Technical analysis may seem confusing… but it doesn’t have to be.
Katie Stockton, founder and managing partner of Fairlead Strategies, LLC, is a chartered market technician (CMT) with over 20 years of experience in technical analysis. Today Katie breaks down her methodology in terms anyone can understand. She also shares her view on the markets… and a few of her favorite sectors to invest in right now [25:36].
I just returned from this year’s Consumer Electronics Show (CES) in Las Vegas, and in my educational segment, I share the most exciting trends I discovered… as well as the biggest winners across several sectors: drones, smart homes and cities, robotics, 5G, and much more. I don’t want to brag, but I think this is the best analysis you’ll hear on CES 2020. Don’t invest in the tech sector until you listen to this episode [51:01].
Wall Street Unplugged | 704
The best analysis you’ll find anywhere on CES 2020
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 January 15th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down headlines and tell you what’s really moving these markets.
Frank Curzio: So we just got back from CES in Las Vegas. It’s the Consumer Electronics Show, where the biggest and best companies showcase their new technology used, new products, gadgets that they’re going to release in 2020. Usually in the first quarter of 2020. It’s amazing how much this thing has grown. I’ve been going there for eight years. I believe it’s now six to seven hotels that take part in it. It used to be the Sands Expo and Las Vegas Convention Center.
Frank Curzio: But if you take all this space of where these companies are presenting in their booths, it amounts to roughly three million square feet of space. It’s incredible when you think about it. So you’re talking around 4500 companies, including 60% of the companies that are in S&P 500, were there. And over 175 thousand people were in attendance.
Frank Curzio: So if you want to put that in perspective, that’s two and a half times the amount of people who attended the Super Bowl in Atlanta last year. That’s how many people were there. This year, for the first time, I brought my own film crew, which consists of one person, who’s actually taping this podcast for me right now. His name is Garrett. Who basically followed me around with, I want to say a 30 to 40 pound camera. This state of the art, uh, walking the floors for three days with me, which amounts to at least 15 miles of walking.
Frank Curzio: Uh, taking videos of me, sampling products, interviewing high profile executives. Some really amazing, amazing content. If you haven’t seen these videos, these live streams, right? So it’s able to do live streams of different media events and stuff like that. You could see all of it. I told you guys to look at my Twitter account, @FrankCurzio. But you could see every video I shot by going to Curzio Research YouTube Channel.
Frank Curzio: Both of these are free, so if it’s the first time you’re listening to my podcast, you’re listening to me. You’re like, “Who is this idiot? What is this guy talking about?” Go to Twitter. Go to YouTube. Yeah, so free. It’s going to give you a much better perspective of the research we do around here, which includes boots on the ground, sampling everything. Visiting factories, traveling around the world, in order to find the best stock ideas for you.
Frank Curzio: So technology is one sector that I cover. This is one sector. I cover all the sectors. Now, when you go to these pages, you’re going to see a lot of cool things, including me in a wetsuit. Okay. It’s not going to be so cool. If you’re 10 pounds overweight, only 10 pounds overweight, you’re going to look chubby in these things. So you can imagine how I looked.
Frank Curzio: It doesn’t matter. It’s not about me. It’s about you. That’s all I care about. But I was one of the few people to jump into a giant tank of water, in front of tons of people, to sample a Sublue, which is a motorized underwater scooter that drags you around the water. Advice from me, I loved it so much I bought one. Bought one for my daughters. Actually, kind of bought it for me, too. But I told them it was for them. It’s amazing. They’re really excited.
Frank Curzio: I sampled virtual reality devices, including one where you had to lay down on this platform, basically using your forearms and your legs. So, your torso’s kind of exposed. And when you put on the headset, it’s a simulator where I’m flying in a wing suit. And my job is to go through these large wings, which are in the air, to get points. In the meantime, you know, I’m holding myself up the whole time. And it’s the best core workout you can get, and I was sore when I finished. It was funny, because when I first got on this, they just showed me how to do it. And just, you know, you feel it in your core, because it’s … not so crazy, where you’re going, you’re going to fall off of it. But you have to balance it, right?
Frank Curzio: It’s like, in airplane. If you go too much to the right, it’s going to go way right. You go too much to the left, it goes way left. So, keeping that steady and balancing, the muscles in your core are really working. I mean, I finished it and well, I mean, you could see the sweat on my face. My stomach was sore. And I was on the machine for less than five minutes.
Frank Curzio: I also jumped off the Stratosphere, literally, off the top of the building. You guys got to do that, it’s amazing. 880 feet, the tallest building in Las Vegas. So, I have videos of this, too, you can see me do that as well. Just before I jumped, along with Garrett, who did it as well. I had a funny message for my lifetime subscribers saying that you’re going to know if that investment you made in Curzio Research was a good one, being a lifetime member, or a bad one in about 30 seconds.
Frank Curzio: It was really cool. It was a great adrenaline rush. I loved the disclaimer, which I took a picture of, asking, have you had any recent surgeries? Back, hips, you can’t ride this, or we do not force you to do this. If you die, we’re going to remove your remains from the ground as quick as possible so we can continue to generate money for our company. You know, everything. Didn’t have the last part, but everything, just about. Like, we’re not responsible, no matter what. Make sure you’re not drunk. It was pretty funny.
Frank Curzio: But I jumped off that building, because my daughter, my 11-year-old, who’s a little bit of a daredevil, which I love, she asked me one thing. She’s like, “Could you do one thing?” Because I’m gone five days a lot from my kids. And I thought she was going to ask for some kind of technology gadget. She’s like, “Could you jump off the Stratosphere?” I’m like, “What?” I was like, “Where did you hear from this?”
Frank Curzio: So, yeah. My wife’s like, “No way, you’re not going to do it. Don’t be crazy. Don’t do it. Don’t do it. Don’t do it.” I said, “I’m not going to do it.” And then, I did it and sent them the video. I’m telling you, it’s amazing. They were just, they called me, face, “Oh my god, you did it, and I showed my teachers. It’s great.” Just, it was really, really cool.
Frank Curzio: So, but the adrenaline rush was amazing. It was great. At the CES, I played Forpheus again, which is the ping pong playing robot. But this time, the robot has more sensors on it. And those sensors include AI, where it measures my mood, based on how many times I blink, frown, smile, sweat, and it adjusts to this level. So, I’m not getting totally pissed off when the robot’s kicking the crap out of me. Right?
Frank Curzio: So, it’s a prototype, but it just shows you the sensors, the AI capabilities, the cloud capabilities, or robotics capabilities. And again, that’s Omron with Forpheus, which is a company that’s in our portfolio that we’re up a lot on. That was really cool.
Frank Curzio: I sampled luggage-carrying robots, which are going to be in every single airport pretty soon. It wasn’t that you had to put a chip on you for the … It was all lidar, so it was kind of really cool.
Frank Curzio: Saw amazing new drone technology. Saw amazing electric vehicles. Self-driving cars. Sampled some of the sex toys that were on display. Not sampled that way, so get your head out of the gutter. But actually had live demonstrations of how the technology works, which was explained to me by a very nice and pretty woman.
Frank Curzio: But sex tech, which is health and wellness, it was very big this year. First time CES allowed this. And I believe that about 20 companies. I really liked it. When we look at this topic, when it comes to sex, right? We all have it. We all like it. But we, and by we, especially women, you can never talk about it. You’re not allowed to talk about it ever.
Frank Curzio: This opened up the conversation of how sex is healthy for you. Health and wellness, it was a huge theme. It’s going to be much, much bigger next year, the following year, the following year. Now that CES relaxed its rules, and by relaxed I’m not talking about CES hurting its image. Because it actually put new rules into place to limit what they call booth babes. All right? So these are usually models who wear skimpy outfits, they draw attention to their booths. It was really bad in the past years. I don’t want to sound like an old person, but from someone that’s doing research, there was more of these girls in there than actual people that you could talk to.
Frank Curzio: And when you go to some of them, because not all of them are dressed crazy, you ask them a question, you’re lucky if they can count to 25. Well, you, they don’t even know the name of the company. You know? So, it’s kind of frustrating. But they’ve really cleaned up that aspect, but I love the sex, health, wellness. It’s a massive, massive market. It’s a market that you can make a ton of money on. I’m actually going to come out with an idea pretty soon. A special IPO, one of the first IPOs in the health and wellness section, from one of the great contacts I have, who’s a very successful hedge fund manager.
Frank Curzio: My Curzio Venture subscribers are going to have access to that, to get into early before the IPO. So, it’s a huge, huge market. It’s very early stages. But now, it’s being opened up to the public, which is important.
Frank Curzio: I played a 15-foot tall NBA Jam game. If you’ve played NBA Jam, I’ve played NBA Jam all my life. It’s great. We have a video of this as well on YouTube channel. Curzio Research. I got a closeup view of LG’s amazing OLED technology. That’s the best technology in TVs in this space. Samsung is trying to catch up. They did a good job this year, but still, OLED, LG is a leader in that space. And they have a 65-inch roll-up TV, which pops out of this case on the ground that’s maybe 12 inches or something, by whatever, is as wide as 65, maybe 70 inches.
Frank Curzio: And it just pops up and comes out of the ground. That retails for a very small price of 60 thousand dollars.
