First quarter (Q1) earnings season is underway—and the results are in for Delta Air Lines (DAL), JPMorgan Chase (JPM), and BlackRock (BLK).
On today’s show, we cover whether any of these companies are buys… and the enormous influence and power of asset managers like BlackRock.
Turning to crypto, Daniel highlights last week’s Bitcoin conference in Miami—including Peter Thiel’s “Bitcoin public enemies” list. Warren Buffett makes the top of the list—and Thiel didn’t hold back in his criticisms.
- Delta’s Q1 earnings [0:35]
- JPMorgan’s Q1 earnings [7:40]
- BlackRock’s Q1 earnings—and massive influence [14:14]
- Peter Thiel’s harsh words for “Bitcoin public enemies” [22:00]
- Does Bitcoin use too much energy? [27:20]
Wall Street Unplugged | 880
Is Warren Buffett ‘sociopathic’?
Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on main street.
Frank Curzio: How’s it going out there? It’s Wednesday, April 13th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down the headlines and tell you what’s really moving these markets. It’s my favorite time of the year, actually favorite time of the quarter. We have earnings season. Shouldn’t say the year, the quarter, and Daniel’s smiling. I’m bringing Daniel Creech here because we love earnings season. That’s where we find the most ideas, listening to the conference calls. We share this with you, especially over the next couple weeks, but we do this every single quarter, have a lot of fun. It’s the best way to find new ideas and what’s going on throughout the industry, throughout the world. These conference calls are amazing, a wealth of access to them. We just saw Delta, JPMorgan, and BlackRock, three major companies, report and going to start breaking them down. Daniel Creech, how’s it going, man?
Daniel Creech: Good morning, Frank, things are good. Another beautiful Wednesday here in Amelia Island.
Frank Curzio: You are going to tell everyone exactly what to do with each of those names, starting with Delta, and how you’re going to be guaranteed to be correct. That’s what you said before we started?
Daniel Creech: Probably. More than likely. I don’t know if that’s word-for-word, but that sounds about right.
Frank Curzio: Let’s start with Delta. Delta had really good numbers. Mostly to their pricing power. There’s pent up demand there. People want to travel even more. We’re in Florida. We’re like, what do you mean? We’ve been traveling for 18 months. But there’s a lot of people out there that haven’t been traveling, depending on where you live and what state you live in. You’re seeing that, which is like just amazing demand, which is coming out of this, which was so in the numbers. But Daniel, what are your thoughts on this, and how do you feel about Delta quarter?
Daniel Creech: Overall was good. This is a great example of how there’s a difference between the stock performance and reality. The premium segment Delta… Capacity is the big thing to look at. Hey, what was it compared to? How was your quarter compared to pre-pandemic, pre-coronavirus, lockdowns, et cetera. Capacity was around. They guided for, what? The third quarter, second quarter, Frank. Capacity and revenues are going to be between 93%, 97% of the second quarter in 2029, 2019, excuse me. That makes a lot of sense.
Daniel Creech: However, they’re making up for it on premium seating I.E. more expensive. Demand is built up. They’re taking advantage of that. They have pricing power. We’ve talked about that a lot in the past for the environment we’re going forward. My point to all that is, this is a great stock. It’s just a bummer, Frank, because the more money they make means what, the more we have to pay to travel. This is how you get back. This is how you benefit and hopefully make some money, make a lot of money because the risk-reward is definitely in your favor. I don’t know if you caught the comments on the CEO of CNBC, Frank? Did you catch any of that this morning?
Frank Curzio: No, I wasn’t able to catch that this morning. No.
Daniel Creech: This isn’t a word for word. But he said, listen, we have pricing power. People are done remodeling their house and home. They want to fly somewhere to go look at somebody else’s house and backyard. That is a good point. Now take that with little salt. He’s like all of us do. We’re confident in our own. We’re talking up our own book. He’s obviously going to be bullish on airlines. However, when you see the prices moving higher, capacity is still going higher and everything else, that’s a great sign for this and a turbulent market. Oh, nope. That’s a terrible pun, Frank. What did you think about it?
Frank Curzio: Well, here’s what I thought about Delta. Okay. I’m going to be honest with you because as you were… I’m looking at numbers and digging through this. This is one of our holdings in our portfolio, in our CRA portfolio. Here’s why everyone should buy the stock immediately right now. When I look at the numbers Daniel, here’s what I get. In 2021, you got revenue of $29.9 billion. That’s COVID. Those are reflected with COVID. 2022, they’re going to go to $44.8 billion and then look after 2024, this is a little over $50 billion. When you look at EBITDA, we’ll look at $2.2 billion this year, which is expect. They lost $2.6 billion last year. That’s the COVID year. That’s going to go to $5.5 billion and 2023 and $7.3 billion. All right, you are looking at a company where earnings are going to explode from a $1.30 this year to 8030 cents by 2024. Their P/E ratio is four based on 2024.
