It’s crazy here in Florida as Hurricane Idalia just made landfall—and it seems like some people are preparing for the apocalypse. Stay safe out there, my fellow Floridians.
Bitcoin rallied over 5% on Tuesday following a win in court for asset manager Grayscale Investments vs. the SEC. The SEC had denied Grayscale’s application to convert its Bitcoin trust into a Bitcoin ETF… but the judge ruled the SEC’s decision was “unlawful.” I break down the ruling… why it’s super bullish for crypto… and why a Bitcoin ETF would be the beginning of a new era for digital assets.
In fact, the smart money is already investing in the latest evolution of digital assets: tokenization. I explain how tokenization works… why it benefits businesses AND investors… and why BlackRock CEO Larry Fink calls it “the next generation for markets.”
The bottom line: Crypto is here to stay. In fact, it’s one of the best risk/reward opportunities I’ve ever seen. And every investor needs exposure to this growth sector.
Best Buy (BBY) recently reported earnings that beat analysts’ expectations. I go through the results and highlight what sets it apart from other retailers… and why it’s primed for long-term success, even as consumers struggle with rising prices.
As we head into September—historically the worst month of the year for stocks—the market is searching for a new catalyst. But despite the uncertainty (and high valuations), there are still plenty of opportunities in the market. Tune in to tomorrow’s WSU Premium, where Daniel and I will highlight which sectors we like right now (and reveal a new Dollar Stock Club pick).
- Hurricane Idalia makes landfall [0:32]
- A huge legal victory for the crypto industry [8:30]
- Crypto: The best risk/reward setup I’ve ever seen [12:35]
- Tokenization will be the next generation of crypto [15:40]
- What sets BBY apart from other retailers [18:05]
- Don’t miss tomorrow’s WSU Premium [31:23]
Wall Street Unplugged | 1069
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 30th.
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.
So happy hurricane day.
So if you live in Florida, if you don’t live in Florida, hurricanes are like culture here.
Mean similar to throwing babies from a 50 story tower in solid poor village in India and people holding a blanket to catch them.
Just believed to give their children good luck and a healthy life.
Talk about a zero sum game.
If your baby makes it, it’s probably gonna be healthy if they miss and don’t catch it.
It’s probably not, but that’s actually true.
You look it up anyway.
In Florida comes to hurricanes, it, it gets a little crazy here.
Once we see it come in, its preparation time.
We usually know probably five days out it’s probably gonna hit Florida.
It looks like they have.
And then they did the cones and then all the models and then you see it all over the place.
As we get closer, it gets really interesting, right? Say like two days.
When we’re two days out, we know what category it’s going to be when it hits land, where it’s likely going to hit, but a cone, right? It’s just maybe a little off to the left to the right.
Our hurricanes, they last for a day, maybe two.
And this one’s hitting us today on Wednesday.
And it’s expect to be gone in a day.
You may lose electricity for a few hours, so having a generator smart see lines at Home Depot, but you really don’t lose electricity for a long time.
Now, I’ve been through a bunch of hurricanes since 2013.
Two or three of ’em were pretty big.
I think one time we lost electricity.
Most of the time it’s for a few hours.
I think once it was for like two days.
But usually it’s a few hours, especially, you know, as long as we’re not talking about a category five and it’s craziness, right? These are category twos and threes, which, you know, again, which is expected to hit.
But as hurricane approaches, people go into like this panic mode, they start running to the grocery stores and they pile up on everything to the food, water, meat cases and cases and cases.
Not like, oh, let’s just repair.
I mean, it is as, it’s like a nuclear missile is heading to Florida and you’re gonna be in a bunker for a month.
I mean, there’s long lines in stores, it’s craziness and it’s not that bad this time, which makes me think maybe this hurricane again hasn’t hit us yet.
It’s gonna hit us maybe a little worse than expected this time around, but it’s insane.
It’s like a frenzy.
Yeah, people fill up their gas tanks, which, you know, I, I guess I understand you don’t wanna be on empty, but you don’t have to be on full.
And you have these long lines for gases.