Frank Curzio: Also got some amazing interviews, which is really cool. I mean, we look a little bit professional. It was nice. We had a Curzio Research microphone. It was awesome. But one of those with the vice president of marketing for Omron. Vice president of marketing. Another of those with Amazon’s worldwide tech lead for automotive. Think about that. Not only is this guy a bigshot, but Amazon and automotive. Crazy.
Frank Curzio: So, I’ve been going to this event for eight years. I’ve seen Amazon grow tremendously. I said it was one of the biggest winners for the past three years. It’s a company that’s in our portfolio. We’re doing very, very well on. Close to the 100%.
Frank Curzio: But this is the first year that Amazon is getting into automotive, and they had two major booths on that floor, which is in the north hall of the Vegas Convention Center, in the auto section. By far one of the most crowded booths. And just to land this interview was just incredible. It was really, really good. Guys, again, you can go watch it. I provide it for everybody. It’s really awesome. I mean, this guy knows his stuff. It was about a four-minute interview. Really detailed. You’re going to see why Amazon is just such an amazing company. Has much more growth potential.
Frank Curzio: Ford was amazing, who had the new Mustang Mach E, Electric Vehicle on display. Awesome looking. Super crowded booth. Everyone was taking pictures of it. I also provided videos of me breaking down almost every trend at the CES, from the show floor. So they have different spots for different trends all over the place, where I’m walking around. And it’s cool, because Garrett’s taping me as I’m walking around, talking about different companies. Talking about the trend itself.
Frank Curzio: Not all positive. Some negative, right? Just giving my honest views of why, here’s some companies you should be looking at. Here’s some why you shouldn’t be looking at. This is why this trend is so big. Why they’re going to be big over the next couple years.
Frank Curzio: But just talking about different products, metrics, and the best companies in each trend. Now, the reason why we’re able to film so much great stuff, is because I have a media badge. Since I’m an influential podcaster, at least, that’s what the CES calls it. And out of the 175 thousand people in attendance, probably only a few thousand have this kind of access.
Frank Curzio: Now, what does that mean? It means that I’m the shit. When I walk past your booth, you better pay attention. I can’t even say that without laughing. It doesn’t mean that. But seriously, it does give us special access. And we have special access to the biggest conference in the world, where companies were shutting down their booths for me to tape in.
Frank Curzio: They will allow me to sample their products immediately, as soon as I walk by. No matter how big the lines are. It gives access to the media day events, which are all pre-CES, before it’s open to the public. And that’s two days before. So you get to see a lot of these products, sample a lot of these products. I attended several, including Intel’s media day, which was awesome.
Frank Curzio: I sat in the front row and live streamed the event on Twitter. You could see real time, as it was happening, the big presentation. Had it in, you know, a big theater, announcing their new products.
Frank Curzio: It gives access to the numerous media rooms, had great technology in them, that have every single hall, or every single, you know, place that we went to. Sands Expo, I went to the Mandalay. Venetian. I mean, I think there’s six or seven. You know obviously, the Convention Center. But they had these big media room setups, which is really cool.
Frank Curzio: They also provide us with lunch, that’s served in a box, although not really sure what they serve in those boxes. Because once they put these things out, it’s like a bunch of hungry wolves that haven’t eaten in weeks, just attacking them. So people got boxes under their arms, two at a time, first couple days. If they put out 1500 boxes at noon, by 12:05 they were gone. It was insane.
Frank Curzio: I don’t know, I mean, I don’t really know shit about the media. It’s nice to get the media badge and everything. I’m an analyst. I don’t know about the culture, but I don’t know if they feed those guys too well. But it’s like a free for all. We didn’t even, we weren’t even able to eat lunch. I think we got there probably 12:20, 12:30. Everything’s always gone.
Frank Curzio: But that badge, that media badge, which I get because of you, since we have a lot of people listening to Wall Street Unplugged now. You know, word of mouth’s really cool. It gives me incredible access to so many people and companies. Which is really, really important for this conference, because there’s 4500 companies there. That’s how many are presenting. That includes 1200 startups, which are located in the Sands Expo, the downstairs area. Area called Eureka Park.
Frank Curzio: But it gives me access to things that I want to see in a timely manner. Without having to wait on these long lines, which could take forever. Think about Disney. If you go to Disney, or Disney doesn’t really have the fast passes. They let you ride three rides. But go to Universal, and you have a fast pass, think how much fun it is. I mean, you’re going to go on all the rides before 12 o’clock.
Frank Curzio: If not, you’re lucky if you get on four of the best rides by the end of the day. Because you’re waiting an hour and a half in line. We don’t have to do that. Because you get everything in a timely manner, and it also gives us pre-access to visit these companies, sample their products, before CES opens its doors to the public, which is amazing.
Frank Curzio: For example, if we go back to my wetsuit thing, which probably the worst example I could bring up, especially if you could see the video. It was 5:30 pm, place closes at six. In fact, I believe it was Thursday. We walked by Sublue, which is the company. And we see a person swimming in this large tank, being pulled by this underwater scooter.
Frank Curzio: So, I went to the booth. I asked some questions about the products, since they were there last year. I wanted to see the new technologies. And they’re like, “Oh, wow, you’re media?” Because it’s yellow, our badge. Has a yellow stripe on it. And yeah, they’re like, “Oh, you’re media? You can actually jump in the tank if you want.”
Frank Curzio: And before I could say anything, I turned to Garrett. And Garrett, his eyes were lit up. He’s like, “Yeah, you’re jumping in the tank.” So, you know, I was like, you know what? Screw it. Let’s do it. And I want to sample this product. The device looked pretty cool. And you know, for me, the only thing I was worried about is they didn’t have a wetsuit that would fit me. And this really nice Asian lady walks over, and she was really cool, really sweet. Spoke broken English.
Frank Curzio: So I ask her, “Yo, do you have a suit that’s going to fit me?” And she says, “I know we have a large, but that’s definitely not fitting you.” I said, “Oh, thanks a lot,” and she didn’t mean it that way. She was laughing. And then, she said, “No, no, we have a bigger suit. There was another guy much stronger than you, that used it.”
Frank Curzio: I was like, “Listen, lady, stop cheering me up, all right?” And she was just laugh, she was very funny. She was just being nice. But it was cool. I don’t know. Maybe the most honest person I ever met, maybe too honest.
Frank Curzio: But there was only a small handful of people that jumped into that tank. I would say less than 10 people outside of the members, employees of Sublue, that actually jumped in that tank to sample the product.
Frank Curzio: But that’s the access, or the kind of access that I’ve had at this conference for many years, for eight years. And it’s helped me bring back some of the great ideas for subscribers. Many of these names, if you go back and track them, I mean, we have everything. Everything’s archived. Everything on this podcast’s archived. You could see whatever I said, you know, I don’t mind when I’m wrong. I say I’m wrong.
Frank Curzio: I like covering the stuff that I’m wrong. That’s what you learn the most. You’ve got to be right more than you’re wrong. I wouldn’t be doing this, of course. But you know, all of our newsletters are archived as well. If you go back, and you look at those January issues, just look at some of those stocks that we recommended.
Frank Curzio: I recommended names that are being talked about now that are 100, 200, 300%. Because people are just talking about these trends now. So we have lots of triple digit winners, great track record. Because of having this access, because of having you. So, thank you very much for listening to this podcast, and able to give me that access.
Frank Curzio: And for me, I want to return it by being able to provide lots of information on these trends. Lots of information on stocks. Things, not just the positive things, what you hear about, but also the negative things and things you need to avoid.
Frank Curzio: But doing this for eight years, it’s kind of amazing how technology is all the rave now. Right? It’s all the rave. Everybody loves technology. The four biggest companies in the SP500 are technology, a couple of trillion dollar valuations, among trillion dollar valuations. It’s incredible. I think it’s Microsoft and Apple, Amazon’s pretty close to that. Google.
Frank Curzio: But this is a sector that has outperformed the market almost every year since the credit crisis. That includes last year, where the sector averaged over 35% gains. But while everyone is jumping on the bandwagon, for the past eight years I’ve been talking about these trends on my podcast. Getting you names before these stocks and sectors were talked about everywhere.
Frank Curzio: Like smart cities four years ago. It was amazing. We had a company called Silver Springs in a portfolio that got bought out, and it got bought out by a company called Itron. And that’s what I really, most people never heard of Itron. It’s in our portfolio. It’s up 16%.
Frank Curzio: Another company that, you know, we were early on. And now when you look at smart cities now, it’s unbelievable. I mean, there was like, a dozen companies there two years ago. Maybe 25, 30. Now, there’s over a hundred companies, smart cities. It was a major section. It was in its own hall.
Frank Curzio: And just to see how that sector grew, it’s pretty cool. But now everybody’s talking smart cities. You don’t want to invest in things when everyone’s talking about them. You want to invest beforehand. And 3D printing, seven years ago, then six years ago, saying that this floor space is shrinking and shrinking and shrinking. This is not going to be in the consumer level. 3D printing had a very good showing this year, though, first time in about five, six years.
Frank Curzio: Wearables, talking about the internet of things. I mean, I was there when Chambers, Cisco’s CEO said there’s going to be, I think there was 12 billion devices connected by 2020. And I was like, this guy is crazy. I was like, what are you talking about? Because I just thought, hey, you know, there’s seven billion people. Not everyone’s going to own a phone and a computer. He wasn’t talking about that.
Frank Curzio: He was talking about everything that’s going to be plugged in. Anything that has batteries is going to be connected to the internet. Well, it turns out he was really wrong. Because it’s about 34 billion devices connected right now. And that’s going to go up to 56 billion over the next five years.
