Brace yourself for a rant about the Federal Reserve. With the Fed constantly moving the goalposts… here’s what investors need to keep in mind during market volatility. [INTRO]
Greg Yenoli, managing partner and director of copywriting here at Curzio Research, says a massive shift is taking place in the advisory industry… He joins me to discuss the evolution of the newsletter business over the last 10 years. We trade stories and share the inside scoop on the industry.
Greg also explains how to transform an idea into a full-blown copy package… and shares an exciting scientific breakthrough that’s captured his attention. [30:20]
Then, Daniel and I break down the volatility in both the stock and crypto markets… and why you need to look beyond the headlines and price action.
And, with earnings season in full swing, we go over some recent results… and share what we’re paying attention to as the season unfolds. [01:01:31]
Wall Street Unplugged | 783
Ignore the fear-mongers… Buy every dip
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? It’s July 21st. 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. If you’re watching the financial media channels, I kind of feel bad for you. I mean, it’s my job to watch them to see what the sediment is out there, what they’re talking about, right? It’s a big deal for me because if you can prove the other side of it, you’ve got to make a lot of money, right? Because it’s trading based on sediment, whatever.
Frank Curzio: But for the average person to be watching this, holy cow. It’s got to be crazy for you guys. Just look at the last six trading days. We saw what, a 4 to 5% pullback in stocks, small caps fell even further, around 10%. Everyone on TV says run to the hills. Inflation is here. Get defensive. Sell growth. Sell the reopen stocks. Rotate into the stay-at-home stocks. They’re great now because Delta is spreading everywhere. Sell, sell, sell, here comes the crash.
Frank Curzio: And it’s just funny to hear that because it’s only a 4 to 5% pullback. Because what happens when Tuesday rolls around? Tuesday rolls around and the markets suddenly come back, come roaring back. Almost recouping all the losses from the previous four days. I mean, look at today. We have a strong open, I don’t know where we’re going to finish. It’s around noon. And now I’m watching TV, and it was like, wow, what a comeback. It’s time to buy growth again. Buy the reopen stocks, along with the cyclicals.
Frank Curzio: I mean, it’s like the Delta Virus, right? One day one for being a major issue, infecting the world again to, hey, we’re okay. It’s not that bad. One day. One day it took. Crazy times. These 24-hour media services, it’s crazy. I mean, they want to scare the shit out of you. That’s their job. This way, you’ve got to keep watching. Should I sell?
Frank Curzio: But for me, the way I look at it is, I like the recent moves. And these types of moves, where they’re all over the place, they tend to happen. If you notice, we didn’t see a 5% crunch for a very, very long time. But what you see in moves like this, where people sporadic and like, is it time? Is this when it’s going to happen? These moves that follow, tend to happen near the top of an extended bull market. Where there are big overreactions, especially about those risks, that everyone knows will eventually come to fruition, like inflation. I mean, if you look at the credit crisis, it was massive leverage. So, much leverage. You knew it’s going to come to a head. It was going to blow up. But it took a while.
Frank Curzio: People were saying that in 2006, in 2007. Finally, in 2008, we saw that. In late 2007, it started. It was the dot com bubble, and people in 1998 said valuation. It’s crazy the valuations where this thing is, and they were right. But the NASDAQ doubled the next year. It kept going up. And what did you see these head fakes? These big head fakes that you say 5, 10% correction. It was like, it’s here. And then boom, it took off again.
Frank Curzio: This is a playbook for what’s going on right now. We see the risks. We know what’s going to happen, but is it going to happen right now or later? And you see these quick corrections and people getting nervous. But you look at 2008, that happened before that collapse. And then look what happens to the NASDAQ. Again, those people call and say valuations. Holy cow, these stocks are crazy. They’re trading at 300 times forward earnings. Some don’t even have earnings, not projected to have earnings. They have three webpages, and they’re trading at a 2, 3, $5 billion valuations.
Frank Curzio: Well, what happened over the next couple of years? It turned out to be right. 75% crash. 75%, the NASDAQ went down in a span of two and a half years. I mean, it’s crazy. I mean, for new people in the market, man, I’m old. It wasn’t that long ago, but still 75. Imagine if the NASDAQ fell 75%. What would happen to you? That was massive. I mean, these guys will leverage. You wonder why that these big companies, these tech companies trying to have valuations have hundreds of billions of dollars in assets and cash on the balance sheets, is because they went through those times and they almost failed. And the ones that made it through did perfectly fine. Yeah. They know, hey, it’s going to happen again. And when it does, we have a lot of cash to buy the shit out of all the people who are leveraged for pennies on the dollar. They’re going to get bigger and bigger and bigger. You learn from your mistakes.
Frank Curzio: Now, just to be clear, I’m not calling for a 75 cent crash or even a 50 cent crash, but we will fall 20, 25%. It’s just not going to happen this year. And here’s why. So, when you look at the recent volatility, it showing the confusion on Wall Street and also Main Street. And that confusion is about what the hell the Fed is going to do over the next six, 12 months to ease inflation. This is something we’ve been highlighting for months on this podcast. Now everybody’s talking about inflation. If you look at the markets, there’s no denying it. Inflation is here, and it’s ugly. It’s very ugly. Go listen to every conference call the company’s reported so far, it’s 15% of the S&P 500.
Frank Curzio: The next two weeks is going to get crazy for earning season. This is where I love the market. You listen to these conference calls, this is what they’re saying. They’re all talking about inflation. They’re talking about high commodity material costs, how they need to raise prices to offset these costs. A lot of them, PPG is a good example. It’s just one out of tons, almost every one them. And I’m quoting here. “To continue to prioritize for the selling price increases, which we expect will fully offset raw material cost inflation before the end of 2021.” So, prioritize for the selling price increases. We’re doing everything we can to raise prices for consumers.
Frank Curzio: You can all see inflation in everything you purchase. Everything is much more expensive. Look at food, electricity, gasoline, streaming. You’re streaming bill, cable bills, wireless bills. Everyone, everyone, everyone is raising prices. Now, we have some experts going out there saying, hey, we don’t have inflation at all. If we did the 10-year yield, we’d be increasing, not decreasing. You’re crazy.
Frank Curzio: Guys, this is one indicator. One indicator, not the end all. I mean, if you want proof of that, go to any home and knock on their door. Then ask them, hey, are you paying more for everything you buy right now compared to three months ago, six months ago, a year ago? And when they say hell yeah, absolutely tell them that it’s not true because the 10 years going lower, not higher. You’re not paying high for anything. What are you talking about? Try telling someone, they’re going to slam the door in your face or punch you in face. Either one. But are you kidding me? People are looking at the year to judge inflation and saying, oh, it is transitory. It’s telling us it’s not going to happen till later on. Are you crazy? You do not see this?
Frank Curzio: You’re putting all your eggs in that one basket at the 10-year? I mean, a 10 year has little to do with 90% of businesses. It’s not the rate they borrow at. If you have Microsoft or Apple, yeah, you can sell 17 billion, 20 billion bonds to the markets. Of course, which the government is buying. And those bonds, it could be 30, 40 years ago… 2.5, 3%. That’s Microsoft and Apple, trillion dollar companies. But if you’re a smaller company with loads of debt, and now you’re seeing cashflow falling along with earnings, since margins are getting compressed as the price of raw materials and commodities. They’re killing everyone. You don’t have the pricing power to raise the price. Eventually, you’re not going to have that. Right now, you do because the world, America and the world is just flooded with extra money right now. So, you’re going to pay whatever you want to pay for these prices. That’s fine.
Frank Curzio: But now they’re seeing earnings come down, margins shrink. And they’re not going to be able to borrow money at a favorable rate to grow. It’s going to be much higher. This means small companies that have loads of debt, speculative names will get crushed, if the inflation rate starts to surge. And you know what, isn’t that what’s happening right now? Look at the Russell. Look at cryptos. Look at the ESG names. Look at small caps in general. These are the speculative names. These are the names that people are pouring into. And again, bull markets, the speculative stocks go much, much, much higher than the one that the better balance sheets. That’s normal in every market. Just like if you’re buying big, large caps and the market sells off. They’re not going to sell off as much as these speculative names. But you saw the massive sell off in these names.
Frank Curzio: Some of these names down 30, 40%. especially in the past two weeks, they got nailed, which is a clear sign. A clear sign. The market’s telling you, hey, inflation’s here. It’s here right now. And the markets, they don’t believe it’s transitory. Transitory, transitory, transitory, transitory. Man, I don’t know how many times the Fed has used that word. It seems like a million times. I’ll tell you why they’re using that word in a minute.
Frank Curzio: But guys, stop looking at the 10-year as an inflationary benchmark and look at what’s really going on out there. I mean home prices, all-time highs. Household wealth, all-time highs. Oil prices have surged. The S&P 500, even before Tuesday, Wednesday coming back. Even with that pullback, it’s still near all-time highs. And you put that in perspective on a 4% pullback. The S&P 500 was up 15% year to date. It was up 16% last year. It was up 29% in 2019. And everyone’s bitching, complaining, running to the hills on a 4% pullback. Are you kidding me? That’s insane.
Frank Curzio: So, putting that move lower in perspective, it’s not that bad as of now. But it could get worse because nobody knows what the Fed’s next move is going to be. Is it going to tighten and finally admit inflation’s not transitory? Or when we do see pullbacks, like we saw with that 4%, people get nervous and maybe it will go down 7, 8, 9%. And that happens quick, right? We usually fall very, very, very quickly over the last 10, 15 years. Our market collapses happened within a few weeks and months and then gradually come back. That’s it. It’s not like the crash from the.com bubble. I mean, that was from March 2000 to mid-2002. I mean, that’s tough. That’s a long, just down, down, down depressing. It doesn’t happen like that. It happens really quick. Even COVID, 20, 35% moves. Boom, down. Then we gradually come up, and we usually come up right away now.
Frank Curzio: But what’s affecting it? If the market falls, is it going to inject even more money into the system? Which we all know, we all know this fact. Everyone in the world knows this fact. It’s going to lead to much higher inflation. So, where am I going with this?
Frank Curzio: As an investor, here’s what you need to know. The Fed is a political body. It’s not separate from Washington like it was meant to be, it’s a politically run institution. I don’t care if you’re a Democrat. I don’t care if you’re Republican, never, ever, never, ever, ever, ever, ever trust a politician. Don’t trust politics. I mean, I think we all learned that from the last two elections. No matter what side you’re on, don’t trust your politician. They don’t really give a shit about you. We all know that. But you have to treat the Fed like it’s being run like the current party. I’m talking about with that current party’s agenda. That goes for today with the Biden office, and that went for the less administration when Trump was in office.
Frank Curzio: Again, I’m talking to you as an investor. I don’t give a shit about your politics. Don’t email me. I don’t care. This is about making your money. That’s why you’re listing to this. Hear me out. So, if you want to look to see how politically corrupt the Fed is, it used to have an unemployment rate target or a benchmark, which was established after the credit crisis. Where once unemployment dropped to a certain level, they would start tightening, which means they’re going to stop buying bonds and raise short-term rates.
Frank Curzio: Then you look a couple of years, right? Then the unemployment rate fell to under 6%. And that was in 2014, 2015. It was above 10% in 2008. That’s where it went to or right at 10%. It just hit just below, 9.9, whatever it was. But it fell to about 5.6, 5.7, which is the historical unemployment rate dating back to 70 years. So, okay, it fell. And you said, okay, once it falls, then we’re going to start tightening. But the Fed said, we’re not ready to take the foot off the gas yet. Because when we fell below 6%, the Fed was supposed to start raising rates and they didn’t. So, then what happened? The Fed said, whoa, whoa, whoa, wait a minute, wait a minute. Forget about that benchmark. Forget about the unemployment benchmark. There’s still a lot of problems out there. We’re going to focus on the inflation rate. That’s more important, right?