Frank Curzio: Next year’s estimates is seven, and this company’s growing, and they have pricing power. You have to keep in mind this why I love the theme so much. Again, it’s been tough. It’s been a tough road and it’s been crazy, but here’s what’s scary. COVID is mostly in the rear view mirror. Okay? Most in the rear view mirror and they report these results at oil prices searching to 130 that quarter and are near 13-year highs. These guys are blowing out the numbers under some of the most difficult conditions.
Frank Curzio: What do you think is going to happen when things ease? Even if the market does come down, you’re going to see people raining spending. They’re still going to travel. People are still going to travel. They haven’t traveled. Most people have not traveled still. They’re still nervous travel. You’re seeing that. Now saying, “Hey, we are going to be profitable going forward and that we are hitting numbers that were pre-pandemic.” To me, that’s amazing because you’re going to see a ton of demand for this name, and it’s dirt cheap. Even if we’re bearish going forward, at least I’m bearish going forward on the economy. Yes, we know if Fed’s going to raise rates, there’s a whole bunch of stuff going on. We know oil prices are high.
Frank Curzio: They’re reporting these results are in extremely, extremely difficult conditions, meaning that they’re great operational. That’s why I love Delta because operational, they’re one of the best. They know how to cut costs. They know how to figure things out. They know when things are bad, exactly what to do. Man, it’s been one of the toughest environments because you’re not just looking at COVID. Everyone got impacted by COVID. But you’re looking at, with Boeing planes and stuff in different orders because of their max, which is tough for the industry, different strands.
Frank Curzio: We saw COVID different lockdowns in different areas. Now, we have wars which are shutting down certain areas. You’re seeing places like Europe and maybe those economies are a little bit weaker, but the problems that they’re dealing with and to put up these numbers is absolutely incredible because it’s dirt cheap. It’s reflecting that it’s going to be a horrible environment for them, and they just showed, “Hey, if this is the horrible environment it’s going to be in we’re kicking ass right now.” Seeing these numbers and going forward and buying a stuff that where earnings are going to explode. You can’t really say that for everyone. You’re looking at companies. You say, how do you forecast going forward? People are going to travel. I don’t know if people are going to buy certain things, but you know that they’re going to travel.
Frank Curzio: You could talk to all of your friends, you could talk to family members. You could figure that by yourself. How many people like, listen, we got to get out of here. We have travel. They have pricing power, massive pent up demand and COVID is mostly in the rear view mirror. They showed that they could operate with super high oil prices, which I don’t know if oil prices are going to stay at these levels and maybe they come down a little bit more. We’ll see then on Russia, and I know that war is getting even worse now. This week’s supposed to be terrible as that war moves to the east, but Delta’s numbers, man, holy cows, is that impressive. My fault that I didn’t get the pun because yeah, I was actually reading it and looking at that number going, holy shit. Is this how much to actually… Because I didn’t look at 2024, I looked 2023, and I was looking at 2024, and I was reading.
Frank Curzio: I was like, holy shit. I was like, is that number right? I just had to check it. But I mean, the numbers that these guys are… Listen, these numbers that I’m telling you are close to consensus, but they’re Goldman Sachs numbers and Goldman Sachs has a neutral rating on them. All right. This is a fair assessment. When you’re looking at EBITDA going to $7.3 billion from $2.2 billion, right that’s from now until 2024, which is not that far away. Holy shit. It’s hard to find numbers like that almost across the board. Those are extreme growth numbers of an industry that’s been really terrible and beat up, but these guys have pricing power. There’s not a lot of competition in the space. People are going to fly and these guys are great, especially when it comes to operations.
Daniel Creech: All right. Bullish on Delta. The only downside there or big headwind is if you go into a recession, but if you want to segue into at JPMorgan, that’s not going to worry about because Jamie Dimon, CEO of JPMorgan says that he doesn’t believe the U.S would be in a recession this year. You say what? Now he’s talking… Sorry, let me leave it to me to ask you a question and then not let you answer. He’s probably talking, if we had to guess about recession on paper, meaning back to back quarters of negative growth. We’ll give him that context. The takeaway there is he highlights, hey, the consumers are still in strong shape. Yes, you don’t have as much money sloshing around in form of direct payments in governments as you did during the coronavirus. But he points to people, same thing with Delta pent up demand.
