Announcer 00:00

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Daniel Creech

How’s it going out there? It’s Wednesday, July 8, and you’re listening to the Wall Street Unplugged Podcast.

Daniel Creech 00:20

I’m Daniel Creech and I am solo once again today. Have no fear, the one and only Frank Curzio is traveling to beautiful and hot Boca Raton, Florida, attending the Rule Symposium. If you are there, look him up, bug him, interrupt, take him to lunch, have him take you to lunch, catch up, all that good stuff.

Daniel Creech 00:42

I miss being down there; that was an excellent conference last year. I expect it will be another success this year. When I’m in charge, we get to talk about whatever I want to talk about, and I want to talk about oil—uh, oh, peace fires over—talk about the Fed minutes out later today,

Daniel Creech 01:03

and they had better show a family food fight, like Fed Chair Kevin Warsh keeps repeating. Then we’ll talk a little bit about earnings that kicks off next week, and then if Mr. Michael Saylor of strategy deserves any criticism for his recent Bitcoin jargon and actions.

Daniel Creech 01:23

Yes, moving right along. Okay, President Trump overseas, doing their big meetings and all that kind of stuff, and got some market-moving reaction here. Check this out, this is just over on CNBC. Crude oil, WTI, is up about 7.5%.

Daniel Creech 01:43

That’s a year-to-date. Here we’re looking at a year chart, clearly looking like it’s going back to its $80 handle. Just looking at this chart, hopefully we can hit the $80 at most, kind of level out, or even retreat a little bit.

Daniel Creech 01:59

And what I want to talk about here is the markets overall have got to be used to this whole wax-on, wax-off, deal, no deal type situation here with Iran. And looking at FinViz here, just looking at the broader markets, I’m recording this about midday. You can see the Dow’s off 1.5, NASDAQ is down 1,

Daniel Creech 02:18

and the S&P 500 is also down 1. Again, oil spiking over 7%. Typically, what we’ve seen in the past is about Sunday evening before futures come out and start trading around 7 o’clock Eastern Time here, we see some sort of a tweet about, “Hey, we’re not going to bomb them into oblivion,

Daniel Creech 02:37

and we’re making deals and negotiating good.” Now Trump’s tone over overseas is how, “They’re a bunch of liars and, you know, you can’t trust them,” and all this kind of stuff, which should surprise nobody.

Daniel Creech 02:53

Now, I’m not laughing at the heart of the matter in a sense. I’m laughing because you have to take this with a grain of salt. It’s the world we live in, and we can’t control the environment. So just like the Russia-Ukraine war is not funny, the US-Iran war is not funny. The tit-for-tat and back-and-forth is what I’m poking fun at here. Now, markets, while they’re down 1% and oil is spiking,

Daniel Creech 03:12

I would say are taking this in stride because, while we never challenge worse, this could be a lot worse. Now, we have talked about, Frank and I, over the course, and me more so, on this political timeline. And what I want to explain or share with you is why I think Trump is willing to escalate this in the short term.

Daniel Creech 03:32

And this is definitely like a whack-a-mole operation here. Now, anybody that really believed that this deal was going to hold ironclad, you know, “We’re finally going to come to the table and both sides are going to meet,” I think is mistaken. And I don’t know that there was a lot of—I don’t know that there was a high percentage of people thinking that.

Daniel Creech 03:51

And markets, you know, you could say, “Ah, well, they were believing it because of oil.” But let’s talk about oil for a moment. Looking through the Strait of Hormuz, okay, we’ve talked about how it’s significant for oil flows, energy flows, etc., 20% roughly of the oil flows passage through there.

Daniel Creech 04:10

Now, the Strait of Hormuz traffic essentially came to a screeching halt in late February when this operation, excursion, however you want to describe this, started. And there was reports anywhere between hundreds, if not a couple of thousand, of ships from very large crude carriers to all kinds of other ships stranded.

Daniel Creech 04:31

And you have thousands of crewmen on those ships stranded. Now, some of that traffic was eased through either operations and the US Naval escorts.

Daniel Creech 04:43

And then recently, there has been—and I was listening to some other podcasts on macro voices and such—and recently, with this new kind of MOU and this ceasefire up until last night, a lot of that oil at least made its way out from a choke point or from a traffic jam standpoint.

