, whether it’s US, China, Russia, India, Saudi Arabia, they have the most natural resources. Being the producer of affordable energy, which we are in the US, makes us stronger.
Frank Curzio: Other countries will always need us. It allows us to have power, the upper hand to negotiate with other countries for so many different things. Taking that away weakens us. It makes our enemies stronger, which, I don’t know if you are familiar with other OPEC members, however many there are, what is it, something like 20… Actually, I think there’s 14. You can correct me on that, but some of the members in OPEC, I just wanted to tell you, because we’re making OPEC stronger. Iran, Iraq, Venezuela, Libya. Not the most friendliest nations. Okay. Now, OPEC’s been around for 60 years where 1973, we imported 35% of our oil, and we were like, back then, “The oil count’s too much. We have to do something about this.” By 2010, it surged to 60% we were importing.
Frank Curzio: In 2019, thanks to our new technologies, fracking, horizontal drilling, that went from 2011, 12, 13, all the way through of this decade, we became a net petroleum exporter of oil for the first time ever. And that’s going back to 1949 since EIA kept statistics, which is amazing. Now, we’re about to give that up. But the irony here is we’re giving it up because current administration, a lot of people believe that the world is in danger, which is okay. Okay, that’s fine if that’s what you believe. But now, you’re releasing oil from the strategic reserves because you created a runaway inflationary environment. There’s higher energy prices, impacts everyone, every business, every consumer directly. But now you’re releasing this as if the world doesn’t matter all of a sudden. So, for me, the political bullshit needs to stop. What pisses me off the worst, Daniel, is how many funds are behind, the Vanguards, the BlackRocks, CalPERS.
Frank Curzio: These are the guys that are running our money, and they’re using that power to force companies to make stupid decisions for political purposes, like telling our launched oil companies that you can’t drill. Don’t drill. We don’t want you to drill. So, what’s going to happen? We don’t have the replacements here. We don’t have alternative energy. We don’t have the replacements right now. So, what’s happening? We’re seeing massive, massive inflation. These guys aren’t drilling. We get these little idiot guys that take a position in the board that are to influence these bigger shareholders and the way to combat this is, if I was these oil companies, I would go private. I love Chick-fil-A. Chick-fil-A’s business model; we’re private. They get attacked for being a Catholic organization, whether it’s from the transgender… You know what they tell them? They say, “Fuck off. We don’t care.” However, if your-
Daniel Creech: They don’t say that, Frank.
Frank Curzio: Well, they don’t curse. But they do say that when they’re together. They’re like, “These guys are nuts. Whatever. This is our company. We’re running it the way we want to.” You can’t say that if you’re a 2% shareholder and the larger shareholders control 30%, 40%, 50% of your company now, because then they can influence, and now you have the large oil companies in the world being told that they can’t drill, which is insane. And now, we have runaway inflation. This is the most important point. If we can lower energy prices, inflation will go away. And because this impacts every business, this is one of the reasons why everyone is forced to raise prices, every business, because the energy prices. So, the fact that we’re even messing with this, that we’ve become energy independent, is just crazy to me, considering that China’s come in this country, Russia come… You’re looking at places that don’t care about this.
Frank Curzio: And if they’re not lowering their stuff, which of course they said they’re going to do, but if they’re not really lowering their CO2 emissions, which Beijing is doing it right now because they have to, they got the Olympics in a couple months, but they’re not going to do it. They’re still producing coal like crazy, and you can’t blame them because it’s energy, it’s cheap energy, and they don’t really care about the environment. But if other countries don’t care about the environment and we do, we’re making them significantly stronger and we’re losing our edge here, and that’s what’s crazy. So, I understand the pullback, I understand if you think about climate change, but we need something to replace it.
Frank Curzio: You can’t just stop drilling oil and say, “We’re going to stop drilling.” Someone else is going to drill it. It’s the same CO2 that’s hurting the world. So, let’s drill it for now until we have solar, wind, nuclear, all this stuff that we could replace, but if we don’t replace it, man, you’re going to see a $120 oil prices. We’re going to see $5 a gallon here, which you’re seeing in some places in the US. But for me, this just doesn’t make sense to me. Again, nothing really does have to make sense. It doesn’t matter. Even if you capture shit on video these days, you could still have an opinion and disagree. I could shoot you in the head, Daniel, and I could say, “I didn’t shoot you in the head,” and it’s okay. “Well, you shot him in the head.” “No, I didn’t. I didn’t shoot him in the head. What are you talking about? I did not shoot him in the head.” “Yeah, you did. We saw it on video.” It doesn’t matter. That’s the environment we’re live in now. Sorry. I can’t wait for the emails on that.
Daniel Creech: There’s a good rant. Yeah. That’s a good energy rant. No, that’s fun. Hey, but if you agree with us, if you’re listening to us, I’ll give you two names: Devon Energy, which is an old fan favorite of ours. That stock’s been on a tear a lot with oil companies. And Continental Resources, who, the chairman, I think he moved to chairman, Harold Hamm. If you can’t back a guy that writes damn near a billion dollars in a divorce check and has to write it out, I don’t know what to tell you. So, those two stocks.
