Wall Street Unplugged
Episode: 1144May 29, 2024

Is Elon Musk about to dominate the AI landscape?

Inside this episode:
  • Should you be worried about the market pullback? [2:43]
  • 2 market indicators are telling opposite stories—which one is true? [7:57]
  • The markets are in unchartered waters [17:09]
  • Musk’s new AI startup [21:29]
  • Why Zuckerberg is getting serious AI street cred [27:28]
  • How to position your portfolio for the AI boom [36:13]
  • This crypto lawyer should be shot… in the foot [40:03]
  • Why we’ll see consolidation in crypto miners [45:29]
  • This stock popped after adding Bitcoin to its balance sheet [49:38]
  • Why you NEED crypto exposure [54:10]

Image by Robert Harker from Pixabay

Transcript

Wall Street Unplugged | 1144

Is Elon Musk about to dominate the AI landscape?

This transcript was automatically generated.

00:02 – 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.

00:16 – Frank (Host)

What’s going on there? It’s May 29th. I’m Frank Curzio of Wall Street Unplugged, podcasting media headlines and telling you what’s really moving these markets. I’ll see you later. Golf, right? No, golf really this week. Anything going on in golf? I mean, I know your boy lost last week.

00:44 – Daniel (Host)

I know Way to bring that up. That was terrible. But, that’s okay. Well, that was two weeks ago. You’re rubbing it about the PGA aren’t you?

00:52 – Frank (Host)

Yeah, pretty much yeah.

00:53 – Daniel (Host)

Koepka, long live, LIV. Well, I’ll get some hate mail for that one.

01:09 – Frank (Host)

I know, was so angry about it. Seriously, he was like I can’t believe these guys sold their souls to the devil and I’m like I wouldn’t go that far. I mean these are guys that are doing what’s in the best interest of their family, right? I mean they’re gonna get paid, just like john robin said. They’re gonna get paid more and work less, spend more time with your family, right. So it’s a, it’s a decision that he’s like okay. Remember golf. You know better than anybody dave when it comes to’s guaranteed. I mean, you see guys that are great a couple of years and then they fall off the tour.

01:25 – Daniel (Host)

You don’t know you get hurt, yeah, Jordan Spieth.

01:27 – Frank (Host)

Well, he’s still on the tour though. Yeah, but I mean he hasn’t done anything. But I’m talking about, like guys in the mid-tiers and stuff like that or whatever, but it’s, they’re going to do what’s in the best interest of the family. Anyway, it’s kind of crazy.

01:43 – Daniel (Host)

That’s kind of like the AI holy grail Less work, more pay. Yeah, works out. Maybe that’s LIV. They ought to take that up in marketing.

01:49 – Frank (Host)

Yeah, maybe Speaking of AI, right, I mean Elon Musk. We’re going to talk a lot going on. Right, talk about AI, with Elon Musk trying to become the king of AI right?

02:09 – Daniel (Host)

Yeah, he raised $6 billion, correct. Is that a record? Did I read that right?

02:14 – Frank (Host)

It’s a record for a Series B funding, right. So and you know, people who want to doubt him can doubt him, but he just does great in every single industry, whether it’s, you know, spacex, solar or EVs. But also consolidation in the crypto sector what I thought crypto wasn’t a real sector. Consolidation right. We’re seeing takeover announcements and then you also have George Lucas finally throwing in the towel on AI right, saying that it is the future and look, we need to adapt right now. And you know pretty big deal.

02:43

We’re going to get to that in a minute, but I wanted to start with what’s going on with the market seeing a little bit of a pullback and the underlying currents of the market.

02:52

We’re not seeing good breath where a lot of sectors are participating, so we’re near all-time highs and we’re just off and everyone would be like, hey, we’re doing great. But it’s much more than that and people are starting to recognize it where the consolidation that’s taking place in a max seven in terms of hedge funds, they’re that they’re at their most long exposure for these stocks in history. It’s at a record, right. You would think like, oh my god, there are so much, so we’re pulling back a little bit. You’re seeing like this become more of a bigger pie of the sp500, and even hedge funds, and investors are going more into these names. So it looks like the market’s doing great, but under the surface surface there’s a lot of sectors getting hit, a lot of stocks getting hit, and I guess my question to you, which is very, very easy, daniel, you should answer this, no problem, but does NVIDIA’s strong earnings mark a top for the markets?

03:35 – Daniel (Host)

No. Next question.

03:37 – Frank (Host)

Okay, let’s move on.

03:39 – Daniel (Host)

No, I’ll tell you because, in addition to NVIDIA blowing out the expectations yet once again, we continue to be on this melt up or at least I don’t want to put that argument on you, frank. But the big thing that I continue to pound the table on and say if somebody doesn’t bring this up when they talk about market conditions, then I just think they are either being lazy or carrying some other water pail for somebody else. Frank, there’s a screenshot that I took here. Let me pull it up from mid-May and I’m not going to get into the details, but it was a Bloomberg US Financial Condition Index. We’ve talked about this in the past. All you need to know is financial conditions are easiest or more liquid. However, you want to say that they’re easiest since 2021. What does that mean? That means that you have, behind the scenes, easing financial conditions today, as you did when rates were zero, frank. Today, rates are over 5%.

04:30 – Frank (Host)

Going over 6% and 7%. Did you hear Jamie Dimon really quick about that, Jamie, Jamie.

04:33 – Daniel (Host)

Dimon.

04:34 – Frank (Host)

So he spoke again about it and he was cool the way he spoke about it. He’s like you know, none of you. He’s like most of you didn’t live in an interest rate world that was above 6%, but you believe that that can never happen. Why could that never happen? That could actually happen. There’s a real possibility of that happening. And just you know the way he explained it wasn’t. It was just like, hey, it’s not as far fetched as you think, like interest rates going high and that’s kind of what we’re seeing right now, with tenure going high, which is certain to markets.

04:56 – Daniel (Host)

But again, I just I won’t throw it the best bankster, but you have. So behind the scenes, you have financial easing conditions at the same pace or the same levels as you want to say, since 2021. The other thing that we continue to pound the table and I am proud of that, we should take a victory lap on that is it’s going to be very hard, if not damn near impossible, frank, to have a recession on paper yes, paper, because why? We’re running trillion and a half to trillion seven deficits and you’re not going to have huge major slowdowns when you have tons and tons of money literally being printed out of thin air and injected in the economy still on the back end and you have mass immigration which is propping up the labor markets and things like that. I know we may get banned on saying the I word. We need a swear jar, frank. That’d be a lot of fun. Only we could do it a drinking game.

05:41 – Frank (Host)

We could get buzzed every day and be happy all the time you would be, I would be broke, I tell you what you want to talk about a financial killer. I get mixed Probably 75% of people. I don’t do it just to it’s like sometimes like the New York comes out, Can I?

05:54 – Daniel (Host)

interrupt you. Here’s your thing. It’s like having this fits you as well. You’re a parent, you’re a CEO. You, you can be late for anything, you can have the messiest house or car for anything Cause you have kids. You have the best excuses. And I think on the customer side, you’re a New Yorker. Now, I’m not saying anything negative against New Yorkers, it’s just common folk that New Yorkers cuss a lot, and I will give you one more credit. And he’d just be like you know he could do it in a negative way, but he would just be happy and fun and like talking about something. He’d just rattle off the F-bombs like crazy. So anyway, it’s not a nobody thinks lowly of you that. Listen to the podcast, frank.

06:38 – Frank (Host)

What you see is what you get. It is and it’s funny because we have new policy when we bring on new subscribers to our high-end products that are usually $1,000 or more. You know we talk to them, right, I do a 10-minute phone call with them. Again, we can’t give investment advice or anything like that, but you know I get feedback on it, saying oh, you know it’s, you know I like that you curse and don’t really say that.

07:00

I don’t like it. Maybe one or two people. But the one thing they say is which I think is pretty cool is that you know you sound exactly the way you do, like even when I meet people in person at conferences. I mean, this is me right. So you know, I’ll cool it off a little bit sometimes, but sometimes just the emotions get the best of me.

