Wall Street Unplugged
Episode: 1067August 23, 2023

The Fed is done hiking rates

By the time you listen to this episode, Nvidia (NVDA) will have reported its latest earnings… Right now, the market is holding its breath ahead of the results.

I break down NVDA’s insanely high valuation… whether I expect it to meet the market’s huge expectations… and some obstacles it will face in the coming quarters. Plus, I highlight the two companies that represent the biggest threat to NVDA’s dominance. (Most folks will be surprised by these names).

Next, I make a bold prediction… The Fed is done hiking interest rates. I explain my thesis… and why sluggish global growth is the “new normal.”

I also highlight a major red flag in the housing market. It’s a situation that’s never happened before… and will put massive pressure on the economy (and lead to more stock market volatility in the coming months). 

Last week, I shared a unique opportunity with members of our most elite service, Curzio One. It’s a private placement that I believe could generate 80x gains over the next 18 months. I’m personally investing $50,000 in this opportunity… and there’s a limited window available for anyone who wants to join us. If you’re interested, you’ll need to act quickly, as we only have a few spots left. 

On tomorrow’s episode of WSU Premium, I’ll highlight my favorite stocks and sectors for the current market. Plus, I’ll reveal our new Dollar Stock Club pick—a beaten-down stock that hedge funds are scooping up ahead of a major turnaround.

Inside this episode:
  • What to expect from Nvidia’s earnings [3:50]
  • The surprising tech names that could disrupt NVDA [13:00]
  • The Fed is done hiking interest rates [18:57]
  • A history-making concern in the housing market [28:10]
  • How to get a shot at 80x gains [34:40]
  • Don’t miss tomorrow’s WSU Premium [38:50]
Frank Curzio
Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 12 million times.
Transcript

Wall Street Unplugged | 1067

The Fed is done hiking rates

This transcript was automatically generated.

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 August 23rd.

I’m Frank Curzio. This is the Wall Street Unplugged podcast where I break down the headlines and tell you what’s really moving these markets.

It’s funny, my washing machine broke again.

I think I got through a washing machine every three years, ever since they put like the environmental features on there and stuff like that.

I know Trump said something about that recently.

It’s, it’s so crazy, right? So I under the warranty with Best Buy and we call them and they say, okay, we’re gonna come in a week, which is a long time when you have kids in school and stuff like that to get your clothes done.

So I’m like, okay, no problem.

We’re gonna come in a week.

So they’re planning to come and I think it was on Wednesday or whatever, and on Tuesday we didn’t hear from them.

So I’m like, okay.

I give him a call late at night and say, Hey, I didn’t hear from you.

Your Window’s seven to seven, right? So I guess, you know, you have to be there.

So I wants to be in the house.

Like nobody works, right? That, that’s what these people think.

And they said, well, we change your appointment.

And I said, well, why didn’t you email me? I, you emailed me with the appointment and, and showing, you know, saying, well, we booked the appointment, I got an email, I got a text and everything.

Oh, we sent it to you.

I was like, I didn’t get it.

Whatcha talking about? They said, well, the part didn’t come in.

I’m like, what part are you talking about? You didn’t look the machine yet.

They’re like, well, based on what you said, we’re figuring what the part’s going to.

I’ve never seen this in my life.

I’ve never seen a company do this before.

Right? So basically they ordered a part and sent it to our house and it didn’t show up at the house yet without the guy coming and looking at it, which spells disaster.

So the next day, the day it’s supposed to come, I call him, the part gets to the house and I say, Hey, the parts here, can we have the same day? They said, we can’t do, we have to push it out a week.

I said, so now it’s two weeks out.

I said, you know, you gotta be kidding me.

So I’m p****d off.

I’m ranting, raving, saying, okay, you know, you, you take off of work, right? If you take off work, you’re gotta be the whole day.

Then you, you don’t even tell me they changing the appointment.

Don’t call me.

This is Best Buy by the way.

So now the next week comes, the guy comes and I told him, I said, I’ve never seen this before.

He goes, yeah, it’s a whole new system where, you know, based on the comments, all automated and they’ll order the, the the part.

So basically what happens is he goes there and then there’s two weeks later now and comes back out like an hour later.

He goes, it’s the wrong part.

I said, great.

So now I have to wait another week.

Now we’re going on three weeks.

Great, great guy by the way.

He’s like, the system sucks.

He’s like, I get so many complaints about it.

He’s like, listen, here’s my direct number and call me.

He’s like, I order the part one day.

Supposed to come in like one day shipping.

So two days altogether, whatever.

It’s still not there a week later.

So now they just cancel me again.

So if they came the very first time, they would’ve known what part they needed.

They could’ve ordered it and it would’ve been done probably in 10 days.

We’re on three to four weeks now and it’s still not gonna get done.

That’s the customer service that you’re getting right now.

