Wall Street Unplugged
Episode: 1108January 24, 2024

How to trade Tesla


Netflix (NFLX) jumped over 10% today after reporting blowout quarterly results. That’s great news for our WSU Premium members—since I just recommended NFLX last week. If you’re not getting my weekly trade recommendations, you’re missing out. Join us for tomorrow’s new pick.

I break down NFLX’s impressive quarter… why it remains the undisputed king of streaming… and the business moves that will drive shares even higher in 2024. 

Tesla (TSLA) reports earnings after the bell today. I share my thoughts on this market darling—including why I expect it to easily beat analyst estimates (but why that’s not as positive as it sounds)… why the stock’s current valuation is absolutely insane… and how I’d trade it right now.

Finally, I explain why the current stock market is unlike any other in history… why I expect a major pullback in the coming months… and why the market bulls’ current thesis is incredibly dangerous. On tomorrow’s episode of WSU Premium, Daniel and I will share how to protect your portfolio from the fallout. Don’t miss the episode.

Inside this episode:
Frank Curzio
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 Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 12 million times.

Wall Street Unplugged | 1108

How to trade Tesla

This transcript was automatically generated.

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 January 24th, I’m Frank Curzio.

This is the Wall Street Unplugged podcast where I break down the headlines and tell you what’s really moving these markets.

On today’s show, I’m covering Netflix, blowout earnings.

Congratulations to Wall Street Unplugged Premium members, just recommended that stock five trading days ago in Dollar Stock Club.

That’s a trading newsletter.

Wall Street Unplugged Premium members get for free.

But I’ll tell you why Netflix, even after this big move today, has more upside potential than any of the Magnificent 7 stocks.

By the way, Netflix is not in the Magnificent seven.

I dunno if everybody knew that.

Also about stocks, how they continue to hit new highs every single day.

At least that’s what it seems.

But unlike what you’re hearing in the financial media every single day, I’m, and explain why you need to protect yourself right now.

And then I’m gonna break down Tesla, which is reporting after the bell.

I’m talk about why Tesla is almost guaranteed to report better than expected results for the quarter, but you’d be surprised how I’m gonna tell you how to play it.

So let’s start with Netflix.

Blow out the numbers.

Sales rose 13% year over year earnings missed by a little bit.

But remember guys, it’s not about earnings for the current quarter, it’s about your guidance.

Okay? You can report s****y earnings, s****y revenue, but if your guidance is much, much stronger than what the consensus is, that little number that they put in the bottom, I’m gonna cover that with Tesla.

Why it’s a big deal, then it really doesn’t matter, right? It doesn’t matter what those earnings are.

So earnings came in a little bit light, but their guidance was great.

They raised earnings per share guidance by 10% next quarter, not for the year 10%.

They also said global streaming net ads.

Net ads with 13.1 million.

Okay? I love how Netflix is using net ads as a KPI.

Okay? Key performance indicator.

So in you’re a business, you have four or five that you talk to investors and those are the ones that are the most important metrics and they’re not all the same.

You wanna see earnings and sales go higher for Disney.

Three years ago during COVID, the the biggest KPI was subscriber growth, right? Which, which is pretty big among subscription services, but they were giving it away for free.

Uh, sometimes it’s same store sales, which is big for retailers.

So it’s not always the same KPIs for every company, but net ads, net ads is a big deal because other streaming companies can’t compete with that gauge, with that KPI that they’re using.

It’s kind of similar how at and t and Verizon does it as well.

But nobody in the industry, especially with within streaming, are going to be able to report a net ad number.

Because when you’re looking at Disney, Disney added hundreds, well a hundred million plus subscribers, a lot of those are for free.

You’re gonna see tens of millions of those people drop off and they’re not gonna be able to have a net ad number.

It’s gonna be a net decline because a lot of these people are coming off the platform.

Why? Disney plus, several reasons.

They don’t have great new content, which we all know their best content comes out in movies.