You know, the storm they think it’s gonna be here for for weeks, but again, it blows in one day, blows out.
I mean, if a bunch of trees fall, you can’t drive over the trees anyway, so that’s meaningless.
And even if they do, it’s not like you, you, you’re in the keys expecting a, a category five with 140 mile an hour winds.
You don’t need to top off your gas tank and then also fill up like three gas cans and put ’em in.
You know, it’s like just craziness here.
And normally during hurricanes, everyone inside of Florida and outside of Florida kinda watches the Weather Channel.
And you have these experts like Jim Ken Tory, whom my wife loves by the way.
He always goes into the craziest parts of the hurricane.
A quick story about Jim Ken Tory, by the way, ’cause my wife really loves him.
And every time I watch Tiger Woods, I love watching Tiger Woods.
I’m a big Tiger Woods fan.
Love watching him play golf.
Uh, my always, always says, you know why you watch that whenever I’m watching, he’s over my show.
Why are you watching that guy, that guy, I hate him, cheat on his wife, had all his girlfriends.
He’s such an ass, but she hates Tiger Woods.
I mean, I couldn’t give a s**t about his personal life.
I just love watching people who are the best at things and he’s the best golfer ever.
I don’t care about his personal life.
But Jim Canto, again, who she loves, and I found this story about two years ago, but he left his wife of 16 years, a few years after she was diagnosed with Parkinson’s Disease and then he started dating a pretty young journalist at C N N.
So she mentioned him recently.
I’m like, why do you like that guy? That guy’s such an a*****e.
I can’t believe.
Look what he did to his wife.
That’s messed up.
She’s like, shut up.
Anyway, that’s me and my wife’s relationship.
But getting back to Jim Kit or you, you, you have these big hurricanes and you have, you know, cantor, a few others, they go right in the middle of the storm.
The very worst areas every port from them, right? Makes seem like the hurricane I is a lot worse than it is because they’ll show maybe three of the houses that got hit pretty hard of the the craziest wind tunnels and they’re walking.
They can’t even walk.
It’s the most windy areas.
I dunno if you remember when, when there was people in a canoe paddling, and I think it was on C n N, they showed a few years of how bad it is.
I dunno, I forgot what hurricane it was even whatever it was.
Uh, what, and the reporter was talking while, was reporter talking, telling you how bad it was.
It was someone that walked by, like walked next to the canoe and, and right behind the reporter and you saw the water was like less than Kneehigh and everybody, I mean I think they got a lot of s**t for that.
That was a weather channel.
But when you look at hurricanes, it’s like this big entertainment factor because you have fear unknowingness, you know the visuals and what’s gonna happen.
And you know, you have cantone and, and the crew reporting from the front lines and they say, yeah, we do this coast with professionals.
Everybody should be off the streets.
Like being professional in this field, helps you determine when a 50 foot tree is gonna split in half and then go flying through your skull.
I guess there’s a class that teaches you that.
This guys get a little crazy sometimes.
But hurricanes, while common in Florida, there’s a lot of craziness that goes behind the scenes that I’m sure a lot of people that don’t live in Florida know about.
Uh, most of the time we’re cool.
The Sandis has done a fantastic job when it comes to preparedness and getting everything ready and making sure everything’s cool and closing places.
I mean, there was hurricanes here and I live in Amelia Island that they, they, they came out and said, listen, you have until 12:00 PM to leave.
Not this hurricane.
Well the one, the bad ones, you have the 12:00 PM to leave the island.
If you don’t, nobody’s coming to rescue you.
We’re not risking anyone.
I mean, that’s pretty cool and pretty crazy, right? Like we gave you plenty of time to get outta there.
We told you three days ago, if you’re not outta there and you call 9 1 1 or whatever, we’re not coming to get you so they don’t mess around, right? So there’s no, you know, not it’s hitting Tampa.
It’s gonna be a little craziness.
Uh, I know that they’re expecting a cat three by the time it hits land.
Big storm surges, around Tampa Gulf of Mexico and stuff like that.