Frank Curzio: 56 billion devices. That’s based on Intel, amazing when you think about it. Big data analytics, we talked about how long ago, if you look at my issues. Mobile trends, and e-commerce. Cloud. Smart homes. Last year, I said, is the year of the smart homes. Because it wasn’t, these devices were not compatible with everything, right? You want to make them compatible. You don’t want to have to buy certain devices only, because some company might sell really good devices. And maybe some don’t. Maybe you have washing machines, dryers, you have cameras. You have just … the bells. Everything. There’s so many different areas where you’d like to buy everything from the same company. And now, with Alexa, everything’s connected. Everything’s compatible.
Frank Curzio: And that was last year, that happened. Because you had the Google Home. You had Apple. They were all on displays, like three, four years ago. And nobody really knew the direction it was going to take. And it was like, high definition Blu-ray type thing. Which way are they going to go? Once they go, everybody adopts it.
Frank Curzio: Last year was the year. This year, I mean, through the roof. Unit sales are up over 20%. People selling these products. Every home is eventually going to become smart. Because every product that you buy has smart capabilities, meaning it’s going to be able to connect to the internet, whether you want to or not.
Frank Curzio: But to see how this trend is taking off is cool. Virtual reality, augmented reality, and this is five years ago. I remember doing a presentation when I was at Stansbury. I think it was 2013, with these virtual reality glasses. And just showed a video and said, “Guys, this thing is pretty close to being here.” Everyone was like, “Wow, this is cool. We’ll never see this.”
Frank Curzio: But it’s here. It was a very big presence. 5G, I mean, for three years I’ve been talking about this. It’s finally here. It’s just, I love the fact that we see so many promotions out there going, “You should buy Qualcomm and AT&T,” you know. These 5G companies. And I just laugh. I’m like, these are companies we were talking about three years ago.
Frank Curzio: The cell phone tower companies. Things like that. The infrastructure’s going to be built. Now you have Samsung’s phone that’s 5G. AT&T has 5G capabilities. Now you’re going to have Apple’s Next Generation, and the next phone’s going to come out. It’s going to be 5G capable.
Frank Curzio: 5G is one of the biggest trends in the world. It was actually one of the least talked about trends, according to statistics at CES. Because everybody’s been talking about for such a long, well, at least for this year. But 5G enhances every single trend I just talked about.
Frank Curzio: Okay, big data analytics, makes it much faster. Mobile, faster. E-commerce, cloud, more storage. Faster. AI, it just, you know, these trends, they’re all enhanced by 5G. And now, 5G is here.
Frank Curzio: But again, something we talked about a while ago. And when it comes to this business guys, again, what’s our goal? Our goal is to make money where our kids are going to be secure. Their kids are going to be secure. Right? That’s what we want to do. Right?
Frank Curzio: I don’t care about egos. I don’t care about whatever. That’s what we want. that’s why we invest. And in order to make money investing, you don’t do that by following the crowd. You make it by doing the research, boots on the ground, being in the room. Getting into things early. So, when the rest of the world is talking about it on CNBC or Fox Business or in the media, Today Show, that’s creating enough liquidity for you to sell your position and move onto the next big trend.
Frank Curzio: That’s the goal. There’s nothing better than having a stock that’s up 100, 200%, 300%, and everybody’s talking about it on CNBC. Saying, “It’s a buy, it just broke 10 of the levels. Everything is great,” and it’s funny that we’re bringing this to you early. Because we’re in the room. That’s what our research is about here.
Frank Curzio: It’s just pretty cool to see a lot of these trends develop, and trends that we’ve been talking about for such a long time. And it’s resulted in a lot of big winners in our portfolios.
Frank Curzio: But this year, being the first where I took a professional counter-person with me, the possibilities are endless. Because next year, I can contact any of these major companies. And they’re going to open their doors to Curzio Research, allowing me to sample their products days before the CES opens.
Frank Curzio: So, talk about calling up an auto manufacturer that has a self-driving vehicle. And say, “Hey, I’m part of media.” They’ll say, “Okay, we’re going to pick you up from the airport and drive you to the hotel, in a self-driving car.” It’s pretty cool.
Frank Curzio: Wearing the amazing exoskeleton suit from Delta. I mean, think about Alien, when she’s fighting the alien at the end. Sigourney Weaver, one of those things that she’s in. That’s, it’s much smaller. It’s exoskeleton. But she could pick up, like, 20 times her weight. She was fixing engines, and they specifically put a girl that probably weighed about 95 pounds in there, just to show how this is amazing. And how Delta’s rolling these things out.
Frank Curzio: I mean, Delta had an amazing presence there. But it just goes to show you, Delta. Technology. Every company’s becoming a technology company. If you have a website, if you track data, analytics. That’s why 60% of the S&P 500 was there, even though how many technology companies are in there in the S&P 500. I’m not too sure, but if I had to guess, probably, maybe like 15%.
Frank Curzio: And getting access to the Uber taxi, which was on display in the Hyundai booth. Think Avatar and those four-propeller helicopters things. Copters. It was amazing. But you know, just being able to sample all the new electronic cars. Getting personal tours at major booths, like Samsung, Sony, LG, that had the biggest booths there with all the new products, days before the CES opens. Those are the possibilities. That’s what it opens up to you.
Frank Curzio: That’s the kind of access I want to bring to you. I mean, that’s my job. That’s what you pay me for. But you know what? I fucking love it. I love doing this stuff. Sampling these project, going out there, learning. Having those contacts, and doing it for such a long time. It’s really, really cool.
Frank Curzio: So, if you want to see all that cool stuff from the CES, that you’re not going to see anywhere else, lot of people, top things, the craziest things. No, this is detail. Talking about trends, how to make money. You’re not going to find that. I haven’t found it anyplace.
Frank Curzio: You go to Curzio Research YouTube page. Watch all the videos there. See everything. Okay, that’s actually for free. Or some of the stuff we did post on Twitter, and my handle is @FrankCurzio.
Frank Curzio: So, I’m going to share more information about the biggest tech trends, this year’s CES, along with some amazing stock ideas. That’s going to be in my educational segment. But for now, I have a really, really great interview set up for you. It’s a first time guest. You may have seen Squawk Box, Bloomberg, almost every major media outlet. Wisest person. Such a high profile guest, it’s because she’s one of the best technical analysts you’ll see.
Frank Curzio: Her name is Katie Stockton. So, Katie is a Chartered Market Technician, who is actually the vice president of the CMT from 2012, 2016. That’s, means she knows all the greatest technicians out there. She worked in several big shops to Sell Side firms, like Morgan Stanley, Wit Soundview, BTGI, MKM Partners. The latter two, she was either the chief strategist, chief technician. With 20 years’ experience technical analyst, someone that’s humble. Her track record and reputation speak for themselves.
Frank Curzio: Now she launched her own company, like me a few years ago. It’s called Fairlead Strategies. Where she is the founder and managing partner. And through her company, she provides really amazing research on macro and sectors, individual stocks, along with weekly newsletters.
Frank Curzio: But she’s going to talk about her favorite sectors, her favorite stocks to buy, her methodology and really break down how she finds these picks, the technical indicators that she uses that separates herself from the rest of everyone else in this industry. And she’s also going to give us our forecast of the S&P 500 and what she thinks, where it’s going to end in 2020. Really good stuff.
Frank Curzio: Let’s get to interview with Katie Stockholm right now.
Frank Curzio: Katie Stockholm, thank you so much for joining us on Wall Street Unplugged.
Katie Stockton: Of course. Glad to be with you guys.
Frank Curzio: So you have over 20 years’ experience as a technician, which includes serving as vice president of the CMT and being a chief technical strategist and technician at several respectable Sell Side firms. Now you’re the founder and managing partner of Fairlead Strategies. What led to the decision for you to start your own shop, especially considering, with your track record and experience, I’m sure you can get a job at almost any Sell Side firm?
Katie Stockton: Really, as you know, as you said, my background really is sort of long at this point in the field. I wanted to do this on my own, really all along. Always feeling like a subscription model lends itself very well to any kind of research that’s top-down oriented. Of course, it’s nice to have the flexibility that working for yourself affords.
Katie Stockton: But also, to open up the research to a broader audience, including individuals, including investment advisors, who I could not service when I had that career on the Sell Side. And so, now in my own seat, I am publishing research that looks very much like what I did at, on the Sell Side, and also providing consulting services.
Katie Stockton: But happily, I’m finding myself not spread as thinly as I was then, and able to provide really a higher level of service, which was another one of my goals. So I’ve really not looked back in terms of my former seat. But really happy to have started off on my own.
Frank Curzio: That’s great stuff. That’s great stuff. Congratulations. You’re a Chartered Market Technician, right? So, CMT. Think association for professional technical analysts. I guess you could think, like, for our audience, a CFA for fundamental analysts. If, I don’t know if that’s comparable.
Frank Curzio: But for my listeners who are thinking of having a career as a technical analyst, how does one get that designation?
Katie Stockton: The CMT designation for me has been invaluable. I received it in 2001. So, which makes me, it kind of dates me. And yet, of course the program has changed a lot since then. So I’m not probably the best resource, in terms of how it looks today.
Katie Stockton: But it is a three-level exam process. Very similar to the CFA, and yet the audience for it has historically been smaller. And therefore, I think it really differentiates folks, when they can put that CMT behind their name and really get the foundation in technical analysis that the exam, I guess, studying process really affords.