When they say, Hey, you wanna pay an extra $30 for the warranty or an extra $80 for the warranty, f*****g don’t get it.

Don’t get it.

It’s a waste.

It’s like insurance for an airline.

Oh, you have to write in personally and do the, you know, you think like, oh okay, I’m canceling the flight.

It’s a whole process to get your money back.

It’s this massive process that most people don’t do and that’s where they make money.

That’s why they’re selling this stuff, selling this stuff, selling this stuff.

All these warranties and I mean the margins on that.

Holy cow.

Anyway.

And we’re right at the three year part where, you know, I’m glad I called but it’s gonna be after three years.

And it weren’t at the time they fix this thing, but it’s a washing machine, right? It’s hard.

I gotta go to one.

Anyway, my personal problems, I gotta throw them at you.

That’s what this podcast is for.

’cause we’re all seeing craziness in the markets right now and today by the time you get this podcast should get a little bit around the same time.

NVIDIA’s gonna report NVIDIA’s report today is massive.

This is the company that’s been helping keep the market up.

If this company s***s the bed lookout, you’re gonna see a 3% decline in SB 500.

They’re probably not because you have so many analysts I probably talk to management expectations are sky high.

Expectations have never been greater.

Heading into a call for any company that I’ve ever saw in my life.

And I’m gonna explain that right now.

So you’re looking at the reporting Q two, they’re expected to earn 2008 shares on 11.

2 billion in sales.

Okay? They’re gonna beat those estimates.

The biggest thing is gonna be the guidance.

Their guidance.

Remember they were expected what, the guidance was supposed to be around 7 billion, they raised it to 11 billion.

So now you’re expecting at least 12 billion in sales this quarter.

Even though they said 11 billion, their guidance for next quarter, that’s gonna be a big deal.

They’re expecting the guidance expecting 12.

6 billion.

But expectations when you look at a whisper number for the, it’s more like 14 point a half billion.

That’s the number, okay? So if they come in at 13 billion, that’s gonna be a disappointment.

It’s gonna say a beat estimates because all these guys who raise their numbers, and by the way we’re talking about all these analysts, there’s 49 of them, there’s 49 and I think something like 43 have a buy rating on the stock.

Everybody’s raised their numbers and estimates into the quarter but they didn’t raise them high enough, right? Obviously ’cause they wanna make sure they beat and that’s what drives the stock higher.

That’s all you hear Nvidia beat estimates, you don’t know what those estimates are.

Those estimates could have been revised 20%, 30% lower, these would been revised higher.

But all of them know they should be revised significantly higher.

Even some of the reports I read said, listen, you know, our numbers at a 12.

3 consensus is 12.

6, but you know there’s numbers out there that are looking at at 1314 0.

5 billion.

I’m like, so why don’t you put it at 14 5 billion if that’s what you think.

Again, it’s a whole game of Wall Street.

Now for fiscal year 2024, the expectations are 43 billion in revenue.

Just know that’s 61% year year growth and 8027% earnings.

That’s about 246% year year growth and they’re expecting 69% margins.

Now I want them to look at a 2025 estimates.

’cause again, they’re in Q two of you know this year.

So you know, it’s not long.

It’s not that far away.

So let’s see what, what 2025 expectations are.

So you’re looking at a company where earnings are expected to grow to whatever 50% growth is up.

And then they expect margins in 2025 to go from 69% in 2024 to 73%.

They expect margins to go higher.

So a few things, okay? Because everyone’s gonna break down Nvidia and tell you what they want.

You’re gonna see.

So I just want you to prepared, maybe you’ll listen to this before, maybe you’ll listen to this after if you listen to it after.

I love that.

’cause you know, you hold me accountable and I’m saying this stuff before the report, not after and saying I told you so when I really, I you, you go on and say NVIDIA’s probably gonna beat, I think this stock can go higher, but it might go a little bit lower.

And then the next day when you’re reporting to on C B C, like Hey, I told you so.

What did you tell me? You told me it could go lower, could go higher.

There’re probably gonna be estimates.

You know, and they take credit for it, right? That that’s Wall Street.

I gotta give Cramer credit because he had Footlocker, Footlocker got destroyed.

I’ll cover that in a minute.

And at least he owned it and that’s fine because I mean people get on Cramer and I’ve gotten on Cramer, I disagree with him sometimes and again, as a person, I work for a person I know who went to my wedding.

But if you’re looking at those fang stocks, he’s one of the ones that invented that.

Okay? So, so if, if you’re looking to criticize that guy, that guy’s been riding these stocks for the past 10, 12 years, okay? And he’s got a lot of losers, but it’s fine.

You know, you could talk about you winners a lot when you talk about you losers.

Most people don’t.

And I credit him ’cause he really got that one wrong.

And he mentioned, he said, I got it wrong.