I know everyone’s watching a couple questions and, and concerns about it, but, where it’s gonna hit us, it’s gonna be probably about 60 mile an hour winds, which is pretty crazy.
I mean, I taped some of these hurricanes and, and 60 miles an hour, you don’t realize how crazy 60 mile an hour.
That’s why a hundred, 120 is insane.
But I’m praying for everyone to be safe.
A lot, A lot of people could be watching on tv.
Hopefully if electricity goes out, it’s not out for long.
Uh, and if it is from our perspective, just from logistics, you know, we’ll see Wall Street Unplugged Premium, we usually tape, on, on Thursday.
We might push to Friday.
We’ll see in terms of, you know, what’s going on here.
But just thoughts and prayers go out to everyone.
There’s gonna be a little craziness.
Again, it’s not supposed to be as bad and hit category three, but sometimes you really don’t know.
Uh, and I’m just hoping everybody’s safe and everybody is okay.
But yeah, the whole hurricane thing, I’m getting used to it.
’cause I call myself Floridian now in 13 years and you know, most of the time it’s a little more crazy than it leads on to be and what you’ve seen on tv.
And hopefully that is the case this time.
Although I did go shopping last night to get our normal shopping stuff and I realized like, oh man, it’s gonna be crowded and everything’s gonna be out.
It was crowded, it was in Jacksonville.
It was definitely crowded, but they had a lot of stuff in.
And I heard it wasn’t too bad on the island either, which I don’t know, again, makes me a little nervous ’cause usually everything is out outta stock and everybody’s going crazy.
The fact that they’re not, I’m hoping that doesn’t mean that it’s gonna be worse than it is, but we’ll see.
We report accordingly and I hope everybody stays safe out there.
Let’s get to the markets.
Few big stories.
The first is Bitcoin, right? The appellate court side with gray scale.
That was in a lawsuit against the S e c, against the SECguys, where the SECdenied gray scale’s applications to converge.
Bitcoin trusted into an E T F and the decline it because it was political, right? Politically motivated.
But now at the court’s side of a gray scale, there’s all but assures that Bitcoin ETFs are coming and they’re probably gonna come sooner than expected.
Now why is this a big deal? You have Fidelity, BlackRock, arc, Invesco WisdomTree when you talk about management firms with trillions of assets of management, all filing to launch their own Bitcoin ETFs.
And if you look at the news, Bitcoin surged over 7%.
This happened on Tuesday being all crypto related companies.
High been the stock market, Coinbase, everything surged.
It’s about freaking time considering it’s been a really dead market for a few months now.
Very exciting for a while.
And for us, as you know, we’re, we’re expecting this news and these approvals.
I said it’s a great time to come into our Crypto Intelligence newsletter, which got its ass kicked like everything else in crypto we did unbelievably before that.
But it’s been a bad 1218 months.
F T X 2022 is a nightmare.
Came back a little bit in 2023.
You could say that for Bitcoin and Ethereum, but not so much for the top 50 or so cryptos, which are good names, good technologies still down 70% plus from their highs.
And now’s the time.
Now’s a great time to get in with a lot of good stuff going on.
But this is significant news ’cause Bitcoin, ETFs guys, it’s just the beginning.
I mean you’re looking at Grayscale, ProShares, Bitwise and VanEck.
These are just a few large asset managers who filed for Ethereum ETFs, which you don’t hear about often.
It’s always Bitcoin ETFs.
And once these start to get approved, it’s gonna lead to active crypto ETFs, passive crypto ETFs, gaming, crypto ETFs, defi, crypto ETFs, smart beta ETFs, blah blah blah.
Keep going and going.
That’s why it’s a big deal.
’cause if you really look at the E T F evolution over the past 20 years and the impact it’s had to the overall markets, I mean the numbers are incredible.
And just the last 10 years we had 2300 ETFs.
Now we have 5,700 can have an E T F for like anything.
A leverage robotics, AI with whatever.
I mean there’s an E T F for everything.
Every single thing.
If you looking at assets that went from 1.
2 trillion in 2010 to 6.
7 trillion today, and it was over 7000000000007.