Katie Stockton: So, it has been invaluable. I think it differentiates folks. It also gives them kind of real life skills, in terms of investing, where if they’re not even using it in their career, they can certainly use the tools that they learn about in their own personal investing. So, it’s offered through the CMT association. As you mentioned, I was involved in that organization and still try to stay involved on a different level.
Katie Stockton: They’re great. They really are educating not only Wall Street, but Main Street, about technical research.
Frank Curzio: Now, when it comes to fundamental analysis, right, fundamental analysis, we’re looking at so many different things. Right? So you can be a fundamental analyst and have two totally different styles, where they could look at EBITDA, sales, cashflow, insider buying. You know, experience of management, ROI. There’s just so many different indicators that one uses differently.
Frank Curzio: I would think it’s definitely going to be the same with technical analysts. So, what is your methodology? What is something within that you do that separates yourself from everyone else and all the other technical analysts out there?
Katie Stockton: Well, you know, we all look at things different ways, as you mentioned. And there’s so many tools at our disposal. So, I don’t think there’s any right answer to what we should be using, except that to find something that works for us. Right?
Katie Stockton: So, over the years, I’ve had mentors who have shown me various tools that they use, that I’ve adopted and made my own. And therein created a methodology almost by accident. I do tend to look at the market from a top-down perspective, starting with primarily US equity centric. Starting with things like the S&P 500, and things that I would consider to be macro technical securities.
Katie Stockton: So, looking at treasury yields and various ETFs that represent sectors, currencies, commodities. Anything that really impacts US equities, I have an interest in. So I start with that. And when I’m looking at a chart, the first thing I’m looking for is the prevailing trends across various timeframes. And then also support and resistance, because the support and resistance, which is often known as potential areas of buying pressure and selling pressure, that can tell you, or it can give you information about the risk reward from that security.
Katie Stockton: So, it’s really invaluable when you can get adept at identifying these levels that may hold importance. So that’s what I’m looking for primarily, and then I consult technical indicators. So just like a fundamental analyst, I have a lot of indicators that I adhere to, to enhance my top-down views or otherwise.
Katie Stockton: For things like trend following devices, so moving averages, the mac B indicator, which is a derivation of a moving average. On the overbought, oversold front, I’ll look at things like the stochastic oscillator and the Demark indicators. And I also consult relative strength measures, so looking at price to price ratios as a way to understand where those areas of out performance, potentially.
Katie Stockton: And finally, I would comment on the market internal measures as another input of mine, albeit really tertiary to the other two. And that would be things like breadth, leadership, and sentiment.
Frank Curzio: Thank you so much for explaining that, too, because a lot of people just see a final product, right? And they just say, “Hey, here’s a stock,” and you talk about a few things. And really to get in depth really helps the audience.
Frank Curzio: I want to put this into a real life example, because you were nice enough to send me your alert, which you put out every week. And we’ll get to some of the services that you offer. But you’re talking about the QQQ. I don’t want to give away too much, because I know people pay for this. But you talk about maybe up, short term upside exhaustion, based on Demark indicators, which you just mentioned. And also you’re saying, you know, once the stochastics fall below, are back below 80, we’re looking at a 50-day moving average as a gage of initial support.
Frank Curzio: Could you tell me a little bit more about Demark indicators? Tell audience, and why stochastics are so important falling below 80?
Katie Stockton: For sure. So, as we know, it’s been a strongly trending tape. QQQ is a great example of that. They’re very technology-sector heavy, and the technology sector has been a source of upside leadership. So there’s a very strong uptrend in the triple Q ETFs.
Katie Stockton: And what we do to try to manage risk as a steep uptrend is to watch some of the overbought, oversold measures, like those Demark indicators. Like those stochastics, for a hint at a sign of upside exhaustion. And that’s indeed what we have, but we don’t have confirmation of that from a loss of momentum, which is when it really becomes actionable.
Katie Stockton: So, at this stage we’re making a note of these signals, which would be considered short term sell signals. But still, unconfirmed and we’re waiting for that confirmation to actually get hedged or start taking data exposure in the technology sector, for one, to manage risk if it pulled back to that 50-day moving average.
Katie Stockton: So, the Demark indicators, to give you some color without getting too, too technical, they are designed to identify inflection points. Ideally in real time. And they’re really the closest thing that I have found to being quite accurate in doing so. And yet, as an overbought, oversold measure in a trending tape, you’re going to have to manage, I guess, it through that, the fact that there’s going to be a lot of overbought sell signals in a strong uptrend, by also overlaying momentum indicators. So, using things like those moving averages, and the Mac D.
Katie Stockton: So I take them in sum, and that’s where my bias comes from. So, the Demark indicators are, have a derivation in the Fibonacci Sequence. They are really, really useful, especially if you can crosscheck them with these other gages. And they can be one of the best indicator of inflection points, especially on a short term basis.
Katie Stockton: The signals that we have now really only have implications for a couple of weeks. So, I don’t think it’s something that needs to be on the radar of very long term investors, unless they just want to manage risk in the near term. But something to make a note of and certainly something that I would feature in my research.
Frank Curzio: Now, you know, talking about the QQQs, which tracks technology. Technology seems like has led the market forever, since the credit crisis, especially the past couple years, especially last year. Huge out performance. What about the rest of the market? And I know it’s hard to say, because a lot of these are weighted, and when you’re looking at the four biggest technology stocks are the biggest companies in the S&P 500. They pull a lot of weight in those indices. But what do your predictions say are some of the things technical’s telling you about where the market is heading? Maybe next six months to a year, or timeframes.
Frank Curzio: Because I mean, I would think the better gage might be the QQQ. But are you getting a different reading for maybe the S&P 500?
Katie Stockton: So, you know, there, the up trends are really across the board. I think that top-down view is so important, because it really drives the action in the individual stocks. So to have a correct bias for the major indices, S and P 500, NASDAQ 100, which is the basis for triple Q. And then also, the sectors, that’s so important to out performing, and that really is a driving force behind the markets.
Katie Stockton: So, you can find an awesome company in a bear market, and it still doesn’t act well. Right? Even though it supposedly should, right? And it’s just because of the market. And the same goes in an uptrend. So I really want to make sure that I start top down, and let that trickle down into my biases on the individual stock level, on the bottom up work that I do. Which for me, is really looking at a lot of individual stock charts.
Katie Stockton: So, not to be confused with the bottom up work that a fundamental analyst would conduct. So, I think both are important. With the sector work, I think technology leadership has proven to be quite, quite strong, obviously over time. The exhaustion signals there, like I said, are only short term in nature. And that goes for the relatives as well. Actually, when we do see a market pullback, you tend to get downside leadership during that pullback from higher beta stocks, of which many could be found in that technology sector.
Katie Stockton: So that would be natural development. But there are other sources of long term leadership, in my opinion. We saw in Q4 last year, some breakouts in the relative strength ratios of financials and healthcare stocks. So that was somewhat compelling to me.
Katie Stockton: And then we can use the short term bias to look for oversold bounces in various sectors to find little spots of out performance. I think as long as we have a couple of sectors, especially if they’re these big heavyweight sectors, exhibiting upside leadership, that then of course translates into a strong tape.
Katie Stockton: So when I look at the NASDAQ 100 and the S&P 500, my bias is the same. The up trends are supported by positive intermediate and long term momentum, and the targets from the breakouts that we saw in 2019 are still higher, in the range of mid-single digits. The implications from those breakouts would be long term, but the long term could put us towards the end of this year. So, those targets seem attainable, based on the fact that we do not have widespread overbought conditions on a long term basis, at least not in a concerning way.
Katie Stockton: And so, it does suggest that breadth, even though it’s been so strong, after a pullback would have room to expand further. The way we drive targets is by using typically a measured move, when there’s no resistance to key off it. So, a measured move puts the S&P 500 for one around 34.75.
Frank Curzio: So you sound pretty bullish… bullish, right?
Katie Stockton: Yeah, and listen, as a technician, it’s hard to imagine not being bullish, right? The up trend’s been intact for a long time. And the pullbacks have been constructive in that they’ve helped regulate the slope of the uptrend. So I really don’t see anything structural, in terms of issues for the market from a technical perspective.
Katie Stockton: Now, there’s plenty of things to worry about on the macro front, and if that starts having meaningful impact on market breadth and starts to generate breakdowns on the individual stock level, we’ll certainly pay attention to that.
Frank Curzio: Now, I want to ask you a tough question, because when it comes to technical analysts, it seems like, you know, so many are bullish when the market’s doing good. And so many are bearish when the market’s not doing so good. But now we’re in unprecedented territory, where we’re hitting record highs in everything. So, I guess it’s, yeah, it’s nice to see a chart. We have a lot of volatility.
Frank Curzio: Where the resistance levels were, and support levels, and also the resistant levels. But we’re past everything now, so how do you determine when this market turns around? Is it, you know, because we’re at new highs, the S&P 500. I mean, does it come down a certain amount? Three, four, five percent, then you look at your top-down approach. And look at different, you know, top down from sectors.
Frank Curzio: But how does a technical analyst understand where it’s a time to sell? Are we waiting for a little bit of a pullback? Because it seems like the higher we go, and we’re in record territory, there’s less information you can gather, especially when it comes to those resistant levels.