Daniel Creech 05:04

And why is that key? Well, because one of the things that I got wrong on oil spiking was the timeline. So we did some headlines about, “Hey, are you prepared for $150 oil,” etc. And I’m glad that I was wrong on that, but more wrong was my timing on that. And that’s okay. Because when you look at the oil flows,

Daniel Creech 05:24

production routes, and then refineries that I talked a little bit about yesterday to our Alpha subscribers, one of the best things that happened was the Strategic Petroleum Reserves globally release. And that did manage a lot of the pain, let’s say. Now, I’m not ignoring the fact that oil spiked over 100,

Daniel Creech 05:45

and we’ve seen a lot of—there’s going to be a lot of inflationary spikes ripple through the economy and such.

Daniel Creech 05:51

I’m simply saying it’s a good thing, and I’m not giving credit or anybody on their plan here from either Trump or Iran. I’m just simply saying it was good for some of that oil to get stuck out of that log jam traffic jam and be heading to refineries and different destinations. That bought both sides some time, if you look at it that way.

Daniel Creech 06:11

And I do think that you have to play that in to understand why are we escalating this right now. Because I’ve been on record, and I will continue to be there until proven wrong, which is a possibility, that I think you have to have essentially a calmness three months leading up to November.

Daniel Creech 06:28

So you got August, September, and October that I think you really want to have this genie back in the bottle as far as oil prices spiking, gasoline prices, and those inflation expectations and tailwinds kind of shifting through the economy kind of downriver idea, because everything is influenced by the price of oil.

Daniel Creech 06:48

And so I think that Trump does have—again, I could be wrong. I’m simply saying, if I’m trying to think out loud here, I think that Trump views his July calendar as optionality on Iran. And you can kind of go bomb them into oblivion and hit them harder. And he made comments today that, “Yeah, we hit them hard last night.

Daniel Creech 07:08

We’re going to hit them even harder tonight.” Of course, that sets you up for a tweet that says, “Ah, out of negotiations and good faith and all this, and this guy over here asking me, and this woman over here asking me, I’m going to delay this bombing, and the market could rally.” That’s all noise. What I think is you want to pay attention to the rest of July. And if I were giving advice,

Daniel Creech 07:29

which I’m not politically, I would simply say you need three months, one quarter, essentially, to go to have leading up to the elections to be able to sell, “Hey, this is working or not.” And of course, the Democrats are going to use that same timeline to point to what they don’t like and why you should vote for them and change course.

Daniel Creech 07:54

Last comments here. There’s a lot of time left in the market, a lot of uncertainty still around with what Trump can say and how this Iran situation could escalate tonight. But it is good to see the markets pulling back only about 1%. We’ll see if the sell-off continues, how that kind of goes through.

Daniel Creech 08:14

Speaking of volatility and continuing with this, today, later on this afternoon, and I’m doing this ahead of time, so you can make fun of me, danielkrzio@research.com. Criticism, praise, don’t worry about it, email me.

Daniel Creech 08:29

The Fed minutes will come out from last month’s meeting where new Fed Chair Kevin Warsh took the helm. Remember, he cut the original Fed statement way down. People were complaining in the media that it was short as a tweet, blah, blah, blah. Wants to get rid of forward guidance, more comments, etc.

Daniel Creech 08:48

Now, Mr. Warsh was on a panel. They were over in Portugal, and CNBC’s Sarah Eisman moderated it. And overall, I like her from a—I don’t know her personally. I like her from a professional standpoint for the most part. She did okay, given the circumstances and, you know, the panel they had.

Daniel Creech 09:09

She was talking with Kevin Warsh and other central bankers from—or governors from Canada to Europe and all that kind of stuff. And essentially, they were excellent politicians, and they didn’t really answer a whole lot, and they deflected blame because it’s not all their fault, and they’re smarter than everybody, and here’s how they’re going to handle everything.