5 I believe last year.
The market’s come down, this is across US and Europe, but they made close to 40% of the total US equity volume last year.
That’s how big this is.
And that’s what crypto’s about.
What are people worried about? Well, I don’t feel like open up a wallet.
I gotta worry about everything.
I mean this comes on top of Coinbase just being one of the first institutions where they’re gonna allow custody, which is huge.
These are the necessary steps that have to be taken in order for crypto to thrive and making it easier.
Fidelity launching their platform with Paradigm Citadel and Schwab.
Schwab and Fidelity alone.
Not all of ’em are gonna buy crypto.
But now you see the liquidity there.
You make it easier for people where they can go to their brokerage firm and it’s very easy to purchase this stuff now or through their ETFs and have an allocation.
And people want it.
They want it and they should want it.
Crypto is here to stay.
I keep telling everybody, listen for 30 years, I mean mostly small caps throughout my whole entire career managing risk.
You’re not gonna see a better setup in any sector when it comes to risk reward or better opportunities in crypto.
Could you lose your money? Absolutely.
But the reward is someplace where you can get 50 x a hundred x a thousand x.
And this isn’t cherry picking like a Microsoft from, you know, 25 years ago.
This is like the top 60, 70 tokens.
Look at their performance from when they started in a five year period and when they peaked.
This is like the whole in this is this industry is still in its infancy.
The technologies, the tokenization is a reason why every bank is launching their own blockchain.
So they’re gonna tokenize their assets.
Why would you tokenize assets? Well, there’s 16 trillion worth of illiquid assets.
That’s bonds, that’s real estate.
And imagine tokenizing them.
Now you make them liquid.
You could sell off pieces to individual investors or institutions and make it easy.
’cause the blockchains are gonna talk to each other.
And there’s companies that are doing that within crypto to make that easy without forming bridges and worrying about getting hacked and things like that.
And that’s what SPACs wall about, right? You guys should know that by now.
It’s just a matter.
SPACs was so big because hey, it allows the insiders and these private companies to go to the shell company, make ’em private.
Instead of waiting seven to 10 years for a liquidity period, now you have a couple months do these pipe deals, all the insiders get out.
You can only do that in a bull market where you could b******t the retail investor and come out with these insane valuations and allow the insiders to get out.
That’s a s****y way of doing it.
But what if there’s a legit way of doing it? I mean they did it where they inflated the valuations.
Now what do you have? You have SPACs down 90% sitting with hundreds of millions of dollars in cash on that balance sheet that they raised at a much, much higher valuation.
And the stock is s**t.
’cause the structure’s garbage, they can’t sell out of it.
There’s not enough volume.
All these guys, 40, even if it’s a dollar now it goes to 30 cents.
They’re still gonna sell 30 cents ’cause they’re gonna make 30 x.
Who cares about the retail investor? But this isn’t about that.
This is about having these assets and it’s important.
You wanna have access to your money.
If you’re in commercial real estate, you own a hundred million dollars in commercial real estate and you’re sitting there, it, it makes sense for you to sell off a piece of that.
Lemme sell 20%.
All right, I’ll get 20 million.
Now the rest of that could trade as a stock or shares, right? It’s tokenized.
Anyone could own commercial real estate.
It’s good for me.
I just got a $20 million check so I’m liquid.
I could buy more commercial real estate and do this and even more.
It’s great for everybody else.
’cause now I could say, hey, this is gonna pay a seven to 8% yield on the, on the rental income that I’m generating.
Now you have access to to, to a great asset that who has access to commercial real estate as a retail investor, a smaller investor, you don’t checks off all the boxes.
Okay? You got more people out there, more liquidity.
That’s more pricing, more competition.
That’s great for pricing.
That’s what you want.
That’s what tokenization is.
But a lot of this is around, this is what we did when the first company you ever tokenize our, our company, been a little slow to develop.
But now Larry Fink, BlackRock just said that’s the next biggest revolution is tokenization.
And he just said this said this a few months ago, that’s the next biggest thing after ETFs.
That’s the next biggest thing.
That’s what he said he should know a little bit.