07:14 – Daniel (Host)

I’ll take the other side of that trade. So you are like I said you can’t change.

07:19 – Frank (Host)

That I mean you look at the markets.

07:23 – Daniel (Host)

My big thing is you have crazy deficits. You have financial conditions easing on the back end. The latest Fed meeting, when Powell said they were going to continue buying bonds with the excess reserves. I mean that’s literally quantitative easing during an election year and they’re just not saying it out loud, which is fine, but that’s okay. So that’s why, again, it makes me nervous. I’m not a perma-bull.

07:43

Yeah, yeah but, man, it’s hard not to be bullish when you have mag seven basically 30% of the S&P 500, putting up great numbers. And what are you going to do between now and the next Fed meeting, or now, between the next data? All right, markets are going to sell off, and then what? Oh, we might as well start buying again.

07:57 – Frank (Host)

I know that’s the way the market is right now, but I have to tell you, when I see the front page of CNBC, two stories next to each other. One of them said Bank of America technical research analyst named Stephen Suttmeier, as of May 23rd, that marked the 100th trading day of 2024. And the S&P 500 rallied more than 10% for the year. And that was as of May 23rd. She said when this happens in an election year, 93% of the time the S&P 500 rises the rest of the year. And then the same page right next to it.

08:25

Right next to it it says market crash indicator called Hindenburg-Ohman I never heard of this before either and it says it was just triggered, right. So this is basically seven indicators measuring breadth of the market. You know highs against lows and you know it suggests the market’s about to crash. The record’s a little sketchy, right? It predicted the last two crashes, but every single bear perma bear in the world always tells you how they predicted every crash. They didn’t tell you that it only crashed three times in the last 25 years right, they didn’t tell you.

08:53

Okay, I’m three for 25, right, they don’t tell you that. But, like I predicted every single crash, right it’s. You see this back and forth where it’s kind of confusing for individual investors Because you have, you can cite the positives and we hear people saying the consumer is doing great and other people saying the consumer is not doing great. I would argue that the consumer is not. The average consumer is not doing great right now because high interest rates are really starting to impact them. Then we look at the markets and say, okay, well, we have the inverted yield curve, which always precedes recession all the time. This is the longest it’s gone on. Well, we haven’t seen that. So you know, there’s so many indicators. But what I can tell you about the markets, when you have this mix, like we call it, goldilocks right, not too hot, not too cold, or people just when you have opinions on both sides, it’s usually good for stocks.

09:39

It’s when everyone leans to one side, which is why I bought puts in Tesla. Right, I mean, everyone was leaning to one side. It’s terrible. The stock’s already down 40%. And then you can go to the, you know, outside of NVIDIA in terms of expectations and beating them. And then you know, going through the roof it’s. You know, a lot of times you’ll see a company report decent earnings and then pull back because expectations are so high and the stock ran up into that. Expectations are so high and the stock ran up into that. But when you have this you know, oh my God, I think it’s going to crash. And you’re highlighting all the deficits and debt and what’s going on with the consumers. And then you’re looking at some of the positives, which you know again unemployment’s really good right now You’re seeing it being led by technology.

10:21

But overall, when I look at this market, the breadth is really terrible. That’s something that’s different and worrisome. So, meaning that it’s concentrated right, it’s basically the back seven stocks again. And what happened during this massive round that we’ve seen for most of the year? We saw it go to different areas, but now we’re seeing those areas pull back a lot. And same with the Russell 2000, which I highlighted last week. I mean the concentration. The average Russell 2000 stock is what it comes in between two and two and 10 billion. I think it’s supposed to be like two and five. It’s around two and 10 billion. I it’s not an exact number because it depends how big the market caps are. For what is it Like? Like you know, the 3000 stocks right, super micro.

10:54

So then after a thousand the next 2000 market caps. That’s why it’s it’s like a 50 60 billion dollar market cap and the top five have market caps on average of 25 billion 30 billion. That’s the top seven stocks. So is a russell really doing good? Is it doing bad? The russell is not an indication of a small caps doing good or bad, because it’s so heavily concentrated. That’s going to change next month when they rebalance and they’re going to pull those stocks out and rebalance it. And those bigger names are going to change next month when they rebalance and they’re going to pull those stocks out and rebalance it and those bigger names are going to go to the S&P 500. But my point is, when you look at the MAG-7, which is Apple, amazon, google, microsoft, nvidia and Tesla are hot right now and you could say, okay, frank, there’s some pockets that are hot. Okay, gold, bitcoin, oil. Now a lot of consolidation. We’re going to come out tomorrow a lot more in detail and give you stocks and ideas, like we always do in our premium podcast, daniel and I. But when you look under the hood, american Airlines just warned okay, taking down the sector.

11:52

Healthcare has been a disaster. I mean, for someone who follows healthcare a lot from my business and how much we pay and how they keep reducing the amount of what you get, and also how you know I have Walgreens across the street. Everybody goes to Walgreens or CVS or maybe Publix or whatever your pharmacy to fill your prescriptions. And now Walgreens is not covering UN Healthcare. Unh is not part of Walgreens. I mean you’re talking about the largest healthcare provider, which is one of the main outlets of distribution when it comes to prescriptions, and you’re just seeing a lot of changes in the space where everybody’s complaining. But somebody has to be making. I’m putting money in the swear jar, fucking money in the sector because they’re annihilating people, right? I mean we’re getting annihilated with costs. It’s a fortune. So you know, now I’m paying healthcare insurance. Just example of it same healthcare. I mean I had two hip replacements, one five years ago I paid nothing for and I had to pay, I think six, seven grand for the other out of pocket with insurance. You know what’s going on, but healthcare hasn’t been good.

12:48

Mcdonald’s, starbucks not good right. Walmart, target, warning about how the consumer is trading down. They would know better than anyone Finding a few pockets in consumer discretionary working. Ambercrombie, Dick’s reported today Good comeback, right, they got beat up and had a lot of problems. Good comeback, chipotle is good, but Shopify was a disaster. But most of those consumer discretionary stocks, you’re seeing them not perform in a market where the consumer is supposed to be healthy, and good Media stocks.

13:14

I mean just, you want to talk about being unprepared. I mean, this is an industry that saw this coming miles and miles and miles and miles and miles away. They said, okay, traditional media outlets, okay, we’re going to streaming, and they just thought they could start the streaming and it was going to be easy. And now they know that this is a disaster because people want to get all these channels and they want to pay the least amount of possible. And now, when you have streaming, you’re streaming to four different companies, five different. You’re paying just as much as the old cable bill was, but outside of Netflix nobody can make this work.

13:44

But these are serious headwinds that aren’t going away. So home build is starting to pull back now as well. And a lot of this is in relation to the 10-year, which is interest rates. Higher yields are not good for stocks. Makes sense, right? The higher the yields, the higher the debt payments. Higher credit card, the higher delinquency rates go up. Now, why is the market this time around since 2021, like you said, rates have gone up tremendously is because $12 trillion has been injected into this market and they’re not stopping. I mean for you to say that, daniel. What was the indicator?

14:16 – Daniel (Host)

The Bloomberg Financial Conditions.

14:17 – Frank (Host)

Index, Financial Conditions Index right, that’s supposed to be tightening conditions. Right, we’re starting to pull back because inflation is still very high, much higher than the target. So what they’re trying to do is basically force a recession, try to slow down the economy, and we haven’t seen that slowdown. You don’t see the S&P 500 traded higher PEs in high interest rate environments. That P is supposed to go down and it’s gone up. It was 18 to 19 times over the last 10 years of the average. Right now it’s 21. They’re trading 21 times forward earnings, right, and interest rates are much higher than they were the past 10 years on average, right Outside of the past couple.

14:52 – Daniel (Host)

So and couple that with volatility, is very low or really dead. I mean there’s no fear there, it’s wild.