It’s on me.

And I like that.

Okay? That’s how you learn.

And just to show you, no matter how many years of experience you have in this industry, you’re always gonna learn.

So be humble, trust me because I was arrogant.

I’ve been arrogant and man, I got punched in the face every single time.

I get ahead of myself and I dig in.

The greatest person in the world when it comes to analyzing stocks, that’s what this market does to you because it’s crazy.

Now a few things with Nvidia, I’m not sure how they’re gonna grow margins with so many competitors entering the market, right? These are very deep pockets that are entering the market, right? These companies and it’s significant.

So you gotta look at orders and you have to look at the lead time for these orders because the lead times to get these chips right now is out past nine months.

Meaning if you place an order for NVIDIA’s chips, you’re not gonna get them for nine months.

That’s what’s going on right now.

That’s how long it’s, that’s significant.

Again, your booking orders now and your wait time is over nine months, meaning you don’t have that capacity.

So you have to either build more fab plans, try to get more capacity through Taiwan, semi whatever.

But it’s taking a very, very long time.

Now nine months in technology is like 10 years in other sectors.

And if you want proof, nine months ago Nvidia was trading at 120.

And I went from a footnote to the greatest trend in technology since creation of the internet.

This is nine months.

Nine months ago everyone was going AI’s the greatest thing.

Oh my god.

All the technology cut, everybody went crazy.

Pretty much it started around nine months ago, eight months ago.

But Nvidia was trading at at 120, what is it? 4 50, 4 60 Now over those nine months and going forward, so over the next nine months you have a m d, Intel, Broadcom, I b M, all spending boatloads on ai.

I know I threw I B M in there, but it’s true.

And you’re like I B M again these are small intel.

You gotta be kidding me, okay? But you also have chip startups like Mythic Tache and they’ve raised over this is unusual.

The biggest tech companies are entering the space.

We’re talking Meta, Amazon, Microsoft, Apple and Google are making their own AI chips.

Now why would they do this? Why would they make their own AI chips? Why would they get into this industry? Which is usually a s****y industry.

I mean you used to have four gm, anyone that makes chips, they used to be like, this is what we need a chip to do.

Go ahead guys, go bid.

It was a commoditized business, not Nvidia.

’cause you have the best of the best and these are the chips you need and you have to use.

And they control 70% of the market right now when it comes to ai, they’re getting into this ’cause Nvidia, again, they’re controlling 70% of the market, but they generate an incredible 70% margins on hardware.

That’s unheard of.

Need to remember something.

These companies, if you’re looking at the top six in technology mice, Nvidia have close to 1 trillion in cash on their balance sheets, enough to poach the best players from Nvidia enough to put in a ton of money, hire great talent and go crazy.

The whole entire world is coming for Nvidia.

If you’re making 10 million a year a developer for Nvidia, that’s awesome.

But Apple can pay triple at and have these guys say running their own divisions when they might be the number two, number three, number four at these places at Nvidia.

So when you look nine months from now, this industry is gonna look very different than what it does right now.

And why is that important? Because when you’re looking at Nvidia and where it trades, it trades on what the future is, what the future valuation is, maybe five years, maybe 10 years out.

This is on the future of what it’s gonna earn.

’cause even if AVIDIA is able to generate this is 2025, $12 and 60 cents a share in earnings, massive, massive increase, 50% increase.

And what is it three, 400% increase from? From 2023 whatever.

It’s 2023 levels.

If you put this company at $500 a share, which it’s almost at right now, maybe it’s a little bit higher when things are gonna go a lot, lot higher.

But if it’s at $500 a share at 1260 in earnings in 2025, which is remarkable, the stock’s gonna be trading at 40 times forward earnings.

Now you deserve a high premium when you’re growing.

That’s not expensive and you’re growing and NVIDIA’s growing right now, but we’re talking nine months from now on that call.

It’s not about how much they earn.

They’re gonna blow out these numbers.

They’re low, they’re gonna destroy them.

It’s the guidance.

And the guidance should be very strong.

But you better get on that call and listen to the lead times.

That’s gonna determine if NVIDIA’s gonna go up and be up for a few weeks and then probably come down really, really hard over the next month or two because they need to get these chips out sooner than nine months because of the competition coming in.

And I can’t see Nvidia growing at this pace over the next 24 months with the massive amount of competition that’s entering the space.

Again, I just can’t see ’em generate 70% margins and more competition is gonna lead to price wars.

And I see the biggest dangers for Nvidia, not from the heavyweights entering this industry, some of ’em for the first time, but it’s from the Intel and IBMs.

These are the guys that have absolutely nothing to lose and they’ll go all in, offer massive incentives for new developers, give away their stock for free.

They, that’s what these companies should be doing.

I mean they’ve been such s****y companies for so long behind every single freaking trend.