Forget about the politics and stuff like that.
Guys wonder with powerful people in the world controls almost every major company, right? I mean it’s insane.
The whole e s G thing, wow, everybody jumped on board of that in, in the corporate world.
But all good news for crypto, it’s been, you know, just this crazy period.
But this is an area that everyone should have exposure to and crypto’s here, it’s not going anywhere.
The sc try to stop it again.
Closing crypto banks where there’s no evidence of fraudulent activities like it’s Silver Bank and signature all b******t.
Like I said before, I never saw a better risk reward for an asset class than crypto.
And you can lose your money in it.
But the upside is unbelievable.
That’s why it deserves a place in everyone’s speculative portfolio.
The upside on this stuff is incredible.
And you don’t have that upside in the stock market all the time unless you see a massive crash or unless you’re an insider, you get founder shares.
But most of the time when you’re buying an I P O, it’s coming outta a crazy valuation.
Guys a really crazy valuation.
You might get lucky and maybe five extra money or seven, eight, you’re not gonna get 20 x 50 x you.
These are gains that you don’t see in the stock market.
Believe me, cover 30 years.
I mean they, they, it’s rare.
Well here it’s common to see 50 x games in crypto.
But again, you have to be careful.
If you know what you’re doing, you’re gonna be risking money.
I’m not saying put all your speculative money, but it deserves a place in your portfolio and everyone’s portfolio who are seeking risk.
So I’m happy for grayscale.
It’s a big win for all these companies.
I mean not the Ft XSS and the fraudulent players out there.
If all the guy’s doing the right thing, playing by the rules, talk to the S E C for years and make sure they would be compliant.
And the S E C just turns around and goes against them all of a sudden outta nowhere.
I mean come on with the politics and the b******t.
It’s really good for grayscale, great for the industry, great for crypto.
Second story, it’s Best Buy’s earnings.
I thought that was a big deal.
They reported on Tuesday.
The stock popped 5% or so.
But Best Buy Best Buys is just a great company.
I mean it’s well managed.
If you look back in history, a name pure play, electronic retails, almost every single one has gone bankrupt.
Every one of them.
Comp U Ss a crazy Eddie Radio Shack, circuit City, computer City, tweeter The Wiz.
Remember all those shops? Holy cow.
None of those guys could get it right.
Best Buy got it right.
Instead of fighting, remember the whole big box retail on onlines killing them in pricing and stuff like that.
They partnered with Amazon, sat down both CEOs and said, Hey, let’s do this for our businesses is better.
It’s like Amazon’s hardware to a lot of these to to consumers and retailers.
It makes sense.
Creating Geek Squad, which is a super high margin business.
A lot of people, it’s hard to put a, you know how difficult it’s, but a flat screen TV on wall, I mean it’s not difficult.
But if you do it wrong, you’re done.
Things falling off the wall now you gotta pay for a new tv, the wall’s gonna cost you a lot of money.
You gotta sheet rock the whole thing up again.
And you wanna get that done professionally and professionally with the wires where you don’t see them and everything.
And then not only that, more importantly I would say 95% of people set up their TVs wrong in terms of the specs and the distance away and the sound surround sound and how far that is.
That’s, that’s an art that’s not easy to do.
Making sure they’ll look at the brightness of your room, what room is in every room has different brightness.
Of course when you go to Best Buy, it’s eight k, beautiful.
But that’s on something that’s an eight k shot.
And notice that that TV’s gonna be in a dark place.
That’s why it looks like that.
That’s not gonna look like that at your house.
And most stuff is not eight K stuff is just barely four K now when you have content.
But they’re able to do all this and look the lighting and put in.
Those guys are really smart.
But great logistics.
They started price matching a while ago and just, always on the ball and listen, you know, it hasn’t been roses.
I mean earnings per share fell by 20%.
Sales down 7%.
But they beat the numbers.
They beat on earnings, also beat on margins.
Stock popped about 5%.
It was like $77 but it was down 10% over the past three weeks or so heading into this quarter.
I think it was around 85 or so.