Daniel Creech: If oil stays here or goes up, Devon’s doing a great split shareholder friendly thing. They’re doing a minimum dividend, and then they’re going to scale it up and down depending on oil revenues, which I think is smart. It’s going to attract investor base in my opinion. So yeah, Devon and Continental, if you want to play, if you agree with us on higher energy prices and want to profit, which is what you should do. Don’t just be upset about how the world is since you don’t make any of the rules and you’re stuck to playing it. Profit from it, and those are two names to do it.
Frank Curzio: And Harold Hamm, Continental, just to let you know, I don’t know how it’s been in the last two years, I haven’t looked at it, but the last 10 before that, 12 years, again, going through the fracking boom, these guys don’t hedge, Dan.
Daniel Creech: He didn’t hedge at all.
Frank Curzio: They don’t hedge. They don’t hedge. They’re like, “I don’t care what oil price is.”
Daniel Creech: Well, I don’t want to say at all, but very little. Yeah, that was a big deal.
Frank Curzio: Very, very little hedging. What does that mean? It means that they’re going to be more tied to the rising price of oil than anybody else. Because a lot of people hedge and you’re hedging, you’re locking in profits is smart. You’re looking at the largest companies with the largest fleets in the world, usually hedge. This way they lock in production, they lock in price. This way, it’s easy to figure out CapEx, you know how much you’re paying. You’re looking at airline companies as well, but if you don’t lock it in, with airline companies, now you’re seeing demand come back. And if you didn’t lock in prices at a lower level for maybe 18 months, now look where oil prices are now. So, a lot of these guys like to lock in. Continental is one of the ones that doesn’t really hedge.
Frank Curzio: So, if you think oil prices are going higher, this company’s going to benefit more than the average oil company, but it will go lower as we saw when oil prices crashed than most other companies. So, Dan, we got a lot out, talked about a lot of names. I really appreciate you coming in. Happy Thanksgiving, you and your family. Thanks. I like doing this segment with you. I definitely wanted to get this in instead of cutting this one and doing an interview because we have Kristin Tate coming on, but I said, “Let’s cut my monologue. Bring Daniel on. Let’s have some fun today,” and I really appreciate you coming on, buddy.
Daniel Creech: Yeah. Thank you. Always great to be here. Hopefully, everybody enjoys it, and we can help out. And happy Thanksgiving to everybody. It’s great. It’s a good time of year, so enjoy it.
Frank Curzio: Okay guys. So, we officially launched Big Money Trader. This is our new service from Luke Downey, really excited, it’s doing well. And to me, in this environment, this is the product that makes a lot of sense right now because you’re seeing that big money flow in and out of so many different things, and there’s a lot of big technology names outside of those FAANG names that are getting hit. This has to do with one of the recent recommendations in Luke’s newsletter, but this is using his system and it’s using options as well to limit your risk and also provide maximum returns. But this is an option-based newsletter as well, not a hundred percent option-based, but he goes over all the educational videos and everything, but you’re looking at finding the next big winners in this market when it comes to growth stocks, that you usually avoid, that go a lot, lot higher because of valuations, like I mentioned, Tesla, Netflix, and stuff like that. These are stocks that Luke has in his personal portfolio over the years.
Frank Curzio: And these are the stocks he found based on the money flowing into that, and that’s what he’s doing now. It’s a growth-based newsletter. I think growth’s going to trump value for a very long time, especially since interest rates are going to remain low. This is a fantastic product. I’m very, very happy launching it. It is being offered at a substantial discount just for our subscribers. So, if you’re interested, go to our website at curzioresearch.com. If not, no worries, but this is a fantastic newsletter and we’re getting already great, great reviews. You’re going to see lots of trades in it. Again, this is in beta version for our Curzio One members, who get to see this product before everybody else and just comment on it, how we can make it better before we launch it.
Frank Curzio: So, subscribers, it’s not, hey, you got one position so far. No, you got three different positions in there right now, and already you’re going to get to trade a lot of these things, and Luke does a great job explaining those option strategies, how to trade them. Again, you can do this through your E-Trade account, your Ameritrade account, whatever, your Schwab accounts, even your Robinhood accounts, but options are so big now. I’ve never seen so many people trade options, so many people get so many questions on options. This is a great newsletter, especially being option-based. And also, you get to see long positions in it as well. So, real excited. That’s our first backend newsletter that we’ve launched in a long time. It’s doing well. I want to say thank you.
Frank Curzio: But that special offer, which is going to give you a year for free, is going to end very, very soon. So, if you’re going to take advantage, take advantage soon. If not, once that comes off, then that year, you can only subscribe for one year for that price that we’re offering at. So guys, that’s it for me. Really appreciate all the support. I won’t go too much into Thanksgiving right now because I am going to see you tomorrow with a fantastic interview, Kristin Tate. Again, one of the most wildly listened to podcasts that we taped this year, which is in January. She’s coming back on. She’s controversial. It’s awesome. So, definitely stay tuned tomorrow. And as always, thank you so much for your support. I’ll see you in a couple hours. Take care.
Announcer: Wall Street Unplugged is produced by Curio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.
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