Frank Curzio: So, they changed their benchmark. The Fed said that if inflation goes over 2%, that’s when we’ll start tightening. Which is a great move because we stayed below 2% for what, five years? Up to early 2020 from 2014, 15, to be stable of that 2% mark mostly. I mean, we went above it a couple times, not really. But we stayed pretty much below it, which allowed the Fed to put pedal to metal. And we all know that early 2020, that was right before COVID. So, it allowed the Fed to keep rates super low and continue buying tens of billions of bonds in the market, flooding the market with cash.
Frank Curzio: Now, let’s fast forward to today. COVID has subsided in America. Everything’s open. 6% of people are vaccinated. More and more people are getting vaccinated because they’re scaring everyone with Delta, which I think is hilarious. And this was after a 10 and a half trillion dollar injection, 45% of our GDP into the market. Handing people checks directly, which never happened. I mean, it did happen, but not on that level. I mean, TARP was what, 475 billion to backstop the banks and save the global financial system. That’s all it took to stabilize. And some of those banks never lent that money out, they just wanted to make sure everything was stable. Banks are going to be fine. You’re going to get paid. You get your money out and that was fine. 10 and a half trillion, are you kidding me?
Frank Curzio: And this is leading to huge inflation where the CPI, as of last month’s rating, is up 5% now. That’s your 5%, the CPI. And that gauge has been built in the Reagan era to never have rents, never ever show inflation ever. And that’s showing inflation. So, it’s much, much higher than 5%, but we’ll use their gauge. The government’s gauge. It’s 5%. 5% is much higher than the 2% benchmark it created. So now, how does the Fed transition? Because it wants to continue to stimulate the economy. Again, it’s a political organization. It benefits everybody. Stimulus, stimulus, stimulus, right?
Frank Curzio: But inflation is well above their benchmark now. So, what does the Fed do? It decided to change the benchmark again. What a surprise. So, let’s not focused on the inflation rate anymore since it’s doubled the benchmark it’s set, where they told us it would stop using. The Fed is now using the unemployment rate. Again, that’s their benchmark where it said, you know what, we’re looking for unemployment to fall below pre-COVID levels before tightening. That number happens to be 3.9%. That’s what it was in January 2020, pre-COVID. 3.9%. So, the unemployment rate today is 5.9%. They needed to go to 3.9% before they start tightening. That’s what they said.
Frank Curzio: Now, let’s put that 3.9% number in perspective. That’s the lowest unemployment rate America has seen since the 1950s. Since the 1950s. Now, why do you think the Fed has gone back to the unemployment rate as its benchmark? And specifically highlighted that it wanted to see this rate fall below 4% again before tightening. It’s because it’s never, ever going to happen. Never. Our government continues to flood money into our economy.
Frank Curzio: People are still getting paid more to stay at home than to work. And in many states that are not going to roll back this policy, they say they are. You hear in the news, those extended benefits are going to end. They’re not going to end guys. They’re not going to end. No way. More and more people are going to have to go back to work, which they should be because they’re getting incentives. Now, even McDonald’s is paying some tuition. People are getting $1,500 checks as sign-on bonuses to become waiters and bartenders. It’s the greatest market right now to get a job. People just don’t like to work. Believe me. I know that very clearly in Florida.
Frank Curzio: So, we’re never going to fall back below that 4% rate, which is basically full employment. So the Fed, who’s brilliant, they have to do everything they can to get people to ignore the rise in inflation. Even from the bullshit gauges they use. So, what do they do? They put out a measured response telling the world that this huge spike in inflation is transitory. Again, we’re going to say it a million times. It’s transitory. We’re not going to tell how long transitory is. That word means brief. They’re not going to tell you. But, It’s not going to be here long. It’s all right. All those companies raising prices, they’re going to lower prices soon. They’re all going to say, do you know what, I know all of our customers are paying this, but you know what? We’re going to lower that now. We’re going to lower the price of it. That’s what they’re telling you, right? That’s not what they think. They know that’s not going to happen. We know it’s not going to happen. But that’s what they’re telling everyone.
Frank Curzio: And it’s a measured response. We’re hearing that word transitory every day, everywhere. I mean really. Do you know how many times the Fed… Every single time one of Fed, they talk about transitory. For me, I want to know what transitory means. Is it three months? Which that’s transitory to me. Is it six months? Is it 12 to 18 months? Which is a pretty big deal if you expect inflation to rise much higher from these levels over the next 12 to 18 months. I think that’s something we need to know. But the Fed, no way, they’re not going to say that.
Frank Curzio: And when you put all this together, which is what you, as an investor needs to understand with all this bullshit going on. That’s why you listen to this podcast. I’m sure you’re not going to hear this anywhere else other than people who are independent like us and own their own shops. Because we don’t have to have an agenda here. We’ll just tell it how it is. The Feds not tightening anytime soon, guys. I mean, they made this crystal clear. And for those of you think that’s crazy, just use your common sense. And imagine if the Fed said that inflation is not transitory. So, they come and say it’s not transitory. Inflation is going higher over the next six to 12 months. And every company is going to continue to raise prices. Imagine if the Fed said that. Said it publicly. They will be forced to raise rates and stop buying bonds right now. But they’re never going to do that. Why? Because we’re heading into election year for midterm elections. It would crush the markets, crush consumers and consumers always, always, always, always vote with their wallets.
Frank Curzio: So, transitory policy is actually brilliant. I got to give them credit. I mean, it makes sense. It’s great politics. It’s going to be transitory. You know it’s not going to be transitory, but as long as they say it’s transitory, it doesn’t matter how high it goes. Hey, it’s going to be temporary. Don’t worry.
Frank Curzio: So, what does this mean for you as an investor? Continue to buy every dip. The Feds are going to continue injecting money into the markets. Rates are going to be low through 2022, likely into 2023. They’re not going to raise heading into midterm elections, which are what, November of next year? If you think that’s going to happen, you’re crazy. And this is going to cause a further spike in inflation. But after midterm elections, look out. That’s when the shits going to hit the fan. The Feds going to be forced to admit inflation is not transitory because they’re not taking away any of these measures that stimulated the economy, which was stimulating the economy all along. And we had very good GDP growth before COVID. Now, you’re injecting 10 and a half trillion into the system. Earnings are higher than they’ve ever been. Everything’s at all-time highs, and you’re still injecting money into the system. But that’s when the shits going to hit the fan.
Frank Curzio: And you might see the markets really start pulling back earlier than that. Maybe mid next year before those midterm elections. They’re going to have to stop buying bonds. They’re going to have to raise rates aggressively. You can see speculative assets, probably full 35% plus, and most names, even large caps, pull back 10 to 20% with defensive sectors, banks do great when interest rates go higher. Gold is going to be great. Defensive names, utilities. There’s definitely going to be pockets where you go to where you can make money out before in the markets. But that’s where we’re heading. It’s pretty obvious. But for now by the reopen trade and be smart because everybody puts these things in one basket. Don’t buy the cruises. I mean, they probably have 35% of those boats in operation right now and they’re trading… I mean, they got to the levels where they’re trading higher then pre COVID levels. Are you kidding me? You got ahead of yourself there.
Frank Curzio: Don’t buy oil. I mean, oil, you’re looking at oil. I think oil is a great shore here. Not necessarily the price, but a lot of these companies, I mean the rate of petroleum went up 10X over the past 12 months. Then they announced that they’re cutting their workforce. Does that make sense to you? Your company’s doing that good and you’re cutting your workforce? I mean, that sounds pretty crazy to me. You know OPEC’s going to flood the market with oil, right? They don’t want our shale industry to get to where it was before when we don’t need anybody anymore. And shale could produce at $60 across the board. Yes, you have some wells I visited, you can do 35. Most can’t at 40 bucks. But man, with oil at 70, these guys are going to produce like crazy. We’re going to get back to those levels of 11 million barrels a day, which hit a record. Well, we really don’t need OPEC. OPEC doesn’t want that. So, they’ll flood… Oil’s is going to come down, but why are these guys laying off?
Frank Curzio: In Laredo, what did they do? A massive secondary from selling shareholders. They’re margins are going lower. They reported a bad quarter and the stocks are coming… You’re going to see a lot in the oil industry. These things have come back tremendously. Not all of them, but man, these speculative names. Holy cow. These insiders are starting to sell. How are you cutting costs at a market where oil is trading at what, five-year highs, whatever how many year highs and your stocks up 10X. It’s a red flag. Why are you cutting costs?
Frank Curzio: So, they’re worried about margins right now. You’re going to see that industry come down. It got well ahead of itself. There’s a lot of headwinds out there. Less drilling for me is gee, yes, it could result in higher prices. You’ve got electric vehicles. We’re going to see the same demand that we saw. It bounced back very, very quickly. So, I say buy reopened trade. I won’t go oil and cruises, but airlines, I mean, airlines are down to December lows where the FDA gave emergency approval for the vaccine. Holy cow, they’re still 30, 35% off of their highs, their pre-COVID highs. And not like the cruises, which are above those levels based on enterprise value, which as soon as debt. Buy domestic hotels in the US, we’re fully open. So, you don’t have the deal with this bullshit with Tokyo closing the entire Olympics. Delta is going to spread like crazy. It’s nuts.
Frank Curzio: I went over the statistics with you. I mean, you look at Europe opening up, population 4 X of Tokyo with some of these areas. Or Tokyo has a population 4 X bigger than some of these areas, especially the UK and things like that. But, they have like, what is it, 14 to 24… I think it’s 24,000 cases that they’re getting of COVID right now. And that’s in the UK specifically. If you look at Tokyo, it’s like 1700, 1800 per day. Not deaths, just cases. And yet, you’re closing everything down.
Frank Curzio: I mean just say, Hey, if you have the vaccine, you can go to the games. Delta, we know for a fact it’s 95% effective against… The vaccine is 95% effective against Delta. But you’re closing… I don’t know what’s going to happen internationally. It gets crazy in some areas depending on where you are. But I do know domestically in the US, everything’s open and we are definitely not going back, definitely not going back, unless there’s all whole another thing where the vaccines don’t work at all. But people are done. People had done here, everything’s open. We’re ready to go. Every state, even the ones that didn’t want to open were forced to open.
Frank Curzio: So, do you know what, that’s good for domestic hotels. And one of the names we have that’s up a lot already, I think pulled back about 15, 20% from its highs, we’re up over 100%, is Red Rock Resorts. It’s a good name. They own casinos and hotels off strip in Vegas. Huge growth. Great quarters. I mean be smart. These things are going to reopen. People are going to be spending money like crazy. Growth names are also going to work, especially in major tech companies. Look at Apple, Amazon, Facebook. I mean they’re starting to ramp higher. New highs.
Frank Curzio: These are names that are going to go even higher over the next 12 months easily. But again, the Fed is making this crystal clear. It’s not going to tighten this year or next. They’re telling us that by saying transitory, because they remove inflation off the table by saying transitory. It doesn’t matter how high it goes. It can go 10%, 15%, it’s transitory. That’s what they’re going to say, because they need to keep the pedal to the metal. And I can tell you, we’re going to see times when the market does pull back like it did last week and on Monday, you see lots of volatility when inflation numbers like the CPI and PPI come out and consumer spending and people are going to say, “Wow, inflation is really ramping” and the Fed’s going to come in and say, “No, it’s transitory,” but we’re going to see these type of volatile markets. But continue using these pullbacks as buying opportunities. Because you have the Fed… The Fed’s going to be able to bullshit most of Wall Street.