Daniel Creech 09:30

Kevin Warsh did an excellent job of being a politician and not really saying anything other than, “Hey, we have our task force working on such, and we’re going to look at how we collect data and everything.” Now, what I want to point to is he keeps using this term,

Daniel Creech 09:48

“a family fight.” And we can have this good old family fight and debate and then, you know, kind of get along. And everybody understands that with family. I think it’s a decent analogy. Well, the Fed minutes that come out later today had better show a family fight. And here’s why. I want to see who is descending,

Daniel Creech 10:07

if any, well, on the comment side, because if memory serves me correct, I believe everybody kind of voted in line to hold rates steady. We want to see what the conversation was about. And this is going to be headlines, in my opinion. And what you want to see is a lot of fighting back and forth. You want to see some people saying, “Hey, we should have hiked rates.” You want to see people saying,

Daniel Creech 10:27

“We should have cut rates.” You want to see people saying, “We should hold rates,” because that’s really a dysfunctional family that everybody can kind of understand. The other reason I think that this would be good is because I believe Kevin Warsh is trying to sound like a strong line, straight line, “Hey,

Daniel Creech 10:46

we are going to deliver on our goals of price stability.” And then I think he is going to kind of change that interpretation or definition of price stability later on in the task force as they come back with their findings later on this year. That remains to be seen.

Daniel Creech 11:03

And again, there’s a big chance that I could be wrong on that.

Daniel Creech 11:10

Along with the Iran conflict starting up again and the bombs start flying, oil spiking, if we get a hawkish tone or a lot of disagreement in the Fed, I think that’s going to cause further downside or further pressure on markets. And honestly, I think that that’s a good thing. Hear me out.

Daniel Creech 11:30

I don’t want stocks to crash. I don’t like seeing my portfolio take a hit. I don’t want any subscribers to lose money, of course. However, I’m simply saying the market has to get the idea that the Fed is serious about this and kind of get its credibility back. We like to use quotations with that. It needs to get its credibility back.

Daniel Creech 11:52

And it has done that in some sense, because just look at the future pricing in of rate hikes or cuts. So earlier this year, we were looking at rate cuts. Now we’re looking at rate hikes. That, in my opinion, is a definition of credibility that they’re looking for. It’s not how I look at credibility and results and if they’re doing their job and such.

Daniel Creech 12:10

But that doesn’t matter. We’re talking about the market here. And I think that in order for Warsh to be successful, you need to have that credibility.

Daniel Creech 12:19

So I think that we should—it would be positive, not in the exact short term, but through the rest of this year, through the summer leading into the election and the midterms, I would think it’s good if the market does price in these rate hikes. Do I personally think they’re going to come? No, because I think that the volatility in oil,

Daniel Creech 12:38

its recent plunge, even though it’s upticking today, gives Warsh the ammo and tailwind he needs to kind of hold rates steady, because you can play the same game that Jerome Powell played with tariffs. And that’s, “Hey, we’re looking ahead, and they’re coming. There’s a storm on the horizon, and we got to hold rates.” He was arguing not to cut rates at that time.

Daniel Creech 12:58

But now, Kevin Warsh can flip that script and say, “Hey, oil is plunging. That storm is past. It’s through us now. And now we’re going to get clear skies for a little bit, and that should make its way lower into all cost, as oil does. And let’s just see how this plays out. We have time to hold rates steady and wait.” We’ll see how all that plays out.

Daniel Creech 13:19

But the market getting more nervous about—nervous might not be the right word—but the market getting off of this essentially drip, this morphine drip of Fedspeak and Fed forecasting and talking all the time is a positive thing, in my opinion.

Daniel Creech 13:40

I think that the less the Fed talks, even though it could cause some short-term volatility, I think that that’ll be very good longer term. So let’s keep our—we’ll keep our eyes on that. Fed minutes will come out later today. You’ll definitely see some volatility, in my opinion.

Daniel Creech 13:58

And then back to this panel on the central bankers.

Daniel Creech 14:06

Kevin Warsh talked about how globally all these bankers were meeting, and they were really talking about getting back and delivering on price stability within their own countries and economies. And he did leave the door open on his task force for shaping a lot of things.

Daniel Creech 14:24

And he talked more than once about data and collecting data. And I’ve said in the past, and I’ll continue to say it again, we need massive change at the Fed on how they collect data and the process and the timelines that they use, in my opinion. And I’ve talked about true inflation a lot,

Daniel Creech 14:45

and not that they are the gospel. There’s one gospel, people: Jesus. I’m simply saying the gap between true inflation and what they’re saying, their data in real time, or more real time than the Fed’s, not surveying the same essentially, what their data shows and what the Fed BLS, Bureau of Labor Statistics, shows is drastically different.