14:58 – Frank (Host)

Traditional things like the VIX. I mean the VIX, right? Does anybody pay attention to VIX anymore? I mean what? Lowest levels Again, inverted yield curve, so where the market’s heading? I mean we hear so much shit like sell a man, go away, and I mean I don’t know who came up with that. But let’s look at the stats behind it, because I’m going to pull up a chart really quick here, Daniel, here’s a picture of it. And when you look at this chart it says sell them and go away. Look at this chart. So basically it’s the S&P 500 that I’m putting up. You can see this on our YouTube channel, which is for free, Curzio Research Wall Street Unplugged.

15:28

So it’s the average monthly performance over the past 10 years, right? So it’s broken down by month and the market goes up every single month, pretty much, except for September and December, a tiny bit. It goes down Every On average. I would say well, probably, I don’t know about 10 years, but it goes up around 8% on average, with dividends annually since the 1950s. But they say sell in May and go away. So all right, say, if I’m selling in May, Sometime in May May 31st, start, June, June the market’s up. July is the best performing month out of any month. It’s higher than November and it’s over 3%. And then August is also a positive month. It’s higher than November and it’s over 3%, and then August is also a positive month. And then, if you look at September, September is the worst month, right. But even if you take, say, June, July, August, September, your net returns over that four-month period is almost 3%. All right, so it’s almost a great performing period, even though you’re taking the worst month and the best month, which is July and the worst month, and accounting for September. So when they say seller them, they go away, it makes zero sense. It really does, Because you have to account. You can’t just say okay, because this happens this time, Like it’s an election, your socks always go up. It depends. It depends on the situation.

16:35

Sometimes we know that our government like, look at what Biden’s doing, and he’s doing what every president does, right. What is he doing? Releasing more of the streets of the oil reserve for gasoline prices and bragging about it. That’s not what that’s used for, by the way. So we need to tell him that you shouldn’t be bragging about that. You should just make the consumers feel happy, because it’s the economy which usually wins the elections, we get it. Every president does it, but there’s connotations the way that, hey, because this always happens, it’s supposed to happen. Those days are over. You know, people always say, well, history often rhymes, or peace, and stuff often rhymes whatever.

17:09

This is a different period. This is uncharted territory. We’ve never been in a period like this where our government would not allow us to go into recession. They’re going to spend money unconditionally. They don’t care because it’s not their money. Unconditionally, they don’t care because it’s not their money. I mean, they’re spending how much to fund Ukraine? And yet you see the homeless rate here. What’s going on? Right, so many problems that we have here. I mean, there’s still people that don’t have jobs, people that don’t have homes. Right, there’s so much that you could do. It doesn’t matter, it’s not about that, right, it’s all about getting elected. So, when You’re seeing it, Once we got into the trillions in terms of the money pushing into this market, it’s pretty insane, but eventually that money is going to come out of the market and you’re seeing it right.

17:47

So has Nvidia marked the top? I don’t know, but I do know that the markets are very difficult right now. You’re seeing them at all-time highs. You might be like, wow, my portfolio is okay, it’s not that good. You’re going to have to adjust your portfolio year. You can own the S&P 500 and that’s fine. That’s done well almost forever. But we’re in a period where you’re going to see these massive swings in sectors like oil is red hot right now. Bitcoin, gold, right. Gold. Oh my god, gold is on fire and gold is silver. Silver is on fire, right? I don’t understand. Please somebody explain to me why the gold and silver ratio means anything to investors. I mean, why not gold to Bitcoin? So explain to me. It’s gold higher, so the gold-silver ratio? You know traditionally that means silver should go higher. Well, no, maybe gold needs to go lower. Why are those two relevant? It’s two totally different markets. Yes, okay, one follows the other, but you’re comparing two different asset classes. I have no idea why people like say oh based on the gold-silver ratio.

18:40

Silver needs to go higher. No, maybe you’re wrong. Maybe gold needs to go lower. You know, I don’t know why people use that. It’s just two different markets. People buy them for two different reasons.

18:49 – Daniel (Host)

Well, they make for good charts.

18:50 – Frank (Host)

Yeah, they make for good charts and, again, sentiment indicators. Maybe I don’t know, but it hasn’t worked for a long time. But you know, my point is there’s certain things that are working, based on what we’re seeing. This is interest rate driven. When we’ve seen the 10-year go higher, guys, that’s when you have to be careful. The 10-year is going higher and it’s pushing a lot of things lower. Higher interest rates are going to really continue. They make things worse for the customer over time. Every month that goes by with higher interest rates makes it worse. We’re starting to see that even in the housing market. Finally, home builders are getting it. Eventually this stuff is going to come to roost because we’re seeing delinquency rates really start to rise. How could people who most people have credit card debt 67% of the US lives paycheck to paycheck households and yet that means you’re taking on credit card debt, which means you’re paying 20% plus average interest, which is insane. Your auto loans getting new auto loans insane with the rates that you’re paying for this. Not as easy to grow the business. Not that is easy to raise capital unless you’re elon musk. But yeah, you know it’s tough to say where you want to follow. Companies that have great management teams. Dicks great job did. Crappy adjusted right. Cut costs. Focus on the things that are working right. Walmart adjusted uh, I think is going to be great.

20:06

There’s certain companies that you want to look at and see where hey, here’s the earnings path and I see it going forward, doing a great job. And that’s why you probably see hedge funds with their most long exposure to the MAC-7 stocks, because these are the safety nets. Now these are the growth stocks. But look at their balance sheets. They’re making money at higher interest rates from their balance sheets. They’re making money at higher interest rates from their balance sheets.

20:24

They could do anything. If companies come low, they could use their balance sheet to acquire some of their competitors that aren’t operating that well in this environment, which is not easy, because these guys are all laying off employees. They’re all using AI. That’s where a load of their CapEx is going to. They’re cutting back in everything and almost every subsector outside of AI. So I could see why people have hedge funds and even individual investors have leverage to this, and even we do in our portfolios. Right, we have two of these big names in our portfolio, but you want to protect yourself, you have to have a couple of these names in your portfolio, but be careful, because it is a crazy market and not everything is doing well, even though the market’s doing well.

21:03 – Daniel (Host)

Yeah, speaking of what’s working, are you going to talk about AI or jobs will be a hobby in the future. I know you want to talk about his big capital raise, which I just saw the number, I didn’t know it was a record because. But first question is it difficult to believe that Elon Musk could bring in, like what, saudi Arabia King and all these big players into a capital race? I mean so it was about going to your Rolodex of friends, holy hell.

21:29 – Frank (Host)

Series B. Right, series B is very early funding. For example, it was for his company, xai, and it’s going to compete against who? Against all the big guys, right? So he just raised $6 billion. That’s a record for a Series B round, and there’s a lot under the hood. It’s not just $6 billion. I feel like they mentioned the story a little bit, but when you look under the hood, this company’s being valued at $24 billion, at 24 billion. It was started less than a year ago. Oof, right, bubble? No, I don’t think it’s a bubble, because there’s so much room right now.

21:56

Like, look at OpenAI. I mean, this is an industry that we cover a lot guys. So you know, we know a lot of information here and hopefully we’re able to help you. Openai, the top level of management. They’ve been bleeding these guys. They’ve been other companies. It’s supposed to be the best, right? It’s ChatGPT, right? So if you look at Claude, it’s Anthropic. Amazon’s got an investment there, google DeepMind and Gemini’s Google. You have Llama, which is Meta. These are their platforms, right, their AI platforms, and he’s competing with these guys and one of the things he’s doing is offering much higher pay packages to new employees, right, whatever.

22:29

But when I see the top, the top name in this sector that’s made strides, the fastest growing technology product in history out of anything, of how fast it’s grown, how many subscribers it has in such a short period of time. And now you’re seeing the top people, the top brass, leave, you know, like crazy, and they try to fire. You know Altman as well, and he came back, but just he came back. But you see this, you know what’s going on in this sector, where they’re still jockeying to see who is going to be the leader. And you know, when it comes to Musk, how do you doubt this guy? And just to show you the quality of people that came into this investment Aronson Horowitz, best of the best venture, sequoia Capital again amazing. Fidelity. Prince Alouette Vantallo, valor Equity Vi Capital these are all big, big players, very smart people and when it comes to track record experience, you’re not going to find a better list of early stage investors with this.