This is your chance to go 100% all in that a trend.

This is gonna be a massive trend.

There’s no doubt the spending is there, the money is there, the AI is there.

It’s incredible.

You could ask any question, chat, gt anything.

Even my daughter.

I was, I was doing fractions with her last night, which I forgot of course.

And just say, and then there was a question, I was like, you know, a question with, you know, a bunch of numbers and stuff.

And again, you gotta brush up just a little bit on it, you know, I was like, you know what? I just curious, lemme put this in chat in between and it answered it in two seconds and showed me the formula and everything in two seconds.

I mean it’s real, this trend, absolutely.

But I’d be more worried about the guys have the backs of the wall that are gonna do anything to make sure that they’ve become a major player in this industry.

So I see them more of a threat than the companies even with the big pockets who haven’t really been in this industry before.

So this is a company that’s gonna drive the market and it’s important ’cause it’s the one name you could look at and be like, huh, okay, you know we’re okay.

I mean you look at a technology falling off, you look at the banks falling off, you’re seeing an oil still maintaining, but kind of that, you know, not surging the stocks as they were a couple months ago.

And we’re in a lot of those names and they did well for us throughout our portfolios.

But where’s the leadership gonna come from? ’cause right now it’s coming from ai, it’s coming from Nvidia.

And one last thing I wanna ask you this question, how big do you think the AI market is, is market or projected to be in 2025? Think about a number and I want you to just say it wherever you are, what that number is.

What is the projection, right for ai? What is the, what’s the total addressable market for AI in 2025? What’s the amount? It’s just a hundred billion dollars.

It sounds like a big number.

Tokenization has a potential to be a 16 and a half trillion dollars industry.

So SPACs are created, right? To create liquidity for insiders and get them out of the liquid investments, which are private companies.

And you turn ’em into publicly traded, you know, burgeon with those publicly traded entity, right? That’s what you can get a lot quicker.

And that’s such a big massive trend.

That’s why tokenization is all the, all the banks launching their own blockchains and putting and tokenizing all their assets.

Imagine having liquid assets that you could sell little bits and pieces up.

That is amazing.

That’s what they wanna do.

They wanna be locked up in commercial real estate and bonds and stuff like that.

It’s hard to sell.

Now anyone could buy these things.

That’s what they’re doing, right? That’s a 16 and a half trillion dollars trend.

Trend.

They wear it the first ever tokenize our company.

But the total addressable market is a hundred billion and that’s by 2025.

This could be a trillion dollar market by 2030.

But it just goes to show you and put in perspective how much hype we’ve seen in ai.

I mean it’s a fascinating trend but it’s gonna take many years within the largest players outside of Nvidia to make money.

And that goes for Microsoft as well, saying in the quarter we’re not really gonna see anything meaningful until, you know, at least the second half of 2024.

And this is one of the biggest second biggest company in the world.

Market cap two, two and a half trillion dollars company going all in on ai.

That’s how long it’s taken on the software side.

Incorporating AI into your business.

This isn’t like Rivian, this isn’t like Tesla where you have companies going all in and it’s they wake up and breathe EVs.

This is like Ford and GM saying, oh we wanna incorporate this.

You know, EVs into it.

You know, so we’re gonna like half-ass go into this trend and see how we do.

You know, that’s what companies are doing right now.

Can’t be a big part of your business unless you wanna be like Tesla and Rivian and lose tens of billions of dollars a year before the trend finally picks up, right? Because you’re not gonna generate money.

It’s so hard to incorporate this and actually make money off of it.

So this fascinating technology, it’s gonna take time to implement.

And that means if you’re holding these software, AI companies look out.

’cause eventually you have to put up the numbers.

You can’t be like Disney and say, oh we have a hundred million subscribers, 112, we have more subscribers in it then everyone in the industry and Netflix and we’re the biggest in the world.

Yeah, but you’re giving away for free.

You’re not making s**t.

You’re not making any money.

And then investors finally came around and said, oh wow, those names, they’re not gonna pay for your services ’cause you’re not providing any new content ’cause all your new content has to come out in the movies.

Wait a minute, I’m just gonna go to Netflix and pay for Netflix.

And that’s why you’re seeing Disney where it’s eventually you have to show those numbers.

You could have the greatest story ever, but you have to put up the numbers eventually.

Especially in this market where if you’re not putting up the numbers and you talk about the massive growth, you’re probably sitting on huge amounts of debt, which is getting more and more expensive to service.

Something to think about.

Let’s see what happens after the close.

But then revenue guidance, close to 14 billion expectations like 12, I think it’s a little bit of a disappointment considering again they’re 50 analysts covering the stock.

There’s 50 not for number 50 analyst covering the stock for Avidia 43 have a buy rating on it, only one has a sell.

And I have to say 80% of those analysts raise their numbers over the past two weeks leading into this call.

