These days, it seems like nothing is good news—not even “good news.” But don’t panic—there are plenty of positives in today’s market…
That said, if one event takes place, all bets are off. [00:54]
Curzio’s own in-house analyst, Daniel Creech, helps break down what we can expect heading into the election… and whether the outcome actually matters to the market. Daniel also explains the two things that are critical when investing in this market… and some of the companies that have his attention right now. [36:55]
In today’s market, we’re not seeing gradual pullbacks—we’re seeing corrections of 7–10% in days. With the volatility likely to continue, one simple strategy will both protect you… and help you profit. [1:10:32]
Wall Street Unplugged | 738
If this happens... we'll retest the March lows
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 here? It’s September 9th. I’m Frank Curzio, host of the Wall Street Unplugged Podcast, where I break down headlines and tell you what’s really moving these markets. We’ve finally saw a pullback in stocks. Don’t see this crazy, high flying tech names that looked overvalued two months ago. That was rolling on. They just kept going higher and higher. NASDAQ pulled back sharply. It’s Wednesday, we’re getting a little bit of a balance here, maybe a little short covering, we’ll see. But I just want to put some of these things in perspective for you.
Frank Curzio: You have Tesla down 30% plus. It was 500, now it’s 350, and I love the $5 billion offering they announced on September 1st, where the stock was at 500, at its high, its all-time high. Now it’s 350, so 30% lower, just nine days. I’m not sure if they closed that offering. I was trying to find out information of where they closed the offering on that price, but they said it should be done by today. But I’m curious to see the price that they were able to close this at. I haven’t seen it yet. If you have it, you can send it to me, but I’ll probably know by the end of the day. I just couldn’t find it before this.
Frank Curzio: I don’t know if it was a shelf offering where they could sell $5 billion over a certain amount of time or whatever, but I also read that they were looking to do it or finish it by September 9th, but man, good time to raise money. Hopefully they raised a little bit of money at a much higher price.
Frank Curzio: Overstock. Overstock was trading at $128 three weeks ago. It’s $65. So we’re talking about a 50% retracement since August 20th. That’s another company did a great job in their offering, raised $177 million on August 11th at a price of $84.50. $84.50 they got that offering done just three weeks ago. It’s great for the company because the stock is under 70 now. Not good for investments though. The mostly institutional investments that came in, but again, great for the company. Raising money at a super high price.
Frank Curzio: Moderna down from $98 six weeks ago and it’s $55, so you’re looking at a 40% decline. I can’t believe that they’re telling people I think three weeks ago that it’s a good short. I did a video on it, if you look at YouTube or Twitter, only because when the numbers came out on how much the government, who they’re partnered with, is going to charge for the vaccine, if they’re the first to the… whatever, it was something like $20, $25. Every company that covers these guys, they were modeling $120 or higher. Think about that. All the evaluations saying, “Well the stock should be worth $100 or $95,” it was all based on that vaccine, which is going to be 95% to 98% of all their sales, and we’re talking about their modeling for the next three years.
Frank Curzio: Holy cow. You got to see the 10 year outlook and discounted cashflow models. They’re predicting, I’m not kidding you, like $100 billion in cash on the balance sheet 10 years from now. Crazy, considering the company never brought anything to the market, FDA approved, whatever. Man, I’m surprised it didn’t get hit harder because that’s your only product, and you just got told you got to sell it at a 70% discount than what was originally thought, but not too many people lowered their numbers. Stalling for Wall Street, especially for biotech companies that are going to look to raise money and the guys covering them get investment fees. Makes sense.
Frank Curzio: Looking at Apple, $137 to $115. You say, “Well it’s not that big in terms of percent loss.” The amount of market cap Apple lost is $400 billion. We throw around billions and trillions like crazy, right? Let’s put this in perspective. That $400 billion amount lost in three trading days, $400 billion is more than the market caps of 492 of the 500 companies of the S&P 500. Think about that for a minute. Total of eight companies have a market cap in the S&P 500, that’s larger than $400 billion. I’m going to give you those names and I’m going to leave one out because I’m sure if I told you to guess what those eight names are, you’re going to say Apple, Google, Microsoft, Facebook, what do you have? Walmart, you have Berkshire, you have…
Frank Curzio: There’s one on that list that surprised the hell out of me. It really did. I don’t know why. Maybe you guys knew, and I’ll give you a second, but it’s Visa. I didn’t know Visa was the eighth largest company in the U.S. based on market cap. I was surprised to see that. I mean not crazy surprised. Just didn’t think, I don’t know, some reason. Anyway, you’re looking at eight companies, only eight have a market cap margin of $400 billion. That’s how much market cap Apple lost in three days. Facebook went from $304 to $275. Again, not crazy percentage-wise, but it amounted to a $70 billion loss in market cap, in video losing nearly 100 points, to 589 to 490.
Frank Curzio: I mean insane, insane moves. When you look at everything on a whole, and NASDAQ, what, fell 10% in three trading days, as I mentioned there was rebound a little bit today, and that 10% number, it seems like a lot, it’s enough to make investors nervous or maybe it’s just the media making you nervous and some major financial channels, those media channels. I mean the guests, the host, the headlines you’re seeing, that would scare the crap out of anyone. “Breaking news” in red, red everywhere, all over the screens. “We’re in a correction,” which is the definition of a 10% decline in the stock sector, whatever. “Correction territory. Could we see this sell off…” and then you have Kramer coming in saying, “You’ve got to be an idiot not to take profits here.”
Frank Curzio: Just so easy to make money, and again, not making fun of him, he’s kind of right, but just everyone, “Sell, sell,” right? “We’re in correction territory.” They’re bringing on all the technical analysts, and every, every, every technical analyst warned that more pain is coming. I didn’t hear one say buy the dip. I didn’t. Not one. Of course, when tech rebounds another 5%, 99 of these guys are going on TV and tell you to buy the shit out of stock. “You got to buy it. You got to buy it. For now, more pain ahead.” It’s a cool job being a technical analyst sometimes. Just wish you’d let us know things that happen beforehand, not tell us after the fact analysis.
Frank Curzio: It’s like falling down the stairs and breaking your arm, and the doc was like, “Look, if you watch you were going and held onto the banister, you could have avoided all this.” Just meaningless, meaningless. I love when they say, “This is why this happened.” I don’t care why it happened. Could you explain to me how I could avoid it? That’s what you pay these people, that’s what you’re paying me for. They try to warn you on things with COVID, when I’m worried about the markets, and that’s our job. That’s what you guys pay me for, and subscribers pay me for, you listen to this podcast.
Frank Curzio: I don’t tell you after the fact that everything happens. Man, anyone could do that. Putting the tech drop in perspective, okay, because the tech, “Oh it’s scary!” The NASDAQ was up 75% from its March lows and 32% year to date and that was as of September 2nd before the pull back. When you look at the rest of the market outside of tech and you strip out FANG plus Microsoft, most of the market’s not down that much. It’s down around 3% over the past three, four trading days. That’s based on the S&P 500, the equal weight index. Obviously the bigger names, the bigger market caps, the FANG names and Microsoft, carry a much bigger weighting. They equal 22% of the entire S&P 500 index, responsible for that index just surging.
Frank Curzio: If you strip them out and give everyone the same rating, or the weight index, the S&P 500 is down on the year. Interesting. Now there are tons of tailwinds that will continue to put a bid onto this market. You could have no buyers here, just I’m going to share some of these ideas during my educational segment, but listen. It’s important that you understand this. Economic data across the board in the U.S. has been trending higher or better, and in the meantime the economists still remain bearish, which is a bullish sign because they have yet to upgrade their forecast. They’re late to the party. What you hate to see is what you saw with high flying growth companies.
Frank Curzio: If you look at names that I just expected to grow enormously, but yet they missed those estimates, what happens? Look at Slack. You get crushed. It’s the same thing when it comes to the economy and economic data. If it’s conservative, you’re going to say, “Wow, they blew out expectations.” It’s all about expectations. That’s what the market trades on. You’re looking at manufacturing, you’re looking at consumer spending, retail numbers, unemployment. I don’t know if you guys saw the 40% year over year increase in mortgages, 40%. I mean that number’s like single digit. That’s a single digit number forever.
Frank Curzio: 40% year over year increase, incredible. Home stocks are going through the roof, and that trend is likely going to continue as long as we have low interest rates. Look at the Fed, monetary, fiscal stimulus going to continue, trillions more coming. Interest rates will remain for a considerate amount of time, years, and if they don’t, they’re going to implement yield curve control. They have to keep those rates low, so it’s a win-win situation. I would say they’re going to use yield curve control, and it’s going to be great even for small cap stocks especially, most riskiest assets, to give you a long-term time frame that, hey, we’re capping the rates at a certain level, but the only way it doesn’t happen is if rates stay low by themselves, but I think they will generally move higher forcing the Fed’s hands.