23:20

Now for Elon to raise that much money on a company like this. Again, record funding for Series B to Series A, b, c, d those are private rounds of funding, right, and there’s a whole game to be played where, if you come into B, the Series A, b, c, d. Those are private rounds of funding. There’s a whole game to be played where if you come into B, you get discounts to the C and the D. A lot of these guys will invest even more, but for Series B it’s very early. Obviously, a is the beginning, but Series B $6 billion usually, you see maybe $10, $20, $40 million raised. That means, hey, this idea is growing, let’s put more money into it. It’s almost like they raised a limited amount of capital here and they had to stop people from investing in it. That’s how much people believe in them.

23:56

But his new XAI system this cash is going to be used to bring new products to the market to compete, and it also includes building its own AI supercomputer, which we heard from Microsoft. That supercomputer is going to require 100,000 of NVIDIA’s H100 chips. 100 is going to require 100,000 of NVIDIA’s H100 chips. Okay, 100,000 of them, which? What do they sell for? $25,000, $30,000, whatever? Remember, they’re selling currently the 200 chips which everyone’s trying to compete with the 100 chips. And then they’re coming out with their brand new chip, blackboard, which is coming out in 2025, early 2025. And we covered that right of the difference of how amazing that chip actually is, compared to you know much, much faster, better, more energy efficient. So it’s pretty crazy considering Musk says what did you say before about him saying that you know all jobs?

24:49 – Daniel (Host)

Well, he just said if you want to do a job it’s kind of like a hobby you can, but otherwise AI and robots will provide any goods or services you want. This was in an interview, or I saw the clip on CNBC either last week or this weekend. It just caught my eye. I mean, that’s just that cracks me up.

25:03 – Frank (Host)

Yeah, I mean, it’s everything, anything that could be automated, right? And who said this? Peter Thiel, I think. I think it was Peter Thiel. And Peter Thiel said that there was always an unfair advantage when it came to tech, because if you knew how to write code and you knew technology and write algorithms, it puts you in a different class where you’re in control, you’re a specialized employee, you’re making a fortune. Right Now, he says, you’re leveling the playing field because this is what NVIDIA is doing, saying, hey, no, you don’t need to write code. Okay, this is all you need to do is tell this thing what to do and we’ll do it for you and we’ll tailor it exactly to your business and you own it and we’ll help you out along the way. You’re just paying for our hardware. You’re going to pay for our software as well and pay price for our software and whatever it is. But you know, to me, when I see this and where AI is going, it’s incredible, because people are like, oh it’s a fad or it has a play, you know?

25:58

is it done? Is this trend done? Is it, you know? Topped out here, right? Is it a bubble? Are you kidding me? I mean, look at the names, the investments, the monies, Look at NVIDIA’s quarter.

26:08

But Musk believes AGI. If you’re not familiar with AGI, that’s the day AI surpasses human intelligence In 2019, the smartest people in the world projected that would take 80 years. That’s when the first version of ChatGPT was released. Musk now today is saying it’s going to happen next year. That’s how fast we are moving. If that happens, it makes sense for him to raise this much money.

26:31

But it’s automation, computers learning from computers. Imagine now you have smaller players that can compete with big guys. You have computers doing surgeries for you and robots. I mean, it’s a whole different world where we’re not prepared for it. It’s a world that it’s hard to imagine right now, just like when I brought up railroads in one of our our presentations that we did live presentations, where, oh my God, you have all these railroads. You never thought, like when that first happened, right, and this is 1800s and into 1900, and you have all these railroads now starting to be built across the United States, of what would happen to major cities of the separation like this industrial revolution, right, Nobody could really foresee how big these cities were going to be and how many people would move here and how great it was. It was just too hard. That’s where we are with AI, the capacity, because it is inevitable and it really is amazing, but $6 billion being raised I mean, we’re still in the infancy in this sector. We really are.

27:28 – Daniel (Host)

One thing I wanted to ask you is and this is more up your alley, but there’s an interesting article on how AI is making Mark Zuckerberg, ceo of Meta, popular again in Silicon Valley. This is from D-N-Y-U-Z. Frank. Now, I thought this is what you get for assuming there’s a Mr Emanuel here. And how do you like this description, frank? Part-time hacker, full-time AI enthusiast you ever been called something like that? No, I haven’t. I’m not smart enough for that. He says he’s tinkered with closed AI models, including open AIs. I was under the assumption that open AI was a open model, but it sounds like it’s more closed. Is that accurate? Because this guy’s point is to say hey, musk and their new LLAMA2 is fully open. And I guess in Silicon Valley, especially this, mr Emanuel is saying he is getting a lot of street credit back because that’s a big deal, you can take it, you can copy it, you can mold it to yourself.

28:27 – Frank (Host)

Not Musk, but yeah Lama is meta Zuckerberg, right Zuckerberg, yeah, I’m sorry, yes, opens a big deal. I mean that’s.

28:33 – Daniel (Host)

Yeah, I mean, that’s a game changer.

28:35 – Frank (Host)

It’s a game changer, because you know it’s hard for a company to do open because you’re sharing a technology. I always admired that when Elon Musk was saying, hey, if you want chargers or if you want to learn our technology, it’s there. You can use our technology. Right, apple never, ever, did that in its life. Right, apple controls everything, and it makes sense. You want to control them this way. They have to come to you, right, and then you get them in your ecosystem and then now you have services, clouds, everything. Right. Now you’re in, you’re locked in An open system is why he needs to believe an open system has to be open, because that’s his dream.

29:09

He changed the company of his name to Meta, which is Metaverse, and we all think that’s a bad word. Now, right, metaverse what Metaverse is, is open. That’s what the internet was supposed to be where it’s not supposed to be controlled by four or five companies, which it is right now. That’s what it’s controlled. It’s controlled four or five companies, and if you don’t think it’s controlled, they of what happened to anyone who said anything that wasn’t part of the agenda. All right, they took drugs off the market, right, and you got suppressed. Right, they took you offline. They suspended your account, right, and you’re like wait a minute, how could they do that? Well, because they own you right Now. If they don’t own you, what does that mean? It allows everyone to build on this software and brings everyone together.

29:50

Okay, now, the former CEO of Gold Corp once did this. All right, this is pretty cool. He changed the dynamic of the gold industry. God, I forgot his name. He’s a legend, billionaire, and I interviewed him a couple times. Great guy, short guy, great, older, one of the legends of mining, former CEO of Gold Corp. And they had—.

30:07 – Daniel (Host)

Not Ross. Is it Ross? No, no, no not.

30:09 – Frank (Host)

Ross Beatty. Ross Beatty is pretty much in line with him. There’s two kings there, two kings. So what he did is they had a mine and he wanted to figure out the best way to develop it, and he had all of his geologists and everything and they really come out with the best way. No-transcript, we own the mine but you know, they might see a little bit more of our technology. And what happens is they had thousands of geologists, right, tell me a story that all emailed in and one or two of them had fantastic ideas which got that site, the largest mine developed and which changed the history of that company. Right, and he was willing to, because in geology, geologists and oil mining it’s very like, hey, keep your secrets.

30:59 – Daniel (Host)

These are our secrets.

31:00 – Frank (Host)

Even drilling when it comes to oil industry. Okay, this is how we drill. It’s all secrets, right?

31:03 – Daniel (Host)

And that makes sense. It’s a competition.