First I explain this, you’re looking at, at Disney, all these tens of millions, they’re gonna come off the file because they were given a platform and given access to free, right? If you have a Verizon count and you have the family plan, everyone within that family plan was given a free subscription forever.

That was me before I switched to at and t, I no longer have a Disney plus subscription, but now they’re raising prices and they’re putting ads all over it.

And then again, you’re gonna continue to lose people when you have net ads, right? Well, you have the net number there.

All these platforms can compete with Netflix in terms of the new content.

And nobody’s canceling Netflix, okay? People love Netflix.

Might say, well, it’s a lot of money.

It’s, I have the, the full package, which is no ads 4K ’cause I have like a theater room, which I love and I love to watch sports and stuff like that.

And it costs me, I think $25 a month.

So whatever, 250, $300, it’s gonna cost you over a hundred dollars to bring a family, afford to the movies after you buy popcorn for 50 bucks and a soda, right? And, and for all of ’em, oh, I want a soda, I want this.

Six bucks, seven bucks, eight bucks, It’s gonna cost you well over a hundred dollars, right? For to go to movies one time, right? So, so the value that you’re getting constant content, new content is fantastic.

And a lot of these companies are not able to compete at least a lot of the smaller ones where the big ones do have the balance sheets to compete.

So the net ads is huge.

And again, when you’re looking at, at, you know, I use Disney as example, but there’s a lot of others there.

Timem Warner actually just sold because Timem Warner, because they’re struggling, right? It’s a lot of money streaming.

We talked about this for three, four years.

I felt like nobody got it with their model, but they sold Sex in the city, the license to Right? Sex and City to Netflix, right? And that’s what you’re seeing companies doing to, to try to, you know, leverage some of their assets.

’cause they can’t really compete with Netflix and no one’s gonna pay especially on Disney, 10, $20 to watch Dumbo 20 times.

They want new content.

So when it comes to new content, Netflix is king.

Now when, why does the stock have tons of upside after this? Why would you buy after the 13% move, which 90% of the time I’d say you’re crazy.

It’s priced in.

Here’s why.

They’re the clear winner in streaming in the entire industry.

They have a strong balance sheet.

They’re gonna spend 17, 18 billion on new content every single year.

Okay? Most of the companies can’t compete with that.

But when you’re talking about that and the companies that compete on maybe Prime and, and Apple, you know, and, and Google YouTube a little bit, but they don’t really have too much YouTube tv where they have a lot of new content, right? It’s like live TV platform.

But when you have that amount of money and things are going that great, what does it mean? Everybody’s gonna come to your platform.

I’m not talking about subscribers, I’m talking about the best writers, the best actors, the best directors.

And that’s what’s happened with Netflix.

So this gives ’em a great runway or what Warren Buffett likes to call this competitive moat, always loves to invest in companies with competitive moat, right? That’s what he says the last 40, 50 years.

But it gives ’em this great runway to continue to make great new content going forward.

They also have pricing power, one of the few streaming platforms that does today.

So the pricing power, and this is the real reason.

It’s not the 13 million ads, it’s not the guidance, this is the reason the stock’s up 13% right now, okay? It would’ve been up 5% with the net ads.

It would’ve been up maybe 7%.

Uh, you know, with the raised guidance, 8%, it’s up 13% plus.

This is the reason why it’s up so much.

It’s the operating margins.

The stock is popping today ’cause it’s a stock that has pricing power and pricing power is massive, okay? It’s not like it’s much bigger than volume, okay? So if you have volume, you want to increase volume, you want to increase the amount of subscribers, it costs you money to do that.

Marketing expenses, hire more employees, market, whatever, when you raise prices, it doesn’t cost you a thing.

So that’s why you saw companies profits surge when a lot of people, even me thought they would come down.

Because if you have the ability to raise prices, it’s massive.

If you’re charging something that’s $20 and maybe inflation pushes to 22, now you can sell for 30.

That’s why you’re seeing companies like Chipotle, Lululemon with good products, able to have that pricing power and their numbers keep going higher and higher.