Frank Curzio: If not, either way, it’s a good scenario, which makes stocks a great investment. I think it’s pretty reasonable to expect inflation and trillions just handed to people directly. We’re not talking about TARP where it was given to the banks. Consumers are getting these checks in the mail, businesses, everything. I have to tell you, when it comes to inflation, everyone’s scared of it, but equities are actually a very good investment at early stages and mid-stages of inflation, which I expect to see. I told you that in February and March when all the shit was hitting the fan, hearing a lot of people come out and say, “Yes, I expect inflation now.”
Frank Curzio: A lot easier to see. Look at valuations, yeah, they’re stretched, but take out the crazy tech names, maybe some nutty biotech, and look at some of the… energy, industrials, financials, cyclicals, dividend-paying stocks, small caps, are reasonably priced. A lot of names within those sectors or segments are well off their highs. I’ll say this stat again, remember, the major tech companies, FANG plus Microsoft account for 22% of the S&P 500 index, and these names are what pushed the major indexes higher, especially since the coronavirus.
Frank Curzio: Also, there’s plenty of tech names outside of the high fliers. Plenty of them that are trading at below 20 times forward earnings and growing their earnings by more than 20%. You say, “Wait, 20 times forward earnings, Frank. That’s expensive.” It’s expensive if you compare it to the S&P 500 over the past 10 years and say, “Well it was trading at 16 and a half times, that’s the normal PE ratio over the past 10 years, the average, the mean, whatever.” Which is right, but we have a low interest rate environment, so maybe you push up to like 17 and a half, whatever, but it’s a company by company basis guys.
Frank Curzio: If you’re trading at 30 times forward earnings, but your earnings are growing at 35%, 40%, your stock is actually cheap. These are the names that exploded, and these names aren’t garbage names that are up 100% for the year. I look at the sales trends. I covered this in a video. Go check Twitter, it’s free, @FrankCurzio or Curzio Research YouTube page. I did a video on it. Credit Suisse came out with a great report. Look at the margins. The margins have exploded compared to the rest of the group, to everybody else.
Frank Curzio: If you look at the names that took off, it’s because they’re seeing sales earnings, margins explode, but when I did my own screen, I look at companies in tech that are trading below 20 times forward earnings and growing earnings by more than 20%, Qualcomm, VMware, Teradyne, Aspen Tech, Fortinet, Palo Alto, Micron, just a few of a ton. Decent sized list.
Frank Curzio: These are names I’m researching. Don’t go out and buy those names. I’m going to look at the individual basis. Maybe you see insiders buying. Maybe you see more… There’s another 50 factors I’d have to go through to see which ones are the best, but that’s a good starting point. Usually, that starting point’s a lot smaller for me when I’m screening names. Oh, here’s about 12 names. I didn’t think there’d be 50. Let’s see which ones are the best and have the best catalyst going forward.
Frank Curzio: Another reason you’re looking at another… Where else are you going to put your money? We all know we have tons of liquidity, and this money has to flow somewhere. Maybe it comes out of these large cap techs. If you’re a multi-billion dollar hedge fund, pension for managing billions, even trillions even, some of these get trillions, BlackRocks and Vanguards or whatever, where are you going to put the money? Name another country that you would put this money rather than putting it in the U.S., and most still have under 25% capacity, which is in terms of opening their economy.
Frank Curzio: Even New York just announced as I’m doing this, they’re going to allow 25% indoor now, up to 25% capacity. Congratulations. You were only closed for six months. Nice job. You going to put it in treasuries, 10 year at .6? Good luck. You going to buy gold? Yeah, yeah, they’re buying gold, but most of these guys don’t have more than 5% allocation in gold. Where else they going to put the rest of the money?
Frank Curzio: Then you look at COVID. Everywhere you look in the U.S., the numbers are getting better and better. A 2.89% death rate this week. That’s the lowest this far, people who get the coronavirus. It was 8% in April, just to show you that this number keeps coming down because we know we have to protect the right people and we’re smarter about this, but that’s what we want to see. Hospitalization rates are at their lowest levels as well.
Frank Curzio: With that said, with that said, all those positives, the reasons why you should buy stocks, not all stocks, but why the bull market’s going to continue, all of this can be derailed. All of it can be derailed. We can see a massive, massive collapse in stocks and a huge slow-down in our economy. How can it be derailed? There is a huge agenda to make things seem much worse than they actually are when it comes to the coronavirus. It’s important that you’re aware of this. Most of you are, some of you are not. It’s fine. I don’t care what side you’re on, it doesn’t matter. This is about your portfolio.
Frank Curzio: For example, if you have a social media account, I want you to do me a favor. Try reporting something positive about the coronavirus, positive facts. The positive numbers that I just mentioned, 2.89% death rate, hospitalization rates, just those, or the fact that out of all COVID deaths in the U.S., only 6% have been 100% caused by COVID. The other 94% had two to three other serious illnesses. An overwhelming majority of those people much, much older aged, 90% in nursing homes. Not saying that COVID isn’t the cause of all these 180,000 plus deaths, but it’s not the sole cause. 94% of these people that died was because they had two to three other underlying conditions, and they were much, much, much older. Fact.
Frank Curzio: Maybe post a stat about how the recent data from CDC when it comes to the coronavirus and influenza, this is February 1st through August, if you’re under 15 years old living in the U.S., you are 40 times more likely to die from the flu after catching it than dying from the coronavirus. 40 times more. Don’t shoot the messenger here. Just reporting the numbers on the CDC website, which is unbiased. I mean used by democrats and republicans, the site data. If you have another site, let me know that’s unbiased.
Frank Curzio: Again, this is data I’m trying to capture to tell everyone, but try posting positive data about COVID on social media. Just try and watch how quickly you get attacked. Just look at my social media accounts. Just posting this data, “Hey, this is great news,” “No, you don’t understand. It’s crazy. Why you telling kids to go back to school for? You don’t even have kids.” No, I have kids. I have one that takes Humira and lowers her immune system, and I’m a little worried, but looking at statistics, I think she’s going to be fine. I’m in the boat just like you.
Frank Curzio: I’m not saying all parents should send their kids back. I’m saying it should be up to the parents though based on the statistics. It shouldn’t be up to the politicians. I mean I understand why they want to attack you. I mean scaring the shit out of everyone means more people are going to stay home, they’re going to watch more of your news channels, and the people who own these networks and hosts are going to make an absolute fortune. It’s in their best interest to scare the shit out of you so you keep watching, which is pretty crazy if you think about it since they’re truly hurting America and hurting Americans by not reporting the truth, which remember when that used to be the media’s job, to tell the truth without an agenda? Not today.
Frank Curzio: I mean these are the numbers, this is the data, this is the science. I have no agenda here. If we see cases rise, the death rate goes up, you’re going to hear me talk about it and say, “Hey, we got to watch out,” whatever. These are numbers. Some of this has been following us for longer than most people out there, since January. This is the data, this is the science. You have people with an agenda, like the idiots running New York and California, and I have nothing against New York and California, people. I love those areas, they’re really, really cool. I just hate the fact that you have people telling you what to do and what you need to do, which is crazy.
Frank Curzio: The people running a lot of places around the country, they don’t want to hear it. They don’t want to listen to science, and it’s funny because everyone, everyone, every politician, every politician, they all say the same thing. They’re going to follow the science. “We’re going to follow the science, do what the science tells us.” What science are you talking about? Because I’ve seen assholes like Zeke Emanuel who is the chair of the Department of Medical Ethics and Health Policy at University of Pennsylvania, oncologist, probably a big voice out there. When it comes to COVID, he’s encouraging lockdowns. He wants lockdowns. He’s encouraging that we still have lockdowns.
Frank Curzio: Now that’s his opinion. Everyone’s entitled to one, and that’s not why I think he’s an asshole, even though he’s a respected doctor and should be looking at all the data, which he’s not, but I’m not ripping because of his opinion. This guy’s an asshole because he also has his own consulting firm that charges businesses and companies on how to reopen or get around the current red tape from governments that are keeping their economies closed. I mean you got to love that guy. Got to love that guy. He has an agenda, and he’s going to make a fortune if the lockdowns continue, but he is part of science that someone could be listening to.
Frank Curzio: You have to remember, whatever side of the aisle you’re on, these politicians, they don’t give a shit about you, they don’t give a shit about me. They only care about power and money. You don’t know that by now? They’re going to do anything and say anything to maintain their status. Trump just changed on drilling off the west coast of Florida, offshore drilling. He’s for it, “Oh it’s great,” now he changed because Florida’s a big battleground state. You look at Biden, “I never said defund the police. Wait a minute, I didn’t say…” Yes, you did. “I didn’t say no fracking.” Yes, you did. “I said fracking federal…” No, no, you didn’t say… Well they’re changing because they’re looking at polls that people care about and they’re going to change their opinion because they want to get elected. They want power.
