Transcript was automatically generated.

0:00:01 – Daniel Creech

How’s it going out there? It’s Wednesday, November 5th, and you’re listening to the Wall Street Unplugged podcast, normally hosted by Frank Curzio, where he breaks down and tells you what’s really moving markets. He does it much better than I, but he is on the road. He is in New Orleans attending a resource conference. Boots on the ground, research is what he’s doing. That leaves me, Daniel Creech Hello and welcome behind the mic today, and you know what that means. 

We’re going to talk about whatever the flying Florida I want to talk about, and we’re going to have some fun and talk about some serious things as well. Let’s get right into it. I have a huge announcement. I’m going to put everybody at ease. I want you all to stop what you’re doing, unless you’re driving. Don’t stop if you’re driving, because self-proclaimed my words king of climate trying to control mother nature, bill Pool, party Gates, is out with a major announcement or essay, a long essay, and he has announced to the world that, hey, climate change is a serious problem, but it will not end or be the end of civilization. You can see, this is truth number one on his long essay. Truth number two is something about the temperature is not the best way to measure our success or failures when it comes to, you know, breathing out or having cows belch or you know whatever, ruin the earth. Look at that. Truth. Number two temperature is not the best way to measure our progress on climate change. Now, why am I having fun with this? Because this is finally bringing some common sense, some gravity to this floating conversation of silliness finally bringing some common sense, some gravity to this floating conversation of silliness. And there are big lessons here that I want to get across. Number one is these experts and yes, I’m using the Dr Evil quotes experts from Austin Powers for all of you not watching. Be cautious on trusting people. Be skeptical of me as well, but be cautious on just trusting the experts who think they’re experts on everything, and our society and me including, involved in that is to blame because we value wealthy and rich people and Bill Gates is a genius when it comes to certain things. Climate is not one of them. Okay, and you can look back and he had a book. This is the same guy, this pivoting pool party Gates. Look that up if you’re not familiar with that joke. 

In 2021, he came out with a book about climate crisis and he said and I could paraphrase here the climate change and the crisis was bigger and a more threat than the coronavirus, the COVID virus oh my gosh, covid-19. Do you remember that? And let me tell you why that is utter BS, because it wasn’t the COVID virus that was so dangerous. It was the impact and the actions taken by governments globally, including ours, to shut down the economy Not a good idea. To force people like lab rats to go get shots Also not a good idea. And to inflate the economy, which we are still going to feel now, because you print money out of thin air Think Wizard of Oz and Willy Wonka stuff and you inject it into the economy. This is serious stuff, people. 

And he is saying that that wasn’t as near as a big deal as the climate crisis. And now he’s saying, well, you know, it’s not that big of a deal. We need to focus on just helping the poorest people among us. Well, golly, gee, bill, a singer teal runs down my face for that. Thank you for that revelation, my friend. I mean, oh, my goodness. 

And here is the greater point on this that I want to talk about and why I get passionate about stuff like this. There is a massive opportunity cost with things like this. There’s opportunity cost everywhere. But with this you want to go back over the several years and you can pick your timeline of when you want to start on this silliness of climate change and listen, I should say man-made climate change, because nobody, including this guy behind the mic, is denying the climate is changing for crying out loud. Okay, use your eyes, people. It’s easy to see that. Read some history. That’s not a problem either. It’s easy to see that. Read some history, that’s not a problem either. But when these do-gooders, self-proclaimed, talk about making the world better and the first thing that Bill Gates points out here is that him flying around in a private jet, well, he offsets with carbon credits. 

Okay, those are fun Tinkerbell things made up of government pointy shoes wearing and vest ties, all the like, to make you think that, hey, they’re doing good and it’s just the old do as I say, not as I do, type deal. It’s just utter BS and that’s all there is to it. Now, when you look, whenever you want to pick, when this silliness started and this screwery with the narrative and this control and power over the common folks like me and you here, what I want you to think about is the horrible investments that were made that sent a lot of money to money heaven, on silly projects or silliness, usually big government contracts which are still going on, and a lot of just utter bureaucracy and BS and trans, not transforming but transferring money from one group of people, ie the middle class and lower class, to the rich and wealthy, powerful, smartest group, and you have bad investments on one side and then you have a lack of investments on another side. Now, there’s not real hard data here, but it’s not going out on a limb and handing your enemy the saw to think out loud here. That’s what we do, independent thinkers. We encourage you to think, not tell you how to think. That’s key and that’s valuable. But when you have powers that be like Bill Gates talking and controlling and using his money which I’m a fan of to buy and to twist policy, think of all the investments that were not made five years ago, 10 years ago or longer. That could be reaping benefits for the poorest among us in nations that don’t have clean water, energy and the way of life that we do here in the good old US of A, and that, to me, is the real kicker, and that is very aggravating because you could have started running this race if you want to use that analogy a long time ago. You could have the fruits of your labor and investments, say, from five years or 10 years. Again, pick your timeline coming to fruition in reality right now. To help Now. We can start right now. 

And I have to give him some credit for writing this. I don’t think his intentions are good. I do not know his heart, so I could be completely wrong on this. If I had to guess or bet, I’m more of an investor, not a better. But if I had to bet, if you put a gun to my head, I would think that he is A losing the political battle going on because now you have a Trump administration in and they are not part of this whole climate hoax. I would assume that he has lost a lot of money on these silly and worthless investments and it didn’t make up for it. On the power side, I don’t know that. Again, I could be totally wrong. If I am, hey, I’ll eat humble pie. Wouldn’t be the first time. The other side is, I hope that some of those investments on clean and good energy, because energy is key. It is the key to everything in our worldly world here and that more energy can help the poorest among us, who all these rich, do-gooder, jet-setting people claim to want to help. 