Frank Curzio: Most of the financial media with its transitory thesis, at least for another six to 12 months. And what we have leftover? Super low rates, trillions more coming into the system and infrastructure, balance sheets flush with cash. They’re going to buy the crap out of their stock. You’re seeing that. They can’t do it right now. They’re in like that quiet period earning season, but how many companies? AutoNation. You see AutoNation where they buying back something like 10, 11% listed. We talked about AutoNation how great the conditions were. I mean, it blew out the numbers, stock went higher, but they’re buying back, they just announced another billion dollar buyback.
Frank Curzio: I think it’s around 10% of the shares and they already bought like 10%. I mean, you’re going to see earnings skyrocket due to this. Balance sheets are flush with cash. That’s not going away. You see those buybacks really hit the market, right after earning season. But if you look at those conditions, those variable conditions, they’re not going away this year and probably not going away through 2022, until election, November, or maybe a few months before that. And you’re going to see what? Earnings explode higher, all year record highs.
Frank Curzio: There’s 15% of the S&P 500 that report already, the average gained earnings of 20%. That compares to the 10% that analysts were projecting. They’re beating by twice the amount, already. Wait until the rest of the company’s report earnings. It’s going to be insane. Wait until you see the tech companies report. Wait until you see them report. You thought it was good last time, wait until you see this quarter, it’s going to be insane. Because as of now, companies they’re able to raise prices past their rising costs of raw materials and commodities onto the consumer right now, because the consumers are flooded with cash thanks to the government.
Frank Curzio: Yeah, we have infrastructure. Trillions in infrastructure coming as well. More money being flooded into the system. These are ideal conditions for the markets to go higher and they’re going to continue to go higher. So, use these pullbacks as a buying opportunity, especially when you’re putting on that financial media and they’re trying to scare the shit out of you saying, “Here it is, there’s a crash you got to watch out.” I know it’s difficult. I know when a programmed that way. Programmed to listen to the guy, whatever it is, but we’ve seen throughout the last 10 years, every single pullback was a buying opportunity and conditions are better today, injecting 10 and a half trillion to the system, than they were almost any time of the past 10 years. So, continue to buy on these pullbacks. These conditions are going to stay like this for at least, at least another 12 months, and the Fed is making that perfectly clear.
Frank Curzio: Anyway, that’s just my two cents, what do I know? What do I know? Do the opposite of what I said, whatever you want to do. That’s just my opinion. That’s how I feel. Let’s move on and get to our interview, which is what the world famous Greg Yenoli. I think he’s famous. He’s one of my four partners in Curzio Research, our copy director, who I say is the best copywriter in the world, at least from my point of view. I do know a lot of copywriters and they might be emailing me and say, “What!” It’s true, I’ve worked with Greg for a long time. Well, before he came over and we started this company, he could have gone anywhere he wanted to and he came here, which is awesome. But we’re going to have a great conversation guys, on how we take a brand new idea or a trend, something you’re not going to hear about anywhere else that we’re super early to, but has the potential to disrupt the world.
Frank Curzio: And we’ve done that numerous times in the Shell industry, talking about how Shell was going to disrupt the world in 2010, 2009, talking about cloud computing, probably a good five, six years before people really knew what cloud computing was. But how do you get that concept and turn it into something you can market to the masses and get them to understand that concept? I’m not just talking about investment ideas. I talk about how to specifically create packages and market it, because many great ideas, especially in technology and biotech, they’re not that easy to understand. A lot of people didn’t know what cloud was. A lot of people didn’t know what AI was. Now everybody knows what AI is. How do you get that concept to explain to everyone, go out to the masses and say, “Hey, this is going to change the world”? And we’re going to bring up one example of a technology that I know for a fact, 99.9% of you have never heard of, even people in technology haven’t heard of it.
Frank Curzio: And when we go over it, you’re going to get really excited because you get to see more information coming out. And now it’s a massive process of research in this thing to death, going crazy on it, but I’m telling you, you’re going to love this interview. You’re going to get a behind the scenes of Curzio Research, how we get ideas to the markets, not just to stock ideas, but how we market it, how we get ahead of things. I’m telling you, the idea we’re going to talk about is absolutely awesome. You know what? Let’s get to that interview with Greg right now. Greg Yenoli, what’s going on man?
Greg Yenoli: What’s up, Frank?
Frank Curzio: Thanks so much for joining us today. So, I think few people know that we have a pretty cool history together, right? I mean, you came over in 2017, very early, but we worked together, worked on lots of projects, you’ve been the copywriter and me learning about that industry, you learning about me and back and forth. We’ve gone on a lot of road trips together, back in the day. And we had Stansberry, right? I mean, that was pretty cool, right?
Greg Yenoli: Yep. Yep. Lots of road trips. Lots of cool trips. The kind of-
Frank Curzio: No, go ahead, go ahead.
Greg Yenoli: No, just the kind of places that you would never think to necessarily go on your own, so it was cool.
Frank Curzio: One of those trips were, I remember the company, which was in Vancouver.
Greg Yenoli: Yeah, Westport.
Frank Curzio: Westport. Westport, I loved it, and I remember they tried to turn on that engine and it didn’t work.
Greg Yenoli: Yeah, didn’t work.
Frank Curzio: And they were like, “don’t put”… We had a film crew with us, “Don’t put that in there, don’t put that in there,” which is funny and I know we went out afterwards. We had a really good time with a good crew, which I always liked to do, but we also went to the Williston basin, during the heart of when oil prices were really high and holy cow, it was awesome, right?
Greg Yenoli: Yeah. It was really awesome. Yeah, that place was… I mean, I’ve never seen a boomtown before. That was like a boomtown. I mean, it was crazy to see all that activity there. Amazing. I mean, unlike anything you could read about, I mean, a lot of stuff was written about back then, about what was going on and then to actually see it though, it was a whole different animal.
Frank Curzio: I would picture it as, just in the middle of nowhere. I mean, the airport, you got off the airport, the rental car is right… you walk on a runway. It didn’t even seem like an airport. I think there were three major hotels there. It was very small, but yet the average person was making like $150,000 a year. They were paying McDonald’s employees, 25 dollars an hour.
Greg Yenoli: And they were looking for them and they were looking for people to work.
Frank Curzio: Yeah.
Greg Yenoli: It wasn’t like, “Oh, there’s no jobs.”
Frank Curzio: Yeah. I mean it was-
Greg Yenoli: It was like that booming.
Frank Curzio: And they’d been through a couple boom and bust cycles, right? And this cycle turned out to… one of them bust a little bit, but just being in the heart and learning and just going to different projects, bringing that film crew, it’s part of the whole reason why I wanted to have this conversation and bringing you on, because a lot of people may see marketing package or things that I do, or I’m on camera saying, “Hey this is a great idea” and I’m always trying to get new subscribers in, but copy is the thing that brings us all together. Right? And for me, when I started this business, I’m like, “We need copy and we need names.” And people were like, “Well, Frank, you need a good editor.” I was like, “Well, no, I know a lot of places don’t have a good editor.”
Frank Curzio: I said, “I want to change that and have a good editor, where these guys are getting really great ideas, and we’re also able to market this,” but that’s a big component, if you want to grow, is being able to tell a difficult story and we even take that one. I mean, “Well oil is booming right now and we’ll stay and you can produce at $65 a barrel, and now we’re at a $100 a barrel. And, “This is really great for companies that are drilling, so buy this.” I mean, it’s not as exciting as when you’re going there and you’re seeing “Holy shit, this economy is booming right now.”
Frank Curzio: I mean, people were telling us that the strip bars, the girls that were coming in from Russia, because the kids there were making a $150,000 plus, and it was like a rule where you had to go spend your entire paycheck there. I mean, it was booming to the point where, they’re not going to New York City, not going to Chicago, they’re going to the Williston basin and they had these man camps there where you work four months on, five months… just seeing this growth seeing… Do you remember the railroads we saw?
Greg Yenoli: Yeah. Yeah, it was… man, I forget. I forget how many cars there were. I know we counted them and then to just see that thing come all the way in and just basically coil up like a snake, get filled up like car by car, and then just ship back out again. That was pretty impressive.
Frank Curzio: That was impressive, but where am I going with is a lot of times, and I didn’t even bring up Jim Cramer. I mean, I’ve seen a million shows of him in my time, whether it was Drew Kaiser or Cullo, whatever. A lot of those guys… the reason why Cramer works and he’s been around so long, is because of the entertainment factor. He makes things entertaining. And for me and you, working together for such a long time, one of the things I love is not every copy guy gets out in the field. Right? They’re great writers, not everyone, some of them do, but getting out in the field allows you to see things for real. And that perspective… I’ll put it this… a good example, right, would be, I’ve never been, I don’t really like NASCAR too much. I’ll watch the big events. Right?
Greg Yenoli: Yeah. Yeah.
Frank Curzio: Everyone told me, “Go to one event, just go once.” And when you hear those engines and it, same thing happened with the World Cup.
Greg Yenoli: I heard the same thing. I heard the same thing about the cars.
Frank Curzio: Wasn’t a big soccer fan and they’re like, “Dude, you got to go. You got to go overseas” I went to the World Cup and now I watch soccer all the time. Watched the whole Euro 2020, which is 2021, but they call it 2020. But just, the crowd, I’ve never seen anything like that at any venue, in any sport in America. And just being there, you’re like, “Holy…” and when it comes to what we do, marketing is extremely important because we can’t market an idea you don’t get a lot of subscribers in, there’s no excitement. And that’s why a lot of businesses struggle to do what we’re doing.
Greg Yenoli: Yeah.
Frank Curzio: And that’s why I love working with you. I mean, you’ve gone on trips with me. We’ve made sure we always have fun afterwards and have some drinks and everything because we worked our asses off. And again, we brought a film crew with us and people were filming us, taking those notes, going over everything and cleaning then all the copy packages. But I know you guys see me and you used to say, “Well, Frank’s reading this…” This is written by Greg and copywriters that we have here, and I wanted to take them through this process, and let’s do that right now, because let’s start from scratch. Let’s start from scratch. Right? We’ve got an idea that is called DNA molecules and people right away say, “DNA, molecules, it’s biotech… It’s not biotech. They’re talk about data storage and you’re looking at cloud, and I bet most people don’t understand this, I mean, cloud, I think they kind of say, “Well cloud it’s like in the air or whatever.” It’s not in the air, they’re just massive, massive server farms.
Frank Curzio: So, all this stuff’s using up massive amounts of electricity and now, video… it’s going to get, 5G, quantum computing, nano, you can keep going and going and going for the future, everything video takes up tons and tons of storage. This thing is burning electricity like unbelievable, which nobody really talks about it. They talk about fricking Bitcoin electricity, but something has to change. And when you’re looking at some of these major companies, they’re making investments in a private space for this new technology that allows you to store whatever, a hundred X amount of the information on something that’s a size of like a dot. It’s still early stage, right. But something that we want to talk about, when you see the major companies, which we know, you see patents and check all that stuff out of what companies are investing in. These companies starting to raise like 50 million, a hundred million dollars in the private industry and now there’s a couple of publicly traded companies. And this is a fascinating idea, but saying, “Hey, DNA molecule,” no one’s really going to follow you, right?