Daniel Creech: People are willing to pay higher prices for things right now, who knows how long this is going to last. But just like we talk about the spill in the river, it depends on how long it takes to get down river, Frank. I was impressed with JPMorgan’s numbers. They’re a big bank. They’re going to make tons of money off fees and everything else. They did a big buyback purchase program of $30 billion. But one thing that stuck out to me was a quick quote from Jamie Dimon. JPMorgan generated $30 billion in revenue, $8.3 billion in earnings and a return on capital invested is 16%. Right outside of that, Frank, is damn good results. If you just spit that out of a machine that you want to invest money and those are fantastic.
Daniel Creech: That’s along with putting aside an additional $902 million for credit reserves, largely due to higher probabilities of downside risk I.E. Russia, inflation, things like that. Here you have a bank making a lot of money putting money aside for higher credit losses going forward because the risk doesn’t see a recession. Yes, it’s going to be volatile, but the largest bank in the U.S is telling you don’t have anything to worry about today. In my opinion, I’m not saying he’s completely right. I’m just saying for the bulls out there and to be selective on stock picking, that’s a good thing on consumer balance sheets remaining to be strong from their perspective.
Frank Curzio: Yeah.
Daniel Creech: I wouldn’t buy JPMorgan here. I’m not a big fan of them, but still good.
Frank Curzio: Yeah. That number is pretty big and that’s what everyone’s talking about. The $900 billion to charge to bill credit reserves. If they’re putting that much aside, you got to figure, it’s got to be around $250 billion, maybe $200 billion. They’re very conservative, and I’m a big fan of Jimmy Dimon. I think he speaks exactly from the heart. I don’t agree with everything he says, but I think he’s very truthful. One of the smartest guys that you’ll see in banking and finance and stuff like that. Again, I don’t agree with his put on Bitcoin of blockchain, even though he’s in blockchain now and whatever. But when I look at these numbers, I think JPMorgan is a screaming buy for anyone who wants to hold this stock longer than 12 months. It’s paying a 3% yield.
Frank Curzio: It’s great. The recession thing, I don’t know. Does it matter if we’re in a recession nine months from now, or a year and a half from now? I know that we’re going to be in every recession. If you don’t think we’re going to be in a recession, you need to see my briefing, which I published. It’s going to be published later today for Curzio Research Advisory members. That’s a product that’s, I think, we sell $79 a year. Most of the people listen to us, I believe own that product, but we just entire briefing showing of all the data I’m seeing the cracks the foundation I’m seeing over the past couple weeks. I shared that data with you, data that I’m not hearing at all on TV or anything like that, but we are hearing about the rate hikes, of course and that’s going to be good for this company.
Frank Curzio: We are hearing about trading revenue falling. Yes. We’re going to see that, but we’re all going to see unbelievable volatility, which is something Jamie Dimon said as well, where he’s like anyone not expecting it is absolutely crazy. We have war, we have China lockdowns. We have everything going on with interest rates going higher. The Fed going crazy has no idea what they’re doing right now. Nobody knows what they’re going to do. We’re all like, okay, they’re going to raise. But you know, hopefully, they do because they got to raise a lot. But when I look at JPMorgan results here, they beat the numbers and the headlines are like, well, profit was down 40% from last year. Okay. They’re talking about the credit reserves, which they’re being safe. You got to build credit reserves because interest rates are going higher.
Frank Curzio: There’s a lot of leverage out there. That’s smart. He’s anticipating that we had a good 12, 13… They were having… Did nothing. Nothing was going bankrupt, almost nothing. I covered these statistics in past podcasts showing that if you are bearish, and this was a year ago. You’re seeing hardly any bankruptcies. You’re seeing companies paying their bills, everybody paying their bills. Again, people want to go crazy about debt. You have to worry about debt when people stop paying it. Everybody’s paying it, but it’s going to get harder. This is what I cover in that briefing. You can get 5:00 PM tonight if you’re CRA subscriber, but it’s going to get hard and hard as interest rates go higher. That’s one of the things that he’s concerned about.
Frank Curzio: However, with that said, if you look at these numbers, they beat the earnings and they beat the earnings pretty handily, and that included 13% impact from Russia. What you’re going to see during earnings season, because everyone’s like, we’re not doing business with Russia. We’re not right, Dan. No, we’re not doing business for it’s going to hurt your freaking earnings. Some of these companies have leverage. It’s pack companies. You have agricultural, you have leverage. It’s all nice to say, oh, you know what? We’re not doing it, but it’s going to show your results. A 13% charge for that, and the $900 billion charge for credit reserve. With those two charges, they still beat earnings. He included that. A lot of people are saying well, without that, this is what earnings were going to be. I cover earnings, you cover it, you see that a lot minus these charges.