So expectations were kind of low.
And I don’t blame them when you see some of these retailers getting annihilated like Dick’s boying, good downs, 30% foot locker getting smoked also down 30, 35%.
I mean you can’t blame people going, wow, you know, I’m know, I’m looking at Taiwan.
Freaking exports are down 30%, 25%.
You go into Best Buys now you’re not seeing a lot of traffic in there.
I’ve been in there past couple weeks, few times and it’s al also hard to find somebody that’s working there.
It’s gonna help you is not as many people.
So they’re cutting costs, which guess they need to do.
But still, despite all that, a dollar 22 in earnings, 16 cents better than expected, 9.
6 billion in sales, holy s**t for the quarter.
I mean that’s pretty good.
Also issued inline guidance, which everybody, you know, that’s the measure.
If you’re lowering guidance, you’re gonna get nailed in this environment.
I mean even if you report strong guidance now, I mean stocks are so inflated.
A lot of those names haven’t gone up.
They went up a little bit and then came back down like Nvidia actually had a good day on Tuesday.
And you’re looking at all these results from Best Buy in an environment where consumer spending electronics is down.
You look at it.
What headsets? I mean who’s buying you know, mobile phones? Who’s buying TVs? Smart home devices with housing PCs? Holy cow.
Clearly slowing Good management team, good results.
Good, good stock that doesn’t translate over into every business.
We have five below reporting tonight.
I’m just to see what they say.
That’s the ultimate consumer discretionary stock.
I mean everything they sell in there is completely useless, but they do.
It kind of reminds me of Snapchat, like after you send the person a text and read it, it disappears.
That it’s kinda like what you buy something five below the value is, is gone the second you walk out the store.
But people buy stuff.
My daughters buy stuff in there.
I’m like, oh, here we go.
And they, they made it work good for them.
I’m not, you know, I’m not making, I’m making fun of it, but still, hey, they make it work and people, but you know, nothing in there is a necessity.
You know, there’s nothing in nothing in there that’s a necessity.
Nothing, nothing but good for them.
That models work.
But I wanna see not really what the report, more importantly what they say about the state of the consumer.
’cause that demographic that goes in there and, and you know, maybe it’s a little bit younger, but the demographic is very, they’re very big spenders between, if you’re looking at 20 year olds to to 30 year olds, again, I don’t wanna put it in Gen Z Gen, whatever, I’m saying that that’s a, a grip that they spend a lot of money even if you go up to like 35 years old.
But remember, student loans gonna have to start paying that.
And I think there was a survey that came out 60, 65%, like can’t afford to pay that right now for three years it was paused.
So what does that mean? A lot of bills, credit cards, they’re looking at credit cards in that demographic.
Did you see it? I mean holy cow delinquencies higher than they were in You’re looking at rates higher than they’ve ever abandoned record highs for credit cards.
I mean you’re taking that group and taking them out of the spending, right? The, the, the, the US spending circle that total addressable market and those, those guys are gonna get hurt a ton.
And there’s a lot of businesses and that’s the foot lockers, right? That goes right into the foot lockers.
It, there’s a lot of different businesses.
You have to be very, very careful at retail.
And those guys are significantly cutting back.
It’s much different from that demographic than you’re looking from 35 to say 50 who are doing okay, they still have some money, they’re spending a little bit even in the high, even in China, if you look at China, I mean it’s not a big demographic, but the high end is doing okay.
It’s, it’s back to pre pandemic levels.
Everything else is s**t.
But it’s certain demographics.
But now you have to look at companies that fit inside these demographics.
’cause there’s a big difference between a 25 year old compared to the 40 year old, 45 year old.
There’s a big difference in spending.
And that filters down to a lot of different companies.
So now I made fun of them.
I made fun of five below.
You know, the stock’s gonna pop like 40% tomorrow, right? My face funny, I hope it does.
But shareholders really nothing against them.
But we also got some interesting names reporting later in the week, right? Campbell Soup Hormel.
See how those guys do usually in the safe environment.
Those are better names.
The safer names have done terribly tight.
Machinery is reporting.