Katie Stockton: Yeah, I mean, it’s really unchartered territory, right? So, it does, when you have resistance, it’s almost um… It gives you some peace of mind, because it’s a gage of upside. But we, here we are with really no gage of upside for some of the major indices, except perhaps some of the small cap benchmarks, which have yet to reach new highs.
Katie Stockton: The same can be said outside of the US, too. We’re seeing new all-time highs for some benchmarks. The stock 600 just cleared final resistance in what appears to be a nice, big long-term breakout.
Katie Stockton: The best way we can manage risk of a major selloff is by watching those indicators that I mentioned. So, watching stochastics, watching the Mac Ds, especially on a longer term basis. Then also, in the bottom-up work, paying attention to a shift that would drive more breakdowns and breakouts. And they don’t have to be major breakdowns, but stocks taking out their 50-day moving averages, things like that. When you start to see that, and it becomes epidemic and it starts to be a real drag on the breadth measures, so one of those market internals, things like the cumulative advance decline lines start to pull back in earnest and make a lower high.
Katie Stockton: Those are the types of things that make us nervous. And we just don’t have them right now. There’s no major concerning Demark sell signals. Something like that might also be a red flag. But those are the kind of things that we watch for.
Frank Curzio: You mentioned something earlier about using trend following indicators. And you know, I’m very familiar with algorithms that, you know, we have some of the largest hedge funds in the world that are using. What I’m seeing is increased volatility every place, where on any bit of news. I mean, companies report earnings. They would probably report earnings, say, after the close. And the stock will be up 5%. And then an hour into the open, it’s up like 15, 17, 20%.
Frank Curzio: Just, it seems like the moves are accelerated on the upside and the downside much more over the past couple years than they’ve ever been, from someone who’s been doing this for 25 years. Does that influence your strategy at all? Because it seems like we’re seeing, and it seems like, we’re definitely seeing more volatility around news events than we’ve ever seen, where these stocks can move 10, 15% a month.
Katie Stockton: Yeah.
Frank Curzio: Where we were kind of used to them not moving that much. I’m not talking about if you have terrible news, and you blow the earnings in guidance. You blow out the numbers, and the stock’s going to go where it’s going to go.
Frank Curzio: But you know, you’ll see companies, you know, be in a little bit positive, and it goes up three, four, five percent, and next thing you know, it’s up 15%. But has that influenced anything or forced you to change your methodology to keep up with that? Or are you seeing that on your end? I’m just curious to hear from a technical perspective.
Katie Stockton: Yeah. I mean, I’m definitely seeing it. I call it time compression. Because the moves that used to take six months seem like they take six weeks, and so on. I think that you’re really seeing targets reached more quickly, and you can probably attribute that to this phenomenon, to some degree at least. Right? It’s not really something that we can measure.
Katie Stockton: But I think we all feel it, to some degree. You know, the volatility can occur on the upside, and of course to the downside, too. When we do see pullbacks in US equities, they tend to be really sort of fast and furious. You know, you tend to really need to, I guess, watch the closing prices for cues. That’s one way to kind of manage through the extreme moves that we see on an intra-day or intra-week basis, because the closing price holds a little bit more information as it pertains to support and resistance and where the benchmarks are.
Katie Stockton: So, support and resistance, we have to think about also as a cushion for price, not a precise point. Because there’s just too many market participants, now especially more than ever, with different strategies that are going to really lead, I guess those bubbles, to be more of a squishy point for the equities in question, or for the securities in question.
Katie Stockton: So I think it’s considering the levels as cushions, so realizing that for a breakout to occur is not just one day above. It’s not just even in cases, some cases one week above. It’s a couple of good solid closes above a resistance level that gets you that breakout. So, waiting for that kind of confirmation is a way to manage through, I think, this phenomenon that we’ve all become accustomed to in recent years.
Frank Curzio: Okay. So last question here, and thank you so much for answering all my questions.
Katie Stockton: Of course.
Frank Curzio: My audience loves to, loves this part where my guests usually share individual ideas. Do you have anything that you like or maybe even, you know, on the long side or the short side, right now? We are taping this on Wednesday. It’s going to publish in a couple hours, guys. So, you know, this is timely. This is good.
Frank Curzio: So I was curious if you had any ideas that you could share with us.
Katie Stockton: Yeah. I mean, of course, so, in our research, we always have long short ideas on the individual stock level. We recently added Gilead as a short idea. So, that would be one that I’d highlight. I think the short ideas, we have to keep a short term time horizon on in a bull market. So, I’d keep that in mind.
Katie Stockton: But it looks like Gilead, you know, it’s a long term under performer. It’s seen what we call a mac D sell signal, which really translates as a loss of intermediate term momentum within a long term down trend. A gradual long term down trend. So, I don’t know much about the fundamentals of the company, but when you look at it relative to the broader market, you can see that there’s probably some reason it’s underperforming.
Katie Stockton: The downside to support is somewhat significant for that stock, so that’s one that I would highlight on the downside.
Katie Stockton: And then on the upside, I think generally, I’m telling people to wait to add exposure. But there may be some opportunity near term to take advantage of stocks that actually under performed in Q4. You know, in that they had more defensive properties, so therein lagged the broader market. And now, with the bull market still intact but the potential for a pullback to develop, I think there’s some potential to add exposure to some of these utilities, as one example.
Katie Stockton: So, we have on our long idea list, Ameren, AEE is the ticker on that one. So as a long idea, that could do a little bit better during a broad based pullback. But also still in a long term uptrend and looks healthy in that regard. That would be one idea that I’d highlight.
Frank Curzio: Okay. So, let’s end with this, because you talked several times, saying we just published this. We published that. We published a report. Talk about some of the services you offer at Fairlead, because you have a basic plan, an access plan, a premium plan. Could you break those down for me?
Katie Stockton: I’d be happy to. Yeah, thanks for the opportunity. So we do publish research, and in that sense, the basic plan allows for access to two of our reports, of which one is a daily report. Like, a morning note. And one is a weekly report, which is a comprehensive, top-down overview, primarily US equities centric, with coverage of sector relative strengths, long short ideas on the individual stock level, as I mentioned. And also, coverage of important market themes.
Katie Stockton: So, as an example today, we highlighted relative strength behind emerging markets. And of course, that counter trend signal in the triple Qs. And we got into crude oil, gold, the dollar, ten year treasury yields. Things like that as an enhancement to our views.
Katie Stockton: And then, the daily note, we published market internal measures. We show some intra-day charts. I give you a short term bias if you’re a trader. With our access and premium plans, we offer an additional report that’s sector-focused. It’s a deep dive into all of the sectors every six weeks. And it’s more idea generation, looking for breakouts, breakdowns. With some quantitative output regarding technical indicators.
Katie Stockton: Of course, we provide consulting services with those plans of varying degrees. So, we can really facilitate investors as a, whether they’re building a portfolio of equities or simply using ETFs to take advantage of some of these top-down influences. We can help with risk management, market timing, and also opportunistic trading.
Katie Stockton: So that’s sort of sums it up.
Frank Curzio: And if someone wants to find more information on these products and Fairlead, how could they do that?
Katie Stockton: The best place to start would be our website, and it’s fairleadstrategies.com. It’s, leaves something to be desired, in terms of its functionality. But there is enough information on there in regards to the three subscription plans. Of course, from there with an inquiry we can send research samples and have a conversation about how we can best help a person in question.
Frank Curzio: Well, great stuff. And Katie, I want to say thank you so much for coming on. I know how busy you are. I’m glad we were able to hook up through a close friend of ours, who’s also on this podcast. John Petrides. But I really appreciate you coming on. I know you educated my audience, and thank you so much for the ideas. I really, really appreciate it.
Katie Stockton: Of course, Frank. Thanks for the opportunity. I appreciate it, too.
Frank Curzio: Great stuff from Katie. I had some tough questions there. I love technical analysis. It’s something that I use for my recommendations, more fundamental than technical. But it’s important to know where the risks and support levels are, just to get into some of these situations. You don’t want to try to catch a falling knife.
Frank Curzio: But I thought she was great. I mean, I always say the same thing. This podcast is about you, not about me. So let me know what you thought at email@example.com. That’s firstname.lastname@example.org.
Frank Curzio: I also want to give a shout-out to John Petrides, who was on TV with Katie and said, “Hey, you know what? I have someone who has a great podcast that, you know, would give you some exposure for all the products and services that you have.” And you know, I want to thank John for that.
Frank Curzio: But again, it’s all networking. Right? That’s how you get great people. That’s how you get in, you know. Those doors open for you. So, yeah, I want to thank John for that. And John, I’ll have on pretty soon. I usually have him on every quarter to discuss everything. He’s really gloating, because he won his fantasy football league that he keeps texting me about with his son, which I’m jealous because I lost both of mine. I did make the playoffs in both, but I did lose both of them.
Frank Curzio: So, let’s get back to this CES. Okay. I covered a lot of things that I saw. Now, let’s go into the individual trends, and I’ll share a few ideas for you. Obviously, I’m going to save my best ideas for my paid subscribers.
Frank Curzio: But there was amazing things I saw. It was probably the best CES in at least the last four years. What surprised me were the once boring sectors, that seemed like that were out of favor last year, drones, you’re looking at 3D printing, TVs. Yes, I said TVs. I mean, you go there all the time. You sample the TVs. They had 8K TVs last year. Now they have even more 8K TVs.