Frank Curzio: He put those charges in there and still beat estimates. You look at that a company right now is trading a 3% yield, this trading 1.4 times tangible book value. That’s how you value banks your tangible book value. To put that perspective, that’s where it was around 2017. It hit that level several times, almost every single time from then, outside of a seven, eight month period with COVID where everything really came down, went back up. Every time it comes down to this level, it pops every time. I know if you’re a charge looking at this saying, holy shit, it’s breaking down. It’s going to go to 100 and I get it. They say that until the chart no longer works where money’s going to filter into the good names. This is a good name that’s getting it done.
Frank Curzio: They’re smart to put those reserves aside, it’s a 3% yield. They’re going to see an incredible boom to profit. Profitability when you’re looking at where interest rates are expected to go and it might hurt trading. That’s what we’re seeing. You’re seeing a lot of these investment banks with trading and maybe housing and stuff like that. But now you’re looking at, they’re going to make up the difference as interest rates go higher, which is more safer for them and most of these financials, but to me, this is one of the names that you have to own in this crazy environment because it’s a great play on inflation. It’s better than keeping your money in the bank, and you’re losing money on the massive inflation. Now at least, you’re getting paid 3% yield and a company that’s going to benefit and that earning is going to increase due inflation as they make that interest margin is going to get wider and wider, and they’re going to make more money and margins going to increase. But this is a name that I would be buying.
Daniel Creech: Nice. So, you’re right. Buy Delta, buy JPMorgan. What about, are you ready to go into BlackRock and Larry Fink?
Frank Curzio: Yes. Okay. You could start with BlackRock. These guys. I was just going to say the one thing. You look at JPMorgan, Daniel, and they’d have a little less than $4 trillion in assets under management. When you look at BlackRock, it’s pushing $10 trillion in ETFs and assets. They $9 trillion and what is it last Q1, and this Q1 it’s up to $9.6 trillion, man. You want to talk about influence?
Daniel Creech: Yeah, absolutely. It’s just wild. Taking a quote from Larry Fink. BlackRock generated $114 billion in long term net inflows in the first quarter. Just in the first quarter, you have $114 billion in long term net inflows. They talk about how it was positive across all product types, investment styles and regions. This demonstrates the breadth and the asset management platform, its electronic traded funds, ETFs delivered $56 billion in net inflows as clients continue to use their products for efficient capital allocation, liquidity and management risk. The big takeaway here is these guys make tons of money on fees.
Daniel Creech: I’m not saying it’s a bad business. It’s a great business. The issue that I always poke fun at with Larry Fink and these asset managers is their influence and politicization of the economic forum and markets, Frank, because as you just alluded to, you can throw your weight around. We’ve already talked about this with ExxonMobil. They got small minority holders of ExxonMobil ordered to the board because they have such voting power and all the shares that they hold and they own massive shares as all this money comes into it. I wouldn’t buy it here, but it’s great business. I just –
Frank Curzio: I think there’s better businesses.
Daniel Creech: Yeah.
Frank Curzio: I think there’s much better businesses than –
Daniel Creech: Like the ones we… Well, you did.
Frank Curzio: I think some of the banks and also you mentioned to private equity and this is one of the names that you’re going to get in CRA because these guys are sitting on tons of dry powder. I did very, very well in KKR, and I think my investors did well in KKR. This was when I recommended after credit crisis because when you seeing tough times and businesses have trouble, they have to turn to these guys, and these guys are great at dictating the terms or the credit terms and everything they want to do. KKR was able to buy so much real estate that Europe and the U.S and even Europe more to the point was forced to sell, to reduce their exposure to some of these assets, to increase their ratios, when all these regulations took place 2000, 2009, and they were getting stuff at pennies in a dollar.
Frank Curzio: Why? Because they were the only people that had tons of money. The one we’re recommending has, I think it’s over $80 billion in dry powder. A lot of these guys, $80 billion in dry powder out of their $300 billion in assets, under management. These are the companies you want to own because as it comes to down, these are the guys that get pick and choose and say, okay, well here. We’re going to get this script. We’re going to get it for nothing. We’ll be behind you. But the terms that they dictate and the position that they’re in. When you have this kind of cash, you are king in tough markets. That’s what I think everyone’s expecting going forward. When I look at BlackRock, if you own it, I wouldn’t sell it. That’s fine. But I just think the JPMorgans are better.
Frank Curzio: I love the private equity firms better if you’re looking at finance within finance and those are better. I just want to say this one thing, because I know you’ve been on private equity, but I want to say one more thing about BlackRock. Do you think it’s fair, Daniel? Because the influence they have is, and most of you out there are part of BlackRock. If you’re in the 401(k)s and ETFs and things like that. A lot of this is retirement money. This is retirement money. You’re checking a box and saying, okay, I want this and then they go and buy and you’re in BlackRock. Now you have all these people in BlackRock, and now you build up to $9 trillion assets. Literally BlackRock, I want to say is in every single stock that you’ll find. Almost every single stock that has a market cap above say $250 million, you’re probably going to see BlackRock’s name there.