I like to see report on those guys.
Broadcom, Dell, Lululemon.
Lulu is one of the greatest brands in the world.
They could take yoga pants and punch holes in them with a whole puncher and someone’s gonna pay a hundred bucks for it.
They’ll sell it for a hundred.
That, that, that brand is like unbelievable, unbelievable.
People just gonna spend and spend and spend every time I go to.
My girls love it, people online all the time.
I mean it, it’s really is a great, great company and a loyal brand.
See what they have to say.
I dunno if that’s a good gauge of the state of the consumer.
’cause man I think it, it’s like tattoos in Florida.
It’s like people will will use the last $150 they have to go get a tattoo.
So I don’t have, it’s a good gauge of spending ’cause they’re gonna spend on that no matter what.
But I’m interested to see that report.
High expectations going in.
But outside of that, what period are we in? Because earning season relatively over Jackson Hole is done.
Powell at his peace more hikes lightly.
We likely we still see a little inflation in the markets.
My question’s, what’s gonna drive stocks higher from here? You need catalyst because we’re at a high valuation.
You need catalyst to drive it higher.
If you don’t have catalyst, it’s probably gonna, if you’re cheap, maybe you know you go a little bit higher and whatever.
But when you’re, we’re trading at a very expensive valuation, consider where interest rates are and consider that earnings aren’t growing year over year.
The down 4.
5% year over year this quarter.
Third trade, quarter of negative earnings growth.
You need catalyst, is it gonna be China? They tried lowering rates, lower taxes on trades, giving country guard a 40 day grace period for upcoming bond maturities.
I dunno if you’ve read that.
It worked for like a minute.
Mean stocks popped and then you know, they sold off a little bit.
There’s a lot going on in China guys when reporting to you for, I mean you’re looking at across the board ETFs markets are down 10, 12% in August in China.
And we’ve been warned about that for a while guys, you should have been ahead of that.
Still see a lot of pain ahead.
Let’s see, but the risk separation, my cow’s probably gonna do okay, people are gonna gamble no matter what.
The high end isn’t as bad.
It doesn’t mean everything.
China’s terrible but most of it is.
But are we gonna see growth from there? I don’t know.
We’re gonna see from Europe where just said that you know, Eurozone Europe, look at the raise rates further control inflation.
So trading levels s b trading around is 50 day, which everyone is watching right now.
And then we’re heading to September, which is the worst month for stocks historically.
And this is data going back 75 years.
Interesting facts here.
So in September we post negative returns 56% of the time.
And to put that in perspective, September is the only month of the year to average a negative return.
We show positive returns every other month going back in history except for September.
So now you know, September we’re gonna go up 30% ’cause I said that but seriously you’re going into a month and it’s like a lull, right? So we got the holiday weekend coming, there’s not a lot going on in September.
You’re right in between earning season and everyone’s like, oh you know cautious you do have an Apple event coming out but you know, what are they gonna say? I mean do you really need, I mean give it away the 14 for free that you know there’s a company.
That’s why I say yeah just with Apple and everything else, there’s separate, there’s clear separation guys between what’s going on with Meta and Google and those stocks of surging compared to everything else.
Apple’s cashing a little bit of a bid because they’re gonna come out with their whole, you know, presentation and everything and that’s it in a couple weeks and launching their new phone and stuff, their events, that’s fine.
But what a difference.
I mean Tesla, you know, Tesla’s been s**t, Apple’s been selling off Netflix, eh, it’s been okay but not like Meta and Google.
I mean that’s what I’m seeing in this market.
Lots of disconnects when it comes to stocks and valuations.
That’s both sides.
Like some stocks that are really expensive.
That should be like why own Apple and Microsoft here when you could own Nvidia at the same multiple, I mean NVIDIA’s growing earnings, they expected to grow earnings over the next two years by 50% and sales by Apple and Microsoft are barely growing and trading at the same multiple.
You choose what you want.
I mean I think one of two things has to happen.
Either NVIDIA’s gonna take off, which we saw on Tuesday and outperform these guys or Apple and Microsoft are gonna come down a lot.