Okay, now the second part, or another part I’ve lost numbers here that I get aggravated about is because there are people that I know and love and care about and I’m sure you are the same that have put off joy for lack of a better word or deferred joy in this world because they are so worried and got caught up in these hoaxes and lies, and that drives me crazy. So now I am not a father, I’m an uncle, but I don’t think that’s for me on the father side. But I know people that I care about and love that are persuaded in choosing not to have kids, or at least putting a lot of data and not having children, because they think that would ruin the earth. And my goodness, that just drives me insane. Now you can believe whatever you want to believe. You can think whatever you want to think. I’m simply telling you do not just trust these experts because you think they are experts in general. 

And Bill Gates is a brilliant businessman. He has created an enormous amount of wealth and I tip my hat to him if I was wearing one. He does not owe me anything. I don’t think he should pay higher taxes and universal basic income and all that BS. I think that’s absolutely silly. Income and all that BS. I think that’s absolutely silly. I think he ought to be a better defender of capitalism and growing the wealth pie it’s not finite, like the amount of Bitcoins here. 

And to prove and to have some fun here with this, just quickly and I’ll move on, bill Gates wrote this essay it’s like 13 pages or something before the COP30, which is just a goofy name for a climate gathering of people, and, if nothing else, says I love the climate, like building a four-lane highway through the Amazon. All right, now, this is where the COP30 is going to be held. It’s coming up soon I believe it’s like the 10th of November or something like that but 50,000 people are expected. Now, this is from March 2025, if you’re following along from the old BBC, there are more up-to-date pictures and articles and such. In fact. We can look at this here Again, this is beautiful, right here? 

I mean, what says climate lovers? Like a good old diesel burning backhoe, pushing dirt and trees around? Huh, I’m telling you guys, use the brain God gave you in your head when he created you. All right. So the aggravating thing here in the takeaway value is there. Think of the bad investments and the investments that were held off. Hopefully that gets turned around and we can create cleaner, better energy and lifestyles for absolutely Florida Everybody, from the rich and wealthy, the jet setters all the way down to the individual investors like this guy, and then the poorest among us that need our help all over the globe. That is a big deal, and leave it to nobody else other than our president, mr Trump, to declare victory with his social tweet. Here you can say I, then we just one, and I give him credit because he does say Bill Gates finally admitted all this, but it took courage to do so and it does. So I’m happy that he has kind of come to more common senses and is being a leader on saying hey, this is not the end of the world. I guess the old saying better late than never rings a good bell. All right, let’s move on to Election Tuesday. 

Yesterday, and contrary to what media reports from all over the mainstream media and headlines that I was checking this morning want to tell you or try to guide you on, there was absolutely no surprises in this, and I mean absolutely ziltch, nada, zero. And you had a mayor electoral election in New York, and I’ll leave that tomorrow for Wall Street Unplugged premium listeners when the one and only Frank Curzio gets back to talk about his home state more in depth. And you had some Virginia and also New Jersey races. And let me tell you why. There are no surprises here, and I get it the mainstream hates President Trump. I’m not telling you to be a fan or a foe of him. I’m simply pointing out the reality of the situation. 

Let’s look at some data. The reason there were no surprises here is that because all the way from 2012 to 2016 to 2020, new Jersey and Virginia have been heavily democratic towards, especially, the presidential election. Now, virginia hasn’t been a Republican leading state according to bias, chat, gpts and Groks and all the AIs that are going to either save us or terminate us. That coin is still flipping and that’s a good thing. Hopefully it just keeps on spinning while we can enjoy our time here on the world. And New Jersey has been reliably Democrat since 1988. So if you want to get on the bandwagon of this voter turnout and kind of trying to put up roadblocks or stops or really just stop Trump in his second term tracks. 

You can believe that I agree to disagree. That’s fine. I’m simply saying we are constantly taking in data in our world, our 24-7 society, that we live in news feeds. Everybody has a job to do, including this guy, and my point is is that I’m just trying to help bring some gravity to these conversations, some common sense to these, and for news outlets to go out there and act like this is a surprise or a big deal. I just think that that is silly and I’ll just. That’s all I’ll say about that. 

Tomorrow we will talk more about the situation in New York because, depending on how much power he can actually or has as mayor and what he can implement, there was a businesswoman on CNBC this morning Partnerships of New York, if memory serves me correct and talking about how he doesn’t have the new mayor, mbaba Dami, to raise taxes. We’ll see about that If his influence can. He doesn’t have that power under the mayor side. But the takeaway here is and this is all you need to know the cliff version notes capitalism is under attack and you need to pay attention to that, because when the capitalist structure changes, that’s when all bets can start to be taken off, and that is a serious notion. I do not say that lightly, but I believe including my 80 year-year-old grandparents should have exposure to the stock market. Cheap ETF is the easiest way to go for a lot of individual investors, and then you can dive into individual stocks, risk-rewarding your opportunity that we so passionately love here at Curzio Research. 

If you change the structure of capitalism, then we have to do an entirely different roadmap. That is like going from this library to that one, and I’m not talking about Barack Obama’s concrete looking weirdo structure for a billion dollars that you see floating around the internet. All right, so rest assured, let me bring a smile on your face. The climate’s not going to kill us all in civilization. There were no surprises yesterday. 