Frank Curzio: Instead of really sticking to what they believe, they’re going to tell you whatever they want. You got to know that by now. Again, back to Zeke, talking out of both sides of his mouth, nothing new. You remember Al Gore, who’s a brilliant, brilliant person? Extremely smart guy that told the greatest story ever about how the world is basically going to end if we don’t address global warming immediately, right? That was 2006. He scared millions and millions of people. He forced government bodies and institutions to invest billions to help save the world. They had to invest or they would have been called out.
Frank Curzio: Got to save the world, lower carbon emissions. He even got famous actors to join the cause, preach on his behalf. I mean, that’s the definition of a cult, but listen to some of the things he said. “Sea levels are going to surge by 20 feet.” They’re rising by three millimeters per year since his forecast. So based on his forecast, that 20 foot surge, that’s not going to happen until 3017, that year, okay. He said polar bears are going to die. Polar bears, they’re dead. They’re not going to find ice, they’re going to die. Polar bear numbers are actually increasing. They’ve been for years.
Frank Curzio: The Arctic Sea ice will be completely gone by 2014. It’s not. The forecast keeps getting pushed out every year, 2025, now 2050. We get to 2025, it’s going to get pushed out again. I’m not against trying to make this world a cleaner place, a better place, or against climate change in general. I’m against someone intentionally making bullshit predictions that know would never come true, something we actually see in the financial news industry all the time, but to scare the hell out of everyone, right? That’s his intention, to go over the top.
Frank Curzio: Why? Because Gore was buying carbon credits through a fund set up with the former chief of Goldman Sachs Asset Management started their own fund, and they amassed a fortune trading carbon credits, which rose tremendously as he started promoting this movie and getting governments to mandate global warming policies, but Al Gore not becoming president was the best thing that ever happened to him. He was worth around $3 million back then. This is in 2000 when he lost to Bush. By 2013, he was worth $300 million. That’s after publishing his documentary, An Inconvenient Truth, a few years earlier. Very smart politician.
Frank Curzio: Scared the hell out of everyone to make an absolute fortune. You didn’t have to scare… You didn’t have to make bullshit predictions. You can get your point across and both people on both sides of the aisle will believe you, but when you make stupid predictions like that because you want to scare the shit out of everyone so you make a fortune, that’s politics. Getting back to the science part and who we listen to, guys this is very important. Zeke Emanuel believes we need to lock down again. Again, he has his own agenda. We have a blueprint with Sweden showing we don’t need lockdowns to lower death rates and hospitalization rates.
Frank Curzio: Look at states like Georgia and Florida, first to reopen. Numbers are going down across the board as they reopen at the end of April, early March. You look around, businesses are not dying in these areas. People are living. Hospitalization and death rates are low, now that we know people under 60 without underlying conditions will have mild-like symptoms. We know that. Take Dr. Fauci who I have no idea, again, I’m about the science, who we’re listening to. No idea why this guy was promoted to the world’s leading voice of the coronavirus, who originally said, “The U.S. is fine. We’re fine. Never going to need to lock down cities. Not like in China, no way, we’ll never do that in the U.S.”
Frank Curzio: Today, Dr. Fauci, never shake hands again. Don’t shake anyone’s hand. Don’t shake anyone’s hand, while he’s posing in pictures on the front page of magazines. Instead of being in the field analyzing every piece of data available on the coronavirus, coming in, what, from every state on an hourly basis. I have nothing against Fauci, I think he’s a decent person, but he’s been very, very, very wrong. There’s no denying that. There’s no denying that. What about Dr. Theresa Tam. She someone I’m going to listen to? Canada’s chief public health officer. You going to listen to her, on her interpretation of the science, who says that everyone should wear a mask when having sex with their partner. Everyone, wear a mask.
Frank Curzio: Even if you’re under 50. Coronavirus is like a mild flu for 98% of that demographic, wear a mask. I’m sure Dr. Tam is single. If she’s not, I’m sure her husband’s probably going to leave her if she really practices what she preaches, because that’s a joke. That’s Canada’s chief public health officer, is telling everybody that. That’s considered the science to people. Why is that important? Because Joe Biden came out and said, again, he’s leading the presidential race by most polls, you can’t deny that, definitely going to become our next president, saying he would close our entire economy if scientists recommend it. What scientists, Joe? I need to know, because everyone I just mentioned has an agenda. Are these the people that you’re going to listen to?
Frank Curzio: That’s a good question, because what happens if he does listen to those scientists that I just mentioned? Imagine shutting down the entire U.S. economy again when looking at the current data because you’re listening to these scientists that have an agenda. Imagine what would happen to our country, giving the middle finger to every working person in America, telling them to stay home and keep your business closed because of a virus that’s less lethal than the flu in people who are under 60 years old with no underlying conditions. 60, 60 and older. That’s the key demographic, that if you’re in, if you’re 60 or older, you need to be very concerned about contracting the coronavirus, especially if you have an underlying condition. We know that. That’s a fact.
Frank Curzio: At that 60, based at… This is an age where the death rate of the infected starts to move up considerably. Then it moves even higher past 65, and much, much, much higher past 70 years old if you get the coronavirus, and especially if you have underlying conditions if you’re over 70. Now where am I going with this? Why am I saying that with 70? Hear me out guys, this is important. If you are 70 or older, don’t you think you will have a much different viewpoint on the coronavirus compared to someone who is 45? There’s leading doctors, they’re under 50 years old, in charge of major hospitals, and I can tell you from speaking with close to a dozen around this age, zero of them, zero support lockdowns and believe kids should go back to school because they’re looking at the data. They don’t have an agenda. They’re not on TV.
Frank Curzio: It’s just natural. If you are over 70, you should be scared of catching the coronavirus, and again, I just talked about the data here that shows the risk of fatality from the coronavirus moves up considerably, surges when you’re over 70. Yet, yet, look at the people who are or will be in charge of making decisions for the entire population of Americans about the coronavirus. Let’s take Trump, 74 years old. Biden is 77. Dr. Fauci is 79. Pelosi’s 80 years old. Schumer is going to be 70 next month. Mitch McConnell, 78. Guys, democrats and republicans are named here. Bernie Sanders, 79. Then we don’t have to worry about listening to him anymore.
Frank Curzio: Think about those people making the decisions. Are these the people we really want to tell the 328 million people living in America of how they should live with the coronavirus, or how about the 274 million people of those 328 who are under 65 years old. You talk about these are kids going to school, the working class, people who own their own business. 274 million people who are not in that danger zone. Do we really want these people who are all in the danger zone, who, again, I would think differently if I’m 75 too. I would be scared shit… telling everybody you go to worry. I mean of course you’re going to be biased. This is a small part of the population, of the overall population.
Frank Curzio: I mean excuse my language, it’s fucking insane to be listening to these people who are over 70 telling you that you have to worry about the coronavirus and how scary it is when they’re right for their demographic, but for the majority of Americans they’re dead wrong, based on the statistics. It’s like putting someone who just survived a plane crash in charge of airline security at a major airport. I mean everybody would be boarding the plane with parachutes on. It’s insane.
Frank Curzio: Seriously, these are people we want, or these are people that I want to tell me, every parent out there that are kids under 15 years must stay home from school even though the fatality rate of these kids infected with coronavirus is .04%? .04%. If you get it, that’s the chance that you… .04%? The rate of someone dying from a car crash is .9%. Look it up. .9%, not .09%, .9%. Should every American start driving cars right now? It wouldn’t be a bad thing for AOC. I mean no more planes, boats or cars, that’s pretty cool. Some of my subscribers in Hawaii, Alaska, overseas, I guess we’ll never meet in person if that Green Deal gets passed. Interesting.
Frank Curzio: The point of this, and I’m hoping I’m driving this home and I’m not boring you to death guys. Listen, the biggest risk to our economy right now, higher interest rates, yeah, that’s a no-brainer, but the misinformation about the coronavirus is just scaring so many people, and that results in sentiment where people are scared to go out. For example, my friends in New York think I’m crazy for sending my kids back to school since the city remains closed. Again, I just got it now, just got it. I got my watch on, I get updates, that Cuomo is opening up restaurants, indoor dining, 25% after six months, but a lot of my friends in New York think I’m crazy. Why? Because de Blasio and Cuomo get on TV twice a day saying the world’s going to end if you open your business.
Frank Curzio: They’re being conditioned to be scared. It’s not hard to do. It depends on what news stations you’re watching and what newspapers you’re reading. If you’re in New York City, you’re nerved, but in Florida, Georgia, everything has been open since May, early May. Businesses are doing well. We saw a quick spike in infected rates over reopen. Again, every media channel let us know that. “Look at the spikes.” They didn’t want to talk about the death rates, hospitalization rates stayed low and continued to decline sharply as a percentage each passing week while businesses are opened here and things are good.
Frank Curzio: That’s great for Florida and Georgia but it sucks for other cities. Look at L.A. where the mayor said, “We’re going to turn off your electricity and water for anyone hosting a party or social gathering.” If you’re having your daughter’s 10 year old birthday party where you invite over 10 people to the party at your house and you’re taking their temperature before they come into your house, no electricity or water. You’re cut off. You’re completely cut off. “We’re going to cut off your electricity and water.” To be honest, maybe you should have threatened them with something else since you’re already shutting off the electricity. That makes sense.