When you’re talking about a company expectations sky high, if you are along this market, you better hope at the end of the day Nvidia reports really, really good numbers and drives that stock higher or it stays, it doesn’t collapse.

If it collapse, you’re gonna see an ultimate market collapse.

You’re gonna see a two to 3% decline in the S&P 500 because everything right now in terms of growth is linked to this.

’cause you’re not finding growth anywhere in anything.

Maybe outside offshore drilling in a couple areas here or there.

But it’s ugly out there because when we look at the rest of the market, I think the Fed’s done raising rates.

It’s the first time I’ve said that.

The first time I’ve said that in two years they should be done raising rates.

I mean you’re seeing a lot of things roll over right now.

A lot of things roll over now you’re looking how high interest rates impact everyone else even outside the us.

I mean you look at France, Germany, broader Eurozone, its service manufacturing.

P P M I came in below 50 showing contraction, yet inflation is ticking back up.

Imagine being in that situation.

Holy cow, what a nightmare.

China ultimate disaster if you get a chance, Kyle Bass, great interview on C B C this morning.

He believes China’s gonna take over Taiwan next year.

That’s gonna happen next year.

You’re seeing Taiwan exports are down tremendously, right? That’s technology.

We’re supposed to believe that technology’s great, it’s great in Nvidia, outside of Nvidia, not so great.

And we’re talk about, what is it, 25, they make most of the chips for the world down tremendously Best Buy’s coming up.

Let’s see how that quarter is.

The stock has gotten annihilated.

Let’s see, but demand’s going but he thinks that’s gonna happen next year.

And he says this is based on what she’s saying and doing.

When a lot of times we’ll see different things and everyone analyze it.

You’re reading a story about someone’s opinion.

Sometimes you just have to sit back and listen to the person talking and not listen to all the a******s with all the opinions sometimes.

And I can be one of those a******s because if you listen to Powell, he’s doing exactly what he said he is going to do over the past, what, And how many times since then, since the last what, 16 months, whatever he is been starting since March, raising rates.

How many times have we heard on TV from not dozens, hundreds of analysts that the Fed has done raising rates.

Just not believing what he’s saying yet.

He’s telling you exactly what he’s gonna do.

I’m raising, I’m raising, we gotta get down 2%.

I’m raising our rates.

So we get down 2%.

Jobs gonna be so strong.

Wages are good, you’re seeing productivity come back.

I’m so, and he’s actually saying we’re probably gonna continue to raise.

I’m just saying based on the recent data, why I’m seeing, it’s crazy because even when you get back to China and you listen to Kyle Bass, I’m gonna try to get him on this podcast because he was talking about how you know, she listened to what he’s saying and what he’s doing also, I was surprised that she was supposed to attend the Brix conference, canceled last minute.

Nobody knows why.

Uh, which was interesting.

But when they asked on Squawk box, should they invest in China since again that growth is gonna come back and China’s gonna be great and that economy’s gonna be fine.

So we said, he said, let me put it this way here, the best analogies I’ve ever seen, ’cause China’s G D P rose over 500% in the last 15 years.

Yet if you’ve invested in their primary index RS P hundred, which is the Shenzhen Shanghai 300 index, you’re down 31% over the same timeframe over those 15 years.

Think about that.

If you compare to the us, the US grew regrow our economy by 70% over the same timeframe and S P 500 is up over 300% including dividends.

Why? Because we have trust in our markets.

We have government oversight rules, regulations that are in place.

We believe in numbers.

You have to sign off on them in China even he said, where’s all the money go? It doesn’t go to the Westerners.

How are we benefiting from investing in China? You can invest in companies here that have exposure to China, that’s fine, but investing directly in China company, why? Like where’s all that money going? It’s going to the party, it’s going to politics.

It’s not going into your hands.

The shareholders know.

But how can you have accounted with A G D P grew 500%, but your major index, right? Your primary index is down 31% over that same timeframe.

Think about that.

You wanna invest in China based on that.

Good luck because I could tell you the next 15 years there’s no effing way did that growing G D P by 500% or even a hundred percent for that matter.

So where do you think those returns are gonna go? That’s why you have to be careful of China when you’re dealing with a communist nation.

It’s for the party.

That’s what you deal with.

That’s why the US is the best place to invest.

Why the dollar is so strong.

But yeah, we see the dollarization and a lot of countries trying to weed themselves off the dollar because the us, they don’t want the US to control everything they do through the SWIFT system.

And they wanna be able to trade in dollars, whether it’s oil or different things in India and Latin America and different things in case that happens.

And that’s why they’re testing the waters.

And that’s why you’re seeing the global share of the US when it comes to dollars decline.

And it’s down significantly.

It’s down 8% alone in 2022.

So that’s China, that’s Europe.