Now let’s get to some stocks and to continue this amount of data that we must take in as investors, as humans, as whatever. You want to be able to compartmentalize all this, and so we can take in all the data you want, but let most of it just kind of go in one ear and out the other. And then we want to put a lot of data or weight on certain data points, and this is not one of them. I’ve had fun with this in the past, this fear and greed index from CNN. Now, when you look at this picture on the far right, you have extreme greed, which means like think bubble territory and just valuations and silliness and everybody’s just leveraging and wanting to bet the house, okay. And then you have greed and as you work your way left, then you get neutral, neutral, 50. You can see that and we get fear and then extreme fear and right now we, or this gauge, stock market indicators and investor sentiment is pointing to extreme fear, extreme fear, fearful. 

Now when you think of fear or scary for lack of a better word maybe you think Halloween. Well, we’re past Halloween, people, we’re on Thanksgiving, all right. That’s a real good story of capitalism. I’ll talk more about that around Thanksgiving. Extreme fear, okay. Extreme fear. Okay. 

Now if we pull up a stock chart here and I’ll just go to FinViz and the market’s open right now, so we’re flat-ish or whatever. But here’s the S&P 500, spy, the ETF, and if you look towards the top right of your screen here, where my cursor is, this was the all-time high in stocks recently. Let’s just round up to 690. Stocks are around 675. I spent a lot of time in college didn’t get a math degree. We’re less than 5% from all-time highs less than 5%. And yet we are in extreme fear from an investor sentiment standpoint. 

Okay, remember I talked about compartmentalizing and all that kind of stuff. This one, the CNN fun greed fear index, okay, that one goes over here in the trash bin. That’s where that goes. Okay, so you can take this in, you can have fun with it. We can laugh and share. You know, laugh over your coffee or a cocktail, depending on when you drink, or when you listen to this, or when you drink, it’s 5 o’clock somewhere, as they say. But it does show you how caught up we can get in everything and listen. We’re all to blame from that, including the guy and starting with the guy behind the mic here, because we are knee deep in this stuff and when you’re passionate, you follow it and it is a 24 seven cycle and all that. 

But we must be able, especially as investors, because I do not want you to be swayed by emotions. Remember, money is emotion and you want to keep as much of that out of it when you’re investing as possible. Choppiness is fine, taking losses is fine. It’s part of the game. It sucks, it hurts. It’s humbling. I’ve done it several times. I’ll do it in the future, unfortunately, but you have to be able to separate that and understand that. 

Even if this is, what if the market just topped? What if the AI bubble that everybody’s talking about? By the way, bubbles usually don’t pop when everybody’s pointing to them. Frank’s done a great job over the years of explaining when the market is talking and looking at something and is aware of problems, it can handle it. There might be pullbacks, there might be setbacks. Nothing goes up in a straight line, but it’s not when everybody is talking about it. Does that usually come and ruin things? Okay, and the point here is what if the top is in? What if we draw back 10% or 15% or 20%? I’ll get to this in a little bit later. 

But you want to think about what has changed and if the thesis hasn’t changed, then you want to stay the course and you want to ride out the turbulence. If you’re flying in an airplane and you’re not delayed, we’ll see about how that works. So have some fun with that. On the extreme fear side, but do not put you know when you come across things like that. Do not worry about it. And on this market, pullback and stuff. These are healthy and listen. It sucks to watch. It stinks. This is a family show. If you got your munchkins running around, listen to this while you have it on in the kitchen or whatever. More power to you. There’ll be young capitalists and grow up to be big capitalists. That’s great. 

The point here is you must remember and this is tough because when I see stocks go down or my stocks go down and all that kind of stuff, it gets you in the gut Up is better than down, green is better than red in this game but they are healthy and you must remember that they are part of the business cycle. Now I know our Fed is trying to get rid of the R word recessions, but pullbacks are good because they give you opportunity. So that’s why you should always know what you own and why Stick to your thesis. If the thesis changed, then start changing. Don’t be crazy levers. Focus on position sizing and stop losses. Balance your risk, because that is important. You want to be in this for the long term. This is not a sprint, this is a marathon. I hope you make money on every trade. I hope you make 10x right away. Pick your return and excitement, whatever, more power to you, but that is not a realistic expectation. And here we are grounded in common sense and we want to talk about the long-term game. So you want to buy great quality companies, you want to take advantage of the secular moves, ai and power, crypto, et cetera, and you want to try to latch onto those and ride these waves of momentum. Okay, all right. Now we’ve gone through quite a bit already. 

Let’s talk about one specific macro stock, palantir. Because they reported earnings yesterday or, excuse me, the day before. The stock fell about seven-ish, eight-ish percent and, like I said, the markets are open. This is going to reset here on FinViz, but you can see on your far right screen, it set a new all-time high of over $200. I don’t know if it was 206 or 207, call it. And then it fell down 7, 8-ish percent yesterday. If you look at the report the Q3 report, excuse me numbers were very good. It was a beat and raise quarter. So that means that they beat earnings expectations and remember whether those expectations are high year over year, lower year over year, in a sense, it does not matter. As Frank says, whatever the expectations are. That’s the bar of consensus analysis. So these guys. Palantir beat it and then they also raised forward guidance. That’s what you want and need to see from a massive growth company that also trades on crazy valuations. 

That’s always been the story and this is what drives me insane about some stuff is that when you go to Palantir I listened to so many people yesterday on the mainstream and financial channels and all that kind of stuff talking about the same old Florida thing with Palantir, and you know what I’m going to say. It starts with a V valuation and, oh my gosh, it’s overvalued. And look at the valuation and the PE and let’s have some fun here. If you just look at and this is as of, let’s see, this looks like it resets. So it’s down almost 1% today, call it. But if you look at old FinViz here and take these with a grain of salt, I don’t know where exactly they’re pulling it from. The forward PE is 197. That’s crazy. I admit that, all right. If you want to look at the rear PE, it’s 451. Well, that makes 197 look a lot better. By any metric, you can say that this is absolutely crazy overvalued. But that is not valuable to you retail investors or us investors, because it has always been a story of overvaluation. To say it another way, this is not and never has been a valuation story. 