Frank Curzio: You’re going to see Fidelity’s name there. They’re managing other people’s money with all those opinions and stuff like that. But now they’re able to have this mass them all together, and it’s BlackRock that’s speaking. They can get behind climate change like they did with Exxon and said, hey, we’re voting. We’re going to get these guys on the board and they could do whatever, because they have massive voting power. That’s what you’re seeing right now while a lot of companies. I think Shopify did this as well, where he wants more power. Again, the whole world revolves around power. I’m reading Animal Pharma to my daughter, holy shit. Haven’t read a long time, but man, you can see what’s going on right now when it comes to power.
Frank Curzio: How things change. You tell everyone things are going to be different this time and then as you go along, you see that person who’s in charge is trying to get as much power as they can and that’s what they’re doing. BlackRock is just a very powerful company. But do you think it’s fair because they’re able to have one opinion, because they’re BlackRock. Get everyone who’s in their funds, and sometimes you’re forced to be in their funds depending on what company you have, what 401(k) plan you have. But now, they’re able to push their weight around to get their agenda.
Frank Curzio: I have to be honest with that agenda is from. What I see with BlackRock and a lot of these firms is, a lot of it has to do with world culture, which is pretty it crazy. Is it fair? I don’t know if it matters if it’s fair, but how you pull everyone’s money, who has different opinions, and even if you were like… If BlackRock is super conservative and doing it, I would say the same thing. It’s just, to me that’s a problem there. That’s a major problem because these guys have massive control and it’s the control because they’re having all this control over people’s money and they’re not really representing their opinions I think.
Daniel Creech: Not at all. I don’t think it’s fair at all, but in the fine print, when you invest with these asset managers, you are giving them the power and or whatever to vote for you. This could easily be fixed like most things. You can simply… Frank, a lot of people out there get emails if you’re on a brokerage account, when there’s a vote or something at the annual meeting, most probably ignore that because most individual investors don’t have a huge enough or excuse me, large enough stake to make any voting influence. You could easily just say, if you buy it through an asset manager, Frank, why couldn’t the SEC just say, hey, you’re obligated to send these, the information out on when and what is up for the vote. If they ignore that, then those votes just simply don’t count at all and you take that away from BlackRock.
Daniel Creech: They’re not going to do that because again, it comes back to power and the big transition of listen, us individuals, aren’t smart enough to make decisions on our own. Frank, you know that. That’s why the powers would be one to do everything for us. No, it’s not fair. But unfortunately, no, it doesn’t matter. That’s the reality that we choose to live in. If they were conservative and agreed with me on everything, as they should, I still wouldn’t think that’s good. You should still be up to the individual. That’s not going happen that’s okay.
Frank Curzio: And people… They do get the votes and they’ll get in the… I don’t know if you own stocks and Dan, you do too. When you get that big pamphlet in the mail, it’s usually like 50 pages, 30 pages or whatever. It’s all garbage. Really, they’re hiding one thing that they’re pushing through, right.
Daniel Creech: Compensation point.
Frank Curzio: And it’s on page like 32 on the bottom, you know what I mean? It’s so funny when they do that shit. That’s why the lawyers and politicians that make the laws and stuff like that. It’s so funny that, listen, we know why you’re sending this out. There’s one reason it’s because of a certain vote that you want particularly, but you’re going to throw everything that you possibly can in there. This way, nobody even reads that shit and most people throw it out. If you don’t respond, then that’s the vote. It is what it is, but yeah. Is it fair? No, I don’t think it’s fair. Again, whether it’s far left or far right cultures, it’s just for them to have that power to really support and have an agenda is I think that’s a problem. I really do. We’re seeing that as a problem.
Daniel Creech: Yeah, but it’s not… Yeah. I don’t think… I agree. We don’t think it’s fair, but it’s not a reason to stay away. They’ve made some changes at ExxonMobil, along with other things in rising prices and energy policies and all that. We use that to our advantage and dollar stock club. That’s how you of that game. You don’t sit on the sidelines and not play. You just understand the rules and play along with them.
Frank Curzio: Larry Fink is the band when it comes to BlackRock and Jamie Dimon is the man when it comes to JPMorgan. It’s kind of funny because at the Bitcoin conference which was last week, which don’t talk too much about. When I say Bitcoin conference, guys, this conference is 100% Bitcoin. Because even Daniel mentioned it too. It’s kind of funny about Ethereum. If you mention Ethereum there, they’re like hang you.