However, we’re in a market where inflation’s now coming down and a lot of companies, especially in streaming, don’t have pricing power ’cause they’re not gonna pay a lot.

And everyone’s paying for one streaming service and maybe another for their live tv.

So maybe you have Netflix, maybe you have YouTube TV Sling or whatever, and then you’re gonna limit the other ones in order to keep the other subscriptions for 10, $15 a month, you wanna see new content.

But when you’re looking at operating margins, this is the reason why the stock popped is is popping up even higher by the time we close.

So when you looking at those operating margins, they were expected to come in 13.

3%. They came in at 17% this quarter, which is freaking insane.

There’s a reason why you have this in basis points because if you’re able to increase basis points, which is, you know, 13.3 expected to 13.6, that’s a big deal.

That’s great.

You’re earning more money, profitability margins are high, that’s great.

From 13.3% to 17% is unheard of.

That’s insane.

Even crazier is Netflix said next quarter, not next year, not 20 25, 27, 29 30, all these forecasts in the next quarter they operating margins are gonna be 26%.

They were, that’s double what was expected for this quarter.

So when I see that you have pricing power, when you see the fact that people aren’t canceling, they’re adding more people, right? There’s not a lot of people dropping off the platform where you’ll see maybe at t and Verizon, at and t was horrible by the way, and Verizon was great.

You know, I’ll cover that tomorrow.

Wall Street Unplugged Premium with Daniel.

How this separation between the industries.

Now you just can’t buy any cloud company or any magnificent 7 20 24 is gonna be the year of a stock picker, right? Not everything in every industry is gonna go up.

You’re gonna see separation that happens between management teams, how they manage costs, how they manage through a slower economy.

And that’s what you’re seeing.

Netflix, great, Disney terrible, you’re seeing at and t terrible, Verizon great.

But a lot of times when they have their net ads or they’ll say, Hey, we added 1 million, you know, or say a a hundred thousand new wireless subscribers, they lost 1 25.

So their net ad is actually a negative or they’ll call it, you know, the net loss in terms of ads.

It’s a very big deal for Netflix.

Now the catalyst ahead for this company, why would I say wow, it still has a lot of upside.

And again, we’re up 15% on this in our portfolio for Dollar Stock Club.

We bought it five trading days ago.

Uh, that’s Raw stream, home Premium.

The catalyst that have Netflix advertising, advertising is go advertising is the entire business model for Google and Meta.

It’s the entire business model for those guys.

They make an absolute fortune.

It’s incredibly high margin if you provide the VE tools for advertisers where they could see everything.

And also we are not shoving advertising in your face.

Like when you see, when you go on certain websites, fortune street.com, you’re gotta see thousand popups every blah blah.

It’s just as much money as you could possibly make, right? And the experience is terrible, especially they make you click like three or four pages to go the story and it takes like 10 seconds to to click through these things even though you have super high internet 5G.

So they’re gonna come out with a platform that’s great where people are not going to leave.

Uh, it’s gonna be a great advertising model where it’s gonna be more targeted for people and showing you ads that you want.

This is what happens with Netflix.

This is how you use AI.

When you control the data and you have data for 10, like the social media companies like Google, that’s where AI is most effective.

That’s where it’s gonna be massive.

It’s all about data, right? And, and so you don’t look at Netflix what AI and advertising, advertising, advertising is gonna be the Netflix, what cloud was to Microsoft and Amazon.

It’s gonna change the landscape of the company.

It’s growing 70% off a very small base year over year.

Uh, I think from last quarter and a quarter before that grew a hundred percent.

It’s gonna continue to grow massively.

They’re gonna have people lined up out the door because they know their client, they know it’s gonna get in front of people.

And when you do that, that’s why social media when it comes to advertising is such a big deal, right? It makes a lot of sense because you’re tracking the client.

It’s more targeted compared to just putting an ad on the golf channel when you really don’t know someone just left the TV on.

If they’re watching who’s actually watching it, you don’t know.