When we recommended this for Curzio Research subscribers, we did not say this is a value play. We were not pounding the table on cash flows and low PE multiples and all that kind of stuff and dividends and the steady growing and hopefully it’s going to be a dividend aristocrat sometime soon. No, we didn’t do that at all. We said this is a growth stock and you have to ignore valuations, because that’s what you do with these type of companies. You want to look at their TAM, their total addressable market, and Palantir was switching from that non-profitable to profitable on a gap basis. That’s important, because that was the same time interest rates were going from zero to being raised higher and the market has to adjust. And they say listen, we’re not just going to put any kind of crazy multiple on everybody, burning through money and sending it to money heaven, like a lot of the climate hoax stuff that was happening. No, they want to see that the business can actually be sustainable and turn a profit and stand on its own two legs. Then you catch momentum and you put up great growth and the rest is history and you can go just parabolic and go crazy. 

Now the rule of 40 is popular for these software as a service companies and that takes the annual revenue growth percentage and you want to add that to the profit margin percentage and you just rule 40. As the name hints, 40 is good, and if you’re 40 or above, that’s really good, and if you’re 40 or below it’s like the combined ratio for insurance. If you’re over a hundred, bad, under a hundred, good. The lower, the better. In this case, the higher the better. Palantir put up a rule of 40 of over 110%. I think it was like 114%. Okay, that’s impressive. 

But what really stood out to me and what I think is going under the mark here is when Alex Karp went on. Alex Karp, excuse me, the CEO of Palantir, and yesterday he went on CNBC and the anchors. It was during Squawk Box and the anchors said it was kind of unscheduled or last minute deal and they had a gentleman who was doing a biography or spent a lot of time with him, wrote a book on Alex Karp on and then they made the announcement, said hey, actually you know we’re Alex Karp is going to grace us with his presence here a little bit. It was not the exact next segment, but it was later on in the show and his comments. He’s always entertaining to me. He’s got an odd sense of humor and he’s very outspoken. I respect that. Whether I like him or agree with it, I think that’s a good trait to have, and he said something that stood out to me, and he was first of all, he talked about the retail investor, and he was talking about how he speaks directly to the retail investor, and the retail investor is a big component of Palantir’s base and also a big reason for their success, and by success I just mean the stock is climbing higher and higher. 

And so when I go back to this chat, gpt and Grox, I want to share this with you here and when I think about this out loud, there are massive changes taking place that you want to grasp onto, and so and I use this too much at times these paradigm shifts and I apologize for that, for my lack of vocabulary public schools and colleges you never heard of not knocking them at all, but one of the biggest shifts that’s going on is in the retail investor area. And so here’s some charts from and I’ve compared these with the bias chat, gpt and the bias, groks and all this kind of stuff. But if you look at over the last 10 years, the retail investor, us individuals, the little guys, okay have made drastic changes and this is a great piece of the puzzle into a greater puzzle, and I’ll get into a little bit of that. Why about this? Is just capitalism. This is a great success story in the making and I want you to be a part of this and participating in this, because this is the kind of stuff that just gets me wanting to nerd out on things. 

Over the last 10 years, you can see the ownership share, trading volumes and participation rates, which they define here as the percentage of households that have exposure to stocks. It has all gone up pretty significantly and so, from 2015, you can say and again, let me quickly here these are don’t take this as the gospel, people. There is only one gospel. Okay, these are rounding numbers. Okay, chat, gpt, grok, they were pretty close. They have slightly different numbers and stuff, but I’m okay with rounding. This is not something where it’s accurate to the decimal point. Don’t say, oh well, it’s 51% or it’s 55%, I’m a few percentages off and therefore you threw out the entire argument. I mean, you’re more than welcome to do that. This is a free world and I want you to use your brain. My point is you’re going to miss the bigger point if you get caught up in those details, and I understand how that can sound silly, but email me at danielcurzioresearchcom. In 2015, the participation rate was around 52% of adults. Fast forward to today it’s around 62%. That’s a great increase. 

The trading volume has gone from, say, let’s say, 10 percent in 2015-ish meaning retail investors are responsible for that type of volume to between 20 and 25 percent. And I’ve even seen other, you know, throw it into your Google machine and whatever AI they use and stuff. I’ve seen it go up to, you know, 30, even 33 percent, and then you have your ownership share. So when you think about this, you want to think about hey, you got big dogs, you have your ownership share. So when you think about this, you want to think about hey, you got big dogs. You got your institutions, your hedge funds, your family offices, rich guys, and then you have the individual investors are the smaller players and you have ownership shares have gone up, even from a percentage standpoint very nicely, from 15 to 18-ish to 24 to 26-ish, and the reason I said that this is one piece of the puzzle is, if you look to your far right here, the key drivers of that. This is showing you how capitalism works, how companies like Robinhood, how disruptors another one like Robinhood, disruptors, another one like Robinhood create products, go out on limbs, take chances and try to gain volume in business and grow. Now the reason this is so exciting and that I want to try it and I’m not going to do justice here, but bear with me here One of the biggest reasons that retail investor activity and ownership has gone up and influence and power and momentum think GameStop, think short squeezes during the COVID is because you have companies taking chances and trying to disrupt other markets and gain market share For lack of a better word. 