31:07 – Frank (Host)

You have the efficiency and you want to hold it. And he realized, like I don’t have the best ideas and nobody does, you might be really smart in your field I’m not smart in your field, but outside of the field if you bring everyone together in this community. That’s what the metaverse is, where now, instead of going into, say, fortnite, roblox, minecraft, everything you buy goes to those specific companies. Now, instead of doing that, imagine you can create your own stuff, create your own skins, create your own guns in a game or whatever your own skins, create your own guns in a game or whatever. Now you could sell them and you’re making money. That’s what the metaverse is. It’s this open world that you can go into, create whatever you want, sell whatever you want, build businesses and you own the rights. And you own the rights through NFTs which are on the blockchain. The blockchain is like a patent Once you’re on there, it’s registered and that’s it.

31:57

No-transcript company called tcg and I would like to go out there and say, hey, I’m going to give five percent ownership of all of everything that we build there. You could build whatever you want to. I’m not a developer. So, the best developers, I’m going to give you 5% equity stake and I’ll give you 10% of sales. Build whatever you want, and I want to unleash that talent, that innovation behind these people and now they can build their own thing. I’m benefiting. I’m not doing anything, they’re building it. I’m giving away free, but that’s where it comes into the metaverse. So it’s a good question. You know, lama, and being open, they have to be open. I mean, this is what his, this is what his vision is. Okay, whether you agree with it or not, maybe he’s too early with the metaverse. He changed the company’s name from Facebook to Meta. Right, this is his vision. That platform has to be open, and kudos to him, because that’s why he’s deserving and say, no, we’re going to do this and not do it right, which is really cool.

32:51 – Daniel (Host)

But and it allows everybody to make their own chatbots, their own systems. You know just real quick, daniel Creech. What do I think I think this is great for? I mean, competition is always great. That’s why capitalism is the leading and best platform that we have Now, because we’re going to benefit guys like me that don’t have any idea on this. Like you said, with Peter Thiel’s comments and everything.

33:12

This levels the playing field to where you can download one of these, and I’m going to mess around with some of this. Download this, try to create your own thing out of it to help you get more efficient or to learn more or whatever. My point is is that all this competition with the smartest, biggest, most powerful, richest people I think is a good thing for consumers in general, and that’s the takeaway for everybody from here forward, in my opinion. So don’t if you feel overwhelmed or drinking out of a fire hose like I do. Frank is a great AI guy. He’s always talking to me about stuff like this and I’m kind of like, yeah, I just want to go back to oil and gas and talk about that, but the point is is that this is exciting stuff and it’s going to benefit everybody, no matter what your field is. So keep us cool and warm and all that kind of stuff, especially now that global warming is just out of control.

33:59 – Frank (Host)

Out of control. Out of control, it’s getting hot here in Florida, I’ll stop there and it’s taking over industry by industry and you should be aware of this, right. I mean, george Lucas came out we said earlier. He says AI is inevitable and it’s like saying I don’t believe these cars are going to work, let’s just stick with horses.

34:26 – Daniel (Host)

And I know he came to this term when, if you do a YouTube search right now, there’s people who’ve done Star Wars trailers that are unbelievable in AI, and they’ve done them in 10 minutes.

34:34 – Frank (Host)

Now you’re just taking footage from them and just rearranging it to make it exciting. Yeah, so it’s not even taking footage from them. You’re able to use these models and tell them and they’re called prompts, right? And you prompt them and say, okay, star Wars, and it’s going to take everything it knows from the computer. That’s just taking all this data off there right, okay.

34:46

And you’re able to create shorts and you know whatever you could make it. There’s a lot of great scenes with every Star Wars where they have, like you know, a party going on in the background. They have like 50 different characters in almost every movie. You know just the background to the story and everything, but you know they were showing this and it was good. It was good, it was really good. And when you see these shorts and you’re seeing, you know actors anymore. So it’s like like having green screen but you can do whatever you want. And a lot of these actors are nervous and they should be and writers because now the writers in hollywood are the greatest writers ever.

35:17

I mean, think about their job, especially for a series. Think about your favorite series. Your favorite series is always a pilot. It comes out they don’t know, you think it’s going to be great, but a lot you don’t know. It’s a coin flip. Yeah, whether it’s seinfeld or whether it’s it’s oark, and all of a sudden you’re like, holy shit, this is great. All right, we got to do another season of Breaking Bad. All right, breaking Bad for me. It was tough for me to get through the second season into the third After that it was insane, because now you’re like, wow, this is really going to okay, we got to keep going.

35:48

The creativity from these writers that, hey, we need these guys. These guys are great because now you have a system that can do this for you. Is it fair? No, but it saves a ton of costs and it levels the playing field. And it doesn’t have one or two companies or different directors or pick your industry where they own it, and they’re able to lock up everyone who’s brilliant within, who can write code and cloud and stuff like that.

36:13

Now you don’t need experts to do this and it’s changing the landscape of our business as well, which is where we’re going, which we have a lot of AI. So this is fascinating to me. You should learn as much as you can about it. It’s just like crypto right, throw yourself in the fire, ask lots of questions, go on Google, find people to search. We talk about this. We have a crazy AI newsletter and he’s showing companies, small caps, that are not AI companies but are using AI to change landscapes of their business and productivity soaring where people are looking oh, where’s the AI component? They’re using AI across all their divisions. That’s why you’re seeing so many companies, especially technology, they’re laying off employees like crazy, which you’ve never seen happen ever. When stocks are at all-time highs, usually you’re spending more.

36:54 – Daniel (Host)

You want to grow more they’re not. They’re cutting their costs, especially their stocks, to your point. Markets are at all-time highs because of those stocks. Their stocks are at all-time highs and they’re firing people left and right.

37:00 – Frank (Host)

The thing is they’re firing people. So you think, okay, sales are coming down, maybe earnings go higher. Sales are still going higher. Right, are incredible and you need to pay attention because it is going to change the landscape of the world. Chances are your job is at risk. Your job could be at risk, okay, so try to prevent that. Try to learn everything you can about AI. But every business, their sole goal is to produce the most, produce whatever product at the cheapest cost. Right, make profit margins, increase the profit margins. So AI does that for every single, almost every single company, and that means they’re coming for your jobs.

37:35

You should be prepared. It’s not like I’m saying something you shouldn’t know, but just be prepared, because when I went to Consumer Electronics Show Daniel, it was so funny because everybody was pitching. Everybody, you know, took executive tours for AI. Everyone’s pitching this. I’m just looking at these people saying people saying you know you’re not gonna have a job in a year, like you’re pretty excited about something that’s gonna take your job, right, and and I don’t think people really get it and they’re starting to get it. I mean george lucas, right? I mean they hated c, you know cgi and so many people came out and these movies are crazy and whatever. And I mean, george lucas is the best of the best, saying ai is here. This is inevitable. You know. You better learn it or you’re done and it’s’s changing the landscape of Hollywood and you’re going to see big adjustments there.

38:13

Now I wanted to change things to crypto, because crypto man we went from. I mean, one of the biggest stories, I think, is how Donald Trump is now pro-crypto. He wasn’t pro-crypto, okay, he was not pro-crypto. And now Biden has basically tried to eliminate this sector. Totally right, biden has basically tried to eliminate this sector, totally right. I mean, with the SEC and you know, just constantly. It happened when he closed down banks illegally, you know. But all the nonsense that was taking place and it started again the past couple of months, right, you’re bringing up these lawsuits and all of a sudden, we had a bill that passed through bipartisan, passed very easily through the House, probably going to go through the Senate, where we’re going to have a framework for regulation, which most people want. That’s how you get trillions into the sector to protect your money. But that was just one story. Ethereum ETFs got approved already. I’d say they were going to get approved. I thought it would happen in October, like September, october.

39:03 – Daniel (Host)

I didn’t think it would happen this quick. I didn’t think they were going to happen at all this year.

39:07 – Frank (Host)

And rightly so, think so. When you said you didn’t think so, there’s a 20 chance of approval, a lot of people didn’t think it was going to happen. So I I for me, I was like, listen, it’s eventually happened. I think it should happen. You know, based on the filings and stuff like that, and the sec comes back and says this is what you need. Uh, I figured october, and how could you not approve the etfs for ethereum when you prove them for bitcoin? Just didn’t make sense, especially when you already said that that ethereum is, is not a security. Then you saw, did you see Sam Bankman-Fried, his top lieutenant?