Daniel Creech: Yeah.
Frank Curzio: Right. Going there is Bitcoin. It’s not going there where you go into a conference where you’re going to get… You could network and get ideas, but it’s 100% all diehard Bitcoin, that’s it. It’s not all coins. There’s no nothing. It’s, that’s what it is. Is everything around Bitcoin. You had Peter Thiel, and it’s Peter Thiel, and you say Peter Thiel. Right. But I think it’s Peter Thiel-
Daniel Creech: I say Thiel.
Frank Curzio: I don’t know.
Daniel Creech: I say both.
Frank Curzio: I like my New York accent. Everything, it’s just I don’t really pronounce things right. Anyway, but whatever it is. But I’m always a big fan of his. I know they paint him as a political picture now, but I was just a big fan because he’s smart. When I see him, I think I trust him. If you see him compared to some of the other people on TV selling these SPACs, I just think with him, he has those results, and I just feel like I have more faith in what he’s saying than almost 99% of anyone else that’s talking, especially when it comes to SPACs or anything else. But he called out a lot of people in his speech at Bitcoin conference. What did he say about enemies?
Daniel Creech: Yeah. He just came out with an enemy’s list. Larry Fink, BlackRock, that we were just talking about is number three on that list. Coincidentally, JPMorgan, Jamie Dimon is number two on that list. And number one, public enemy number one, if you want to have some fun with that, is Warren Buffet himself. Now, let me give you the short version here first, and we can back into this over time. What he’s saying, Peter Thiel, used this and I encourage everybody to just Duck Duck Go or Google the Bitcoin Conference 2022 in Miami. You can watch the YouTube live streams from day one through three. You can watch different segments. I’m going to highlight a couple of those real quick. But Peter Thiel was interesting because you talk about a guy that come out swinging. He played a version of himself, and I believe 1999 was still a PayPal.
Daniel Creech: He was talking about how currencies were going mobile and all that. It’s really neat to see. And then he admitted, “Hey, I got a lot wrong back then.” His big takeaway on the public enemy’s list is, he doesn’t want to compare Bitcoin to gold. Even though he thinks it’s replacing gold as a store of value. Bitcoin is roughly $800 billion give or take whatever current price it is right now versus a $12 trillion market cap in gold. He thinks a better comparison is Bitcoin to the S&P 500 Frank, which is a whole different other topic. When you talk about the value of it and how it should be perceived. He believes it’s going up a lot more, excuse me, than current prices. The biggest hindrance of Bitcoin being a lot higher in price terms and the money flowing into it is his enemy’s list. That’s the Warren Buffet, the BlackRocks and the JP, Dimons because they’re, and he even said this. They’re making a political decision when they choose not to allocate money into Bitcoin. I want to unpack that at a later time, we can maybe do a segment on that.
Daniel Creech: That is a huge statement for the community in my opinion. He is literally calling out them and he’s encouraging the community to push back into, for lack of a better word. Just like we see in politics when you don’t like something, what do you do? You protest, you grab a megaphone. You shout, you scream, you grab attention. He wants them and I think the community will do this. You’re already seeing adoption through mass institutions. We’ve highlighted in the past MassMutual, one of the largest mutual insurance companies and the oldest in the country. They’ve allocated a little bit to Bitcoin. Nothing to move the needle in terms of their allocation, but the process in general, that calling out those top three people and he was calling them names and everything else. Of course, people were cheering and ranting raven, because he’s preaching to the choir there.
Daniel Creech: I want to time stamp this and see about allocation because we’ve talked about Galaxy Digital and the influence that they have, and the Middle East money flowing in, and all the huge partners they work with. But I encourage everybody… You’ve got to go watch these things because he calls them out. He compares Bitcoin to Ethereum. He thinks Ethereum is going to be more like a visa payment thing. Bitcoin is more of a value hold over time type deal. I didn’t take as a negative against Ethereum, but some articles that I read perceived it that way. I really don’t care about that. Are you ready to chime in here, Frank, or you’re… I feel like I’m rambling at this point.
Frank Curzio: Listen, you’ve been really, really covering this and that’s what I love.
Daniel Creech: How much time do we got? I want to highlight one other thing people need to turn to.
Frank Curzio: Keep going. No, go.