Frank Curzio: Man, I mean you’re better off living in North Korea. You got more freedoms there. All you have to do is don’t say anything bad. Whatever his name is, don’t say anything bad about government and you’re fine. You’re going to be cool there. Go to North Korea. Again, I have nothing against California. I love it. It’s a beautiful place. I have lots of friends there, really cool people. I just, I have no idea what’s going on. When I see it, I’m like, “Whoa. Really, you’re going to shut off my electricity and water if I have a couple people over my house, especially if everyone’s under 30?” Man. Pretty crazy times, but hopefully we’re going to stop the bullshit, start putting Americans first again and America first.
Frank Curzio: Especially Americans, or the people who actually voted these politicians into office, right? You’re supposed to give a shit about them. Because we continue spreading this fear, continue to scare the hell out of people and decide to lock things down again, look out. Look out. Game changer. Our economy will crash. We’ll retest lows. Not just retest those March lows, we’ll blow right through them, and we’ll probably do it a day or two after that announcement. I mean you’ll see a massive selloff. See people leaving all major cities, see more unrest, more riots, more police retiring. I mean America’s going to be a really scary place if we lock down again.
Frank Curzio: For anyone thinking differently, no matter what side you’re on, you’re not a realist. You’re really not a realist. People are dying to get out. They’re being told you have to stay in your house for something that we’re getting the stats that actually is not that bad for the majority of people, for the majority of people living in the United States. We know who we need to protect. Man, America will be a really, really scary place if that happens.
Frank Curzio: When you say you’re looking at the science, it depends whose science you’re listening to, and I hope we’re listening to the people who don’t have an agenda because those are the people that are looking at these stats and opening up, and ever since you’re looking around every single state that’s opened up, look at their economies. They’re doing fine. Look at basketball, look at the live sports. Not seeing tons of people there, you’re not seeing it spread as fast. Name an athlete that’s died from COVID, that’s currently playing, that’s in good shape. I don’t know any, and I follow sports like crazy, my whole life. Look at the facts, and use your common sense because that’s what really matters.
Frank Curzio: Now, talk more about the current election coming up and how it will impact your portfolio is Daniel Creech, who’s a senior analyst at Curzio Research. Going to be a big part of Wall Street Unplugged, as we go to our video format, and audio, don’t worry. Wall Street Unplugged still going to be broadcasting audio uploaded to iTunes and our website, but it’s also going to be at Curzio Research YouTube page, and it’s cool because we have our studio set up. He’s in studio now. It’s going to be awesome. Daniel’s going to share some of his favorite ideas and sectors that he likes. He loves giving away names. Really cool conversation. Lots of fun.
Frank Curzio: Then my educational segment, I’m going to explain why the recent downturn, especially in technology, should have made you a lot of money if you followed this key strategy I’ve been pounding in your heads over the past six months. I’m not patting myself on the back here. I will get things wrong from time to time, but this strategy is essential to every one of your portfolios, and if you’re not using it, you continue to get hurt when the markets have these quick and violent pullbacks, which we’re going to continue to see. Lots of volatility. So a great educational segment coming up, but first bring in my partner in crime, probably the one person that knows me better than anyone, since he works side by side with me every single day, and that’s Daniel Creech.
Frank Curzio: Daniel Creech, how’s it going bud?
Daniel Creech: Hey, wonderful Frank. Thanks. Great to be back.
Frank Curzio: I want to start out by talking about the election, which we all know, Biden’s leading in the polls, and we all know that Biden or Trump, whoever wins is going to have significant consequences on everyone’s portfolio, at least the way you allocate your portfolio, since there’s going to be clear winners and losers. I want to start off, because I know you have strong opinions about this, I want to start off with a Biden win. What does the U.S. look like if Biden wins and the Democrats take the Senate?
Daniel Creech: Ooh, well that’s serious because as it stands right now, if the Republicans keep the Senate and the House keeps Democratic and you get a Republican president, that’s one thing. Under your scenario, you’d have a replay of basically the Obama Administration. What I mean by that, and hold all the hate mail here real quick, is that what you have to give Democrats credit for is that they band together a lot better than Republicans do on average. You never hear about never Pelosis or never Bidens or anything like you do the never Trumpers.
Daniel Creech: If they win everything, just like with the healthcare bill that Obama had, I believe, did that go through on was it Christmas Eve? It was in December, and they just ran through healthcare, boom, boom, boom, House, Senate, signed, and that’s how quickly a major piece of legislation can take over, and you would see that… Well I don’t know where exactly you’d see it first, but you definitely have more takeover and more meddling with healthcare, and then the easiest situation on the chopping block would be energy.
Daniel Creech: You’ve had both the candidate and vice president, Harris, talk about they were against fracking. They’re going to eliminate or phase it out. Now they’ve kind of walked that back just recently in Pennsylvania. As you see, and as will happen, everybody will kind of cling towards the middle come election, which what, 50-ish days now?
Frank Curzio: It’s interesting because, we’ll talk about what if Trump wins, but what’s dangerous here, and even Trump I think did the same thing, where he was for offshore drilling and fracking and drilling more, but yet off the west coast of Florida, he just signed into law that you can’t drill off the west coast of Florida, and Florida is a big battleground state. So that leads me to this question. I know that Democrats are saying lots of things because there’s a key portion of this vote, and it’s not just them, it’s also the Republicans. There’s a key portion of that vote, and remember, the left and the right, guys, you’re going to, no matter what, no matter what facts are present, you’re going to believe what you want to believe and you’ll never ever change your mind. I get it.
But it’s that middle ground that they’re trying to persuade. But yet, like you see with Biden, where he’ll flip flop on fracking. All of a sudden, he’s like, “I never said about fracking,” and then you have Trump that just kind of flip flopped on offshore. My question to you is are you worried because when I hear defund the police, when I hear just the things that are going on out there where someone could run up to an older person and punch them in the face or shout and there’s almost no consequence. Maybe not punch them in the face, but almost no consequences. These people are eating and you have protesters run up to them and shout right in their face and curse.
Frank Curzio: I understand that you don’t want to go against this crowd because you need those votes, but are you worried that we could see something pretty crazy, depending on even if it’s a Trump win or a Biden win. But yeah, I feel like they’re just saying everything right to get the right people, but I’m really worried if they’re really supporting things like defund the police because that’s just, again, there’s bad apples there and we’re dealing with them, but it’s very, very scary if we’re going to defund the police, and also talking about taking away their guns, peoples guns or people’s right to arms and stuff like that. It’s a pretty grave scenario.
Daniel Creech: Oh hell yeah. You ought to be scared is the short of it, and that’s terrible. But hey, think about that. Put yourself in that situation. Now this is easy for me because I don’t have children, so you can’t get me on the emotional side of “Oh what would you do and how would you handle this?” You’re sitting outside, those videos in I think it’s Rochester, New York, okay? You’re sitting outside. Let’s say you have your children and the protesters come up, start turning over tables, drinking out of your glass, yelling obscenities and all that. How you going to react?
Daniel Creech: Well if you’ve got kids, you’re probably just getting the hell out of there because you don’t want to harm anybody or you don’t want to put them in danger. If it’s you and a couple guys, you might just say, “Hey, what the hell are you guys doing? Why you disrupting this business? Why you disrupting us personally,” and all that, but yeah, it’s going to escalate no matter who wins. I’ll tell you, this is a personal issue here with me because as part of my job is I have to understand and go through the news, so I go through both sides.
Daniel Creech: Frank is lucky here. Little inside baseball, Frank doesn’t have to check CNN and MSNBC and Fox News like I do every single morning. It’s depressing, so thank goodness for alcohol and coffee. You go through these websites every day, and really the disheartening thing of what the media is conditioning the people to accept or not accept is this, and Zuckerberg just did it recently, was it yesterday or the day before it broke on Axio or Axios, however you say that. He’s basically telling everybody on Facebook, which is hundreds of millions of people, billions of people worldwide, not to… and you see this throughout different news medias across all boards, but they’re conditioning you to not expect, think about this, not expect an election night winner.
Daniel Creech: Now why else would you do that other than to create divisiveness and more separation in one against the other? There is clear… This is the first time election the Post Office has been referred to as the center of command or whatever for electoral votes. That’s ridiculous. The fact that you have different news medias, and then you have Facebook, the CEO of Facebook out there telling people, “Hey, it could take days, it could take weeks,” that is just starting… I mean that is lighting the biggest box of matches you could imagine, and it’s all done on purpose, which is aggravating, but it is what it is and that’s what you have to gear up for.