You see in higher rates hurt them and still inflation in some areas.

But we’re seeing the banks roll over, right? More downgrades are expected from the credit agencies.

Also, tighter regulations are coming Oil.

I mean you could say the stocks topped a little bit for the moment.

You had a lot of momentum there.

I still think oil’s gonna go higher.

Tech is terrible.

Again, you’ve seen those exports outta Taiwan, which are terrible.

I mean outside of Nvidia Tech has been been horrible.

And then you say, okay, well it’s time to get into the safe names.

No, you got Annihilate, Kellogg’s, Colgate, Verizon, u p s, which just, you know, getting a little bit of momentum now.

They solved their little striking.

You’ll get Citigroup, British American tobacco, so-called safe stocks are trading the three year lows now, well three year lows, these are the names you go into.

Oh I got the dividend.

Well I don’t need the dividend now I don’t need your two and a half, So now I’m buying Colgate based on your company and growing your company and Verizon growing earnings and sales.

And they’re not doing that.

That dividend was that sweetener.

Hey, I can get in 0% rates.

At least I’m getting 3% dividend.

That’s cool.

I love that.

Forget about that.

If you’re looking at the buyback yield compared to the dividend yield, more companies are buying back their stock now.

And as an investor you want that.

You’re gonna get more out of your money.

You get much, much better returns.

SS and P has a study on this going back to 20 years, showing companies that buy back their stock outpace dividends by a lot.

Okay, we doing a promotion on this and we started recommending a lot of companies buying back a large percentage of their float.

That’s what you wanna see because the dividend’s kind of meaningless when hell, well we got 3% dividend.

Well I get 5% risk free.

I don’t need your yield.

I need your company to kick ass and grow.

That’s what I need right now.

And you’re not seeing that.

I mean we thought earnings season, eh, mostly over and now we got the latest batch of earnings.

Yesterday was Macy’s s**t, the Be Dick’s Sporting Goods down 30% plus credit to Daniel.

I told him to sell that stock and he did.

We were going back and forth.

He’s like, I wanna sell.

He said, all right, it’s cool.

And, and yeah, he made the decision to sell and that’s not got crushed and we took a nice gain on it.

So you know, he’s been doing good.

He’s not gonna be here tomorrow by the way.

So I can talk positive about him.

I don’t wanna talk positive about him who’s here, but good job.

Amen.

But look what happened to sporting good and they’re mentioning theft and all this crap.

I’ll cover that tomorrow.

Got annihilated today.

What was it? Peloton Footlocker.

Holy cow.

Destroyed.

But what are you seeing now? You’re seeing companies.

You could only cut costs so much and yes, these companies did a great job cutting cost session inventory.

But at the end of the day you need to see some kind of demand come back into the market.

And we’re not seeing it in many areas.

Especially heres like Footlocker, Dick’s Sporting Goods, Nike Down what, nine straight days.

But look at the companies that focus on the younger demographic because these are the ones that now have to pay student loan debt.

Again, you turn that back on and they’re sending on massive amounts of credit card debt where rates are now at all time highs.

You wanna talk about eliminated consumer from the market and that’s a big consumer.

That’s a big demographic.

But you’re seeing it again, this is what higher rates does to this market.

This isn’t just something that happened and it’s, you know, a one-timer.

It’s a hurricane that destroyed insurance company.

It’s not a one-timer where, oh okay, this is something that’s in the market, it’s gonna be here for a while.

High interest rates, they’re not gonna go away for a while.

Fed’s not gonna lower.

Maybe they lower next year, may, whatever.

But even though they start lowering, that’s when the market, if they start lowering watch out.

’cause that’s telling you that the economy is not doing well.

That’s why they’re lowering.

They’re not gonna lower, but they should stop.

’cause what you’re seeing out of earnings right now and how crazy, it’s the reason why I tell you, Moneyflow Trader has done s**t the first six months of the year.

But man, if you get a name like this or a sector like this, that just s***s the bed.

This is where you make a fortune by buying long-dated puts, just protecting a small part of your portfolio.

You need to do that now.

It’s very, very dangerous.

I’m warning you about this for the past couple of months.

’cause higher rates, it’s this never ending drag that keeps getting worse and worse.

And it’s starting to filter into the housing market now where for the first time in history, for the first time in history, listen to this.

A new home costs less than an existing home based on a meeting and selling price of a US single family home using new home prices supposed to be much more expensive.

But home builders got smart and said, you know what? Let’s start creating smaller homes, not these big mansions and stuff like that and sell them.

So this means if you have an existing house, good luck selling it.

You’re not gonna be able to, since you could buy a new home for basically the same price or maybe a tiny bit cheaper right now.

And this happened to me, I’m giving you firsthand experience.

I mean my mom moved to the villages in Florida.

I bought her a house here, paid about 2 25 for it.