Frank Curzio: They get bigger, which is amazing. They, the picture quality is great. But there’s a lot more details in these. I’m going to cover this sector in a minute. Let’s start with drones, which now have facial recognition technology. Of course, much better cameras. But the big theme throughout the whole show, and why, you know, drones took a leap forward, is the intelligence. Right?
Frank Curzio: They’re tracking everything. They’re storing the data on the cloud. Predicting behavior. They’re more durable than ever. I saw one demonstration when this girl was operating a drone, and she purposely crashed into the side walls, where the old drones, you had the propellers and it would break the propeller. Or stop it, and you know, it would just fall. This had a ring protecting them, and they could bounce off of things. So you didn’t have to worry about hitting things, and you’re going to break your drone. It’s going to get stuck or whatever.
Frank Curzio: I thought that was really cool. She actually had this, and think about it, it’s about the size of your hand. Maybe three times the size of your hands, if you put your hand out flat. It’s like, three times the size, with four propellers. And she was flying this thing around in a cage, and then she flies it and stops it right next to, well, it’s flying. And she just takes it, and she holds it. She holds it in between the propellers. It had a little handle there.
Frank Curzio: She holds it, turns it upside-down. Flips it back over, while it’s on. Lets it go, and it just stayed there. So, the technology out of this was really, really cool, where not only that. There was one company that had lights on their drones, where hundreds and even thousands would be launched, and they’d be synchronized in the sky, forming all shapes, sizes, words. They could do any animal, whatever. It’s beautiful. It’s the most beautiful thing, although presentation is everything. The company that had these had probably about 50 they were doing a demonstration with. And they were all in sync. It’s really cool. They’re all programmed.
Frank Curzio: But they have lights coming down. And for me, I would have shut all the lights off and blasted music. You would have had cameras, everything. I mean, the presentation was so bad, because the technology was so amazing. But drone technology really took a leap forward this year, compared to last year. Where it’s the intelligent factors, it’s the better cameras, it’s the facial recognition. It’s the voice recognition.
Frank Curzio: I mean, these things are pretty incredible. They’re being used across all companies, everywhere. Deliveries, you name it.
Frank Curzio: Smart homes, monster theme. Unit sales up over 20%. And revenue is only up 2%. Now, what does that mean? That’s a great, great sign. So what it’s saying is that they’re selling more products, and prices are coming down. That’s how an industry scales.
Frank Curzio: Now you’ve got to find the companies that do have pricing power, which some of them do. But prices are coming down, because there are more competitors entering the industry. You’re seeing massive growth, more products, you name it. You name it. I mean, one of the best companies by far is Ring. If you’re not familiar with Ring’s story, they went on Shark Tank. And they were like, “We don’t like this company,” then Amazon bought them for a billion dollars.
Frank Curzio: They have had some security issues in the past, which I think is going to make them a much stronger company. But they had a whole entire house set up with everything, like cameras, just a garage opener where you could use your foot to open it. All sensor devices every place. Just facial recognition, where, and voice recognition where, if you have a gate in front of, you know, if you have a big mansion or a gate in front of your house. You know, it’s a half a mile down the road. You know, one of those major houses. It’ll recognize the facial technology, recognize the voices, and you know, you can open it up straight from the app.
Frank Curzio: She took me through this entire house. We went through, and when I say she, I mean one of the girls that were there. And what I noticed about the Ring booth, which is amazing, it was so crowded, I had to wait at least 10, 15 minutes to talk to someone.
Frank Curzio: And every conversation I listened to were people asking specifically about the products. Are they available now? Can I buy them now? Which is a huge buy signal. But you know, Amazon having the money to put behind this company. Ring, everybody talks about it. I mean, everybody talks about it. They love that bell, where, you know, people walk by. You get to see everybody on your app right away. It alerts you.
Frank Curzio: People love it. And now, Ring has a whole suite of every single product that you could possibly have for a smart home. And with Amazon backing it, I mean, this is a trend that I said Amazon is a monster winner in, because Alexa’s compatible with everything. But now that they’re pushing Ring so much, you know, that’s going to be a huge winner.
Frank Curzio: Smart cities. This was really cool. I’ve been covering this trend for a while. Remember when I was covering it, it was Silver Springs that I recommended, which got bought out. And then I recommended the company that bought them out, which was Itron, which are up around 60% on, which is a pure play smart cities.
Frank Curzio: They do an infrastructure and the services and software. What is a smart city? Everything is going to be a smart city. Okay, what they’re doing is, they’re putting new traffic lights in to manage the traffic. This way, they’re going to know what hours, how the lights change. You’re looking at watering stuff during the best times. Not just on set times all the time.
Frank Curzio: Dimming lights in parks when it’s one o’clock to five o’clock in the morning. When it’s dark, they’ll dim them. And then they’ll light up if people are walking, but usually no one’s walking. Cameras everywhere, on every single building. They’re going to be talking with autonomous cars. Just with lidar.
Frank Curzio: It’s just amazing how many cities are using this technology now. And it’s still a monster trend, because I would say 10% of the cities are really started implementing smart products into their cities. But it’s saving them tens of millions of dollars. I mean, parking. Just different things with parking, just so many different aspects of this, where it just, the efficiency is amazing.
Frank Curzio: So, what they want to do is get more intelligent. And as they use these AI systems, and AI was by far the biggest theme, by far. I’ll get to that in a minute. But as they’re getting more intelligent, more smarter, they’re going to increase efficiency, which means what? Which means they increase ROI. That’s the goal for every single company. Your return on investment.
Frank Curzio: Okay. You want to increase ROI, that’s the efficiencies that AI provides. Because they get smarter. But smart cities covering this sector, where nobody was talking about it three years ago, four years ago. Two years ago, you had about a dozen companies. Maybe a little bit more following. This year, there was over a hundred. It was one of the first buildings we walked into. I couldn’t believe how big it was. I did a special presentation right from the floor. It was awesome.
Frank Curzio: Itron’s a leader in that. I wouldn’t say to, you know, we’re up 60% on it. I think it’s going to go incredibly higher over the years ahead. I have no idea what they’re going to report this quarter. They could be up and down. Just keep an eye on it, if it doesn’t report a good quarter, pulls back, might be a good buy. But wait till after the quarter until you buy it.
Frank Curzio: But it’s a company that has a very little market, small market cap. A couple billion dollars, that I think still has upside potential. Again, we’re up a lot on it. If you’re a subscriber, it’s the Curzio Research Advisory. We’ve done very well with that pick. And that was one of the ones we got because I’ve been covering this trend for four years.
Frank Curzio: Well, let’s get to robotics. Intelligence. That’s the biggest thing when it comes to robotics. Voice recognition, looking at facial recognition, so the AI to help these robots learn. They track your moods. They track your patterns, which is incredibly valuable to every company in the world. If they know what you’re going to do, then they know exactly how to sell you. They don’t have to waste money putting an ad on CNBC, or putting an ad on Comcast, putting an ad on the Golf Channel, when you don’t really know who’s watching. Maybe their TV just on all day, you really don’t know.
Frank Curzio: But through social media, through smart homes, through cars, with Amazon getting into this technology, they’re going to be tracking everything. Okay. And I’ll get to AI in a minute. But for robotics, that was the big theme for robotics. We actually saw lifelike people, talking to you, that were robots. It just, it was incredible.
Frank Curzio: And they had AI capabilities. They sound just like people. And again, these are computers that are learning. They don’t know simple things, so you’ve got to teach them from scratch. But they’re going to continue to learn algorithms, get faster and faster 5G, and they’re going to learn it a lot quicker. And that’s the goal here, and that’s why everybody was talking intelligence.
Frank Curzio: Autonomous vehicles were everywhere. Although I still don’t get this trend. I get it in cities, but I saw … Toyota was a big winner in this space. It was one of the few companies that are growing, where the car sales are growing still. Everybody else is kind of seeing declines. You know, small declines.
Frank Curzio: But if you look at Toyota, they had a beautiful autonomous vehicle that I featured, that it was on one of our videos. Again, that’s on the Curzio YouTube page. But it’s a beautiful car. It was actually blinking when we were taking video of it. And I was talking.
Frank Curzio: But the thing is, when I look at these cars, it’s something. These cars are so nice. It’s something I want to drive. You know, if you’re a young person, you want to pull up in front of a hotel and get out and drive and say, “Yeah, this is my car.” You don’t want to get out of the backseat. I don’t want to jump in this thing, in the backseat, and say, “Okay, drive me to the store, and drive me back.”
Frank Curzio: No. And I think the car companies just don’t get that. I think they’re like, “Autonomous is great,” and there’s different levels from level one to level five. Level five being, you know, fully autonomous. No, no human interaction at all. There’s some cars that are like that. But before we get to that, it’s going to take a very long time. I mean, easily over a decade.
Frank Curzio: But to say the whole entire market’s going to turn to that, I don’t know. I’m not there yet. People like to drive. They do. I like to jump in my car and drive.
Frank Curzio: But anyway, some amazing cars. And that’s electronic vehicles everywhere. Amazon was a big winner here. You know, launching their new technology, partnering with almost every auto manufacturer, since they’re already cloud clients. The AWS. And if you get a chance, seriously, I said this earlier, great interview. I couldn’t believe it, because I asked if I could get an interview with somebody, and they had, I think there was one person. Another person said, “You know, we can get somebody else out here.” And he was, you know, the, basically one of the biggest guys in the auto sector for AWS. For Amazon, which is amazing. It’s like a four-minute interview. He covers everything of why the sector’s going to be huge. First time Amazon was on the floor in the auto sector.