They’re greedy and they want to knock this guy off the pedestal and they want to take his spot. The one thing that absolutely drives me Florida crazy is that, for whatever reason, I hope I get there and I have to make this decision someday. Whatever your level of success and wealth is, when you get there, do not be like the billionaires and elitists that talk down to you when you climb the ladder of success. Do not turn around when you get to. Whatever that level of success is, when you get to the exit that says, hey, I, florida made it. Do not turn around and try to pull the ladder up so that the people cannot get out or follow you on that. Look at trying to widen the path, not through the narrow gate, but the wide path. That’s how you lift. 

If all these guys, all these billionaires, all these do-gooders, these private trust people that cover all their expenses for them and their families, actually wanted to help the lower class, I would encourage them to maybe do that. Robinhood, you come out with zero commission trading fees. You don’t think that that really helped them grow their user base, disrupt other players, force the hands of other brokerages to do that, and that’s great for the individual investor. Now, whether or not that was their intent and drive, I would love to think and I do believe that it was their idea to try to just offset or knock off the bigger brokerages. They wanted a piece of that pie. They want to be the numero uno, and that’s a good thing. You know why they wanted a piece of that pie. They want to be the numero uno, and that’s a good thing. You know why? 

Because that kind of selfishness, greed, for lack of a better word actually helps the individual investor because it set the tone and it made everybody across the brokerage firm lower fees and now you can get on several different platforms and trade stocks most stocks not over the counter there’s exceptions, I understand but you can trade a lot of stocks for 0% commission. That encourages more activity from the smaller investor because now your commissions and such do not eat into those trades. Now you can say, oh well, that’s not all good because some people are going to get on there and trade and gamble and blow up their accounts. Yeah, I understand that I don’t want anything to happen there. I’m not wishing bad on anybody, but it is much better opportunity and there’s a lot more positives on this T chart on that side than there are for people losing money or whatever. And I’m not I’m not I’m not being not compassionate towards that, I’m simply saying that is proof of how markets and things can evolve and work and help the individual and that is a very positive thing. 

Now then you had the COVID lockdowns. Again, covid didn’t lock anybody down. The governments locked you down, all right. So you had a COVID boom where you had 15 million new accounts-ish flood the market because everybody was sitting home. Then you have your game stops and all that kind of stuff following the years. Now you have hypes, you have AIs and all that kind of stuff and individuals are going to use different trading algorithms or whatever, just like the big guys. 

But the key takeaway here is what I think went under noticed or is not talked about enough is that the retail investor, you have a lot of power. You hear every politician now is our time, and power to the people and they mean power to the lowest among us, which is a lie most of the time. But you, as the retail investor, have more power than ever right now. And there’s another big fight going on between Carl Icahn and the passive investors like BlockRox and stuff, and I’ll talk to more about this in the future. But one of the big fights that I want to take on and kind of participate and bring to the world is how you have this, the voting and the passive voting. And I’ve ranted on this in the past on how BlackRock and Larry Fink himself that flip-flopper guy and thank goodness he’s flip-flopped to the right side, in my opinion currently when they put an anti-oil person on Exxon Mobil’s board. Dollar Stock Club members made a good return on that easy trade. That’s neither here nor there, but the point is is that the individual investor is going from just your old dumb money to smart money, and I don’t think that that’s going to change, because the more data you have, the more access to data, and thank you to AI. And again, enjoy the ride, because if it turns out, have the more access to data and thank you to AI. And again, enjoy the ride, because if it turns out to be the Terminator, like a lot of people were worrying about, then try to, I guess, make money until the machines take over. But this, this retail investing side, is something that I want to call attention to. I want your feedback on it, daniel@curzioresearch.com. 

And the value here is Palantir is not a valuation story. You shouldn’t need me to tell you that. I will repeat that, because everybody else telling you that is wasting your time and not providing value. What Palantir is is a momentum stock. It’s a great gauge on the market in general. If the market sells off, don’t think Palantir isn’t going to help or add to that and probably lead that. 

Just look at this chart here. This goes back a little over a year. This gap up here on your bottom left around February. Just at the beginning of February, they reported solid earnings boom. The stock pops up and even rallies higher Now, from this high call it 125-ish to the March low of 76,. Let’s just round up, call it 80. 

Now there was some news about, hey, the nervousness of Trump, the tariffs Liberation Day, all that kind of stuff. But really the markets really tanked, coming down and hit their April lows in early April. But this pullback here, okay, this wasn’t because anything negative around Palantir happened. This wasn’t because they came out and said, ah, you know what growth is slowing down or we lost all these government contracts, or the commercial side isn’t growing very fast. No, stock’s got to do something between 9.30 and 4 pm Monday through Friday, mostly outside of holidays on Eastern time zone. 

So have some humility, me including. I need that. I don’t know what is behind every tick. Okay, but do not sell or buy Palantir. You’re not going to buy it on valuation, but do not sell and get out of this on valuation alone. If you’ve gotten profits, if you’re taking this as a trade and you have a small loss or whatever, that’s fine. If you’ve gotten profits, if you’re taking this as a trade and you have a small loss or whatever, that’s fine. But do not fall for this silliness and get involved in the argument of valuation and listening to people whine and moan about that massive trend in that Palantir’s total addressable market is going to continue to expand on both the government sides US and our allies and also the commercial side. 

Think everybody from energy companies to software companies who they announced deals with. That’s how to think about that and if you want exposure to that massive growth, then look at your entry points. You know you can look at. You know your moving averages. You don’t need. I mean, I can share those ideas, but that’s not the point of this conversation. 