Frank Curzio: Okay, let’s switch gears here to a Trump win. Is it status quo? Is everything going to stay the same? Only because I truly thought that everything would be different when he won in terms of uncertainty, it would result in the markets coming down. I thought if Clinton won, it’d be kind of like the status quo, and I was wrong, and a lot of people were wrong, where things changed considerably, and I thought it would change for the worse having this outsider in. I’m not quick to say that if Trump wins, “Hey, everything is going to be okay.” I mean is it going to be maybe a COVID hangover when things are getting better, and we have a vaccine and all that nonsense, and you know the numbers are getting better. We just talked about that.
Frank Curzio: Do you think maybe a COVID hangover 21/22? Is it more tax cuts? What do you see there? And again, we’re trying to position the portfolios right. We know everybody has struggled pains on this, but let’s talk about our portfolios first. What happens with a Trump win?
Daniel Creech: Well I don’t think, and I’m not putting words in your mouth, it’s not everything is going to be all clear because as Trump puts his foot in his mouth, like everybody does, but I mean you talk about the guy having the most fun out of anybody in the world right now is Donald Trump. I mean he just loves the drama, he loves getting involved and mixing it up and he does it every day. So that guy is clearly the happiest guy on the earth, but he says stuff like he’s the king of debt. Remember when he was running in 2016, “Hey, I’m the king of debt,” and he could argue that.
Daniel Creech: Well what the congressional budget just put out, the deficit is $3 trillion. $3 trillion.
Frank Curzio: And Munch is like, “It doesn’t matter. I don’t care. We don’t worry about that now.”
Daniel Creech: Yeah, it doesn’t matter. Yeah. His spokes… who’s the White House spokesperson? Anyway, she’s great, but she was like, “Well, you know, Trump’s, the second term is really going to… we’re going to tackle debt hard.” Well you better because you’re racking it up like you can’t believe. A lot of that will be… COVID hangover is a good tagline because it could be kind of a rerun of what people anticipated in 2016, meaning the price of goods and infrastructure or the resources. Like gold sold off hard and it continued its bear market right after its initial spike. Well now you have the price of gold hanging above $1,900 for a while, hit $2,000 briefly.
Daniel Creech: With all the extra debt and easing by central bankers, I think it’ll be a continuing of what we’re seeing right now, and this brings us to the current market pullback, although the market’s back up today. You’re going to have more discrepancy between the quality and the bigger companies and the well run companies versus your overall averages. You can have a situation where a handful of stocks, like the FANGs have recently, can paint a really nice picture from 10,000 feet, but you dig down. What’d you say the other day, the average weighted S&P is flat to down a few percent?
Frank Curzio: Yeah, if you take the average, which is not…
Daniel Creech: Exactly.
Frank Curzio: … equally weighted. Yeah.
Daniel Creech: Basically anybody that has exposure to the markets has exposure to him. I mean if you own an ETF, you have basically the FANG. So as long as people are making money, it really doesn’t care, but no, Trump’s not out of the woods yet. You’re going to have a crazy balancing act between inflation and the haves and have nots is only going to magnify, which we can get into some really good businesses and different things like that that should withhold, but yeah, it’s not going to be easy sailing, that’s for sure.
Frank Curzio: I’m going to ask you a crazy question now. Is it really going to matter who wins in terms of the market because there always seems to be an adjustment period. Say we have Trump winning, okay, it’s going to be good for energy. Biden probably much better for alternative energy, big tech. There’s just different sectors that are going to benefit. We know that Biden’s running on increasing corporate taxes and corporate taxes, to be fair, the corporate taxes were higher before Trump came in and the markets were trading at all-time highs.
Daniel Creech: Yeah.
Frank Curzio: I mean should we be that worried. I think the scenario is either case, if the Democrats come in and win everything or say the Republicans come in, Trump wins and they happen to win the Senate, which is not really on the table right now, but just that any of them own all three branches, I mean. It’s for me and the fact when I heard some politicians talk about getting rid of the filibuster, which is the two-thirds required to vote for a lot of these things to get passed, which is important because you need people from the other side. This way you don’t have your total crazy agenda.
Frank Curzio: I mean if they have that agenda, they can pass anything. The whole Green Deal could pass. The whole entire Green Deal. I mean that means that my friends in Alaska and Hawaii, I’ll never see personally, because no cars, no boats, no trains, no nothing. Yeah, it’s crazy. It’s like, what is it, $30 trillion or something?
Daniel Creech: Oh man.
Frank Curzio: Again, it’s made by a kid that doesn’t really understand, but you don’t know what could happen. To me that’s the worst case scenario, but I think people looking at this, Daniel, as a Biden win, yet everything else is split, would it be that bad for stocks? Do we really have to worry?
Daniel Creech: I don’t know that it would be that bad for stocks initially because like you said, the stock market did a lot better than Main Street in the Obama Administration, I would argue, and you could also argue that exact same thing right now. Main Street isn’t doing as well as the stock market is near all-time highs, especially right after this coronavirus and the shutdowns, and that’s a big point because… Now this is a stat from back in May, but Reuters had it and so did CNBC ran it, and Frank and I were talking about this the other day, which just kind of helps put things in perspective when you think, “Well how can this discrepancy between stocks, Wall Street and Main Street work?”
Daniel Creech: They ran articles when the pandemic hit and the coronavirus lockdowns were in force, roughly 40% of the people making around $40,000 either lost or were furloughed off their jobs. That’s a huge percentage obviously, 40%. Now I think it was like 19%, if you were from $40k to $100k, but those making over $100,000, they lost or replaced jobs or saw adjustment in hours of 13%. Now the emotional argument, just like death, it’s not that one death is okay, not that anybody losing their job is good, but when you think about well how in the world can this happen when certain companies are doing great and others are not, and that’s that is the one that says it.
Daniel Creech: It’s, hey, those making the lower income were a lot more affected by employment. Those that still have discretionary income, a lot of the people with $100,000 still got stimulus checks, especially if you had children or the one-offs that…
Frank Curzio: Even up to $200 I think. It phased out after $150 a little bit, but yeah.
Daniel Creech: Yeah, I don’t… Yeah, exactly, it phased out, but still you give people that were little affected, and again, 13% is too much, that sucks, but we’re talking big picture here. They still have income coming in, plus they get this little boost and that’s why that discrepancy is going to continue and it’s going to magnify. The biggest difference and risk I see, because money is emotional, with a Biden landslide or win is just the psychological and how he sells it. Now notice today, what’d he do? He came out and he said, “If…” I’m paraphrasing here because it just broke right before I stepped in here, but basically I think the Washington Post was reporting, “Hey, Biden says he’s going to slap a 10% tariff or surcharge on companies that move jobs out of the U.S. and then turn around and sell products back to them.”
Daniel Creech: Well hell, who does that sound like? That’s not… that doesn’t sound like… I mean you go ask your random guy on the street or woman, they’re probably going to think that’s a Trump comment and not a Biden. If he sells it that way, then I think it’s fine, but emotionally and psychologically, if you go back to this globalism, and everybody, this one world type deal, I think that would be the biggest risk, but that would take some time to unfold.
Frank Curzio: Now one of the things I know, which you guys know I had mentioned to you, that I bought my first handgun around two months ago. If you’re defunding the police, the things that I’m seeing out there is pretty crazy. I mean it’s not too bad in Florida because you’re allowed to carry a gun here. Never thought in New York ever you’re not allowed to unless you have special permits or whatever, but having that gun, I’m hoping that I never have to use it, but I will say this. When I started shooting it at the range thanks to a subscriber who sells guns that helped me out, we do training and everything, very, very careful.
Frank Curzio: But we went to a range in Florida and started shooting, and I brought Daniel with me, and Daniel started lighting it up. Lighting it up. He was hitting bullseyes. I’m not kidding. I mentioned it a couple weeks ago when we first went. When the guy turned around, the guy who works there is like, “Man, that guy can shoot,” and I had no idea. Why don’t you give us a little background on that? How’d you learn to shoot, how important that is to you, because I had no clue until you shoot… and I was like, “Whoa.” I mean I’m all over the place. I hit a couple bullseyes, but I’m still all over the place, still learning how to shoot.
Frank Curzio: I mean I’m going to hit the person if I shoot him, but I like to hit pretty much in a nice tight circle, but Dan just grabbed the gun and was just killing it, man. It was awesome.
Daniel Creech: Well, the funny thing there is… Feel sorry for us, because this was an amazing day. Like you said, the subscriber was a great guy, real knowledgeable. That was a lot of fun, but after that, we had a golf lesson. So here we walk into this gun store and everybody’s serious. You walk in and it’s not like walking into a coffee shop. I mean they’re normal people and it’s cool, but it’s just hilarious. Everybody’s more serious, as they should be and all that. We walk in looking like a bunch of golfers getting ready to go play golf, and we’re like, “Oh yeah, yeah, you got some handguns, you got some ammo?” Yeah. “Oh this is cool. Check this target out. Let’s act like…” Not that we’re being silly or goofing around, but we sure as hell don’t look like guys that know what they’re doing when it comes to handguns.