But when you know, when you’re tracking these people, you know exactly when they’re watching, how they’re watching something.

Or you know, in the case of Meta and Google you’re searching for or where you are particularly, I’m checking in which everybody loves to do and tell their live stories, this is going to be massive and it’s just the beginning for advertising.

They’re also looking into live sports.

They just signed a deal with WWE Raw.

My wife took me 51, now it’s a 50th birthday.

She surprised me.

Took me to WWE Raw Live.

Uh, it was unbelievable.

One of the best entertainment things that you’ll see.

It really is incredible.

It’s a massive brand they signed for 10 years, 5 billion.

Uh, they’re also doing in sports, special tennis golf head-to-head matches where they’re gonna broadcast with the biggest names in those sports competing head to head.

Uh, which which is, you know, again, you’re seeing where Peacock for Peacock to charge.

And this is a couple weeks ago for that, what was it? The, the Kansas City chief game where it wasn’t on TV and people were p****d.

What did I mean, what did they get like 30 million people to sign up for that they were p****d but they signed up for it.

So people are gonna pay for great content.

Sports is always great content.

It’s unscripted, it’s awesome.

But to put Netflix in per perspective, sales are projected to grow 15% annually over the next two years.

Much, much faster than the overall market.

While earnings which are expected to grow 12% for the SB 500, they’re going to grow right now consensus by 33% annually over the next two years.

Three times faster almost.

And I think those numbers are conservative.

Now when you look at, at Netflix, this is a company that trades at, we look today $230 billion mark cap, I think it was just over 200 before this move.

So say $230 billion market cap sales are going to 44 billion.

That’s what’s expected for 2024 at $230 billion market cap.

Let’s compare that to Nvidia.

Nvidia has a market cap of 1.4 trillion, 1.4 trillion and you know what their sales, how much are generating sales past 12 months? I’m not saying that it should have a 1.4 trillion valuation, but it probably should have more like a 500 to $700 billion valuation, which puts it at three x, two x or three x from here because they’re experiencing this incredible growth where they’re taking over the entire streaming industry and they have this competitive moat that’s not going away.

So when I look at the Magnificent seven, which isn’t Netflix, right? It’s Microsoft, Apple, Tesla, Nvidia, Google, Amazon Meta, I think Netflix gets added to this group.

Call it the Mag eight people saying A MD should be included.

I, I don’t know, maybe or keep it mag seven and take out Tesla.

I mean I know that sounds crazy but Tesla expect a report after the belt today and they’re almost guaranteed to beat this number.

And I’m gonna tell you why.

Guarantees is a word that you should never ever use in fight.

They’ll come after you almost guaranteed because the number they have to beat today, which is a consensus, a little number on the bottom where they’re gonna say, well they beat this number, it’s 73 cents.

Okay? Cares like the perspective of that number of where it came from.

But if you look at the numbers, it’s a difference.

’cause if while Netflix missed earnings, current earnings by just a little bit and they raised guides significantly, their guidance was raised incredibly to show a ton of growth from last year.

It just didn’t meet the consensus estimates.

This is a JPMorgan’s institution analyst, Goldman Morgan Stanley.

And they have the average of what they’re going to earn for the quarter for the year.

And that’s a consensus estimate of what those guys say.

And sometimes it’s conservative, sometimes it’s aggressive.

Now at 73 cents a put in perspective, which you’re not gonna hear any place, if you look at what Tesla generated last year’s competitive quarter, this quarter last year, they earned a dollar 19 a share.

So the 73 cents a share is a 40% decline in earnings.

Holy s**t.

Now ask the question which is important, how does a company trade at 70 times forward earnings more than three times the 20 times the S&P 500 is trading at? And again, that’s what earnings are expected to grow by 12% this year.

How does Tesla trade at 70 times forward earnings when they’re seeing an earnings decline of 40%? Maybe you say well maybe they’re investing a lot of money right now.

Maybe they just had a down year, whatever, they’re lowering prices for all their vehicles.