Maybe Nvidia kind of stays here.
But the, that’s a disconnect to me.
And the reason why it’s trained at the same multiple is ’cause they put up unbelievable earnings second quarter in a row.
So that confirms it.
Couple of things that that people are worried, are worried about where it’s China, big exposure to China, what’s gonna go on politics, something that can’t control also what they saw in sales and the increase of sales.
And this is unusual ’cause usually when you have a massive increase in sales, and this is the biggest increase of sales we’ve ever seen in history the last two quarters.
Seriously it’s, that’s never happened in the history markets by that amount in, in these two quarters, each of those quarters.
We’ve never seen that much of a guide.
Higher quarter of a quarter ever.
But usually when you see that guys, what do you see? Usually see expenses go higher, expenses didn’t go higher.
And not that that’s a red flag, but it means that they really, really up those prices on the chips, which is confirmed by their margins beating estimates.
And when you’re doing that, it’s, you could do that right now because you are the king of the mountain.
You have the chip that everybody wants, but man there’s a lot of competition coming and that’s the reason.
Do I have to pay 70, you know, 70% margins these guys are making, do I have to pay that much? ’cause for Apple, Google, Microsoft, all those guys, big balance sheets.
Hey let’s take 10 billion off the balance sheet of the next 20 whatever, not even 20, well like five years in spending and let’s start building this stuff ’cause this is getting ridiculous right now.
And that’s the old doing, they’re building their own chips.
But so what I’m looking at that company, I see those three, I would say why, you know, how could you own Apple and Microsoft over Nvidia right now? That’s what happens when you have a surge in earnings and their stock price didn’t really go up too much.
It was at five whatever, but still it’s trading at like 29, 20 times forward earnings.
That’s in line with Apple and Microsoft.
I’d rather own Nvidia here than those two based on valuation and growth, which is what drives stocks.
Usually seeing similar examples of disconnects in other sectors, that’s where tomorrow’s new recommendation is gonna come from.
Dan, I gotta break down a few sectors and under the radar stocks that are likely going start getting some attention that’s in Wall Street Unplugged Premium, our premium service, which is $10 a month.
And you also get access to a Dollar Stock Club newsletter where we recommend the stock every single week get lots of compliments on and it’s cool.
And that’s a podcast only available, it’s not on iTunes or anything else.
Get sent to you directly.
And we’re in a process of billing an app almost at that first version right now, which, you know, coming soon hopefully, but right now that gets sent to you and you can listen to it.
That’s an awesome podcast we have.
It’s much, much more detailed, more ideas, stock picks and things like that and really breaking stuff down and, and we go anywhere with that newsletter, even crypto sometimes.
And who knows, that’s where we might go.
Not tomorrow, but maybe next week we’ll see a lot of those sectors.
I mean you look at large cap telecoms, Verizon upgraded by Citi Utilities a little bit catching a bid, right? The Fed stocks is largely underperformed.
Nobody wants them when you have technology going up 30% for the year, but it’s changing.
Even biotech starting to get a little bit in favor, some names.
So a lot going on over the next couple of weeks to be prepared.
We’ll come out with night recommendation, wall stream flood premium tomorrow.
And Dale, I’m gonna break all this down for you in the meantime, enjoy the day in Florida.
Listen, stay safe from the hurricane.
Seriously poking fun at it and a little joking around before and hopefully it’s not as bad.
You know, we on the other side, it’s not gonna hit us as hard, but you know, those floods and storm surges are real, you know, in Tampa and they’re gonna get hit pretty bad.
Hopefully a lot of ’em evacuated and they’re gonna be okay and hopefully the hurricane’s not gonna be too bad and get through this, you know, and be safe.
But seriously be safe with you and your family.
Hopefully everything’s okay.
We’ll see on our end how things are electricity and stuff like that.
So we may have to push Wall Street Unplugged Premium back a day, which is secondary to everything else that I just said.
Uh, but just letting you guys know.
But either way, we’re gonna report to you hopefully tomorrow, if not by Friday.
And I’ll see you guys then.
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