The point here is ignore the valuation on this. Focus on companies like Alex Karp that talk directly to the retail investor. That is one of the biggest drivers. You’ve seen that in Coinbase. You see that in Galaxy Digital, some Mike Novogratz. They take to X platform and they hold special. I guess I don’t want to speak about special, but they hold their conference calls, earnings reports on X. They do question and answers with investors and individual investors. That is a massive shift going on. You do not need to, you don’t have to be a part of a great investment banker to be on that side. If that makes sense, and that is key and that is very good for us individual investors that momentum will continue. Bear markets are going to hurt At some point, we will have recessions and drawdowns and all that kind of stuff. But mind your position sizes, mind your stops and just understand that you, the retail investor, have more power than ever and that will continue. And that is a great Florida thing. All right, I’ve ranted enough about that, let’s move on. 

Next, I want to talk about the roadmap that CEO Microsoft I believe is laying out for investors and a key item that he talked about that I want to bring some attention to. So Satya Nadella and Sam Altman so Nadella is from Microsoft, ceo of Microsoft, altman OpenAI and quickly here, because I don’t want this to start, they were both on this B2, bg2 with Brad Gertzner podcast and I listened to this and I thought it was pretty good overall. I think Brad does a good job. Smart guy, very smart investor, very successful. Don’t know him. They were talking. He was talking to both of them and then Altman had to drop off earlier, but Nadella was talking about AI and power and they. I thought Brad did a great job asking about the recent changes and like, hey, what’s the new structure and how does the revenue sharing between open AI and Microsoft? For the next several years, open AI is going to be owned. I think Microsoft owns roughly 27% of them all that kind of stuff Because remember Altman, this do-gooder, saver of society and name only, not about money Once the biggest nonprofit ever switched that to a for-profit. They still have a layer of nonprofit. You can understand where I’m going with that. 

And the craziest thing here is Nadella was talking about the biggest roadblock or the biggest challenge that they have right now is power. Now, that shouldn’t surprise any regular subscribers, but I hope it gets attention to our newer listeners because Frank has been spot on bullseye mark I’m telling you about the demand for power is off the charts and that is the biggest hang-up or hiccup in executing everything that AI is and could be or is promised about. And so we’ve talked a lot about the power and you can play AI from so many different areas. It is a massive secular trend and it is a growth trend and it is still ongoing and, yes, we believe here at Curzio Research it is still in the very early stages. What I mean by you can play it many different ways, as you can play it through NVIDIA and the chips. You can play it through GE, vernova and the natural gas power play behind it. You can do it through other power companies. You can do it through cooling systems and the data centers and all that kind of stuff. But Nadella was telling it was about the 1830 mark, if memory serves me correct. 

If you want to tune in and listen about how, hey, it’s not the supply and demand on the chip side I mean, there’s still amazing demand, but it’s not the supply hanging them up, it’s just the power side. And he made a point and I’m paraphrasing, of course, but he made a point to say, hey, it’s like we have chips and racks and stacks of these things that we are ready to go. We just can’t plug in because we do not have the power to turn them on yet. And the big hang up there is hey, how do we go from we need X amount of power to building out, you know, and that takes a lot because it takes permits and approvals and then time and construction and all that kind of stuff. To actually actually excuse me, flipping the switch, getting that to turn. You know, it’s like I remember trading places when they’re yelling at the very end he’s like turn these machines back on. You know, it’s that kind of thing. We need the power there. Okay, and that that was just one line in a great podcast overall, but that to me just was a light bulb moment and it’s like, hey, you know, as an individual investor, you want to focus on those power plays and we have several of them across portfolios here at Curzio Research, and Frank has been spot on about the need for power and the turn to power on, which is why he’s focused a lot on solar, because again, the thesis or the fundamentals have changed. 

It went from very expensive needs government subsidies to a lot cheaper and it’s being used and put to use right now. Expensive needs government subsidies to a lot cheaper and it’s being used and put to use right now. And you also have a big breakthrough and a lot more BESS, these battery energy storage systems, and I’ve talked about EOSE. Eose is the name and the ticker of that company and I want to give you guys they’re on the battery side because Microsoft hyperscalers, all these guys, these AI plays they need power and they need it now, and so you’re going to see a lot of exciting things happen. Thinking outside the box, you’re going to have a lot of gigawatts and megawatts added to the grid, but then you’re also going to have these offsite grids to where you’re just going to try to power the one building without plugging into the bigger grid overall or grids, not one, just big grid across the US. That’s going to lead, and it is already leading, to a lot of opportunity. 

Now, when you think about that, you can play that from several different ways, and so EOSC is one. Solar companies Frank has recommended a couple of ones that are just right out of the gate in his Curzio AI newsletter. Email Frank, if you’re interested in that frank@curzioresearch.com, I’ll plug him there for him. But that story is not going away. These power plays are not going away anytime soon, and when I say anytime soon, I mean at least for the next year or two, because again, it takes time. And look at me. You know it’s not going to shock you that I’m not a construction foreman, right? I don’t know how to build buildings and stuff, but I can read and I can think and I can talk to people in a great network and build that out, and when Nadella is telling you Nadella, excuse me is telling you that the power is the biggest key, or hang up and challenge for him, then pay attention to that and look at some power plays and one of them in Curzio Research Advisory that I’m in front of is Eaton, and Eaton just reported ETN as the ticker and I’ll just give that away. 

We’re up a little bit in Curzio Research Advisory. We’re not up a lot to brag about. It sold off yesterday you see this candle down here. It didn’t close on the lows, it came back and it’s still trading around 382-ish. And they made an acquisition with a company that does a lot in the cooling side of data centers and the data racks and the stacks that Nadella was talking about. That was just one more component. They buy a lot of companies. That’s par for the game for these guys. 