Daniel Creech: Yeah, that’s why you don’t judge a book by its cover. It was a lot of fun. Long story short, I grew up around guns. My brother is a big hunter, fishermen. I mean when people meet my brother and I, it’s hard to tell that we’re related at times just because our interests and things are so different, but I’ve always been around him. I did a lot of… I didn’t do a ton of shooting growing up, but we different training courses and fun stuff. Yeah, I mean it’s just a blast. Then moving to Montana, it’s secondary.
Daniel Creech: It’s so funny how you talk about New York because I just can’t imagine not going over to my grandparents and seeing a ton of guns all the time. Be like, “Oh wow, that wasn’t your normal, huh? That must be nice.”
Frank Curzio: It is funny. It’s just different cultures, right?
Daniel Creech: Absolutely.
Frank Curzio: I mean now I live in the South, it’s extremely religious down here. Extremely over the top religious. Usually when you move into a new neighborhood, you’ll see your neighbors bake you some muffins or something and be like, “Hey, welcome to the neighborhood.” Over here, everyone’s like giving me their church card. “Hey, you got to go to my church. Nice to meet you sir. Here’s the church I go to.” It’s just the different things and the culture and even in the Midwest, guns and stuff like that for me, a lot of that stuff was new. It just surprised the hell out of me, but I’m glad I have you here just in case I give a bad stock pick to somebody.
Daniel Creech: Yeah.
Frank Curzio: At least you’ll hit them if they come and charge me. Joke. That was a joke everyone. In today’s world, they’re going to replay that and say, “Frank’s going to shoot at subscribers.” I’m not going to shoot anybody. Hopefully I really never have to use it, but I like the safety of having it. I do. Let’s keep moving on.
Daniel Creech: Actually real quick, let’s take that a step further. Frank’s not the only one, as everybody should in certain opinions, but Smith and Wesson, look at their stock. It’s actually pulling back recently. They just spun out American Outdoor Brands, so Frank, I can’t remember the guest you had on, but he specialized in spinoffs. It’s been a while now, but it was a really interesting interview on just the big focus as investors and think about this, when somebody spins somebody else off, now what do you do? You get to quit being either the next two or the stepchild, so to speak, and now you can focus on your own thing. You have your own assets, you have your own cashflow. You can manage your own P&L, profit and loss.
Daniel Creech: That’s a big deal. You can kind of step outside the shadows. Everything is emotional. Keep an eye on Smith and Wesson and even American Outdoor Brands as it performs as a standalone. I think that split recently happened. Smith and Wesson reported quarterly results a week or so ago. I mean as you can imagine, gun sales are through the roof year over year. FBI checks are up 30% year over year. That’s the way that everything kind of ties back into capitalism and the markets and what you ought to pay attention to earn wherever you can.
Frank Curzio: Yeah, no, it’s definitely true. It’s going to be interesting to see if that trend continues depending on who gets elected. I mean they’re both basically claiming that there’s going to be riots and it’s going to be crazy depending on who wins. Both sides are saying it. It’s nobody’s fault but it’s both of their fault, but whoever it is and whatever you think, whatever side you’re on, whatever, but either way I think the way they’re pitching it, if you watch TV, you should buy a gun because whoever wins is going to result in riots everywhere, right? It’s crazy.
Daniel Creech: Yeah.
Frank Curzio: Really it’s when people are conditioned that way, depending on what channel you’re watching, it is pretty scary out there. I want to move on here because you’re a person that likes boots on the ground. Your personality’s great where Daniel will sit down in a bar and next thing you know, you know everyone in the whole entire place. Easy to engage, which is a great, great quality in our business, which I say, boots on the ground, you want to talk to everyone. It just gives you a perspective, and that’s why so many of you email in, firstname.lastname@example.org with things happening, housing markets, economy. Love that stuff.
Frank Curzio: You’re someone who’s traveled a few times during COVID. Bars opened up and I’m pretty sure you like bars a little bit, like having a drink, and again, I’m jealous by saying that because the single days are a lot more fun. Talk about-
Daniel Creech: Well not during COVID.
Frank Curzio: Yeah, not during COVID, but talk about what you’re hearing out there, what you’re seeing out there, have you learned everything, because you do talk to a lot of business owners, a lot of people and you have an amazing network.
Daniel Creech: Yeah. You know what’s interesting is that before lockdowns happened and I was in Arizona still when everything initially shut down, and I just couldn’t believe… It was crazy, like a movie. You jump on the 101 or the 202 in Arizona, which are busy highways and connectors, and there’s nobody out there. I mean it’s just eerie. You see still shots of New York City or whatever, and it’s just crazy to think that, “Look at this, it’s dead.” The biggest thing around the cigar bar I go to and different bars I frequent to do boots-on-the-ground research, it’s amazing to hear everybody excited about seeing crowds again, and not being able to go to every restaurant and not have every table empty.
Daniel Creech: Again, from a psychological standpoint, it’s kind of nice. Labor Day, did you try to go to the beach? You went up near the park, right, the skate park?
Frank Curzio: The skate park, oh it was jammed.
Daniel Creech: Yeah.
Frank Curzio: Yeah, there’s tons of people.
Daniel Creech: Yeah, I was going to ask you. There’s no way you found a parking spot.
Frank Curzio: No, it was jammed.
Daniel Creech: It was unbelievable.
Frank Curzio: Yep.
Daniel Creech: The beaches are crowded, and again, I’m not saying be reckless. I’m not getting all that. It was just good to see people out and about and back to a little bit of normality there. The other thing is that’s sticking out to me is that people are going to stick to quality. So the boots on your ground research in the bars, a lot of the bartenders that wear makeup go to Ulta and they love Ulta brands, and I believe the CEO, Mary, is on Kramer’s show tonight, so they might get a little pop on that. It’s the whole do-it-yourself thing. So two drastically different ones. There’s an Auto Zone that just opened up here on the island, and if you’re anything like me and you’re not a hands-on Mr. Fix It type of guy, Auto Zone is one of the best companies and places you can go to when you need help.
Daniel Creech: I’ve been into them. I’ve been into Auto Zones through Texas when I had trouble traveling, Florida, Arizona. I mean they are the nicest guys all over, and their stock price reflects it. That’s a well-run company, but I go in there, I ask them how business is doing, even though I have a newer truck now, so I shouldn’t have to worry about breaking down or anything, but still, you go in there, you ask them how things are going and just what are people doing? People aren’t traveling very much. I know a bunch of guys that frequent flyer and they’re still not. It’s limited, but I think quality’s going to stick out and it’s good to see some things opening and people excited to see crowds again.
Frank Curzio: That’s good. New truck. Must get paid pretty good right? I hear your boss is pretty cool.
Daniel Creech: I took on the U.S. debt plan.
Frank Curzio: Ah, that’s great stuff. Okay, so let’s get more in detail. You gave us some names there, but we just saw a 10% pullback in the market. We’re bouncing back a little bit today. If you would have looked at the markets or watched financial news channels the last three days, it looks like it’s the end of the world, correct. They throw around the word correction like crazy. You got to be careful. But we’re seeing a bounce-back. We still have a lot of conditions in the market that remain low interest rates. We have a fiscal policy where we’re going to see trillions more coming into this market as that separation between Main Street and Wall Street widen.
Frank Curzio: A lot of positives out there especially with the data on COVID getting better, looking at the statistics getting better and better and you’re seeing more things open up, right? I mean that’s a fact. What do you like here on this pullback? Again, we always love pullbacks if you’re prepared, right, it allows you to buy stuff cheaper. What are you looking at? Maybe picking up some of these technology names that pullback? Maybe other things? What has your interest in the market?
Daniel Creech: Yeah, I’ll give you a couple high fliers, then I’ll give you some boring businesses as well. The high flyer, which is a nemesis of ours is Overstock. Long story short, we got burnt on Overstock. They had a great plan at the time, this is all pre-COVID, to eliminate the retail business, the eCommerce business to compete with the likes of Amazon, which they weren’t making money, not doing well at and focus on their blockchain, Medici holding company. Essentially if the plan would have went through, they would have gotten a bunch of money to sell off the retail business, and then you just have a show me moment, like, “Okay, we got a good management team, we got a good product, we got a bunch of cash. Now we’re just going to execute and make this thing work.”
Daniel Creech: Well as luck would have it, better to be lucky than good because what happened, Frank? They didn’t land a deal, they didn’t sell the eCommerce, and then everybody got locked down. So Overstock sold off with the rest of the market in March, went down to sub five and then it went to basically $120. So on a momentum thing… Then you also have the Bitcoin play there. Forget that tZERO is not Bitcoin or anything related to it, it does use blockchain, I get that, but if you look at Overstock’s price action in the stock, OSTK, it kind of fluctuates along with Bitcoin.
Daniel Creech: Bitcoin hit $12,000, pulled back sharply to $9,000 and change. I don’t think that’s a coincidence. If you’ve got some momentum and you’re okay, you can look at something crazy like Overstock. Yeti is another momentum play I like, Y-E-T-I, the affordable handheld coolers.