Greg Yenoli: Yeah. Yeah. Well, I mean, just the idea of storage, DNA storage, the idea that you’d put computer something into DNA. I mean, that’s fascinating to me, but it’s crazy to even think about. I mean, it’s just a fascinating story. I can’t wrap my brain around it yet. I don’t know if I ever will. But it’s a fascinating story. First of all, the idea, the need for it, is a fascinating story. The need that we even have to think about this is crazy in and of itself, because we’ve gotten to a point where we have so much, computing going on that we’re like, “Man, we’re going to run out of space for the computers, we need to figure out how to…” and that’s crazy. And then, now that we’re thinking about doing that, that story in itself is crazy, because it’s like, “Okay, what does that even mean? Who’s involved in this? What is DNA and machine, are we combined now? Are we a DNA and a machine now?” It’s insane.
Greg Yenoli: But, that got us talking to… excuse me, or about the idea of data farms and server farms and the idea that they’re kind of the central hubs of everything. And the fact that they are unbelievably rare, they must be unbelievably well protected and that’s a fascinating story to me too. The idea-
Frank Curzio: They have to be well-protected.
Greg Yenoli: Yeah.
Frank Curzio: I mean, just like they… and when we were talking about this, I brought it up, we talk about areas that terrorists could attack and people say, “Well, utilities and nuclear power plants.” I think one of the places that need to be heavily guarded is the credit card processing places. I mean, the world and the US, and… Nobody carries cash anymore. Everything, you can’t buy anything, nothing without your fricking credit card, nobody fricking carries cash with them anymore. And imagine just eliminating them, and I’ve done researches in the past, it was four major, major hubs, Visa, MasterCard and stuff like that and everything traveling through. But think about how quick and how fricking amazing is it, right? I mean, it wasn’t that long ago, we didn’t have a phone. You stick the credit card in a machine and one second it processes, you take some money out the bank, and you’re good okay, bye. I once said to everybody, if you… To me, that would, if you want to shut down an economy, that’s pretty scary.
Frank Curzio: I mean, you could shut down local areas and do crazy stuff and even in New York and stuff like that, but that’s something that shuts down the entire US economy. But when you look at these storage facilities as well, which are billions and billions of dollars, which is like pennies to the Googles, and Amazons, and Apples, Facebooks and stuff like that. But eventually you’re going to need another way to store this shit, right? What’s the next level, how computing took the world by storm? It was here in 2010, 11. Nobody knew about it, 12, 13, 14. People are like, “Oh, I think I get it.” Now everybody understands it. It got to the level where I need cloud on my iPhone if I’m going to do lots of videos, right? So, people are like, “Oh okay, it’s a storage thing.” Everybody knows it now.
Frank Curzio: I feel like this story is really in its infancy where it just makes sense. It checks off a lot of boxes, like an Uber, right? Where are you going to store some of this stuff? And yeah, it doesn’t require a lot of maintenance, easily copied, the costs are very, very low. And they even say that information in the Library of Congress should be crammed into a DNA archive, the size of a poppy seed, 6,000 times over imagine storing data on something like that. That’s a fascinating story.
Greg Yenoli: Yeah. It’s incredibly fascinating. I really don’t even know where to begin. It’s like something that just came on my radar, it was just like turned onto it and I just started reading about it and I was like, “Man, this is…”, I wouldn’t have even thought that this was happening to the point where it is happening already. So yeah, to think about what that means in terms of where we go from here, I mean, I’ve always been fascinated in the idea of just that exponential growth, the technology just accelerating, accelerating. And of course, you see it happening, and I think we’re kind of numb to it now that it happens so much. I was actually just out with Tyler, a guy that works with us, and we were having lunch, and we were just having a conversation about technology, AI, whatever, and this is crazy that we’re even just casually talking about artificial intelligence, 30, 40, 50 years ago, this is science fiction.
Frank Curzio: Mm-hmm.
Greg Yenoli: Probably not even 50 years ago, this is like a science fiction thing that people wouldn’t even imagine. So, to go from there, to where we are now, to where we’re going. I mean, it’s incredible to think about, and you can’t even imagine what that’s going to be. And then you read a story like DNA storage and you’re like, “What the… What does that mean?” And it means exactly what it means. It means we’re going to put a bunch of storage inside DNA molecules. That’s crazy. I mean, that’s really crazy.
Frank Curzio: As crazy as it sounds, it makes a lot of sense though, right? Because you’re looking at exponentially… that’s data storage, right? It’s growing. It’s not just to build these things, to maintain them billions, billions of dollars, but where it just keeps growing and growing and growing and growing and growing and growing. Right? So, if it keeps growing, you have to find alternatives. And there are private companies that do this because now, we started digging into the research, right?
Frank Curzio: Now we’re like, “Wow, this is fricking cool, right this is awesome,” right? So now, you start digging into research. I’m like, “Okay, are they really companies that people can make money off of,” right? Because, we could sell an idea, but the last thing I want to do is say, “Hey, buy Amazon,” when this isn’t going to count for a big portion of their revenue for very long time. Even though there’s Amazon, there’s a lot of major companies investing in the private companies that are using this technology right now, because they have to. Because of this thing is for real, and the money that they’re raising, Greg, is like 25, 50, over a 100 million dollars, these companies are raising, which makes it real. They’re not in the early, early, super early seeding ground where it’s just like series A, they’re B, C, and D, right.
Frank Curzio: They want to go public, and I wouldn’t be surprised if AI companies get taken off the market, but there are a couple of publicly traded companies with big stakes in these names. So now, I started seeing plays on it, right.
Frank Curzio: So now, I’m like, “Okay, now it’s checking off a couple of boxes, right?” You’re like, “Wow, this is cool. I could talk about this. This is getting good to get excited in this story. It’s early to the party. I don’t really hear anyone talking about this” and I feel like same thing when I go to consumer electronics show, we find lots of ideas. I come back and talk to you, but I’ve been doing it for 10 years.
Frank Curzio: And even when you were at Stansberry I used to come back and talk about just Cisco 2011 saying that… What was it? I forgot the number. It was like 25 billion devices are going to be connected to the internet. And I’m like, “This guy’s on crack in his chambers. He’s on crack!” 7 billion people what does he expect? And then basically, he is like, “Anything that could be connected will be connected,” which means anything that can be connected could also be hacked. And that’s another idea, but just understanding that like, “Holy shit!” and being there and talking about these concepts and getting in years ahead before people are talking about streaming and Netflix and stuff, I mean, that’s how you make life-changing gains, but let’s continue to go through this process now. I’m like, “Okay, I’m good. I think I got some stock plays on this. This is a good fucking idea.”
Frank Curzio: Now, we’re really going into the rabbit… Now, we’re really digging in, at least I am, I go all the way in. It’s a good thing for subscribers and it’s a bad thing for my family because when I go in, I’m going to read a hundred…. Yeah. I’m going to know more about this industry than 99% of people. That’s how I feel like in order for me to recommend, that I’ve got to know this better. So, I’m digging through it. I’m going to provide some nuggets and stuff, but what’s the next step for you as a copywriter and making this happen.
Greg Yenoli: I mean, same thing, fighting the urge to just start writing about it right now when I don’t know anything about it.
Frank Curzio: Yeah.
Greg Yenoli: But yeah, just digging down, really just reading about it, reading a ton about it. That’s it. I mean, I’m just excited about it. So, yeah. That’s it, reading a ton about it and trying to understand what this means, because this is huge. I mean, it’s a huge in the way that… Man, it’s huge in the way in that I’m going to make a prediction, you’re definitely going to start seeing more talk about this, for sure, and very quickly, because I know a lot about what’s going on currently, and this just blew my mind. This is one of those standout stories. So, it’s going to be the story that people are talking about, and then, people are really going to pick up on.
Frank Curzio: And even for me at this stage, I’m looking at, “Okay, what’s wrong with it that it’s not getting adopted right now?” Because if you look at streaming… For me, I looked at streaming and said, “Why isn’t it getting adopted right now at the beginning?” When Netflix started doing this very, very early is because people didn’t have high enough internet speeds to watch movies yet to stream. I mean, that wasn’t that long ago. And then you saw 4G come in and then you see 5G come in and there’s not a household in America that doesn’t have enough speed with an internet connection that they could stream from. And now everyone. So for me, looking at the risks and knowing that there are certain things like reading and writing the DNA in coded files takes long, expected, but that’s where the money is going in to improve that technology.
Frank Curzio: And I think that happens with every technology as you see, the typical computer used to cost $24,000, and it went down to 3000, and I go, “I can buy it.” And now, you get a computer for three, four hundred bucks a laptop, a decent laptop for like three or four hundred bucks.
Frank Curzio: So, you just watch this industry and seeing people invest in it and how you could play it and who’s going to be the biggest beneficiaries, because once this really comes out and starts going mainstream, this just makes sense that you can store so much data in such a small piece, you’re going to save tons of money. It’s just a matter of bringing this technology together, but now you have the resources, right? You have the biggest companies in the world with 50 billion plus on that balance sheet in cash. So yeah, being able to put money into this, I mean, this is the exciting part of the business for me, where I think people don’t see behind the scenes. They’re like, “Oh wow, this is cool, look, Frank did a promotion.” They don’t know that you’re writing a thing from a copy perspective, from a marketing angle to get people excited, and then I’m providing these ideas, but it takes a while for everything come together, right?
Greg Yenoli: So, many people just miss out on a good idea because they just don’t have exposure to it. It’s not explained well, or it’s not… myself included, and this is one of those ideas that’s like, “No, this is really fascinating, and you’re going to be hearing a lot about this.” And I can’t wait to actually put that story together. Yeah, this is part one. This is chapter one. This is the beginning of the journey, because I know nothing about it at this point, other than the basics of, “Holy shit, this is awesome.” So yeah, where this goes, I don’t know. But it’s going to be fascinating, and regardless of what we find, it’s going to be a really cool story to tell.
Frank Curzio: And there’s also YouTube videos on this that I didn’t get to yet. There’s also stories being written in leading science magazines, and it was in Ted talks.
Frank Curzio: You’re seeing companies that are a watch within this industry, and Amazon, Microsoft, Merck talk about investing in companies. I mean, this is something that is a very early stage. It was just our job, right? To bring you stuff, where if this idea really comes to fruition and becomes a big deal that early, we’re… Holy shit. Imagine buying these cloud companies 10 years ago. I mean, man, holy cow. It’s just the gains in some of these names, and people stay away from it because you see this crazy PE, but you’re talking about a market that changes the landscape of the world, right? The data storage is the key to everything. It’s probably responsible for 95% of the S&P 500 because 90% or 85% are basically five companies, right? They’re the trillion dollar companies.
Frank Curzio: And they’re all about data centers, data and data analytics, AI. This whole entire… This disrupts everything. And to see these big guys having the money and being ahead of it and just investing in these things, it’s definitely worth taking a look to see if there’s some companies out there. They’re just going to say, “Hey.” Like a Netflix, “Hey, you know what? We’re no longer going to send this shit through the mail. Here, you’ve got to stream it.”
Frank Curzio: And first, you’re like, “Wow, this is pretty crazy.” And now you see that the whole entire world is trying to catch them. And people looked at Netflix a certain way, and they said, “Wait a minute, Netflix, they can’t compete with these cable companies. They can’t compete with all of these companies.” And I think people that understand that, that wasn’t a thesis. The thesis is, every single cable company in the world is going to try to compete with Netflix.