What Eaton gives you is a global presence or basically cast a wide net to try to capture the AI trend through data centers, electrification, think, upgrading all kinds of grids and buildings and things like that. It gives you some exposure to the EV market and components and thing which is down so out of their segments. The automobile segment is the one trending lower year over year and their guidance is not very good on that. But it is being more than offset by the data center demand, the electrification and everything else on their company. So overall, going through it, just looking at the demand and stuff, I thought that was a pretty good quarter. I didn’t think it was a negative quarter to send a stock down almost 10% at the lows, I believe, but I may be right or wrong on that, time will tell. I just think this is a great way to play a macro standpoint. This is not a small cap stock. There’s always risk and stuff. This is not a huge high risk, high reward. I think this is a simple macro large stock that gives you the risk reward in the individual’s favor if you want exposure to this type of secular move and again, more of a macro idea there. 

The other thing I want to comment quickly on this podcast, episode 39 that BG2 did is there’s a lot of bubble talk and Frank and I have talked about this and Frank’s been spot on about hey, focus on spending. Spending will slow down at some point from the hyperscalers and CapEx. Not anytime soon. Doesn’t look like it’s next year based on the recent earnings from these guys. Not anytime soon Doesn’t look like it’s next year based on the recent earnings from these guys. 

Altman, and from what I can tell here, mr Brad Gertzner is an investor in OpenAI and he was going through some of the details and he was talking about how OpenAI has made commitments through all kinds of deals and partnerships to essentially pay out over a trillion dollars over several years. And Brad was saying and asking Altman hey, you know, how does a company with 10 or 15 or even 20 billion I think he said 17 billion in revenue make commitments over a trillion dollars in the future? And I’m not trying to put words or an argument in his mouth, just thinking out loud. It’s essentially like hey, that is a massive amount of growth you guys have to have in the pipeline. Pipeline’s one thing they can change Business contracts, change Decision makings, change. If you’re doing 15 to 20 billion right now but you have all these commitments in the near future or a handful of years out, how does the company do that? And I think that is a brilliant question. I think that’s a simple question. I think that’s a smart question and Altman’s response was essentially a middle finger to this guy who is an investor, and Altman first of all and it’s early on in the podcast, I didn’t catch the timestamp, I apologize, but he says first of all, we’re doing a lot more revenue. 

Whatever Brad cited in revenue, Altman was like oh, we’re doing a lot more revenue than that. Okay, so you’re doing $50 billion, or let’s just say you’re $100. Let’s really get crazy. You’re doing $150 billion in revenue this year. You’re still pledging to spend over a trillion over the next several years. And Ullman said listen, we’re doing a lot more revenue than that and if you want to sell your shares, I’ll find you a buyer. 

Now I don’t know if this was edited or not, but Brad backed off and he was like ah, okay, I’m not gonna. I’m not gonna press him. I’ve made this little Bond villain want to be angry. You know the guy’s this big around, he wants to act like the rock before he shrunk down for a movie role or whatever. And I have to say I was very surprised. Well, I was surprised on Brad’s reaction. I wasn’t surprised on Haltman’s comment or reaction, because I’ve listened to a lot of interviews on him and he doesn’t shock me. I think he is a different breed, no doubt. But for him to not even acknowledge the question, forget going in depth or even talking more about it. He just totally blew him off, just the old middle finger. And if you want out, we’re doing a lot more than that. And if you want out, we’ll find you a buyer. And he dropped off early. Brad later said to just Nadella hey, we’re not wanting to be a seller in this, we’re a buyer in this company. If he can get more access to it and listen, it’s the greatest growth story right now. It’s putting up unbelievable revenue. It’s putting up unbelievable revenue. It’s the highest. I believe it’s the. It holds the record for the highest privately valued company. 

But my point here is not everything is going to work out in AI. Frank and I have said this we don’t believe the entire AI is in a bubble. There’s always bubblicious stuff going on, but do not think that the bubble is popping right now. That doesn’t mean that everybody is going to be successful, and Altman, to his credit, has even said this, and so has Zuckerberg of Meta, owner of Facebook. Hey, if we overspend a little bit, that’s not a big deal. It’ll benefit society. We’ll have this computing power. We’ll have all this in the near future and we’ll see how it plays out. Just like the dot-com crash, yes, there was a lot of destruction and downside, but overall you can’t argue that there was a lot of value created there for a lot more people. Okay, I get that. 

My point here is and I was dead wrong about when the government would reopen I’ve been wrong a lot there are going to be massive changes to deals with open AI that we’ve already heard about. Right now, signing with everybody, hyperscalers and all this kind of stuff. Now, signing with you know everybody, hyperscalers and all this kind of stuff. This cat is going to either change the rules, not uphold his end of the deal or something. I’ll go out on a limb on that. The way he acted about that I. If you think I’m putting too much emphasis on that one little aspect, go ahead and email me Again. I could be wrong. I’m just willing to go out on a limb. 

As the great late Toby Keith sang, I’m just the guy to call it out or just the guy to do it. It’s the song. All right, let’s get here. Look at the time. Time flies when we’re having fun, people. 

I want to get to one more thing, and that is Mr Jamie Dimon, the best bankster on Wall Street. I mean that as a compliment, if he ever hears this. They have done a 180. He has done a 180. And he was at the 9th Future Investment Initiative FII9 conference over in Saudi Arabia and this was just on the 29th of October. And remember, this is I think Yahoo or Bloomberg had a good you know. They called out Jamie Diamond doing a 180. Because, remember, he said all kinds of things about Bitcoin and crypto and I believe he was even in front of one of the hearings on Capitol Hill talking about, if he was the government, he’d shut it down. I think he’s referred to it as a pet rock, worthless, all this kind of stuff. Well, you have to tip your hat if you’re wearing it to him as well, because of client demand and he’s putting his ego and his personal beliefs aside and running for the better of his clients in the bank. 