And here I’m b******g saying Apple I think is crazy own Meta own Google based on that price to earnings growth.

’cause Apple is not growing earnings in sales right for the past 12 months yet it trades at 30 times forward earnings.

And I’m like wow, that’s crazy.

If you think that’s crazy, I mean that’s a steal compared to Tesla.

Again, this is a company that’s lowering prices for its cars for TVs.

So I think they easily beat the 73 cents number, maybe report 90 cents plus they better ’cause they report lower than 73.

You’re gonna see the stock get hammered, it must better have a good earnings call and talk about you know, delivery on cyber trucks, which everybody wants to hear.

Raise unit sales.

Again those record sales are a big deal.

They like to hear that record sales even though margins are coming down, talk about tax credits, which recently in January, a lot of those are no longer available for certain models including the cyber truck.

Believe it or not.

That just passed.

We have seen costs come down for nickel, cobalt, stuff like that.

But they keep lowering prices.

You’re priced everyone in America outta the market.

But China is still their biggest competitor and they’re trying to compete by lowering prices.

So looking into the quarter, the stock has taken a nosedive and you may say, okay well a lot of this is priced in but remember it’s still really, really expensive given that earnings have crashed as well.

So when I said when I liked Nvidia I missed it on the way up when I saw it at $300 a share, I’m like wow, it shouldn’t even be, it was like two 80.

I’m like, this is crazy.

There’s no way they can meet the number.

And they had the greatest quarter I think I’ve ever seen in in since I’ve been doing this for, for three decades.

I mean unbelievable, right? I mean expect the 7 billion did like 14 billion or whatever they do, 10 and a half than they did 14 following.

So as that stock is going up, it’s actually trading cheaper ’cause the earnings are surging.

This is totally different with Tesla, their earnings are crashing and none of the stock price is coming down.

So they better report something great, I think they easily beat this number.

Maybe it goes up on it and people are gonna say Wow, they blow out the numbers, they’re reporting record sales.

Be careful ’cause these guys are lowing estimates.

Those tax credits are are not available.

I think it’s for the model three and the cyber truck.

But be careful because if this stock pops and it should because they have to beat that number.

If they don’t beat that number to you, I’m gonna be very surprised they have to beat that number.

But they’re gonna beat that number when they do this stock is probably gonna rise.

And when it does, I would be very, very careful if you’re on a Tesla, I would take some off the table until they figure this s**t out.

It’s a great company.

If you doubted Elon Musk, you lost every time I’ve had people, I’ve had people that are hired at showed Tesla, they showed that Tesla, I mean split adjusted probably in in the thirties and forties and fifties.

Don’t you go to 200, even 300? But I mean you’re gonna need a lot of magic eventually.

It’s about the numbers.

That’s what I always said about Disney.

Eventually you could add 500 million subscribers but if they’re paying nothing and your margins are terrible, your average revenue per user is four bucks compared to you know, 17, 18 for Netflix.

Those numbers are gonna matter.

Sooner or later, they’re gonna matter sooner or later.

And now they’re mattering for Disney.

That’s why Nelson PEs had a horrible year because of the position he has in Disney.

So those numbers are gonna matter.

They really didn’t matter because you saw the growth and people are gonna pay for growth.

Like it doesn’t matter.

Tesla’s growing, look how many cars they’re producing, they’re great.

Those numbers, the earnings, the balance sheet, all that s**t, all those risks right now they got good balance sheet generating tons of revenue.

Now it’s not like that anymore.

If you’re lowing prices for your vehicles, you better see huge growth in unit sales and you better have a great call today even though you’re gonna beat those numbers.

Otherwise you’re gonna see the stock pop and probably over the next week or two start falling.

’cause short positions are building, it’s only 3% of the float, which is much bigger than most companies that size.

Usually it’s 1%, one point a half percent, probably lower than 1%.

You’re gonna see a bill of probably of 5% and they’re gonna have a good case.

It’s okay to trade a premium valuation but you have to be growing your earnings and growing your company.