Frank Curzio: And man, did they have a major presence, and that booth was incredibly crowded. So, it was a good interview. It’s going to be a winner in that space.
Frank Curzio: If you have a membership at The Dollar Stock Club, I provide an old school name here that has amazing technology. This is through electric vehicles, company not too many people were talking about, you’re not going to really find anyplace. That was a company recommended, Dollar Stock Club. It’s a dollar for that subscription. It’s me giving back to everybody, where we take a pick from, each week from the guests that I have. And sometimes I’ll mention on podcast, sometimes I won’t.
Frank Curzio: Katie’s pick that we’re using this week, she did not mention on the podcast. But I know that she recommended it. She sent me her research, which was cool. So you get to see all these picks from professionals for a dollar. But this is, you know, this is a really good company. I think it has a lot of upside potential.
Frank Curzio: If you look at the chip space, lots of news. You saw AMD released the first 7-nanometer chip. Stock really didn’t go up too much, because if you’re looking at these stocks in technology, they’re all tremendously over the past six months. It’s insane. I was looking for ideas. I’m like, man, these are up a lot. They’re all trading expensive valuations, which makes sense because the whole sector was up more than 35% last year.
Frank Curzio: But a lot of these companies ran up into this event. And you know how it is, right? You want to buy beforehand, sell the news. Right? Buy the rumors, sell the news. Well, you know, kind of everybody knew AMD was going to come out that 7-nanometer chip before Intel. Probably knew that six months ago.
Frank Curzio: Nvidia, Qualcomm had some great announcement, great products. Snapdragon for Qualcomm, video, new chips graphics. Intel released its new Tiger Lake processor, which is amazing. I saw this close up. I was able to go to the media day, a couple days before, to see this presentation. CEO Bob Swan came out, and then they had a Netflix person come out. Because they have the best technology, compression technology, where Netflix is a customer. And they had one of the top executives come out from Netflix and talk about this.
Frank Curzio: But streaming, right? Monster trend. Still, I don’t know companies that are making money off this trend yet. It hasn’t been proven. There’s not a proven business model in streaming that, where people are making money. Nobody is. If you look at every single company, all the way down the line, they’re all losing money on this.
Frank Curzio: Maybe they’ll make money on the back end. Right? You got to, it takes a lot of money to produce this content. But when it comes to streaming, if you want to know who’s going to win with the services and all, the compressions, that’s Intel.
Frank Curzio: They announced partnerships with Lenovo and Dell, to launch foldable laptops, that they brought out. Actually foldable laptops. They were 17 inches, saw it close up. Really cool. Again, videos of this online. New 3D sports technology. It’s going to change the way you view sports. And the technology is almost there. It’s about two to three years away. And the advances that they made, it’s incredible.
Frank Curzio: Where they’re close to having the 3D technology in 4K. Now, I don’t want you to think 3D in terms like you need glasses. No. 3D is going to be able to give you every single view of, say, a running back that just broke for a 60-yard touchdown, that’s running. You’re going to be able to see around him, every single possible angle.
Frank Curzio: And they showed the technology, and it works. But the picture quality’s not, they can’t get the picture quality that great yet. It’s advanced tremendously from last year. This year, and the next two, three years, you’re going to see this in 4K. And seriously, you’re going to change the landscape sports of how you watch them. You think it’s great now, wait. It’s going to be insane.
Frank Curzio: But I love Intel’s technology. I love their presentation. A lot of people were like, “Intel really dropped,” no. It was very, very good. Tiger Lake’s going to be huge. That’s their new processor. Faster, smaller, speed, compatible with AI. Western Digital was a big winner. It’s a stock that it’s also run up tremendously. They have new products of storage, are just amazing. And it makes sense, right? Because everything is turning to video. Everything is video.
Frank Curzio: What does that mean? It takes a lot to store video. The amount of data is going to explode over the next five to 10 years, because everything is video. So what do you need? You need more storage. Yes, you can store in the cloud. But Western Digital provides great alternatives.
Frank Curzio: Looking at Dram prices, A&D prices. You’re looking at those bottoming out, which hurt these companies. Now they’re much better, especially when it comes to Micron. Micron had a good showing, although that stock has run up. I still think Micron has a lot of potential. It lagged technology sector for a while. Now it’s been running up.
Frank Curzio: Humana was another big winner in healthcare. One of the best things I saw is when I walked into the hall in the Sands Expo, when you go upstairs. They have little wearables technology, health and wellness. The two biggest booths when you first walk in, one of them was Energizer, which I had shot a great video of. Energizer’s up a lot heading into this quarter. I think it pulled back a little bit this week, but it was up … I think it’s up like 40% at least, 50% over the last few months.
Frank Curzio: But the two companies were Omron, who also had a presence. They also had a presence with their robotics in the Las Vegas Convention Center, and then the wearables in the Sands Expo. But it was Omron and Humana, which was cool, you know. You know why? Because those are two of the companies that I recommended in my newsletter, that you’re up a lot on.
Frank Curzio: Humana’s doing great, up over 30%. Omron is up, is up a lot. Doing fantastic. That was my number one pick last year. But to walk into see these guys, having that presence where everybody’s talking about them today. We were talking about them a year ago. It’s really cool. That means that you’re doing your job.
Frank Curzio: And that’s what we want. I want to get into these things early. So just seeing Humana, a big winner, Delta, a huge winner. Just so many different companies, you know, Abbott Labs. There’s so many companies that are presenting that are just, you know. You would think, wow, technology. But everything is a technology. Every company’s a technology company these days.
Frank Curzio: And they’re all … P&G, last year, I told you P&G was great. Their technology’s amazing. It’s going to move the needle eventually. And look at PG’s stock compared to the rest of consumer staples. Easily outperformed.
Frank Curzio: So, you’re seeing more and more of these companies, like Kohler, which I took a video of. It’s a private company. The Kohler family, they, it’s like, 120-year-old company. They’re into plumbing. I mean, you look at plumbing and pipes, and now when you walk into their booth, it’s state-of-the-art technology. It’s the best stuff, where you could, you know, they have the faucets that you could wave to shut off the faucet. Or turn it on. You could say, you use Alexa and say, “Hey, could you get me three cups of water?” And it puts three cups of water into whatever you have it into, measuring cup.
Frank Curzio: The shower heads are all, come with Alexa music capabilities that you screw in. It’s much more water pressure. They have lights every place. They’re toilet bowls are compatible with Alexa. I mean, I don’t know how many commands you’re going to give to a toilet bowl. I’ll let you decide that.
Frank Curzio: But it’s just amazing how you see these old school companies turning to new technologies. And how they reinvent themselves and innovate. And this is a company that does billions, and I think they’re going to do eight billion in sales this year. It’s a private company. Eight billion in sales.
Frank Curzio: But it’s amazing what the Kohler family has done and turned that in, from a plumbing, piping company into what it is today, which is one of the most exciting booths. When you walk in, you want to own every one of their products. And they even have generators now, which are amazing.
Frank Curzio: So it was really cool. If you’re looking at wearables, Apple dominating. Why is Apple dominating? Because they can sell their wearable to the hundreds of millions of people that own the iPhone, which is why I bought an Apple Watch, and I like it. A little critical of it early on. I love it now. Wear it all the time.
Frank Curzio: But because it’s compatible with the phone, it rings. I can answer my phone through my watch. Mine is EKG. But that’s Apple. I mean, Apple has a massive market of people who own their products, and then they make products on top of that. You know, whether it’s tablets or whatever it is, that are compatible with each other.
Frank Curzio: But if you’re looking at the rest of the industry, and easily 100 companies there. You saw the same thing for every one of them. EKG monitors, health monitors. It was just all the same technology in these watches. And I have to tell you something, because I don’t … Someone’s been covering this trend. And the estimates on this trend have been insanely high. Like, over the past three years, where they had to adjust them lower.
Frank Curzio: Now Apple’s finally selling these things. Again, they’re able to sell them because it’s a good product, and they’re selling to people who own iPhones. But there’s nobody that I know, maybe you know, that owns two of these wearable watches. You don’t, I don’t own, I only own one. That’s it. I only need one. I don’t need another one. Maybe it looks a little bit better than the Apple one.
Frank Curzio: But they’re not going to pay three, four, five hundred dollars for it. There’s no one that owns two or three of these, which is important. You have to understand that. You could own three or four different computers. You could own whatever it is. You know, different work. You don’t own, you only own one. And Apple’s controlling that market.
Frank Curzio: And to see 100 companies launching their new products. I mean, even major companies like Garmin. It just, you’re seeing all these wearables across the board. And I’m looking at a trend that, wow, Apple’s going to continue to dominate. But everybody else, I don’t know. Fitbit has its own crowd. Yeah, that’s okay.
Frank Curzio: But I mean, hundreds of, over a hundred companies, I would say, have their own wearables. And there’s no state-of-the-art technology, other than Omron, which was really, really cool. It measures your blood pressure through that. And you know, specially made for people who have heart attacks and irregular heartbeats and strokes and stuff like that. So that, that’s pretty amazing.