Daniel Creech: On the Bitcoin mining, they have a couple of panels on Bitcoin mining, and we’ve talked about this in the past. One of the reasons I continue to get bullish on the sector, Bitcoin and other cryptocurrencies in general is because last year at the Bitcoin conference, I thought it was very authentic. This year, I think it’s much more focused on how they need to fight back. I don’t think it’s coincidence that Peter Thiel is talking about calling out these enemies list and pushing back and encouraging people to allocate capital and massive amounts of weight to this space. It’s not a coincidence that they’re basically starting a super PAC, a political action committee to back like-minded politicians. They understand and what’s cool is within this tent within this conference, Frank, while it’s all about Bitcoin, there’s something for everybody.
Daniel Creech: You have the Bitcoin people, okay with it, not taking over the world. You have the Bitcoin, but they don’t want any other cryptocurrencies. You have the Bitcoin people that just, they don’t want anything. There’s people on there that say they don’t use cash anymore. It’s cool to be off fee currencies. Hey, that’s fine. Teach their own. The world’s big enough for all in my opinion. But there’s so much to take away from this conference. That’s why everybody should look at this and when the argument is against Bitcoin, because of its green footprint or lack of green footprint, its energy uses, that’s when they attack it emotionally. I say they meaning asset managers, politicians, governments, when they attack it from an emotional standpoint, you need to really take note because that’s not the truth. You don’t argue how much it energy uses when you don’t talk about how much every other industry uses in energy finance or financing and energy usage.
Daniel Creech: There’s a real good quote here from the co-founder. I hadn’t heard of this co-founder of Core Scientific. He says that whenever you hear these fear stories and Newsweek did an article back in 2017, Frank, that by 2020, basically the Bitcoin miners and energy uses would use all the power in the world. Just like global warming and stuff. That’s only a couple years late, but results don’t matter to these emotional arguments. He calls out, this Darin Feinstein calls this out, that article out, along with the world economic forum article out. But he put in perspective, total energy rated annually is 160,000 terawatt-hours globally. Okay. That’s according to his data. You guys can fact check that or whatever. I am not smart enough to explain to you how much crazy power that is Frank. I Googled it. There’s some fun examples you can do the same. The takeaway here is of the 160,000 total energy usage of the Bitcoin network is 220. That’s 0.13749, whatever. The point is, it’s literally a rounding error.
Frank Curzio: Yeah. Most smart people and no, it’s a political thing. It’s a fucking joke.
Daniel Creech: Perhaps so.
Frank Curzio: Yeah.
Daniel Creech: But the majority of people I think would admit that the headlines that they see around Bitcoin and energy usage is negative not positive. That is going to start to change as the community itself pushes back, and I don’t see how that’s not crazy bullish for it. There’s several segments or panels about different mining and energy grids and energy uses that I think everybody should, hey, just bump the speed play, the feedback up to one and a half or two times. That cuts down. You can get through this more fast, more quickly, but everybody ought to listen to some of those panels because there’s a lot of great information.
Frank Curzio: Yeah. That’s the thing. Man, I’m going to say something’s going to get me in trouble. I don’t care. But the majority of people don’t know better. Okay. They don’t. They’re not going to do the research. They’re going to listen to someone on TV. They’re going to listen to… They may listen to me on podcast, which I always say, when you listen to this right now, do your own research. Check everything that we say. You could disagree and whatever, but Bitcoin, even this conference really focused on it focuses on it all the time. Every year they have, it is capitalism. You want capitalism and anything that is about capitalism. You’re going to have one group of people that attack it. That’s the climate change. We hate capitalism we don’t want, and they’re going to attack it.
Frank Curzio: When you look at the numbers, it’s absolute joke. It’s a rounding era of why we shouldn’t be using Bitcoin. Should we look at it and say how we can make it better and use less? Yeah. Use less electricity, yeah. That’s fine. Use alternative energy to power this stuff. Some of them are using coal that’s been thrown out at that. There’s some projects that are using coal to power this and power computers and mine and stuff like that. But when I look at that, it’s kind of a joke. But a few things here. Calling out people is… Okay. I disagree with a lot of people on TV and I don’t call them out. I’ll call out certain people and you guys know what I’m talking about. The reason why Peter Thiel is calling out certain people is because when that person disagrees with you, that’s fine.
Frank Curzio: But when they’re saying that you’re basically an asshole for buying Bitcoin, which is what Warren Buffet is saying, Jimmie Dimon is saying, Larry Fink is saying. They’re saying, it’s going to zero. You’re an idiot. It’s bullshit. It’s tool. Maybe again it’s… You’re really attacking the integrity of the people who really believe in this it’s then you have to stand up for yourself. Okay. Then you have to stand… Because Peter Thiel not the type of guy that just rips everybody apart. Again, I love when people have a different opinion. You can disagree, that’s fine. But when people are saying no, because of the way you think you are freaking idiot. That’s why you have Peter Thiel said enough is enough. He said, what he say, Warren Buffet called him a sociopathic grandpa from Omaha. Jamie Dimon, Larry Fink, BlackRock. He says, opposed that revolutionary youth movement behind Bitcoin.