So let’s see how the market’s gonna look where, okay, we’re expected to produce, you know, record unit sales, which is again, it’s, they’re gonna announce that.

Let’s see how the market takes that because they keep lowering these prices where the margin is getting crushed and you don’t see many companies trading at 70 times forward earnings when the earnings are declining 40% year over year.

That’s pretty crazy.

Now let’s talk about the markets real quick before I go.

You really don’t need me, I dunno why you listen to this for just buy stocks, they go up every single day.

Nobody gives a s**t.

It goes up.

It doesn’t matter what you looked at, what you learned, what you throw out.

Every textbook doesn’t make sense.

It doesn’t make sense.

We traded 20 times forward earnings, we’re trading at record levels.

The market is higher today than it was before the Fed started raising interest rates, but interest rates was zero two years ago.

Relatively zero, a little bit above that And I watch CNBC because that’s a consensus and I’ll switch to Bloomberg and Fox Business, just see what they’re saying.

And everyone on these channels, most people are super bullish and it makes sense if you’re a trader, you broke through these rings and, and you know you never wanna really sell stocks when hit all time highs.

I get it.

Understand from technical levels and then you have them, you know when they ask ’em what do you think the mark’s going for you? They have the standard, you know, well we could see a pullback but we’re gonna probably end higher at the end of the year.

I mean, which is like Bill Belichick saying, we either gonna win this game or we’re gonna lose this game, which is completely f*****g useless.

And I love that they cover themselves.

I told you the market was good if it co falls 20%, I told you we could have failed 20%.

Remember I said that? But yet you have optimistic targets for the end of the year, which everybody has I’m gonna tell you something about this market, it’s a rare animal, it’s something none of us has seen before.

And when I’m hearing economists who look at unemployment and inflation coming down, wage growth pretty solid and they’re looking at, oh well interest rates are gonna fall in 2024.

A lot of these econom like hey, the economy’s strong, it’s, I keep hearing the economy’s freaking strong.

Are you crazy? And the housing market is frozen.

And I’m not talking about for new builds and people buying these new homes right now, but, but if you wanna sell your house right now, good luck.

I’m in Florida, my house is on the market for five months.

I got one offer and I I lower it by 15%.

People are going from under 4% mortgages to well over 6% maybe you know a little bit below that pretty soon.

But the housing market interest rates and that’s a major driver of economic growth.

So how are we going higher? Well look at the government spending.

You’re spending trillions and trillions and trillions of dollars in all these plans.

That’s what happens.

Look at US Bank Credit.

If you’re looking at credit for US banks, it’s only been negative year over year.

One time since 19 74, 1 time that was during the credit crisis when the entire financial system almost collapsed.

If the Fed didn’t bails out no financial system, we’d have 30, 40% unemployment right? Now if that happened, believe me, all the banks closed, you wouldn’t be able to get your money rights in the street, right? It, it, it that’s, that’s when we saw that like negative with bank credit turned into the negative, showed these charts on Wall Street Unplugged Premium last week and and guess what? Right now we’re negative when it comes to bank credit.

Again, you can see the chart, the whole of 1974.

It’s only fell below the negative level one time.

That was during the credit crisis we’re negative.

Now stocks are at all time highs at all time highs.

Maybe with 10% off the highs, 5% off the all time highs leading economic indicators.

That’s the biggest gauge.

It’s the best gauge ever.

Everybody uses it.

Why? ’cause it’s a perfect economic indicator that predict predicted every single recession.

So when this turns negative and you go back to date of 1970, a hundred percent of the time we saw a recession, the leading economic indicators, the LEI has declined.

They just came out there two days ago for 21 straight fricking months.

Does this sound like a market where the economy’s strong and stocks speed trading all the time highs.

We all hear about the yield curve when it goes negative, it’s a sign of recession is coming.

But when you really look at the data and dig in, it’s not that the yield curve, the yield curve is the indication, but the recession usually takes place several months after when the curve turns back positive.