Not only can JP Morgan clients now trade and allocate towards crypto, but now JP Morgan is allowing clients only the biggest and best, not for us, peon, retail investors. Yet yet is the key word there, in my opinion. But they are going to allow institutional clients only the biggest and best, not for us, peon, retail investors yet yet is the key word there, in my opinion. But they are going to allow institutional clients, hedge funds, family offices, et cetera, use their Bitcoin and Ethereum the top dogs numero uno and numero dos on the crypto world for collateral, for loans. Now, there’s all kinds of estimates out there. Now you think, well, why would they do this? Well, money, greed, not bad. Like Gordon Gekko said, greed is good. Everything in context people don’t hear what I’m not saying. 

It could open, make available, lift the floodgates, whatever you want to say, billions, 10, 20 billion or more in new business. That’s why you want to do it. You don’t want your competitors to go down the street and go to the other bank Bank of America, citigroup, whatever JP Morgan wants to be and still is, or well, they are the top dog. They want to remain that. Obviously, when you’re number one, it’s not your goal to be like all right, well, we made it. How do we get back to number four? And let’s do it all again? Lord of that, I’m going to stay at number one, also at this conference on the 29th. And again, this is from AI, so if it’s not a perfect quote, yell at them and the Terminator bots, not Daniel Creech. 

Crypto is real. I mean, if you mean blockchain, stable coins it will be used by all of us banks to facilitate better transactions and customer service. To facilitate better transactions and customer service. He called it a pet rock earlier 2023. This is another paradigm shift. 

The real paradigm shift happened under the president’s election of Donald Trump and again, you don’t have to be a fan of him or a foe, I don’t care. I’m not telling you how to think. I’m simply telling you and this isn’t true because Daniel Creech says it’s true. It’s true because it happened. I’m simply looking back and telling you what’s going on. And what happened was you shifted from a anti-government stance towards crypto to a pro-crypto stance from the government. That, my friends, is a magnificent paradigm shift. That’s what I want to continue to pound the table, ring the bell on shift. That’s what I want to continue to pound the table ring the bell on. And these kind of events. You have the biggest bank here, the most successful bank, led by the best CEO on the big banking side. My home bank share CEO is on the little, smaller bank side. Just reading through his transcripts, but this is just a starting point. 

I think this trickles down to the individual. I think the leverage and the adoption, the financialization of Bitcoin is only going to continue more. Now it’s not all positive. That means you’re going to bring in volatility, margin calls, crashes, all kinds of stuff and oh, by the way, bitcoin dipped under 100,000. Holy cow people, this is a big deal for JP Morgan to do this. And just like you got to give Bill Gates some credit for walking back and saying, hey, world’s not ending, I give the same credit to Jamie Dimon, putting his personal beliefs aside and saying listen, my clients want this. This is going to be good for the financialization of it. Crypto is a part of this. It’s not going away. It has withstood the attacks. It has survived. How high or how much it will thrive is unbeknown. I’m not saying anything there. I’m just simply saying this really is a paradigm shift and I want you guys to be aware of it. That’s going to continue to add momentum. It’s going to continue to add volume, it’s going to continue to add volatility, but it’s also going to continue to add demand for it and I think that that’s very good. 

Quickly on the price of Bitcoin here, because it did dip under 100,000. It was 120, some thousand, just a few weeks ago. It will remain volatile. If you want to look at a chart and see where the next leg down is, it would not shock me if we get down to this 90,000. But I want you to think about this. The many hats that Bitcoin and crypto wear, whether it be a hedge, whether it be value, whether it be a trading vehicle, whether it be silliness, I don’t care Again, look at this chart here and you can see the clear. You got these touching points here around 100 and then boom, you got a lot about these 90s and then you even got lower here. Do you think the biggest buyers, the demand, is going away on any of the hats that Bitcoin wears? Is strategy going to quit buying? Is Michael Saylor going to quit buying? Are other companies crypto treasuries going to quit buying? Is Michael Saylor going to quit buying? Are other companies crypto treasuries going to quit buying? Are individuals going to be like, ah. Finally, now this volatility is a little too much and I think the global financial system and the global powers that be governments all over the world are going to do a 180. They’re going to shift, they’re going to get their financial house in order, they’re going to quit printing money. 

Devaluing dollars make everybody more wealthy, not less wealthy by design Maybe, but if you don’t think that those thesis or those big fundamental facts have changed, then you want to use this as an opportunity. And again, I’m not saying to leverage everything, I’m not saying to buy on margin. I’m simply saying focus and know what you own and why it. If you don’t want to own it, that’s fine, but do not buy it because of X. And then if it drops 10%, you sell it when X didn’t change. That is not valuable, that is not good, that is not a great plan. And that’s all I’m trying to say. I’m not trying to preach to you. Learn from my mistakes, our mistakes and whatnot. Ooh, whatnot. You know I’ve been talking too long if I say that, but the point here is if the thesis hasn’t changed, then you can continue to hold, you can trim your positions, you can manage that. You’re smart enough. Remember, nobody gives a flying Florida about your money more than you, including the guy talking to you. That’s the way it is and that’s the way it should be. So think about that. A lot to think about here today. It’s been an absolute pleasure to host this solo, but I can’t wait for the one and only Frank to get back and will be back, and we’ll see you guys tomorrow on Wall Street Unplugged Premium.

Thoughts. Love me, hate me, don’t ignore me. Daniel@curzioresearch.com. Daniel@curzioresearch.com. Until next time, cheers. 

0:56:10- 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.