Market went crazy, went all the way up, it went over 400,000.

I tried to sell it for 4 25 last year.

Then the market started pulling back a little bit.

I said lemme go to like four 15.

And then my real estate agent is very familiar with the area.

He said, look, you’re gonna have to go lower.

He goes, go to 3 75 and sell it.

And I was like, yeah, I don’t wanna go that way.

He goes, you have to go that low.

Why? Because they’re building a massive home complex, which is close to 95, right where I am, where the average price for a new home was under $400,000.

I’m competing with brand new homes.

I have to come below that price.

So existing homes have to come down or you’re not gonna sell them.

So I had to lower the price and we sold it.

I have my other house, my existing house on the island.

I’m not even getting anyone to look at it.

And that was the hottest market you could ever see, could ever see because ho new homes aren’t allowed to be built on it because it’s, you know, they say it’s an island, it’s like 11 miles wide or it’s you know, a million island.

But still that market, even here in Florida, lower taxes safer, better when the prime areas, you starting to see a slowdown now.

But if you have the choice to buy an existing home to save Also, how many homeowners can buy a new home without having to sell their existing one? I dunno what the percentage is, but I, not many, but I could tell you they’re never gonna be able to sell their existing home within maybe a two month period, a three month period.

’cause you’ll look at another home, then you put a bid on it and say, okay, I’m gonna have to sell this house first.

That deal’s not going through.

If you’re a real estate agent and say just find another buyer ’cause you’re not gonna be able to sell your house rates are too high, you’re not gonna be able to sell it.

And unless you really discount it significantly.

But that’s gonna be hard to do.

You know, some people just want more money for their house and think it’s worth a lot more.

But how do you do that? How do you sell your house right now to a new buyer at these rates? I mean skyrocketing rates, well over 7% mortgage rates.

How? How do you sell that house to them and expect that buyer to get approved and everything okay with title lending standards? And then you have to close that out and then you’re gotta be able to buy that home that you put a bid on.

That’s usually the way it works.

Good luck.

How are you gonna sell your house? When I look at these statistics and what’s going on, it tells me the housing market has to come down sharply.

The home builders are okay because they’re building new homes at cheaper prices and they’re seeing demand for that.

But existing home sales is becoming a dead market.

And remember, housing is the biggest driver of economic growth in the US and most countries outside of the government.

You know, constantly every year, which they said they were gonna stop last year, which is why the market took off the first six months.

All because of the 6 trillion coming into the market.

Again, trillions and trillions and trillions and trillions continue to come into market and now higher rates, quantitative tightening get this constant drag.

So what does all this mean? It means buckle up.

It’s gonna get a lot more difficult out there.

The good news is you have the companies like Dick’s, sporting Goods, others, they could lose 30% of their market value, market cap in a day.

And maybe these names have further go down.

That’s okay.

That’s the adjustment you need to see.

Companies like this should not be trading.

Many companies should not be trading near all time highs.

And we’re all for those in the past couple of weeks.

You know, August hasn’t been a good month, but July was pretty good and a lot of people got wrecked ’cause people tried to shorten July, a lot of hedge funds and they were on the wrong side and July was a great month.

So maybe these names come down further, but that’s when you wanna buy assets when they’re cheap.

And we’re in a market where rates surged earnings have not grown year over year for three straight quarters.

Earnings recession and stocks training at all time highs.

I mean something had to break and now it started.

But the positive side is if you’re prepare right, it’s an amazing opportunity to buy great companies at dirt cheap prices.

And that’s how you invest.

Because markets like this don’t come round often.

You don’t make a fortune by buying companies within a bull market.

You make ’em by buying ’em when the market sells off and crashes and you have this disconnect between the price and the stock.

Something like PayPal, it’s hard to find a company right now that’s growing faster than PayPal.

I’ve never owned it.

I people tell me to own it.

300, 200.

Now it’s down to a level where it’s trading much cheaper than the overall market.

Growing two, three times faster than the overall market earnings are gonna explode higher.

Everybody hates.

It’s totally out of favor.

You can only buy PayPal in a market like this that’s totally annihilated at that current price.

What it’s expected to grow earnings and sales much, much faster than the overall market.

It’s been a s**t show for that company.

If you own it, I’m sorry.

Now PayPal’s really good buy.

That’s what happens.

So you’re gonna see separation between the best and the worst in each industry.

Not industries going up together and Nike’s down nine straight days.

You know, Walmart, McDonald’s are doing great.

Kind of put those in the same category.

You look at Abercrombie reported last night, saw a 30% decline in inventory.

Stock is surging today.

So not everything is disaster, but you need to be in the right names and in the right industries, it’s more relevant now than maybe it’s been in the past 10 years because you could have been in the wrong name and with 0% interest rates you could still do okay, you’re gonna get annihilated.