Frank Curzio: Is that what they call them, the affordable?
Daniel Creech: No, I’m having fun with you.
Frank Curzio: I was going to say.
Daniel Creech: I can’t believe how many they sell. Those things are incredible.
Frank Curzio: Oh man.
Daniel Creech: They’re great quality.
Frank Curzio: Yeah. People will pay up for quality.
Daniel Creech: Do you have any Yetis? Do you have a Yeti?
Frank Curzio: I think my wife does, but people pay up for quality. They do. They love things that, yeah.
Daniel Creech: It’s amazing. I watched that stock just keep going up. Interesting red flag: Insiders are selling. Now they still have a ton of stock as insiders. You can’t take them… you can’t blame them for taking some cash off the table. That is something, but Yeti and Overstock are obviously momentum names. Real quick on the boring side. When I was on a couple months ago, I talked about the insurance sector, the property/casualty specifically. I’m talking of Traveler’s, Chubb, W.R. Berkeley, Cincinnati Financial.
Frank Curzio: Progressive is the one, which one do…
Daniel Creech: Progressive, yeah, the auto insurance is the one I give.
Frank Curzio: It’s up nice, as you mentioned last time.
Daniel Creech: Yeah, I think it’s up 14%, 15% in the last couple months. Again, that’s an easy one with… it didn’t sell off with the overall market, but it went right back to at the time highs. I think it’s cracked through the 90th share, which is good, but the interesting thing, I’ve been doing a lot of reading on this, and what I mentioned a couple months ago was business interruption is a big deal right now because you have call it a thousand lawsuits across the country. If you’re a business and you got shut down, you look through your policy, you need all the help you can get. You go and say, “Hey, I want this business interruption. My business was interrupted. I’ve been shut down for two months.”
Daniel Creech: Well the insurance company comes back and says, “Yeah, but you got to have physical damage, so we’re not on the hook for this.” I know I might take a lot of flack for this, I am biased towards insurance companies, but if you’re in a situation where the government forces you to shut down, and that’s what happened, they forced you to shut down, I’m not a big government guy, but how do you put somebody else on the hook for that? If you’re the government and you say, “Hey, Frank, Frank Curzio is shut down, Frank Curzio Capital, you’re shut down, can’t work, so Daniel’s insurance company’s on the hook for that business interruption.”
Daniel Creech: Now of course insurance companies are going to fight this like crazy, and it’s very difficult to win in lawsuits against those guys because they have a whole team of lawyers, but out of Missouri last month it broke where a judge allowed a case to proceed, and they could claim the coronavirus was a physically attached, and therefore is causing physical damage. I think that’s a big stretch. So any sell-off on the insurance companies related to that kind of headline risk I think is a buying opportunity because, A, you can’t price risk that you can’t measure like a virus, and if you change contract law and all of a sudden put insurance companies on the hook for this, you’re going to change… I mean the ramifications of that on every contract going forward would bring everything to a standstill.
Daniel Creech: The odds of that happening are fringe and barely none.
Frank Curzio: What’s your favorite name right now in the space?
Daniel Creech: My favorite? I like Cincinnati Financial and Chubb right off the top. AXIS Capital, AXS has had a lot… Some director is buying stock hand over fist in that company.
Frank Curzio: I saw that.
Daniel Creech: I mean, now granted, you always got to take that with a grain of salt because like you point out, I mean if you’re worth $10 million and you put $7 of it into a stock, that’s a big deal. If you’re worth $10 billion and you put $100 million, that’s a little different. So the director’s got to have a lot of money, but that being said, he has made some serious purchases of that AXS lately. I mean you got to give that guy credit. So I would look into that. Real quick, the reason I like Chubb and Cincinnati Financial is because you read through these transcripts on their earnings call, and it’s just a straightforward management team. They’re all about risk and reward, and they try to be there for people. I know it’s big bad insurance gets lumped in with big oil and all that kind of stuff at times, but they’re just really well run companies that when you get sell-offs like this, I think you want to hold for the long-term even though long-term isn’t sexy right now.
Frank Curzio: All right, cool. Lots of new ideas there. I want to tell you guys something. We’re doing this interview, and Daniel’s actually sitting across from me and we have our studio. It’s the first time I’ve done face to face interview, which we plan to do if people are going to come here, and I’ll pay for their costs. We’re going to have some high profile guests coming on, and a lot of people who have books, love to get that attention, and since you guys like telling everybody about my podcast, that audience is getting bigger and bigger, that I want to thank you for. I want to get some really great quality guests out there and doing these face to face interviews, but having this studio, we’re going to have Daniel ongoing forward, and we’re going to be videotaping it and putting segments of this on YouTube, this way you can see it.
Frank Curzio: Also, we’ll have pictures up and things like that. The studio’s ready to go, just getting a couple backdrops, but it’s really cool. Dan’s on his own microphone. He’s got his own station now, so we’re going to be talking about stocks and the news. I definitely want to hear from you, email@example.com. And as for Daniel, remember, you’re going to have to agree with everything I say. You know that, right?
Daniel Creech: Yeah. I’m on a short-term contract now. I don’t know what that means, but that’s okay.
Frank Curzio: Yeah, it’s so funny too because Daniel and I actually have strong opinions about things, and we have the back and forths, but we do it like you’re supposed to do it instead of like I hate you and you hate me, like we see right now with Democrats and Republicans. For me, and just to let you know Daniel, I think any boss would agree, anyone who has their own company, you could always hire anyone to kiss your ass, it’s not difficult. I want you to give me your honest opinions. I want you to lay it out there, and we’re going to have disagreements, but I’ve seen podcasts, and I know you have too Daniel, where you have a person who I consider it’s a sidekick, and whatever that person says.
Frank Curzio: I mean they could have a green shirt on and say it’s black. “Yep, that black shirt is the nicest shirt I ever…” I’m like, ugh, it’s so terrible. You don’t see that with the ESPN podcasts a lot. Some pod, but there are in our industry that do it and if they have two people doing it, it’s kind of crazy where it’s just like that one person agreed with everything. You’re not going to get that here where we have a wide range of opinions, so many different things. It’s going to be a lot of fun, but I just want to let you know that the studio’s up and running, lights here, we’re going to be doing videos. It’s going to be really, really cool and just any ideas that you guys, suggestions, guests, keep them coming at firstname.lastname@example.org and Daniel, thank you so much for coming on man. You’re going to be on going forward a lot more. It’s going to be fun. People are going to see your face, so get ready man.
Frank Curzio: Get ready for the negative emails. You’re going to have to give your… Oh, I love it. I can’t wait until you get those.
Daniel Creech: I know, he’s passed on. Send a few negative ones because Frank’s forwarded a couple positive ones, and I know he’s hiding the truth, so we can take it. Let’s see how this goes.
Frank Curzio: Yeah, I told him, the more hate mail, that means that you’re making progress. That’s a good thing. All right, Dan, thanks so much for coming on, man. I’ll talk to you soon.
Frank Curzio: All right, great stuff from Creech, the perfect voice of radio. Face, I’m not so sure. Man, we’re going to be making fun of each other all the time. Creech actually looks great, he lost a lot of weight. We do good here. We both encourage each other and eat good, eat well, and working out a lot, so it’s really awesome. It’s nice to have him in the office, and my team coming down in two weeks. Used to seeing them every month, month and a half. I haven’t seen them in a long time due to COVID, so it’s going to be really cool to get the team in-house and have fun.
Frank Curzio: Yeah, Creech, we have the studio set up. Let me know what you thought. That’s what we’re going to be talking about, a lot of different market things. We might even do a podcast even more than once a week for Wall Street Unplugged. If you’re a subscriber, I do a special podcast just for my subscribers only. It’s not on iTunes. That’s the Frankly Speaking. I removed it off the free site because I got people who never paid for my service asking me 5,000 questions like I was their personal portfolio manager and that wasn’t going to happen. I wanted to give more attention to the people that a part of our brand, a part of our family, and they love it.
Frank Curzio: So I’ve taken their questions every Friday, I send them the link out, but Wall Street Unplugged, we’ll try to do that a little bit more. There’s a lot to talk about, and it’s really cool with this format having someone in the office. A lot different than just interviewing someone across the country just using Skype. This is really cool, face-to-face. A lot of fun. Let me know what you thought though, email@example.com, and again, be honest. Everything that we do here is… A lot of our best ideas have come from you because you’ve been critical sometimes of some of the things that we do or things that we want to change.
Frank Curzio: We look at that, I mean our customer service, to me, customer service is always one of the biggest and most important departments because, one, if anything goes wrong, people are going to let you know right there, right then, but you can see what people don’t like and what people like. You build a company, you build a brand by… Can’t do what everybody wants, but the majority, we started newsletters based on your advice and everything, so I definitely want to hear you, firstname.lastname@example.org. Looking forward to doing this with Creech, and this format, which is going to be really, really cool.