Frank Curzio: Now, when you look at the valuation of this thing, trading at 80, 90 times forward earnings, it’s cheap. It’s not expensive because if that’s true, they’re going to control a massive, massive market, which they do now, right? So yeah, just seeing this idea in this concept, go from where we are. I thought that would be a fascinating story. And just from the copy of his perspective as well, because we’ve been working together for a long time and just getting involved in projects like this, my next step would be like, how do I interview someone like this?
Frank Curzio: Can we go someplace and possibly see how this works? I mean, how freaking cool that’d be if we could do that? But when we had a platform, and we have a good podcast, and people would come on, and then they could market themselves or whatever, that gives us the opportunity to really dig deep on this, which is a lot of fun, right?
Greg Yenoli: You know who I’d love to talk to? I would love to talk to the guy who thought to himself, or herself, lady, you know what? I’m going to put this chip into DNA and see how that goes. Somebody decided to do that, who decided to do that? That’s the person I want to talk to.
Frank Curzio: I mean, Ted Talks, there’s been a couple of people that I’m going to look at, that are really cool. That have been talking about it. I don’t know if they’re like the pioneer in the industry, but they’re definitely in the industry. I guess everyone in that industry right now could be considered pioneer because it’s so tiny and small. But yeah, the whole concept of bringing this to the subscriber, that’s the goal, right? To bring you new ideas and seeing these ideas come out.
Frank Curzio: We want to research these things def… Which is awesome. And I guess, Greg, talk a little bit about the copy world because there’s people who want to write copy, they don’t say how difficult it is, how much dedication it is. For you, I love your style. I always say this, you’re the best copywriter. I’m saying that because you joined us and you’re a partner. I just think you working with you and you asking the questions and us having that honest relationship. There’s no between us, ever.
Frank Curzio: We’ve always kept about the company, whatever, say, “No, that’s not going to work or this going to work.” I mean, it’s not like, Greg says, “Frank you look little fat today. You’ve got to…” It’s ever personal, right? It’s all about the business. But it’s always like, “Hey, this is a great marketing idea. This isn’t a good marketing idea. This is going to work.” Or, “I don’t have stocks for this, Greg. It’s not going to fulfill his promises we could possibly make through this package.” And you being there on the ground with me, you understand that shit.
Frank Curzio: And that to me, that was key because I don’t have a lot of those copywriters and I work with some of the best sustains Barry and through the best did this and travel with me. But traveling with that person and seeing what I’m seeing, and then me being able to see what you’re seeing from a marketing perspective how you could sell it. That’s when you get the best packages, that’s how you get the most subscribers on.
Frank Curzio: And yeah, we want to get subscribers onto new ideas like this that were early enough that you could say, “Wow, man, that fucking guy, man, he gave me that thing when it was a dollar, and it’s freaking… It’s a $50 billion company right now.” I mean like Nvidia, it just comes out of nowhere. Holy shit. How’d Nvidia, right? It’s supposed to be commoditized business, semiconductors. But these guys focus all on the industry where it’s not commoditized, where they come, the huge fucking prices for gaming and speed and shit like that and just blew away into brutalize everyone.
Frank Curzio: Stuff like that it’s really cool, but if someone wants to do this and go this route when it comes to copy, where it’s not just you sitting on a beach and riding it. I mean, what’s the best advice that you would give them?
Greg Yenoli: The best advice. Shoot. I mean, the thing is passion trumps everything. So, if you don’t do it, unless you’re compelled to do it, or don’t keep doing it anyway unless you’re compelled to do it. I don’t know. That’s the best I could say because there are so many times when you’re going to have to make that decision, if you want to keep getting better at it. And there are people who tap out and there are people who keep going and… So anyway, just always want to do it because when you don’t want to do it and you’re doing it, it sucks. Yeah. Just want to do it.
Frank Curzio: And if somebody wants to do it, I know you’re saying, because you’ve dealt a lot of people where… Same with me. You have to be passionate. You have to give you someone… Don’t send me a resume, I don’t give a shit what college you got to. Show me someone who’s going to work hard, and I can teach anything. And that’s who I’ve hired. And our young people that we hire have been fantastic. Right?
Frank Curzio: They believe in our message. They believe in the company. They’re loyal. I would recommend that for any business because the game resume, you can say whatever the hell you want. Doesn’t explain what type of person that is. I’ve seen brilliant people that shits has been handed to them, and they don’t work hard. So, if someone want to take that route, and I’m going to be honest with you guys, if you’re going to email, Greg, it’s no bullshit.
Frank Curzio: It’s got to be impressive. It’s got to be something that, “Hey, I’m doing this because I want to do this.” It’s not like, “Hey, let me try this.” Because Greg is really good at this. I think I’m really good at this, that we spot bullshit and time is the most valuable commodity for both of us. So, we don’t want to waste time. But if this is something that you want to do, you want to join a team or whatever, or you want to learn more, learn from Greg and seriously, maybe have some ideas and stuff that you might want to write for Curzio Research. Yeah. How could they get in touch with you, Greg?
Greg Yenoli: Greg@curzioresearch.com.
Frank Curzio: Shit, they already guessed that. I love in a small company, because it’s your first name, as long as no other names, except for his flirts name that what it is. Daniel@curzioresearch.com. Christine@curzioresearch.com. And then it starts getting a little more complicated after that as we grow. So, right now, you know, it’s still small. It’s everybody’s first name @curzioresearch.com. So, that’s cool.
Greg Yenoli: Yup.
Frank Curzio: So listen, Greg, thank you so much for coming on. I think that’s incredibly valuable. I just want to explain to people how much work goes behind each idea, how this business… Really, copy is so essential. I mean, when I started this company, I said, it’s copy and adding names. It’s not about, they’re like, “Oh Frank, you got to have somebody…” You can have anyone there and sell them actually. But for us, the reason why I started this company, is to have both. To have someone there with great copy ideas, analyze names to the file and someone that knows the stocks to choose where you can maximize your profits.
Frank Curzio: Since I’ve been fortunate to work for people who I’ve had to cover all industries. And I think that is the holy grail of this, to bring lots and lots of more people on board knowing that, hey, we’re getting into ideas like this. This is the research process. It’s not just like, hey guys, send you an email. It’s really dig into this where this is… Where in not even the first ending right now, of this idea, right? I mean, maybe the package comes out a little bit later or whatever, but we’re going to know everything about this before it does all. All the companies, how much they invested in and the work that goes into that. I mean, like you said, you have to enjoy this shit or you can’t do this, right?
Greg Yenoli: Yeah. No, absolutely. When the idea comes along that you get really excited about, man, that’s like the best feeling, I guess it’s a really good feeling.
Frank Curzio: And that’s awesome. So, expect to hear more about DNA molecules in the future. Greg, thank you so much for coming on. Greg is a partner at the firms. Someone who could have went anywhere in the world and been a copywriter and probably run the division, and he decided to come here. Something I will never forget in 2017, really cool. We’ve known each other for a while, and I love you, bro. Thanks so much.
Greg Yenoli: Love you too, man.
Frank Curzio: Yeah. Really, really cool stuff. And thanks for coming on, man. This is cool. I think people are going to like it and just see the inside story of that idea that you usually get for me, it’s not just me going someplace and doing it. There’s a lot that goes behind it in terms of Greg helping out and editorial and everything and make an exciting enough to where new people are going to come on board and say, “Hey, you know what? I want to learn more about this.”
Frank Curzio: And then they get to know us and know that, hey, these guys really did the fucking homework on this, and that’s how the business is run. So, thanks so much for coming on. I appreciate it.
Greg Yenoli: Yeah. Thank you, Yeah.
Frank Curzio: And yeah, we’ll have you on sooner. All right, buddy.
Greg Yenoli: Yup. Take care.
Frank Curzio: Bye. Take care. Hi, guys, great stuff from Greg. Let me know what you thought. It was a little different interview, but I thought it would be interesting just to see the concept and how it, really, that whole idea comes to fruition, how we market it to people. But for me, and having the access to the network and even everyone listening to this and emailing me different ideas, being in certain industries, I don’t have that kind of access where if you’re an industry for 20 years, and you’re seeing something that’s disruptive, that’s happening. It’s just really cool.
Frank Curzio: And our job is not just to bring you the concept, but how do you make money off of it, right? So, my job is just… Sometimes it’s the larger names. Sometimes it’s smaller names trying to find different ways. You can make money off of it, but that’s great for current subscribers, how you build this type of visits, you need more subscribers, right? You need more names coming in. And we know when our names come in, new names come in, they tend to buy a lot of our products. You know what? For really they see the video stuff and everything. And the educational component.
Frank Curzio: But there’s a massive process behind it because once we do that, it goes to editorial and we create all these bonus reports of things that we learned. And just to add in and say, here’s something else that you might want to know about this industry. Then you get these new subscribers and are having a great experience and everything comes together. But I think that’s pretty cool. You might not think it’s cool. And if you don’t, that’s perfectly fine. Let me know. Right. This podcasts I say it all the time, and I mean it; this podcast is about you, not about me. Let me know what you thought about that interview at email@example.com. That’s firstname.lastname@example.org.
Frank Curzio: I will say this, if you are a part of our business, if you own our CEO token and the equity owners, our partners, our employees, Greg is a very, very big part of that. Very, very big part of generating sales through his copy packages. And he’s done a fantastic, fantastic job along with all of our employees, and really, really good stuff. So again, let me know what you thought that into email@example.com. Now, let’s bring in the one and only smartest man in the world.
Daniel Creech: In the world?
Frank Curzio: In the world. I’m going with that, which is-
Daniel Creech: In the world.
Frank Curzio: Daniel Creech. What’s going on? Creech, that’s how I got to call you all time, Creech.
Daniel Creech: What’s happening, Frank? What’s happening.
Frank Curzio: What’s up, man.
Daniel Creech: We got a lot to talk about. This is fun because it’s earning season. Some weeks there’s not so much exciting news to discuss and try to provide value, but where do you want to start? You want to start in a… We’re going to start with volatility. You want to go with cryptos? You want to go with regular stocks?
Frank Curzio: I mean, both.
Daniel Creech: Actually I lied. Hold on. Frank, Frank, Frank. So, you just got back beginning of the weeks are busy for us, which is exciting. So, we haven’t really caught up, but you left for a few days, left the entire company in my hands, which I executed flawlessly over Saturday and Sunday. So, how was the horse track? Are you as good as picking stocks?
Frank Curzio: I did okay.
Daniel Creech: Are you doing as horses as you did with stocks?
Frank Curzio: I did. Okay. I lost a little bit of money, but that’s great.
Daniel Creech: Read between the lines, people. That’s not good.
Frank Curzio: Yeah. It wasn’t that bad. No, it’s been better before, but I did okay. I mean, mostly betting numbers, I’ve done okay. Handicap it and Saratoga just doesn’t work, which is good because a lot of long shots usually come in, but… Yeah
Daniel Creech: But a good time. Fun day at the track.
Frank Curzio: Oh, yes.
Daniel Creech: Didn’t get rained out, got to hang out.
Frank Curzio: I mean, one of my friends, they talked about getting a Penn State shirt. I’ve known him since I was three years old. Man, I’m pushing 50 now. The other guys I’ve known since I’m 78 years old. So, that was really cool just to catch up with them. We use to go all the way every year someplace and that was a lot of fun. That was cool. But I have to tell you, I left the company in your hands and look what happens. The markets crashed. So, what’s the matter.
Daniel Creech: Well, yeah, but then they came right back.
Frank Curzio: It came back as soon as I got back.