You’re not used to it.

’cause we’re not used to seeing a negative yield curve.

So inflation went through the roof and all this craziness and interest rates are rising.

So when you’re looking at the data, you compare it to history, it’s not like you know, oh negative yield curve, we’re gonna have a recession tomorrow.

No, it’s when we come outta that and it turns positive a few months later, that’s when we have the recession when the curve’s no longer negative.

So be careful for people saying wow, it’s no longer there.

But that’s a positive thing.

Another thing that everyone says is positive is interest rates.

Interest rates are coming down.

That’s how many times have I heard that catalyst and interest rates still haven’t come down like the Fed hasn’t cut.

We’ve heard that 2023.

If you look, I’m telling you, I would say a hundred percent I hate using absolute terms.

But if you look at anyone who predicted a bull market last year and said the market’s going higher, almost a hundred percent of the people I haven’t seen anyone say interest rates are not going lower and the market’s going high.

Every one of ’em said interest rates are gonna come down tremendously.

Inflation’s coming down.

That’s their thesis.

That was their thesis for the bull market last year.

And it, we still haven’t seen rate cuts and we might not seem to may now remember it was March and the Fed came out in December, it might happen in January, who knows? And the pivot and they walk back there pivot for some reason, which is weird.

But we’ve seen, if you look at the data, we’ve seen the biggest stock market pullbacks.

Not when the Fed starts raising rates, which people think ’cause it gets tighter.

But it makes sense ’cause the Fed’s raising rates, it’s because it’s a sign.

The economy is doing great and we need to slow it down.

But the major pullbacks occur when the Fed starts to cut rates and everyone’s saying that’s gonna be the catalyst.

Is it really? ’cause if you look back at history, be careful, careful what you wish for.

’cause even now, even today, Alan’s coming on TV saying hey we have a huge 5,000 target and s and p and Mark’s gonna go up 10% this year.

And because we’re gonna see a massive decline in, in, in rates and the Fed’s gonna cut.

I mean newsflash, the market’s already pricing this s**t in.

We know we’re pricing in, we’re pricing in six rate cuts this year.

It might be four.

We’re pricing that in and they’re like, well that’s the catalyst.

Someone’s been doing this for a very long time.

If you’re talking about something and and everybody’s talking about about it, it’s factored into stocks.

It’s what are people not talking about? That’s when you get the black swan events like we’ve seen with with commercial banking last year.

Like we’ve seen, you know, just with interest rates in 2000 and oh 8, 0 9, right? I mean we, we saw you the black swan events.

Holy s**t man.

How much exposure’s like nobody knew how much exposure all these a******s in the banks had to, to the housing market and how much they leveraged themselves when the regulators were asleep at the wheel.

We all know that the Fed’s gonna cut.

That’s your catalyst.

But when these cuts happen, it’s an indication.

Why do they cut? It’s an indication of the Fed expects the economist slow and they’re gonna expect it to show slow sharply.

I mean when you look at GDP, we’re calling for GDP, what was it? And economists have it just over 1%, some have it 1.3, 1.4.

That’s a massive down.

Does that make sense to you? So stocks be trading at all time highs.

Valuations super expensive, but economic growth is projected so dramatically over the next 12 months.

It’s not just the US that’s all over the world.

Outside of some bright spots like India.

Be careful here guys.

I’m not telling you to pull everything outta the market.

Absolutely not.

But tomorrow’s Wall Street Unplugged Premium podcast.

Dan and I gonna show you how to hedge your portfolio.

I know hedge is a boring freaking word, but trust me it is really, really, really important for your livelihood, for your family, for your assets to understand, okay, what industry experts call it, we call it is risk adjusted.

So if you are, so for example, last year thought the market was gonna crash in the first half, right? We came down, fell a little bit more in I was wrong that the earnings weren’t gonna meet their estimates.

Our portfolios did fantastic.

We didn’t do as good as the big seven or the Nasdaq going up 40%.

But we did very, very well.

But we had risk adjustment strategies on it.