39:36 – Daniel (Host)

I did and I’m telling you I didn’t realize. Well, he got seven, almost eight years. The headline was best Sam Bankman-Fried top lieutenant gets jail time, or whatever. Frank made a comment earlier. I’m going to let you say it because it made me like fall over laughing, but I didn’t realize that he had turned in such a way to really help their case. So take it away. This is this is one of the best bullet points there is here.

40:03 – Frank (Host)

I mean, this is a guy that that basically turned against his top guy, right? So he cooperated with the government. You cooperate with the government and you still got seven and a half years in prison and fined $11 million when not one of the clients lost money Maybe I shouldn’t say not one of them, but 99% of them. They did not lose money. They actually made money off the deal. Right, they made money off the deal. That guy’s lawyer should be shot. Okay, for that deal. He should be shot Seriously. He should be.

40:29

You’re shot in the foot. Relax, guys, don’t go crazy.

40:31 – Daniel (Host)

Oh, there we go. All right, we can stay on air. He should be shot.

40:33 – Frank (Host)

Okay, you turn in state’s evidence against the ultimate crypto crime boss of what he was painted to be, and I get it. And the guy did a lot of stupid shit and, yes, crypto went up. So you know, no harm, no foul and things doing great. And he still got to go to jail for seven and a half years. He was supposed to get 18 months and he got seven and a half years. And maybe something happened with that story. I didn’t read, but I just want to put it into perspective. Because if you look at Sam and the Bull, gravano confessed to murdering 19 people when he testified against John Gotti and he only got five years in prison. This guy didn’t lose a dime for 99% of your clients. You gave Sam Banker Freed up on a freaking platter. Here you go. Here’s everything you need. Okay, thank you so much. Seven and a half years, $11 million Are you kidding me?

41:26 – Daniel (Host)

And they asked for 18 months right. Yeah, 18 months, that’s close 18 months, seven years that guy’s.

41:31 – Frank (Host)

I don’t know what happened. Maybe he went against something he said I have no idea, maybe he did. You know, what is it the Wolf of Wall Street thing, when he’s got the bug on him and he writes a little note to the?

41:41 – Daniel (Host)

guy. Oh yeah, he’s got a bug yeah.

41:42 – Frank (Host)

Right, maybe he did, I have no idea, but years is a joke. Uh, because you know you’re talking about. You’re talking about fraud within. I mean, this is and let’s be honest, right, fraud when it comes to security industry is a freaking joke, right? I mean you go to jail, you get it’s fun, you get to watch tv, it’s cool. I’ve been.

42:06

I visited friends in jail, I’m not kidding. I grew up in queens, new york, where some of them were in maximum security and and it’s holy cow, one of them converted to Muslim because he said he’s going to die if he doesn’t. And another one there was no fences around and I’m eating at a picnic table with him and he had three years for federal. So when you’re looking at federal, they just don’t get punished like this. It’s different. It’s sad. They should get punished like this. Right, it’s different, it’s sad. They should get punished. Usually they don’t. I’m sure Sam Banker’s free that sentence is going to be lowered tremendously because, again, when you’re looking at who got hurt, not too many people got hurt, but how do you get seven and a half years for rolling over? I just don’t get it. Anyway, that was one of the stories.

42:47

And also Riot is trying to acquire BitF companies right, bitcoin mining companies and they’re looking to acquire BitForums for $800 million, which is $2.30 a share. That’s where the stock is trading right now. They already own a 9% stake. This is consolidation within the industry. Maybe it’s crypto a real industry right? A lot has happened within this industry when it comes to mining and stuff. We get more details on that and, of course, bitforums played tough and said that’s not enough. We want more. This is a pretty good premium, but it’s interesting to see this consolidation in this industry now. I think it’s very, very healthy.

43:19 – Daniel (Host)

Yeah, I agree, and you’ve talked about this post, the Bitcoin halving, where rewards get cut in half, and you’re going to see a lot more of this, because how are you going to survive if you don’t have easy, cheap access to power, which isn’t easy? And I’ve just quit Google searches. You know Bitcoin needs to ride and this has happened every having and the Van Tharp Institute, which he has passed away, used to do these great free reports and talk about. Hey, the Bitcoin price, or break even of Bitcoin miners is roughly around X, so look for Bitcoin to move back to that level at some point. Quick Google search shows that it’s around 80,000, or you know, in different companies, can you know? Obviously mine, for different prices, some cheaper than others, but I do think this is good to see this consolidation in the market. I think it’ll be interesting going forward to watch, because these guys play such a pivotal role in the Bitcoin ecosystem. They’re not going away and you know things are going to be volatile and bounce around. But I just think consumers and individuals unless you’re really diving in a crypto expert and you don’t have to be to make money off this just stick to. Like I said, frank has a great crypto Curzio letter that you can follow for picks, but just stick with the big basics and Bitcoin and Ethereum. But the prices are going to bounce around.

44:38

But these companies there’s going to be huge competition. They got deep pockets. They’ve all raised money. Not all but Marathon and a couple of big ones have raised money. You’re seeing these guys. This is a hostile takeover. They bidded a little over 20% premium to the last month’s prior closing. I don’t blame BitFarms for rejecting it. Of course, your stock’s a couple bucks. So you know, frank, when your stock’s basically a penny stock, you’re always going to turn that down. Why would you turn? Why would you accept that? I think this is overall very good and healthy for the industry and I don’t know if you have anything more to say about that. But did you see another company wanting to be the next MicroStrategy?

45:15 – Frank (Host)

Yeah, you know the MicroStrategy. That’s important to note. I want to get to that in a sec because I’m going to tell you something about Bitfarms One. You say $230, you might think, well, it’s kind of like you know a penny stock.

45:26 – Daniel (Host)

It’s all about the shares outstanding.

45:27 – Frank (Host)

It’s an $800 million company.

45:29

That’s a very big company and I’m going to tell you, bitfarm’s absolutely insane for not taking this offer like immediately. You should take it yesterday, because no one else is coming, because this is the worst to actually invest in mining when it comes to crypto mining. Because you can’t scale a business, meaning that if I sell a certain amount of newsletters, right, I get to a certain point and then everything else is going to be profits. It’s like oil, right, if oil profitable, everything over $50. So if it’s $60, you’re making a lot of money. When it goes to $70, it’s not like your margin is doubled, they’re like quadruple, right, right. So when you do the math, because it goes up tremendously more, because now you’re scaling, because your costs are kind of, hey, it’s 50, $50 to produce. But when it comes to this industry, the Bitcoin halving. So what you do is you know you’re a computer programmer, you solve a problem. Everyone who solves a problem gets a bit of Bitcoin. Right now. Say, if you, just for sake, you got one Bitcoin, now, with the halving, you’re getting half for doing the same thing, right, you’re getting rewarded for half of that, right? So your profit margin is getting cut 50%. Now if you want to say, okay, I’m going to mine even more. You can’t just go and mine more. Right? Your computers are already on fire and going crazy, right? They’re already like solving problems, figuring it out, right? So say, if you have 1,000 of these things, they’re already amped up to the max.

46:43

If you want to produce more Bitcoin, you have to buy more of these computers. What goes into these computers? Nvidia chips, which are expensive. What do you need? You need a massive amount of electricity. Electricity prices are starting to skyrocket. That’s why you don’t see a lot of these go. They’re very particular.

47:01

I went to visit a mining facility in Washington. You want to have it in a cold area. It was snowing, because these things, you know, the temperatures rise tremendously and it saves costs. You see them in other countries, like Hive does this in other countries as well. I don’t know if it’s, you know wherever it is. If it’s, you know Iceland and some areas. You want to have it in cold climates, but electricity prices are going up and up and up.

47:19

Some states don’t even allow this right. Some states don’t even allow this. So now, if you want to produce more Bitcoin, you have to spend more money. So this is a business that is unscalable. So you’ve got to hope Bitcoin goes higher and Bitcoin’s going higher. That’s fine. Now the big players are good, because now the big players are smart. They’re like, okay, we have the best balance sheets, let’s consolidate this while we own the industry. That’s a great move and that’s why you’re seeing this For Bitfarms at $800 million.