Daniel Creech: All right. Now, we’re getting into details. Let’s talk about that. If you’re a permabear, half glass, half empty type of person, or just angry and pissed off about the mechanics going on in the market right now, Frank. You’ve got to be pulling your hair out, man, because you know everybody likes to take a victory lap when the market was down, what seven, 800 points on Monday. You got the why? Well, everybody’s all of a sudden scared about growth. Now, we’re going back to shutdowns or whatever, not literally shutdowns from a government standpoint yet, although they are rumors, but just slower business, slower growth. And this new COVID variant, the Delta variant was gaining headlines, a lot of negative headlines and such.
Daniel Creech: And so the permabear is got to say, “Okay, we’re finally getting to the point where see, we told you so.” A lot of stocks are down two and a half percent. Your big dogs were… Apple was I think down between 2 and 3%, a lot more stocks got hit harder than that. And then what happened on Tuesday? The Delta variant, not that big of a deal, everything went okay.
Daniel Creech: So, if you ever wanted to point to something and say, “See.” Our system is a joke that, the Fed, the money printing, this is not anywhere near realistic. You can’t… and you have to say, you’re right. You can’t stop the conversation there of course, but man, you talk about, oh boy, if you’re a negative person or bearish, you’ve got to be upset right now because it is silly. I mean, you don’t have swings like that for the same exact reason.
Frank Curzio: And you and I look at headlines all day. We look at everything only in the market, it’s our job, right? Most of you have other jobs and you look to us to give you a quick synopsis of everything that’s going on in the market. To give you the real story. But our job is to look at everything. We’re looking at… I’ve seen BC on. Again, I want to learn about sentiment and stuff. And you’re reading the blogs and Wall Street Journal and all this stuff to see the media, it’s reality TV. And I mentioned that before. It’s got to be exciting, you’re not going to watch it. And in order to be exciting, it’s fear or greed, that’s it, fear agreed. Which way they’re going to go.
Frank Curzio: Well, last week it was an extreme stream. When Bitcoin was going to 60,000, they talked about Bitcoin every single… Bitcoin, Bitcoin. Bringing everybody a Bitcoin on… Yeah. That’s their job. But just listening to how panicky people got. I guess I wasn’t surprised because it’s TV. And I mentioned that in my open, but, man, we went from… Again, one day we’re… Delta, holy cow is going to end the world to internationally, everything’s going to close to… One day we’re perfectly fine. Hey, everything’s cool.
Frank Curzio: Same with inflation. Inflation. You’ve seen that, that crept up in small caps of why they got hit a lot harder. It wasn’t just growth. Again, that is the growth argument, but it wasn’t just Delta. It was also, hey, inflation is here. I mean, CPI number came out not long ago and 5% were at right. What happens to the 2% benchmark? And then you’ve seen the volatility in crypto, right? Which has been insane. It fell below 30, right?
Daniel Creech: Yeah. Absolutely.
Frank Curzio: People are like it’s go to 20. And boom. It’s like-
Daniel Creech: Is it back to 32 almost right now, today?
Frank Curzio: Yeah. I’m going to see a flashcard screen in a second. I have a TV on, they usually-
Daniel Creech: Are the things that… So, just from a personal standpoint, when I see headlines like that and you see a lot of red, and it’s not easy, I don’t want to come across as, hey, we got all this figured out, and we’re not emotional or whatever. We’re just trying to share the experience and the background here, because the one thing I did. So, you see all these headlines about Delta variants and the markets are going down. Well. Okay. But just don’t take everything at face value and stop there. Just keep going.
Daniel Creech: And I understand, like you said, if you have other jobs and things like that, there’s only so much amount of time, and you have other things to do. But from our perspective, when you hear the things about the Delta variant, well, okay, thank goodness it’s just luck timing that it’s earning seasons. So, you get to listen to a lot of different companies, a lot of different sectors. And they’re going to talk about price inflation. They’re going to talk about if they have the ability to raise prices on consumers, or are they going to eat the cost and keep prices similar for consumers, even though their raw material costs are going up. That’s a big deal you want to pay attention to.
Daniel Creech: What I fought, fought, Frank, stop it. What I thought was interesting was that both Coca-Cola, who I think reported this morning and United Airlines commented on it. And they said, we’re not seeing any change in behavior from customers over the Delta variant.
Frank Curzio: And that’s via global companies.
Daniel Creech: Exactly.
Frank Curzio: Yes.
Daniel Creech: And now international travel, you’ve talked about that a lot in the past. How that’s slow versus domestic.
Frank Curzio: Hold on right there. Think about that what you just said, though, Daniel. So, you have Coca-Cola you have other companies, the global companies, right? Saying that we’re not seeing… So, that sentiment… They’re telling you about sentiment, right? If sentiment… People worried about Delta, they’re not going to spend, they’re not going to go out.
Frank Curzio: If you listen to the media about Delta, it sounds like, holy shit, we’re in trouble. You got Fauci out there just drilling it in your head, even though it’s perfectly… If you’ve got the vaccine, you’re protected. 95%, you’re fine. But just the companies are telling you that we’re not seeing anything, right? So, just look at the data and look at the data and risks.
Daniel Creech: Exactly. You just don’t want to take one thing at face value. And so where do you come with that? Now, it’s easy to say this on Wednesday because the market rebounded so hard yesterday, and it’s up-to-date as well. I don’t mean all that to say, oh, well, that’s easy to be a buyer on Monday. But when you take… You just have to keep the bigger picture. So, sift through those headlines, build a watch list of what companies you want to pay attention to, pricing power and things like that.
Daniel Creech: Just know that there’s going to be headline risk around COVID variants and all that kind of thing. And the great companies that sell off that have nothing to do with this are going to be good buying opportunities. I’m not saying go all in today because it’s all clear. I just hope that that helps when you see crazy volatility, that really doesn’t make any sense.
Daniel Creech: And then in the back of your mind, why is all that… What happened on Monday? Well, the majority of trades are algorithms and computers and all that. So, once you start hitting triggers, you get these snowball effects rolling downhill, you get these melt up effects, going uphill. Just remember all that and know that tomorrow is going to come around and see what happens. But this is a great time and earning season to pay attention to all that kind of stuff.
Frank Curzio: Yeah. Earning season is awesome. You listen to all the conference calls, you also going to see economic data release. There’s a quiet period we talked about a couple of weeks ago saying, “Hey, it’s not that big of a story.” Then we talked about space and that whole deal, which by the way, we’re bullish on… I love the idea. It’s incredible. What I’m just saying is everyone’s under this impression like, “Hey, these billionaires are using their own money.” No, they’re not using their own money, they’re using your money. Do you know how much… I mean, before he went to space, he’s richer now.
Frank Curzio: After both of these guys went to space, especially Branson, the way he structured that SPAC. That was the point of that. Wasn’t that this isn’t… I mean, to really believe we’re the only living thing in the world. I mean, we’re a micro dot when it comes to space. Gosh, it’s incredible. I mean, the exploration behind, I love what they’re doing, but I hate when that… These guys do not use your own money.
Frank Curzio: They actually… The companies that they created it and the amount of funding they got, I mean, Branson is out… $150 million, I think he made off of a deal already. And then he sold another $200 million worth of stock. And sold you on this whole story, we’re got to be profitable and all this bullshit. You’re lying and structuring a deal where you’re getting shares under the table. You don’t have to report anymore. That’s why SPAC industry is crashing because this guy… You’re going to see all the ship behind these deals that, “Hey, why am I buying this at 10, when these guys are getting it like 5 cents?”
Frank Curzio: So, that was the point of that. But I just… Yeah. We got an email about that saying, “Frank, give us a… And I was like, “No, listen, the whole space thing is great. What Branson did its borderline criminal.” Of what he did and how much money you made off of that that’s really piss me off.
Daniel Creech: I like that. Hey, what are we going to charge for subscription from Martians or something if we find somebody? I like that.
Frank Curzio: I don’t know. I don’t think I’d be interested in stocks. It’s going to be interested in technology stuff.
Daniel Creech: How are they got to be interested in this?
Frank Curzio: I don’t know that. They’re that powerful. They could just steal everything they want, right. We can’t think we have more… Our technology is better than theirs, right? Absolutely not.
Daniel Creech: Yeah. I don’t know. I mean, we got some cool stuff, but yeah. That’s all over my head, and I’ve heard some wild stories about all kinds of different things, UFO’s, whatever. That’s just weird to me. I’m not calling anybody a liar. I’ve got to admit it really doesn’t interest me. Like, hey, you want to go to space or land on the moon or whatever. That’s cool, but I’m good right here.
Frank Curzio: Yeah. So, the emails we got they’re like, “Oh, this is great. This is sending people to space.” No, you have $250,000 ago.
Daniel Creech: $250,000.
Frank Curzio: Not a lot of people do.
Daniel Creech: But, hey that price will come down just like everything else.
Frank Curzio: Oh yeah. Yeah. That’s going to come down to like a $100,000 and $90,000, but-
Daniel Creech: Nowhere to bargain.
Frank Curzio: And that’s assuming that everything goes right, because all you need is a couple of billionaires on one of these things. And it doesn’t go right, and holy cow, that whole industry collapses, right?
Daniel Creech: Yeah.
Frank Curzio: So anyway, I wanted to talk to you about crypto too, which you brought up, and we’ve seen a rebound in crypto. There’s a lot of bears out there saying, “It’s got to go to $20,000.” Or whatever. One thing that I look at when I look at crypto, and again, what I like Daniel is a lot of the shits getting nailed. I thought that would happen a year and a half ago of why credit security token, because you have more transparency and you’re getting an equity stake. And we’re seeing that. Here’s our portfolio have come down, but those are really good names I research. We don’t have bullshit in our Crypto Intelligence portfolio.
Frank Curzio: Some of these names, I’m very confident, a lot of these names and even Bitcoin, Ethereum, things like that. But if you’re looking at it of where it’s going to go, and what’s going to push it lower, I’m trying to find something out there. I mean, listen, if the SEC comes out and deems all these things securities, which they have a great argument for 95% of the market, they are securities, right? I mean, people are trading them, making money off of them. They’re operating right now on the assumption that they’re not securities, which is kind of amazing to me. But if you’re looking at the risks of the market, right. They bring up the Tether shit again, right? Which was heavily investigated, they pay fines and then no data.
Daniel Creech: Real quick, which is supposed to be a 100% backed by us dollars. That’s the big area right. That you got billions of millions of dollars, but they don’t have a 100% of dollars backing those. So, yeah.
Frank Curzio: But it’s the same exact argument we saw two years ago, three years ago.
Daniel Creech: Yup. Absolutely.
Frank Curzio: And then China coming out of it, completely out of the market. Fine. Maybe people thought that China… Anyone in Bitcoin knew that China wasn’t going to adopt Bitcoin. I mean, they just did… It’s the worst thing for them, because that’s a way for… Rich people will get money out of that country. They want everything and they want total control. That’s what you have with that type of government. So, Bitcoin does make sense. That’s why they tried to create their own currency.
Frank Curzio: And now they’ve limited miners, shut the bank funding off everything, right? So, but that’s done, right. That was 6,000, 30,000 and you look at the leverage. This is a very high leverage market where a lot of this leverage come out, what is going to push it much lower here? Maybe it goes 25 minutes, but what’s going to push it much, much lower from here because it’s being adopted by institutions. Is being… You see it at ATM, you see it everywhere, Bitcoin. More and more.
Frank Curzio: You’ve seen NFTs really quick. And now that market is kind of sharp, but security tokens. I can tell you from being in this industry, it’s never been… It’s starting to boom. I mean, the calls I’m getting from everyone out there saying, not just they want to start the cup, but everything is opened up. FOM University just did a big presentation, which I have to listen to, somebody send it to me about real estate and tokenization. Like I said, this checks off all boxes. It doesn’t have the excitement of a garbage crypto, like Dogecoin or whatever. That’s going to go up 20,000% immediately.