Frank Curzio: But there’s nothing that separates them from an Apple Watch. And it’s a low barrier of entry industry, where anyone can get in. So when you’re looking at wearables, just be very careful. It’s like GoPro in the cameras. I mean, GoPro had a monster booth not too far away from Samsung. Prime real estate. There was no one really in the booth. You’re selling your Hero eight. Last year, it was the seven, the year before the six, year before was five.
Frank Curzio: They had an advertisement, “Sign up for services, get a year for free,” which you’re not supposed to advertise at all. I covered that in the video. You’re not supposed to advertise at all. Really supposed to sell your products, especially on that main floor.
Frank Curzio: But there was two, three, four companies I saw with better technology. Better cameras. Better 360 degree cameras that were cheaper. Same with wearables. It’s tough to get into industry when you have no pricing power. That’s one of the reasons why I think there’s going to be a lot of companies making mistakes, getting into the streaming business. There’s not pricing power in that industry.
Frank Curzio: And it costs a shit load of money for content. Again, covering everything individually, so stay with me here, guys. Stay with me. Because I’m getting to the biggest trends.
Frank Curzio: One of them was televisions. I’ve been going for eight years. Televisions, yes, they get bigger. 4K, 8K, better quality. Flatter screen, thinner, lighter. You know, usually their margins are very, very low.
Frank Curzio: If you’re looking at TV, the average TV size that people own right now is 50 inches. The prices are coming down tremendously. You’re looking at revenue year over year, it’s up low single digits. But if you’re looking at unit sales, it’s up a lot higher, meaning more and more people are buying TVs. And the prices are coming down, so they’re able to scale even more. Which is why the average TV size is flat screen 50 inch, which is great for Best Buy. Because Best Buy’s one of the few companies that installs all this stuff.
Frank Curzio: And it’s getting harder to get the color right. And really, you know, unless you’re really tech savvy, with surround sound, installing it on the, everyone’s going to use Best Buy. And most people are going to use Best Buy to install it on their wall, because it’s a big project, and you don’t want to mess it up. Miss the beam, that TV falls, you’re done.
Frank Curzio: So Best Buy is killing it. 52-week high, all-time high. It’s going to be recommended for at least three, four years. But if you’re looking at TVs, the biggest thing with TVs is they’re all smart. What does that mean? It means that they’re connected to the internet. You’re going to have all these apps.
Frank Curzio: Think about that for a minute. Because we’re used to Google, Facebook, Apple, Microsoft tracking everything we do. The Microsoft tablet, you buy a laptop from, that has Microsoft Windows on it, it’s so shitty, it pisses me off. Because the default settings, the default settings, not that you check this. The default settings, unless you change it, seriously, basically say, “We’re going to sell everything that you have, everything you do. Track everything to third parties, and we’re going to make a shit load of money on you.”
Frank Curzio: Those are the default settings for these things. So you can expect to get tracked through your mobile phone. You get tracked through the internet. That’s okay. But with TVs, now that they’re smart, now you’re looking at Samsung, LG, Sony. They’re going to have access to this data. It’s pretty crazy when you think about it.
Frank Curzio: Because when you throw AI on top of that, every company, every major company, this is by far, AI was the biggest theme by a mile. Every company was talking about using AI to enhance your experience, whether it was free driving, smart homes, smart cities. Tracking how you eat. Everything.
Frank Curzio: And you know what? Be afraid. Be very, very afraid. If you’re looking at AI through 4G. Now that we have 5G, it’s going to be even faster, with algorithms that track your data. So let me take you through a scenario really quick.
Frank Curzio: Because if you’re looking at AI, now you have a smart home that’s going to track everything that you do. How many times do you go in the refrigerator, how many times you drink coffee, how many times do you dry your clothes or wash your clothes. All this data’s being recorded.
Frank Curzio: And then, not only is it being recorded, it’s being analyzed. And now you have AI, which is machines that are learning from this to be able to predict your patterns of when you do this. You have cameras in your house. You’re going to have cameras in your house.
Frank Curzio: Now you have your TV. You have Alexa. I mean, they’re going to track every single thing you do, to the point they’re going to know what you’re doing tomorrow, five days from now. Three weeks from now. Two years from now. Because we’re all creatures of habit. We do the same things. We tend to go to the bathroom at the same time, tend to wake up at the same time. We tend to drink coffee at the same time. We tend to have lunch at the same time. We go on vacation the same weeks.
Frank Curzio: And imagine being able to really target that, because it’s all about one thing for these companies. What is it? It’s ROI. How do we increase ROI? That’s how you do it.
Frank Curzio: Imagine selling a product to someone that needs it, and you know they’re going to need it five minutes from now. It’s the easiest sell in the world.
Frank Curzio: That’s what it’s coming down to. But these TVs are going to be able to track a lot more, where it’s not just the big technology companies like Google, Facebook, Apple, Microsoft. Now, it’s Samsung, LG, Sony. The smart home manufacturers that store a lot of this camera data on their cloud.
Frank Curzio: They’re all tracking you. It’s really, really crazy. But if you’re looking at it as a whole, where you have P&G, Abbott, Delta, DuPont, Weber, Bridgestone. Right? All these companies talking AI. And they’re not really considered technology companies.
Frank Curzio: But again, if you have a website, you’re tracking data. You want to know your customer. You want to increase ROI. Now that just about every company in the S&P 500 is considered a technology company.
Frank Curzio: The reason why I continue to see amazing companies presenting, like utilities, consumer staples, mining materials. John Deere was at the CES, which by the way, John Deere displayed one of the biggest tractors you’ll ever see. It was fitted with a ultra-wide, it was 120-foot carbon fiber boom. It was just incredible. I had no idea how they got this thing in there.
Frank Curzio: Where the tractor’s enormous, and it incorporates the internet of things is artificial intelligence. Now, how can you say, “Why is that a big deal?” Well, this tractor, which showed through that 120-foot carbon fiber boom, which sprays down. Right? So, you go through these massive fields.
Frank Curzio: But instead of dusting an entire field with whatever, pesticides, not the entire field needs pesticides. Maybe it’s just certain areas, which is the case a lot. So now, it’s just going to spray chemicals in certain areas. What does that mean? It means that the chemical companies or John Deere would save money. Right? It means that they’re getting more intelligent.
Frank Curzio: It means that you don’t have to worry about more extra pesticides or whatever chemicals being on your food. Whatever it is. But these things increase ROI. They sound simple, but it’s not like, hey, let’s spray this entire field. No, we see that area over there? That only needs to be sprayed.
Frank Curzio: How do we know that? Because we’ve been tracking the data. We’re looking at this for two, three years now. Measuring the crop yields and maybe they’re not the same in all areas. So, really, really cool stuff.
Frank Curzio: And guys, you want to see the work I put in, all with videos? Yes, even of me jumping off a 880-foot building, again, since that was the only thing my 11-year-old asked me to do. But all my videos, interviews can be found on our Curzio Research YouTube page.
Frank Curzio: And if you’re a Curzio Research Advisory subscriber, we pushed the issue out to Friday, because I was at the Consumer Electronics Show and have lots of ideas. On Friday, you’re going to receive a complete breakdown of all these trends. Much more details than I explained today from CES, including the biggest winners and losers.
Frank Curzio: And also, I’m going to share my favorite tech stock to buy right now, which is 180-year-old company that’s using amazing new technology to disrupt an entire industry. It’s fantastic name, one that wasn’t really talked about much as a company. You’re going to be surprised. One that’s not like, a staple that you’re going to hear about. But it’s a leader in their industry, and man, they’re going to be, it’s going to be even bigger for them.
Frank Curzio: So I’m very, very excited. It’s one of the few stocks I’ve found that’s dirt cheap and has incredible growth potential. So, expect to see that issue in your mailbox on Friday. If you’re a Curzio Venture Opportunity subscriber, you’re going to receive my favorite small cap name. I think has unbelievable upside in a sector that everybody used to hate.
Frank Curzio: So it’s a name you’ve probably heard of, that’s made some amazing strides over the past five years restructuring itself. And over the next five years, it’s going to be incredible. You’re going to see those gains a lot sooner.
Frank Curzio: But you’re set to be one of the biggest players in this industry that used to be depressed, and now next year, believe me, it’s going to be the talk of the town. So you’re going see that issue next Wednesday.
Frank Curzio: So guys, covered a lot of stuff. I know it was a long podcast. Had a lot of fun there. But my job is to go out there, find the best ideas. Having this access is because of you, because we have so many listeners to this podcast. I just want to say thank you. Hopefully you enjoyed this podcast.
Frank Curzio: This is just one sector that I’m covering. I cover everything else in mining. By the way, with mining, I was supposed to speak at the Vancouver Mining Conference, I think it’s next week. But personal issues, which is a good thing. My mom is actually coming home this week. She’s been either in ICU or at rehab facilities for over three months. And she’s finally coming home, and since I’m the one that’s here, you know, I want to be able to take care of her for a couple days. It’s going to be nurses there, but really, really good news.
Frank Curzio: But unfortunately, I’m not going to make the Vancouver Resource Investment Conference, which I love. Marin Katusa and Cambridge run it. It’s a great conference. You guys are going to have a lot of fun there. I know there’s a lot of people listen to this that like to see me there.
Frank Curzio: My apologies, but I’ll be attending the Sprott that’s in July and other mining conferences, where I can see you in Vancouver or on the West Coast.
Frank Curzio: So guys, questions or comments, email me. email@example.com. That’s it for me. Thanks so much for listening. I’ll see you guys in seven days. Take care.
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