Frank Curzio: There is a massive youth movement behind Bitcoin. Michael Saylor I thought was interesting too, at that conference saying, he was upbeat about Washington, that they could put regulations in place to safeguard investors in prevent fraudulent activity. That’s what we want. Hopefully, they don’t overregulate, but you’re seeing that. A lot of the big people who manage that’s what they want because you got to see, they’re not allowed to come in unless you have some kind of regulatory framework, and we’re talking hundreds of trillions of dollars on the sidelines that could come into this industry. Even if it’s 1%, you’re looking at Bitcoin going up tremendously. The conference is 100% Bitcoin. I like Peter Thiel speech and I get it. I wouldn’t rip them apart for saying those things. We know that Warren Buffet is the greatest investor of all time.
Frank Curzio: Larry Fink, Jimmie Dimon, people that respect it and look what they did with their businesses. Unbelievable. But when they’re really coming down, and the way they come down, the way they talk about how you’re an idiot if you buy Bitcoin, then that opens a door for you to respond like this. I credit Peter Thiel. I like the way he responded to this. One thing I will say, I think they should stop having these freaking conferences, Daniel, because every time they have them Bitcoin crashes. You look at last year, that I did that in June. It was at 45,000, went to 39,000, a few days later. It was at 40,000 went to 33,000. Now it’s like 45,000, I think when it started 44,000. It’s up over 40 today.
Frank Curzio: It’s going higher a little bit today, but still like 15% correction every time they have these things, but maybe we should think about that before we have these most Bitcoin conferences, because it almost happens on a regular basis. Just that week, two weeks after. Of course, it ends up being a buying opportunity, but still maybe we should worry about that. But yeah, Bitcoin conference now over pretty cool. Good stuff. You could find all those highlights, anywhere there’s a lot of people out of cover it, and some really good speeches that you could find all over YouTube. Really cool stuff. Daniel, thank you because I know you really, really covered that and went over a lot of stuff because right now could, as your research we are doing… We’re in the middle of a very big deal.
Frank Curzio: Something that we’re doing that I’m going to share with all you guys probably in a week, week and a half, that we’re very excited about. A lot of traveling, a lot of research behind this, which is really cool. I’m going to share that with you pretty soon, which is awesome. Dan, thank you for yeah going all out, listen to all that stuff. I had tickets to go to Bitcoin conference, but I couldn’t go this year because it was just too crazy and too busy, but really good stuff. Yeah. Daniel, listen, we covered a lot today. Earnings –
Daniel Creech: You have a great Wednesday.
Frank Curzio: Bitcoin, lots of fun. Guys, if you’re getting your serious subscriber, a Curzio Research Advisory subscriber, we just recorded that special briefing. It’s going to be published around 5:00 PM today. Please play close attention, especially if mostly you listed pockets on equities, own crypto, own everything. I’m going to show you how to protect yourself because it looks like this market could come down a lot more over the next 12 months, and even longer. Not the whole entire market there’s pockets that are definitely working, but you need to position your portfolios properly because you can get really killed if you in the wrong sectors. I’m not just talking about growth. I cover all of this. It’s very detailed. I’m going to show you examples of how the foundation’s cracking. We weren’t seeing the foundation crack. We always had positives, where wage growth was going higher.
Frank Curzio: We saw China was going to ease, but now you’re looking at these things and there’s slowly, all those positive cows are going away. China’s seen inflation go higher again. All right. It lowered in January, February, now it’s going high past two months. We’ll look at the growth engine of the world saying it’s going to be very difficult for the ease when you have inflation going much, much higher there now. You’re looking at wage growth, starting to slow. You’re seeing demand starting to slow, believe it or not. It’s a big deal for car companies, for chip companies. These guys are just petals to the metal. We need as much inventory as we can, but you’re starting to see demand fall for the first time in a long time that not all companies have pricing power, so just be careful.
Frank Curzio: Just be careful out there. You’re going to see a crazy earnings season. It just started over the next couple weeks. Daniel and I are here for you, are going to be covering it. Again, thanks for coming on and yeah. Really good stuff. If they want to reach out to you, Daniel, what’s your email?
Daniel Creech: Daniel@curzioresearch.com.
Frank Curzio: He always smiles when I say that, because it’s so easy to say, but I’ll never say it, firstname.lastname@example.org. If you have any questions or comments, guys, feel free to email me. Enjoy the day. I’ll see you guys, too. 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 host and guests. You should base your investment decision solely on this broadcast. Remember, it’s your money and responsibility.
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