And a lot of people who made money in the first six months are getting annihilated right now.

’cause those are the names that are getting hit the hardest.

I’m gonna share a lot of those names in industries.

Tomorrow’s Wall Street Unplugged Premium podcasts.

And one last note, I wanna thank all the new K one members that came in.

I present that with amazing private placement opportunity to biotech that’s about to disrupt a hundred billion dollar a year market.

A hundred billion dollar a year.

Yes.

Which is the size of ai.

Uh, and not by treating autoimmune diseases, but actually providing a near cure.

I’m not joking.

Okay? I said that leading up to the special call that we had with the CEO last night at 8:00 PM it was open Zizi one members and a few other investors, right? So you know, people like a cure, that’s b******t or whatever.

I think every Curzio one member who listened to that call last night, and that was at eight pmm, which CEO e’s responsible bringing 34 drugs to market, talked about 25 minutes about this new drug and why change the landscape of medicine? It was really, really exciting.

Seriously, I don’t make any money from these companies.

You’re just investing alongside to me, I’m putting 50, putting $50,000 into this.

You know, Curzio one, as you know, is our elite membership where you get all of our products and services free forever, right? You look at charge a small maintenance fee and it’s worth it because if you have, you know, products that you gotta Andy up again and again and again in two, three years, we easily pay that.

That’s not the biggest value.

The biggest value is getting into deals like this.

It’s a special private placement.

Uh, we’re coming in a $50 million valuation where its signature drug showed 85% efficacy and no safety issues in its phase one B study.

And when you compare it using that technology to a similar drug, again, that uses that same technology, which is not targeting the immune system, but targeting the disease.

Everything out there here, Humira and everything, they target the immune system.

A lowers the immune system.

And if you come off Humira, good luck.

Your symptoms are gonna get much, much worse, right? And the more you you take the lower your immune system goes, meaning the more safety issues you have, this is targeting the disease.

It’s different.

And there’s another company, similar technology and this company we’re investing a $50 million valuation, has almost double the efficacy of this other company that just passes phase two trial.

And once it passes phase two, two trial, not f d a approval here, as soon as it passed phase two, one of the largest pharmaceutical companies came and bought them up for which are gonna be done by the end of 2024 with this name.

We’re coming at a $50 million valuation.

This company’s gonna be worth more than 2 billion.

And this acquisition took place in December.

It didn’t take place pre COVID or when, you know, biotech was red hot in 20 20, 20 21.

It just took place.

That’s the market for this type of drug right now.

And these are the ideas that open to Curzio one members.

If you still have a few spots left, if you’re interested in coming in again into high priced, our highest, most expensive product, it’s a great group of people.

Uh, we only open this up probably every six to nine months.

Uh, I open it up because of this opportunity and it’s a great opportunity for people to get in.

There’s a first private placement, unfortunately, you have to be a credit investor, be a credit investor.

And on a lot of our subscriptions and services, you know, all those current subscriptions that you subscribe to, you’re allowed to take that amount off your Curzio One membership.

We send out a couple of emails, just a few people, who use a request that hey, I, you know, put me on a list for Curzio one.

If you wanna see that, let me know, but let me know quickly because you have about another week, week and a half to invest in this.

And that’s it to closing it.

And we only have a few spots left because I think we’re gonna go up over a million dollars in Curzio one investors of how much money Curzio One and me are investing in this name.

Again, I don’t get paid by the company, I don’t make any of ’em come in the same exact terms as you.

You’re just following me.

Are the things that I invest in special ideas like this that come across my plate because of you? I have so many listeners to this podcast.

We have a massive network and it gives us access to really special ideas in a company like this that I’m really, really excited about based on risk reward.

It’s one of the best names that we invest in a private placement.

And, encourage you one and you’ll see that because I have access to the call, which was last night.

If anyone wants to see that call before they decide to come into cur one, I could share it with you.

You can’t get an Alicia Zi one member.

Just lemme know frank@curzioresearch.com.

And thanks because we did get, a few people coming into Curzio One, which is our premium membership.

And again, those are the people you guys that drive us to help us launch new products to help our business grow.

And I just wanna say, I really appreciate that and your trust.

Really, really cool.

Uh, so guys, tomorrow, Wall Street Unplugged Premium.

I’m gonna break down some sectors and stocks, you know, that I do like in this market that you should be in because allocation matters.

It matters where you’re going to be, where you can position yourself because if you position yourself in the wrong place, you’re gonna see these massive losses on these stocks that you’re seeing.

And it’s a dangerous market and you have to be careful.

But it’s gonna open up opportunities.

I’ll share a lot of those things, opportunities and stocks and different things that have a new recommendation for you tomorrow.

And that’s gonna be on Wall Street Unplugged’s Premium podcast.

I’ll see you guys at Take Care.

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

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