47:42

Just to put it in perspective, riot has $1.3 billion in cash and Bitcoin on its balance sheet. It’s trading at a $3 billion valuation. That’s what it’s worth the Bitcoin and they’re assets, because you can probably sell all your computer systems and stuff like that. And now they want to buy Bitfarms for $230. It’s trading at that. It’s an $800 million valuation.

48:04

These guys only have 120 million dollars in cash and bitcoin on their balance sheet. Okay, out of that 120 million, it’s 66 million in cash and you say, okay, that’s pretty good, the rest is in bitcoin. Last quarter in january, this is a company that 88 million dollars in cash. So, just because of the halving, this company has spent 22. They burned 22 million dollars in cash in one quarter. They have $66 million left and, yes, you could sell Bitcoin. This is a company that should accept this offer immediately. Sell the company, sell the valuation. Riot’s doing a good job.

48:36

You’re going to see Marathon’s another one. There’s about 20 publicly traded Bitcoin miners. You’re going to see consolidation. The big guys have to do this. This is how you grow. This is how you grow. This is how you grow in this industry. It’s not by producing more, it’s acquisitions. Where you can consolidate the operations, you can cut costs, take over these facilities, have more computers and stuff like that and faster processors, but after the half and cutting profits in half.

49:00

Be careful with this industry. But, man, if you’re looking at BitFarms, take that and run. Take it and run, because nobody else is going to come. I can’t see Marathon coming and these guys are not in a position to negotiate or to jockey, because if anyone leaves them, the company will probably be out of business in three to four years, unless Bitcoin really goes to like $150,000, $200,000. Because if it stays at this level, it has to go higher Bitcoin. If it doesn’t go higher, it stays the same. These guys are going to continue to lose money, right, and that’s why you’re seeing these companies like this burn through cash. Now.

49:32 – Daniel (Host)

You also said something else about Take the money and run, frank, that’s a good.

49:36 – Frank (Host)

Steve Miller line. Who’s the other company?

49:38 – Daniel (Host)

that just company called Selmer Scientific. They develop, manufacture and market innovative products and services that support early detection and treatment of chronic diseases. Yes, I’m reading that Our flagship product, quantaflow, patented, fda cleared. That’s important in the healthcare industry measures arterial blood flow and extremities and provides results in a matter of minutes. They have had earnings in the past.

50:02

If you pull them up quickly on Finviz, it is SMLR is the ticker. The stock was trading over $50 most of 2024 and has absolutely tanked to under 25 until they said they’re putting $40 million excuse me, $40 million, including fees in Bitcoin on their balance sheet. Frank, this is a $200-ish million market cap. It’s a small cap. Don’t have earnings this year, according to FinViz, but again, they have had them in the past and the press release that they put out said our Bitcoin treasury strategy and purchase of Bitcoin underscores our belief that Bitcoin is a reliable store of value.

50:43

Compelling investment is now a major asset class over a trillion dollar market value. We believe its unique characteristics as scarce and finite asset can be reasonable inflation hedge and safe haven amid global instability. This is important, not because the $40 million they put, not because of this company. No offense to them or the healthcare industry, frank? What if, like MicroStrategy, who is definitely leading the calls and leading the charge, and this small company, but why not? And what if a bunch of other companies start doing this? That is the real takeaway here. I only think it’s a matter of time. I’ve been dead wrong again. What is this beat up on, daniel, today? I was wrong on the ETF approval. I was wrong because I thought GameStop when they put out the.

51:25 – Frank (Host)

You’re right on Chubb. You got 100% gains from Buffett’s side of the buyer. Okay, credit come on.

51:29 – Daniel (Host)

When I put in when GameStop, before their recent raise and craze from Roaring Kitty’s post, they’d made a change to where they can make other investments on their balance sheet. Give the CEO more, or the chairman that gentleman more power over investing assets, I thought that they would already announce that they are adding Bitcoin to its balance sheet. They have not, so I still have egg on my face there. I do think, though, it’s only a matter of time by these companies, because, as Trump says to the African-American voter, what the hell do you have to lose, frank?

51:59 – Frank (Host)

You know, I don’t know about this company particularly. You got to see companies do this to try to get a boost and it work for this company. But you are going to see now the accounting rules are changing starting in next year, january next year, where this isn’t Bitcoin, doesn’t account for intangible assets, it’s actually tangible assets. It’s a big deal because you’ve got to report losses on it. I think if you bought it for whatever $300,000 and it goes higher and it’s worth $20 million, you’ve got to put $300,000. But yet if it goes lower than $300,000 to $200,000, you have to take that value. It’s why micro-strategy always reports losses right, we all know, and you could just look and say, okay, it’s bullshit, accounting, whatever, forget principles, but it’s a big companies. It’s all about earnings and you don’t want to see a company that’s supposed to report $4 on earnings report $1.75 on earnings because they have so much Bitcoin and they have to recognize it as an intangible asset. With that being said, you’re going to see more companies do this.

52:56

I think it makes sense for them to put Bitcoin on their balance sheet and it doesn’t have to be to the scope where it’s more than 1%, 2%, 3% of the assets, but it just gives you an alternative to cash. It gives you an alternative to gold, which, again, it’s not the most liquid, but Bitcoin is very liquid and short-term. So when I look at some of the biggest companies in the world that generate hundreds of billions of dollars in free cash flow like Apple, like Nvidia is going to be there soon and how much money they have in the balance sheets which is $30 billion, $40 billion, $50 billion plus for a lot of the big technology companies I could see them start to do this and you’re going to see more and more companies do this, especially with the regulation that’s coming out. That’s what we needed. I know Bitcoin diehards are like oh we don’t want any regulation.

53:44

You need regulation. You need to know your money’s safe. It needs to have insurance on it. You need to have the fdic if your money gets pulled out of your account or you get hacked or whatever, it needs to be covered right. All these predictions need to be in place by the coin bases, by the robin hoods, by the interactive brokers. You know a lot of these places that do offer cryptocurrencies and you need that. And now that everything is moving in the right direction, I just think you know Bitcoin, ethereum. This is our theme for our Crypto Intelligence newsletter.

54:10

Guys, you can’t really bring any more cryptos to the market in the US because there’s no rules and regulations and automatically it’s deemed as security and nobody wants to touch it right. So you’ve seen that go offshore. However, the top 100 to 200, 250 cryptos there is a lot of really great technologies. The software companies have good utility features. These are great names that are changing the landscape of finance, that offer a massive, massive upside potential, more upside potential than you’ll see in almost any stock outside of NVIDIA over the last 10 years. I mean so many names you’re not even cherry-picking. You can pull them and you’ll see 10,000% gains. It happens often it’s not, again, not cherry picking. You can look at. You know, I would say 70% of the top 200 names have seen that move in a bull market.

54:51

Where what’s the type of market? What have you seen out of your junior mining stock that you owned for 10 years during the worst market? Now you finally have a bull market and the cycle changed. What are your gains on that stock? Only 40% are at highs, even though gold’s at an all-time high, right? So you waited, hoping that you’d get, okay, 2x, 3x, even 4X returns. Maybe you got 1X, maybe you got 2X, maybe you got 3X. You didn’t get 10, 15, 20, 30x, which is what you get, and these are gains that we’ve seen in the past. So our portfolio is really positioned. I’m glad we got a lot of people in when we did, when we discounted that product. But you should be investing in crypto, you should be investing in AI, but, like we mentioned earlier, it’s not the easiest of markets right now, because it looks like it’s doing better than it is and it really isn’t, because the underlying factors and the breadth’s a little bad. Let’s see what happens. A lot of consolidation, and Daniel and I are going to cover a lot of that tomorrow.