We said okay, you know, buy puts, be smart, that’s fine.

I’m okay.

Still did well, still did great.

Didn’t say alright, short the market, you’re crazy.

Get outta the whole entire market.

No, I’m talking about hedging your portfolio in case, because that in case the case for in case is getting bigger and bigger and bigger and bigger.

’cause the things I’m seeing you normally don’t see in a market when you have stocks at all time highs, you don’t see bank credit shrinking, you don’t see leading economic indicators.


You don’t see the money supply absolutely crashing.

These are not associated, you don’t see yield, negative yield curve, right? These aren’t associated with a screaming bull market stocks at all time highs.

So be careful.

Could it go higher? Of course, I’m not gonna tell you to sell stocks when the all time highs the strategy that’s gonna punch you in the face.

I’ve learned that.

But be careful.

Be careful.

There’s a reason why the, the Fed walked back their comments and he told all the Fed presidents there too, which they always speak their mind.

You know that there was a meeting that was taking place after Powell and everyone said he pivoted that, that they walk back those comments and those guys usually say what they wanna say, but they all kind of walk back.

I don’t, no, maybe interest rates, you know, I don’t lower ’em yet.

Why? So tomorrow’s Wall Street Unplugged Premium podcast.

Gotta break down several of those strategies to protect yourself and also share our newest recommendation, which I think you should pay close attention to.

Doing pretty good in that newsletter early on.

Uranium, right? Well your annual prices, which your radio prices is a hundred over $105 now.

Holy cow.

I feel like yesterday with 35 it’s 40 bucks benefited a lot from those stocks.

And then Netflix understanding that story going in, even though it was running up a little bit, but being up 15% of the stock at four trading days is probably enough to pay the $10 a month subscription to Wall Street Unplugged Premium per month for the next three to five years.

That’s what that premium product is about.

Having access to that Dollar Stock Club portfolio, which is a trading newsletter, which some people charge a thousand dollars a year for that.

And you get all that access.

So if you’re interested in learning more about Wall Street Unplugged Premium and you’re new, okay, if you’re new, just go to wsupremium.com and you’re able to try it for a dollar for the first month.

That’s it.

If you want it, you want it.

If you don’t cancel, that’s fine.

I tell you, we don’t have a lot of cancellations ’cause the value you’re getting from that end stock picks and trading is really, really cool.

And that’s what we wanna do with this business.

We wanna create that type of investment club where we’re sharing ideas.

I don’t have to hold back from different things where you know, people are paying for it, but they’re paying for a service that has tremendous value.

That’s why we created the Wall Street Unplugged Premium brand.

And I love having Daniel on it.

Again, gonna break down those hedging strategies, how to protect yourself, not to sell stocks, but how to protect yourself.

And also we’ll have our new recommendation.

This guys is if for me questions come for the email at frank@curzioresearch.com.

I’ll see you guys tomorrow.

Take care.

Love this episode of Wall Street Unplugged.

I think you’ll really love Wall Street Unplugged Premium.

The Wall Street Unplugged Premium is my members only podcast.

Where I dive even deeper into this week’s events.

I’ll do even more than tell you what’s moving this markets.

I’ll tell you specifically what moves you can make today.

So this is gonna be about trading.

Put big money in your pocket right away due to the inconsistencies I see daily in the market.

I’m talk about specific investment ideas I’m recommending and tracking each week that I believe would be impacted directly by everything I just talked about today.

Plus, you’re gonna get the chance to go even further down the rabbit hole with me and my co-host, who’s Daniel Creech.

As we discuss which of these weeks’ trends could turn into massive windfalls, the big trends that we see lurking Horizon.

Also the news we’re picking up from our network of insiders, which has gotten bigger and bigger Thanks to you and so many people listening to this podcast in Over 100s.

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Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry.

The information presented on Wall Street Unplugged is the opinion of its host and guests.

You should not base your investment decisions solely on this broadcast.

Remember, it’s your money, and your responsibility.

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