Frank Curzio: Now let’s get to my educational segment. So we had the markets crashed, right? Fell 10%, notably tech stocks which fell 10% in three days, and we’re seeing a little bit of rebound, but I know many of you own some of these stocks and they’re down. I just mentioned at the beginning of this podcast, in the opening, a lot of them are down 30% plus from their highs. Now over the past 18 months, I’ve been telling you to use a strategy that helps you hedge your portfolio, hedge your portfolio to where your losses in your portfolio will be minimized if the stock market falls, like it did, and to where these hedges could actually result in you making an absolute fortune. What strategy am I talking about? Buying puts, specifically long dated puts. It’s not difficult to do. Don’t get scared of an option strategy and say, “I’m never going to try.” It’s very, very simple.
Frank Curzio: Buying puts is an option strategy. Gives you the right to sell a stock at a certain price at a certain time. You’re basically selling it first and buying it back later. It’s a way to almost short stocks, but you’re betting against stocks where your risk is limited to the amount you put into that trade. That’s like shorting a stock where your risk is unlimited. A stock like Tesla, Zoom, Overstock can pop hundreds of percent in months, probably resulting in your wife kicking you out of the house, that house that she now has to sell and you maybe buying a refrigerator box to live in because you’re completely broke. That’s how dangerous it is.
Frank Curzio: Now when you’re looking at puts, I want to talk about long data puts, which go out for 12 months. The longer the time frame, the more expensive they are. It’s options. I explain how you should be using this strategy to hedge your portfolio. What does that mean? Well most of you, mom and pop investors, common investors, individual investors are long stocks. Most are long stocks. Long stocks only. Say we keep 90% of your portfolio long, say if you have our Curzio Research Advisory newsletter, and you buy all the positions, and just, I’m going to use this number, somebody’s got $1,000, somebody have $10,000, let’s say if it’s a $100,000 portfolio, you have $90,000 in these positions that you’re long. Just say that’s the only thing you own, you don’t own a 401(k), you got $100,000. Just say it. Make the numbers easy.
Frank Curzio: Now you take 10% of it and you buy long data puts on sectors and S&P 500, even individual stocks where a 25% decline, which was saw in a lot of companies in a three day span, could result in 10X profits in months on these positions. Right? You’re looking at a three day crash here, three day pullback, and it’s a crash. Can’t say the NASDAQ crashed, it’s corrected, but these stocks have crashed. A lot of them down 25% plus, 30% plus. A lot of names. What happens when you see a decline like that? Well your long portfolio’s going to get hit, right? It’s going to be down since the markets are pulling back, but you’re going to start generating lots of money from your put positions, which if you hit a good one, like you just did, when the stock falls 50% to 60%, that one position could be worth the entire 90% of your long portfolio. That’s called hedging.
Frank Curzio: Now say if you start a buying puts in April. What happened? Remember, these are one year puts. The market surged, right? March, April, May, just kept going higher and higher and higher, and most of these out of the money for now. Let’s say you lose all of your money on every one of these positions, right, every one of these positions. So 10% of your portfolio you use. You say, “Well Frank, that’s a lot.” That’s every single position. Say if you bought seven or eight different positions, different stock sectors that you think are going to go down and you lost your money in all of them. Well since April, the market, the S&P 500 surged over 50%. That includes this week’s sell-off.
Frank Curzio: Chances are your long portfolio is up huge easily, making up the difference and then some. This is how you hedge your portfolio. With the strategy, with the buying puts you only lose the amount of money you put into the trade, so your risk is limited. Of course, it’s not likely you’re going to lose 100% of your money on every put you buy, but I wanted to throw in a worst case scenario to help you understand the power of hedging. It’s not some bullshit strategy that… I would never use the Curzio Research to help our subscribers. In fact, I created Moneyflow Trader, our newsletter, whose main focus is buying puts and product is run by Genia Turanova, amazing analyst and so much positive. Send me something negative on Genia already.
Frank Curzio: Just a hard worker. Even when she admits her mistakes, tells you what… just really proud. It’s really, really cool watching her. She’s an amazing analyst, but she also has long trades in that portfolio as well, which is a good thing considering the market surge this April. She bought some all options on gold and silver, and made some nice gains while a lot of her other positions were down because the market kept going higher and higher. This product I created for you is because I care about my subscribers, because I care about my investors because the markets don’t always go up and up and up. Over the long term, you can say they do, but sometimes you get names that get destroyed, and the professionals, the experts, this is how they invest.
Frank Curzio: They don’t put everything long and say, “Go, go, go, go.” Some of them do, but this is something that will help you become a better investor. I’m not selling a product here. Learn about buying puts. Strategy, again, most pros use, and the best part, it’s easy, it’s very, very easy to do. Don’t get intimidated. “Oh it’s options, buy puts.” You can do it through your E-Trade, Fidelity account. Moneyflow Trader with Genia, she tells you exactly how to place the trade, leaving almost no work for our subscribers. Just do the trade, put it in your E-Trade and you’re good. She explains everything and how to do it. But get familiar with this strategy because we’re in a market that when it comes down, I mean it comes down in days.
Frank Curzio: You have everyone out there nervous, selling. You’re going to go to a party, everyone’s going to talk about how much money they lost when you could be making a killing simply because you were smart and you hedged your portfolio because in this market it’s a perfect strategy since the credit crisis. The last 10 years, our pullbacks are quick and violent. There’s a lot of… Again, I’m not telling you… Want to go to my free sites, Twitter, @FrankCurzio, or Curzio Research YouTube page, and I put up a video, put a chart up there showing you the declines, those 10% declines. They all happen with 45 days. There’s like seven or eight of them I think over the past 10 years.
Frank Curzio: It’s going to continue to happen. It’s going to happen often, but you have those violent quick pullbacks. It’s not like a long drawn-out recession from 2000 to 2003, in the middle of there was an actual recession, but that period was terrible. The credit crisis took about 18 months for the market to finally hit its lows from its 2007 peak, those March ’19 lows, but different now. It’s a different market with an algorithm. People run to the exits immediately, scare the shit out of you. You have 10%, 12%, 15% pullbacks happen violently. They happen often. That’s why this strategy works. Remember, you have a year. You have a year.
Frank Curzio: If you’re wrong on every one of those positions, chances are your long portfolio is going to go higher, but say if you’re right on a couple and you’re really right on one or two of these things that Genia is recommending in the Moneyflow Trader. Man. You will make an absolute killing. It’s not often you’re seeing people out there, newsletters, whatever, logging 500% gains, 200% gains, 175% gains. These are some of the gains we’ve seen over the last six months. Huge, huge, huge gains, and you’re risking and you’re losing some of the other ones that you’re putting your money into when the market goes higher, but again, the rest of your portfolio should be doing fine, and when you use this as a hedging strategy, you don’t just want to purchase Moneyflow Trader and say, “Okay, this is the only thing I’m doing.” No.
Frank Curzio: It’s a hedge against everything else you own, and you could win both ways. If the market stays flat, and you’re betting against a certain sector of stock and this thing goes down tremendously, now your long portfolio is going to be okay and you’re going to make a lot of money. When it’s risk-reward, when you’re looking at risk-reward, this is such a fantastic strategy that I’m hoping most of you are going to look at. The Moneyflow Trader subscribers are getting so much good positive feedback. If you’re interested in learning more about that product, go to our website, curzioresearch.com. Again, you don’t have to buy it. It is an expensive product. It’s one of our high end products, but almost everyone that has subscribed since Genia’s been there has stayed onboard, is probably loving the product right now because she also had some big winners on the long side with gold and silver, and now you’re seeing a market that’s really, really crazy and it’s going to remain crazy.
Frank Curzio: We’re going to see these violent pullbacks, lots of liquidity in the market. It’s just a perfect product to hedge your portfolio and let you sleep at night. Again, Moneyflow Trader, interested, go to our curzioresearch.com website.
Frank Curzio: Okay, guys, that’s it for me. A little bit longer podcast than expected as our interview with Daniel was really cool. It’s nice having someone in the office. Just flows. Really, really awesome. Okay, I want to hear from you, any ideas, email@example.com. Thank you so much for listening. Really appreciate all support over the years, over the decades. And as always, I’ll see you guys in seven days. Take care.
Announcer: The information presented on Wall Street Unplugged is the opinion of its hosts and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility. Wall Street Unplugged, produced by the Choose Yourself Podcast Network, the leader in podcasts produced to help you choose yourself.
- Guest: Daniel Creech, Curzio Research analyst [36:55]
- Educational: The best strategy to protect your portfolio—and profit—in a volatile market [1:10:32]
Editor’s Note:Genia Turanova of Moneyflow Trader specializes in profiting from market instability. She’s posted 7 triple-digit trades this year—I’m talking gains as high as 508%—and she’s showing no signs of stopping…
Earlier today, Genia released her latest recommendation with triple-digit upside. Listen to Frank explain why her strategy is the best way to capitalize on today’s volatile market.