Frank Curzio: But as those things get nailed, people are looking for another way because this system is cheaper. You don’t have to go to investment banks to raise capital. You could trade. It’s for retail investors. I mean, you get into companies finally, not one snowflake goes public at whatever tens of billions of valuation when everyone’s selling it to you, who got it at a dollar.
Frank Curzio: Yeah. This is the new market. This is a new way of investment banking. And people are flooding into this market. And it’s been very, very exciting. I will say that. And that’s because regular crypto has come down, which you kind of expected that from a lot of these names, we’re trying to… We’re seeing it, but there’s always positives when something doesn’t go right with something else.
Daniel Creech: Yeah. I hate to just kind of blindly agree, but I’m with you because I don’t understand… And maybe crypto, who knows where it’s going in the short term, Bitcoin could easily drop below 30 again, near 20, whatever. But the big headwinds, like you said, the terrible headlines, you never chance never.
Daniel Creech: But the China thing, all that’s past us. And there is interesting to me around the $30,000 mark, give or take a few thousand. We’ve talked about this for a few weeks. It’s kind of bouncing around there. It’s holding. We’ll see what happens, but you don’t have all the major banks in all the headlines from PayPal just raised their limits to a hundred thousand dollars a day now.
Daniel Creech: Squire is making more comments about being more pro… They’ve always been very pro-Bitcoin, but talking about just expanding services to customers, you don’t have Goldman Sachs and everybody else getting into this and sitting on their hands. That’s why I’m so excited about earning season coming up for Galaxy Digital, Marathon Patents, some Riot block, the miners, and things like that.
Daniel Creech: And what got swept under the rug with all this news, it was a huge deal. With all the volatility is a huge deal because we had a first of an over-the-counter stock, pink sheets, American films, about an $8-$9 million market cap company decided and announced that they are going from that market over-the-counter to the tZERO platform. So, you’re going from the standard trading of stocks to the tokenization. That’s a real big deal.
Daniel Creech: This needs to be timestamped because if things go a quarter or half is good as you, we are hoping, and you think so, this is going to be one to look back and be like, “Hey, why in the hell didn’t you guys do this earlier?” Granted, there needs to be infrastructure. There’s got to be a highway that you can cross and take that road to get from A to B.
Frank Curzio: Volatility is the biggest thing you want to have.
Daniel Creech: Absolutely.
Frank Curzio: You have to have liquidity in these and now you’re starting to get it. These exchanges open up and they will try retraining platforms, open up these ATSS and that’s what we’re seeing here.
Daniel Creech: And the good news about to your point is they’re following the anti-money laundering laws. They’re following the know your customer, all the SEC. So basically, my impression is they’re trying to say, “Hey, we don’t have the final blessing from the security exchange commission, the SEC yet,” but were basically saying, “Hey, we’re treating it like stocks and there should be no issue.” That’s a very simple version, but that’s something you need to pay attention to.
Frank Curzio: That’s definitely exciting and definitely Crypto Intelligence. So, we’re going to get ahold of… A lot of companies getting in there early, a lot of companies are coming to us because we pretty much the first, if not one of the first to the market, trade to retail investors.
Daniel Creech: One last thing here, because when I was looking into it, when I saw that announcement, that was pretty cool. I’d never heard of American films, but now that they’ll have to, you would think they’re going to have to put some disclosures out, some financials, you are going to allow investors like us to dig through these.
Daniel Creech: What stood out to me here is that if you just replaced the over-the-counter market or the pink sheet market, you’re talking over a billion dollar, several billion dollars. You could easily get a bunch of companies over there, get a lot of volume, get people interested, get disclosures out there. To your point, it’s not going to be like the 2,000% and altcoins because it’s not 24/7, et cetera.
Daniel Creech: But you talk about a massive bull market and huge price appreciation. When you get in a comfortable environment, and you get people that know that they can trust it, anything can happen. And you’re going to get great businesses on there. So, that’s beyond exciting.
Daniel Creech: It’s going to take some time, Tom Petty said it best, waiting is the hardest part, but there’s a lot of good news that you need to think about. You can’t just be all one direction, but don’t just assume that everything’s bad because the crypto market’s down. Don’t let price dictate your research process.
Frank Curzio: It is very exciting times. And I can tell you personally, the amount of people reaching out, the alternative train of thought, the biggest people in the industry reaching out, just a lot of the news has been reported. It’s been incredible. It’s more in the last six months than it’s been probably in the last 18 months.
Frank Curzio: And COVID did put a little wrinkle in things and people are nervous or whatever, but getting the funding, people raising money, doing reggae offerings, being able to trade to retail investors, US company that’s on a US exchange alternatives, all that, it is now here. And it’s very, very exciting times. Now what I want you to pay… Never really turn a page to talk about it earlier, but the trend and earnings is pretty remarkable.
Frank Curzio: About 15% of the companies reported so far and they’re easily beating estimates. I mean easily, easily. So, it’s 20%, they’re beating by 20% and that’s the bottom line. And that’s the surprises compared to 10%, but they’re blowing up the numbers. I think, we’ve got to see that going forward, but it doesn’t mean necessarily you’ll see that happen. And some of these stocks fall and sometimes you get questions.
Frank Curzio: Well, why don’t you just blow out the earnings? Why that happened? One is a stock’s probably up a lot going into that. That’s the first thing, right? So, the expectations for the company to beat, but also, it’s all about guidance. It doesn’t even matter what they report. They can report and say, “We beat earnings by 5,000%,” and then they could say, “Well, next quarter and for the year, we’re going to really miss estimates.” And the stock’s going to fall off.
Frank Curzio: It’s all about guidance. Everything fall in looking in the markets and that’s the thing with the supply chain issues, haven’t really seen it too much. But reading the reports and the supply chain issues and showing how third quarter is a lot, lot worse than expected, or it’s going to be and saying it’s going to go into fourth quarter, and now, we’ll look at it 2022.
Frank Curzio: Again, I think some positive news out of Ford and partnering with whoever have a car by the end of this year, that’s going to be self-driving for Lyft or something. They’re going to make one car, right? They can’t get the parts and you’re not going to see, but just that announcement’s like, “Wow, Ford!” They’re announcing that, they’re talking about their Evie vehicle.
Frank Curzio: There’s a reason why. Because current production is going to be down more than 50% across the board. You look at the supply chain issues, you’re going to see them creep up. One of the things I worry about guys, if you own some of these stocks, some of them not impacted at all, and others are saying they’re are being impacted, and also raw material.
Frank Curzio: Everyone’s saying raw material prices are higher, they raise in costs to offset that or raising prices to offset those commodity, raw material costs. But for me, just be careful because you might see companies be very conservative with guidance or even say, “Hey, we’re not going to offer guidance because of the supply chain issues.” And if that happens to you on one of those stocks, you got away with that during COVID. It didn’t really hurt you.
Frank Curzio: I usually heard you for 20 years. Really, folks are earning seasons with 20,000 units, for longer than that. But just going through conference calls, reading everything, guidance is the biggest issue. When they come out and say that if they lower guidance or they remove guidance, it’s usually 10%, 15% correction to stock. And we saw all the companies say that during earning season through COVID. And now they’ve come back over the last quarter or two and offering guidance.
Frank Curzio: I’d be careful there. Because if you have that stuff that’s going to say, “Hey, we’re not too sure what will be.” You could take a 15% hit immediately just on that uncertainty. So, just be careful guys. Look, it might not be a big deal, you’re in the stock long-term, but one of the trends that I’m expecting to see with huge two weeks coming up for earnings. Huge earnings.
Daniel Creech: Absolutely. Yeah, you want to pay attention to what they’re saying. You don’t want a bad quarter right now. You don’t want to see awful results, but you do have to say… It’s the old saying what have you done for me lately? Hey, that’s great, you had a good second quarter. What about the third? What about the fourth? What are you thinking about the fiscal year or even next year?
Daniel Creech: You really want to pay attention to that. And to your point, you’re going to get hit. So, what can you do as an investor? We’ll flip that on the other side. So, if you see companies reporting and raising guidance, if you see companies raising buybacks or raising dividends or saying, “Hey, we expect this momentum to continue.” That is just as powerful on the long side. So, that’s why you need watch list.
Daniel Creech: Obviously, Frank, and I have the portfolios that we have for subscribers, but I don’t know how many you got on your watch list come earning season. But it’s a ton. I can imagine just like me. And that’s what you want to see. You want a screen for that? Who’s knocking it out of the park and saying, “Hey, we’re going to continue to see this.” And that takes a lot because management likes to play conservative.
Daniel Creech: You don’t want to set the expectations high and not make them. There is a game in that situation of it. So, you want to manage expectations. But man, when you have companies coming out saying this is going to be great, Knight-Swift transportation, that’s an old family friend of ours and Curzio Research Advisory, you see, they raised their guidance pretty significantly from a percentage standpoint. And they basically came out and said, “Hey, we got tons of momentum, and we expect to see it through next year.”
Frank Curzio: Great company, that it was just totally different from their culture, where it was conservative costs. They manage costs much better and just merging those two companies were incredible. And now you’re seeing, sometimes it hurt the company a little bit and people were like, “Oh they don’t…” They know what they’re doing. They’re not looking to buy a company to just…
Frank Curzio: It’s not like a roll up where they’re buying a company and saying, “Hey, we’re growing this amount next quarter, the quarter after.” They know, three years man, this is going to really build their business in perfect timing. The trucking industry right now, there is supply constraints and stuff like that. But man, these guys command whatever price they want.
Frank Curzio: Another thing too, look at Boeing, guys. I understand. The travel, I get it internationally, but there was 5,500 orders for Max’s. We had the problem with the Max’s before COVID and COVID, but look what we are now. We’re back to those levels where we’re seeing more domestically, right? It’s taking off domestically, no pun intended.
Frank Curzio: So, airlines’ fine. They’re still going to be down a little bit, but they’re going to have to purchase planes. Tons of planes. We’re going to get back to normal, say within six months. We’ll get back to normal. There’s people dying to travel. A lot of those planes are going to need to be filled. They have to restart those fleets because some of these planes are so old and there’s tons of part makers.
Frank Curzio: So, listen to Boeing not to buy Boeing, but see specifically, “Hey, Max’s orders are really coming in.” We recommended a couple of companies, specifically for the Max’s to have parts for them. And we did well. When you’re looking at conference calls, not necessarily you have to listen to Boeing and see if you’re going to buy it. Because that’s pullback with Tokyo International worried about Delta, the Delta virus, but look at it outside the box.
Frank Curzio: Okay, who’s going to benefit? These orders are going to come in. Maybe it takes a year. I don’t know, but they’re definitely going to come in. If they have to upgrade their flight, you go to see travel come back. Everybody has more money than they’ve ever had right now, household wealth at record highs, a dinner to get out of the home, especially internationally. And that’s going to result in an explosion.
Frank Curzio: Airlines are going to have incredible pricing power. They do right now. The price that you’re paying for flights is ridiculously high and that’s not going to change. It’s not going to change. So, that’s how I look at it. But really quick, just a couple of companies that report, Netflix kind of missed estimates. I’d be buying on that pullback.
Frank Curzio: People believe that Netflix… It’s not subscriber growth. They have incredible, incredible pricing power. When you have content, when you have the ability to entertain people, which they do in streaming, they can raise those prices tremendously. And people aren’t… They love Netflix. They love the system. They love everything.