55:48 – Daniel (Host)

But yeah, just crypto has really been on fire and it works because the stock SMLR is up over 30% in the last two trading days and it’s going to make sense for a lot of companies to do this Because listen, especially with biotech because their business model is usually based on one or two drugs in their pipeline and maybe you know it costs a lot of money or whatever.

56:03 – Frank (Host)

Maybe they just want something else, like some other factor. I don’t think you’re going to see the MicroStrategy approach, where you know MicroStrategy is a pure play Bitcoin company, where they’re highly leveraged Bitcoin development company.

56:14

Taking out debt to actually purchase more Bitcoin, but companies that have cash on their balance sheets. You’re probably going to see more and more, especially next year. You’re probably going to see more and more, especially next year. You’re going to see this on fire. A lot of companies are going to announce this and it makes sense if you can get a pop in your stock because it allows you to raise money and it makes sense. It’s just like splits.

56:28

Splits technically should not really drive your stock higher. The valuation doesn’t change and people are like, wow, there’s more retail investors. Retail investors don’t really drive stocks. They could drive, drive Microsoft. They don’t drive the big names, which are the names that you’re seeing split, but stocks go higher, so why are they going to do it? That’s why Netflix is probably going to announce a stock split right, they’re probably next. Anyone who has was MVR, a home builder, anyone who has a stock price that’s over $500, $600 is probably going to announce a stock split because you’re going to see your stock do very, very well. It gives you more opportunities when your stock’s doing well. You could use that leverage for M&A right, use your stock as currency for M&A. You could raise money at a much higher price, which is great, so it’s not as dilutive to your shareholders. There’s just so much what you could do, and now that you’ve seen this gain, you’re probably from this crypto company or from this biotech you’re probably going to see a matter of if or when, not if excuse me yeah

57:27

so, other than that, I think that’s it for us. I did want to give a shout out to. You know I’m always big on customer service because customer service is so horrible lately. So many companies and you get on a phone and some of them are trying to use AI and even like a prescription. You can’t even talk to someone at the pharmacy. Press this press that it takes 20 minutes. Uh, I have a home that’s about a year old and we had grass put in and we have someone that cuts the grass, but I never I never treated it. So now this is the first season where it’s like, holy, she see weeds coming out of the grass. It looks bad. I’m like, wow, I gotta get it treated. So the first thing that comes up is true green you look like white trash with money frank I am white trash, so that’s a good song.

58:04 – Daniel (Host)

Confederate Railroad.

58:05 – Frank (Host)

So I call. I’m like, all right, true green, let’s see. So I fill out, listen to this. I got to say this is cool. I fill out online my name, my phone number and whatever, and I press enter. Then it puts me into like you know, I think, okay, what’s wrong with the grass, and whatever. Ten seconds after I press enter, my phone rings. After I press enter, my phone rings, they call me. They’re like hi, mr Curzio, I noticed that you just filled out a form and I just wanted to know if I could help you out with anything.

58:27 – Daniel (Host)

A human called you Human.

58:28 – Frank (Host)

Call me. This lady called me. I said to her I was like whoa, I was like that was pretty quick.

58:39 – Daniel (Host)

She’s like yeah, we got your name right.

58:40 – Frank (Host)

She’s like, okay, well, next thing, what are you going to think of Price? She goes, okay, what’s your address? Okay, I give her my address and I say you know, you guys operate in Jacksonville, because it’s like you know, whatever, they operate in a bunch of states, right, all nationwide. So she asks me for my address. She goes okay, I’m bringing up your house right now. Wow, okay, I see your property. You have a nice screen enclosure. Okay, your property is this. She knew the perfect dimensions of my property, how much I needed for grass. This is in a five-minute phone call.

59:08 – Daniel (Host)

Yeah, it’s scary.

59:09 – Frank (Host)

And she’s like okay, this is how much it’s going to cost. Blah, blah, blah. I said, oh, okay, they’re like 11 treatments and the price wasn’t that bad. And I was just like you know what, we can give you another 10% discount for that. And afterwards you know what I said to her? I said what’s your name Whatever name, mary, something. I said Mary, you kicked ass on that call. She’s like thank you so much. I was like whoa, they brought up my problem.

59:32 – Daniel (Host)

Do you leave a review?

59:34 – Frank (Host)

No, you know what I’m bad at leaving reviews.

59:39 – Daniel (Host)

I just feel like Come on, Frank.

59:41 – Frank (Host)

You know what. You know what pisses me off, though. I feel like you’re leaving a review for someone that just does their job. She went the extra mile, I got you.

59:48

But people are like oh, if you leave a good review, I’m like your job is to provide good service to me. That’s why I’m paying, that’s why I’m giving you a tip and then, anyway, sometimes I don. She was great. I just wanted to leave off with that because customer service there is hope. Yeah, ai has taken over and AI works for some systems. Let’s see what happens, but it’s really nice. I want to give a shout out to True Green. That was pretty cool.

01:00:10 – Daniel (Host)

We need True Green Not getting paid. We need True Green to be a sponsor.

01:00:17 – Frank (Host)

I’ll call him and ask him to sponsor it. It was really cool. It was a good call for you, frank@curzioresearch.com. Daniel, what’s your email?

01:00:21 – Daniel (Host)

Daniel@curzioresearch.com.

01:00:23 – Frank (Host)

Okay, and catch us tomorrow on Wall Street Unplugged Premium Guys. It’s not on iTunes, all right, so this is with Daniel. I share our favorite stock ideas with you. I’ll also give you access to our trading service Dollar Stock Club. Daniel, how many stocks?

01:00:38 – Daniel (Host)

did you sell last week? I mean portfolio, a few older ones, but some big winners yeah the portfolio’s been doing really, really well.

01:00:43 – Frank (Host)

So it’s just you know, see what’s going on with the markets. Like you know, companies are reporting. We’ll put like a stock in that portfolio every single week, no matter what, but we really get into details, more stock ideas and stuff like that, and to find out more, you could go to Tomorrow as well. Oh sorry, go ahead. No, just go to. But again, that’s not online, guys. So that’s a premium podcast. It’s $10 a month and you can cancel whenever you want, but you get ideas and you get access to one of our best services, and Best Performing Services is doing great right now, which is a lot, a lot of fun.

01:01:12 – Daniel (Host)

So good, I forget what I was going to say.

01:01:15 – Frank (Host)

See that it must have been really, really important. We took some big profits.

01:01:20 – Daniel (Host)

Oh, tomorrow we’ll go over some earnings, some interesting stocks and earnings, and one that I’ve been negative on, but I think it’s about time to start looking to catch the knife just because a big hedge fund guy built a big position and put some people on the board of directors, which is always a good data point to pay attention to.

01:01:39 – Frank (Host)

Definitely, definitely. All right, guys. Thank you so much for listening and we’ll see you tomorrow. Take care, Love this episode of Wall Street Unplugged. I think you’ll really love Wall Street Unplugged Premium. The Wall Street Unplugged Premium is my members-only podcast where I dive even deeper into this week’s events. I’ll do even more than tell you what’s moving these markets. I’ll tell you specifically what moves you can make today. So this is going to be about trading. Put big money in your pocket right away. Due to the inconsistencies I see daily in the market. I’m talking about specific investment ideas. I’m recommending and tracking each week that I believe will be impacted directly by everything I just talked about today. Plus, you’re going to get the chance to go even further down the rabbit hole with me and my co-host, who’s Daniel Creech, as we discuss which of these week’s trends could turn into massive windfalls. The big trends that we see lurking on the horizon.

01:02:36

Also, the news we’re picking up from our network of insiders, which has gotten bigger and bigger, thanks to you and so many people listening to this podcast in over 100 countries, and you’ll get a chance to talk to me directly in my special Ask Me Anything Q&A session. All that, and a lot more, like premium interviews with world leaders in finance, technology, industry and politics. This is all part of Wall Street Unplugged Premium, and becoming a member is super simple and super cheap. So head on over to WSUoffer.com to check it all out. Sign up today and you won’t miss a thing. That’s WSUoffer.com.

01:03:14 – Announcer

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

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