Frank Curzio: I don’t think Disney has that kind of pricing power. They try and raise their prices. As they raise prices, you’re going to see a lot of people fall off that file. And you’re starting to see that now. You see much, much slower growth compared to what we saw, like they got to 120 million in a blink of an eye. But the new content that they have is nothing what the new content coming out for Netflix.
Frank Curzio: And Netflix and Time Warner and Discovery, they’re spending 20 billion probably this year, where Disney spending 5 billion. So it’s about new content. Netflix came down subscribers. I think that’s a real metric to be looking at. They could have much more pricing power.
Frank Curzio: Phillip Morris, top estimates. But the shares fell because they have margin concerns. I don’t know if Philip Morris has any more pricing power, because people are going to vaping and different things and you sort of start get hit. And two, the surgical has been a monster. Great. Last thing is IBM. Did you see those numbers?
Daniel Creech: I did. That’s Wall Street’s favorite whipping boy. That’s hilarious. They was good though. They were finally solid now. They didn’t grow a whole lot, when you back it out of X currency and IBM’s famous for your gap and your non-gap reported numbers and the one-time, one-offs that seemed to reoccur every quarter. But they are a favorite whipping boy on Wall Street, but I thought it was pretty good. Red hat, the acquisition was grown 20%?
Frank Curzio: Twenty percent.
Daniel Creech: Solid.
Frank Curzio: I’m just going to say a few things for you guys. Because it’s difficult to hate IBM. Because IBM an old company that… Let me tell you something. Cloud now accounts for more than 50% of profits. This is an old IBM…
Daniel Creech: Sorry, 15 or 50?
Frank Curzio: Fifty. More than 50% of profits. It’s a massive high margin business, right? So, your revenue is 30%. But margin, when you look at earnings, it’s an incredibly high margin business. Why Amazon is trillion dollar companies like Microsoft, Google, it’s Cloud that really took them to the next level. That’s their biggest growth engine.
Frank Curzio: So now, IBM is clearly getting business through the cloud in their hybrid model, right? So earnings per share projected to grow at 18% annually over the next two years, much faster than the overall market. The stock is trading at 13 times for the earnings. They still hate it. And it pays a four and a half percent yield, which is perfectly safe.
Frank Curzio: They say, $11-$12 billion in cash we’ll expect to generate. You have a high yield where you’re looking at low interest rates for forever, right? Forever. A very, very long time. And you’re getting a nice yield on a growth company that’s growing faster than the market. That’s trading at pretty much.
Daniel Creech: It’s still $40 cheaper than it was in 2017.
Frank Curzio: If you look at the cloud industry, they trading at 25, 27, 30 times. Plus this is 13 times. IBM is a Cloud company. It’s where Cloud goes. Cloud did great. The stock went high. Cloud doesn’t do great, he still regrets it’s not going to do good. But with the Red Hat acquisition, it’s working, going fully integrating to cloud.
Frank Curzio: Hybrid, they think it’s a trillion dollar market, but I don’t know how you would short IBM here when you’re looking at cloud accounting, if you could send a profits again, earnings per share, expected to grow much, much faster than 18% annual of next two years, 13 times for what earnings and a 48% yield. I look at earnings, I see that everybody kind of manipulates earnings or whatever.
Frank Curzio: They’re selling off a lot of business, but as they’re selling off these businesses, yes, these are one-offs. But the more businesses that they sell, the more that they’re getting out of their old shit and putting it into their new stuff. And that’s what you need to understand. “Oh, well that’s a one-time, it’s a one-off.” Well, that one-off business, they just sold for whatever billions of dollars was a 20 percent drag on earnings. That’s what you have to focus on.
Daniel Creech: The joke there is that they have… You have a ton of non-reoccurring or what items every single quarter. That’s the joke that they get beat up on. I know what you’re saying though.
Frank Curzio: Yeah. But now, especially IBM, the transition, yeah. It took 50 years. I understand. You say, “The revenue hasn’t grown in 10 years,” but earnings were skyrocketing. That’s what you care about. And the reason why sales weren’t growing is because the cost of it for servers and the old legacy business.
Frank Curzio: You’re paying $10 billion and getting a 10 and a half billion dollar profit, that profits are really tiny. But if you have a $3 billion business, so you get 3 billion sales and your profits are a billion dollars, your revenue is going to go down, but your earnings are going to go up. As a business, you’re taking that a hundred percent of the time.
Frank Curzio: So, that’s why you saw revenues come down. Now, you’re seeing revenue’s expected to grow finally. I don’t know why people look at the IBM. Again, you might not like it here, but may have it short. I think you’re nuts. I think you’re crazy if you short the stock here.
Daniel Creech: I definitely wouldn’t short it. Just to have fun with the timestamp thing that we were talking about earlier, this is good. When I saw that report, I was like, man, those are decent numbers. The Red Hat acquisition is obviously paying all for going in the right direction.
Daniel Creech: I felt like we could say, “Hey, I don’t think it’s dead money anymore,” because you pull up a five-year chart, it was basically 150, popped almost 180. And now, it’s 140 today. And that’s five years. So, you could argue you’ve been holding the dividend the whole time and all that.
Daniel Creech: Yeah, that’s fine. But my point is that it just feels like it’s getting past that dead money. So, we’ll see what the next quarters bring and if they can continue. But I thought it was very good. I thought that was the best in a while. And I always enjoy seeing still the critics point out their gap and non-gap accounting and stuff, but we’ll see.
Frank Curzio: And also, just bringing up that point. Last thing here is, one of the hardest things is to forget the past. Because you can look at so many companies and recommend a great company that I hated. That I hated and I used to make fun of every time.
Daniel Creech: Don’t have your heart break.
Frank Curzio: I’m not going to give it away. And then I saw it. They changed the business model, earnings are ramping higher, great management team now. And I’m like, “Hey, listen. I hated this company.” You have to take a fresh look. IBM taking a fresh look at it now. Yes, they sucked before. Yes, they got their ass kicked by everybody else.
Frank Curzio: I get it. Try to forget about the past because that’s when you could buy very cheap stocks, stocks that everybody hates. And then when IBM’s 200 and everybody loves it and it is a company has a market cap… What’s the market cap? What you have it up there is like 130 million, billion?
Daniel Creech: Just through, you’re talking…
Frank Curzio: IBM. When you look at a market cap, is it more?
Daniel Creech: No, 125.
Frank Curzio: 125 billion, and you’re looking at the competitors, trillions. These guys could easily double and just take a little bit of market share, but that’s what you really have to look at because once things goes too and everyone’s like, “IBM’s back. This is great.”
Frank Curzio: You know what? These numbers are here now. And if they report another quarter like this, you’re going to see Wall Street change your sentiment. And that dividend, that dividend is really, really important. People love that. A four and a half percent yield is perfectly safe. I hate the fact that they have that dividend.
Frank Curzio: I wish they’d get rid of it or not get rid of it, but bring it down to 2% and put more of those billions into growing cloud. But that’s going to be very attractive in a low interest rate environment. So, good for them. And they put up good numbers. Good for them.
Daniel Creech: Yeah, absolutely. Like you said, going forward from here will be interesting to watch. That was a little bit of a turning point from dead money to, “Hey, this could actually be a mover and be a solid set up.”
Frank Curzio: All right. So Dan, listen. Thanks for joining us, buddy. We like covering the current topics. It’s going to be really crazy, guys. It’s going to be a lot of fun over the next couple of weeks. I love earning season. A lot of stuff coming out, reports from us, it’d be really cool.
Frank Curzio: And guys, pay attention to this, pay attention to earning seasons, see what’s going on, what the companies are saying. You can go to FactSet. Just go to FactSet, PDF type that in Google.
Frank Curzio: It’s going to give you a great rundown and usually three, four or five days old, but it’ll give you a rundown of everything that’s going on at earning season. What sectors are doing bad, and you can find lots and lots of ideas doing that, which is cool, but really, really great stuff. So Dan, thanks for joining us, talking about the topics, and we’ll see you next week, man.
Daniel Creech: All right, take care.
Frank Curzio: All right guys. Man, that’s it for me. One thing here that we’re very, very excited about is The Big Money Report. We launched this to Curzio One members, and they got beta issues, which is awesome. So, they got beta issues. It was like four beta issues. And what we expect for our Curzio One members is to let us know what they like and don’t like about the product.
Frank Curzio: Again, it’s not required, but it lets us tell our product it is supposed to do for the customers. And The Big Money Report, it’s being run by Luke Downey, who’s fantastic. We had him on the podcast. We’re going to have the podcast next week. We officially launched this to current subscribers, now it’s going to be launched to everyone.
Frank Curzio: It’s a very low priced newsletter where this is a newsletter that focused on tracking the smart money. And the examples when you see the video that we bring out and the promotion that we bring out, is remarkable. When you’re looking at when the Big Money enters and you seeing the massive, massive moves, it would be really nice if you see that, that money coming to market, and being able to invest at that time.
Frank Curzio: And this is what Luke’s been doing for 15 years, bringing that strategy here, something that’s very exciting. A lot of you got to see his work already because he’s been writing for us for nine months and just happy to have him on board. This is a very favorable newsletter guys. It’s going to cost less than you felt you guess tank in a month.
Frank Curzio: So, it’s very affordable. It’s really cool. It’s a great, great newsletter. The objective is to get into the Netflix before they become a Netflix’s and these big stocks. And he has a track record of doing that, and very, very excited. So, you’re going to see brochures coming out. You going to see offers coming out. Now, we’re marketing to the masses.
Frank Curzio: We think the newsletter’s going to do very, very well because Luke has just been killing it for a very, very long time. We’re very excited. He’s very excited. More importantly, he’s doing videos like I do videos for my newsletter. So, he’s going to be teaching you, not just, “Hey, you got to buy this. You got to buy.”
Frank Curzio: He’s going to be teaching you and showing you where the Big Money’s coming in. This is why you want to buy it here. And just give you real-time updates, which is awesome. So, very excited. We got everything together. We’ll officially launching. This is going to happen next week.
Frank Curzio: Actually, might even happen early in the next week, maybe Friday or so, but very, very exciting stuff guys. So, anyone interested, I’ll send you the link. I’ll get it out there, but we’re going to have Luke on and talk more about it. Very, very excited. Product’s been out for about two months to just our current paid subscribers.
Frank Curzio: And also, at the very beginning with beta issues. Now, we’re going to launch it to everyone. And it’s a really, really exciting news. Trust me, guys. You’ve got 30 days, you could buy it, and then cancel it. If you think I’m full of shit. It’s just a really, really good newsletter that we’re excited about.
Frank Curzio: And I love launching new products, especially a product like this that I like so much. And plus, they know you’re going to like, but based on the feedback that we’ve gotten already from subscribers. So, really, really cool stuff.
Frank Curzio: And that’s it for me! Questions, comments, feel free to email me, firstname.lastname@example.org. Really appreciate all the support, all listeners out there. Love you guys. Appreciate it. Again, feedback positive, negative. We love getting it at email@example.com. And as always, always, always, always. I’ll report back to you guys soon. Take care.
Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its hosts and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.
- Rant: The Fed keeps moving the goalposts [INTRO]
- Guest: Greg Yenoli, managing partner of Curzio Research [30:20]
- Educational: Looking past the headlines… and earnings season [01:01:31]
Next week, we’re publicly launching Luke Downey’s new growth advisory, The Big Money Report… and with it, a special report that includes three fantastic buying opportunities—and three stocks to avoid at all cost.
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