Daniel Creech 15:06

And my whole point there is I don’t know which one is accurate, if either one of them is accurate. I’m saying that that is too far of a gap. The most advanced, best technological, you know, biggest, largest, best economy in the world should not have a gap the size of Amazon’s earnings. You know,

Daniel Creech 15:26

we might lose $10 billion, we might gain $10 billion, depending on how you want to pull the levers. And that’s going to play into market volatility. You know, just understand that, buckle up, because if I’m anywhere near right on the rest of July, the Fed minutes, the Iran situation and stuff, it’s just going to be very bumpy.

Daniel Creech 15:46

And that volatility will—and I’m not a sky-is-falling guy. Don’t go get in your bunker. Don’t hear what I’m not saying. I’m telling you, buckle up for this volatility. You know, the markets are still within a few percentage points of all-time highs. Just brace yourself for at least a 10% pullback from all-time highs and kind of manage those emotions.

Daniel Creech 16:09

Because I think that this month will continue to do that as far as volatility. And guess what? That’s a good thing, because the world isn’t ending this month. It doesn’t matter if stocks even go down 15% in July. The world’s not ending. And that will create more opportunities, and we will adjust accordingly. So just a couple of comments on that.

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Daniel Creech 17:41

All right. Switching gears here to upcoming earnings season. Now, next week, the earnings season kicks off with the big banksters. And I mean that as a compliment. Now this, I’m sharing my screen here to show you FactSet earnings insight. This is from last Friday,

Daniel Creech 18:02

the—or excuse me, yes. No, I’m sorry. It’s from July 2nd, so that’d be Thursday. And this is a great free report. Frank has talked about this a lot. And what I want to talk about here is just highlight some stuff that stood out to me.

Daniel Creech 18:17

So going into next week’s earnings, Q2 earnings per share is expected to grow 23.3% year over year. Doctor, evil, let me put your pinky up and salute you. Holy cow, 23%. If that’s the actual growth rate,

Daniel Creech 18:37

that’ll be the second, one, two, second straight quarter of double-digit earnings growth. Now, here’s an interesting stat or data point to me. Typically, revisions from the end of the quarter until the start of earnings season. So we’re looking at March 31st was the end of the first quarter.

Daniel Creech 18:59

And now we’re looking here at the start of the third, the beginning of the second quarter earnings season. I did a horrible job explaining that. I apologize. Typically, in the three months before we report earnings, earnings revisions are revised lower, down, people. And roughly,

Daniel Creech 19:19

let’s just say 2 to 3% is the normal revision downward, okay? This month, or in the last three months, it has actually gone higher by 3.4%.

Daniel Creech 19:32

And this, if you’re following along, is a beautiful chart because it shows you that the revision higher was 3.4% since March 31st. And that is actually the highest since going back on this chart on the far left to Q2 of 2021.

Daniel Creech 19:53

Obviously, that was a big revision because you had this rebound from the COVID collapse and situation there.

Daniel Creech 20:02

So a 3.4% increase, revision higher, just helps with market sentiment.

Daniel Creech 20:09

Now, I was also throwing into AI and just looking at some general questions because the 20-some percent earnings growth is really led by information technology, your hyperscalers, your Mag 7 stocks,

Daniel Creech 20:29

because when you have companies that are beating or raising expectations by such a high margin or missing on the other side,

Daniel Creech 20:37

that can kind of influence the big categories of such.

Daniel Creech 20:45

And for instance, since March 31st, looking at this chart here, the change in Q2 earnings per share by sector, energy has went up 61.5% since March 31st. Why is that?

Daniel Creech 21:04

Well, because if you go back, oil wasn’t falling until just recently. So it had time.

Daniel Creech 21:11

If we look back here, if we switch this chart here to a three-month chart or a six-month chart, you can see oil really started falling. Let’s call it, if we’re, you know, we could even say 90. That wasn’t until June 10th.

Daniel Creech 21:32

So we had a couple of quarters—excuse me, a couple of months of the second quarter—where you had higher prices. And that’s where these revisions were coming from. Hopefully, that makes some sense. Now, when you look at the overall Mag 7,

Daniel Creech 21:53

and I was looking at, hey, if you take out Mag 7, what’s the typical growth rate for the other stocks? And you can find some information that it’s 10 to 12%. And then you got to look at averages. So you can look back over your five-year average and your 10-year average and such.

Daniel Creech 22:11

The good news is some reports are showing that because of energy and because of different sectors—and again, I don’t—I want to stress this for right now and getting ready for it, but this is going to change depending on what energy and everything else does into the next quarter, Q3.

Daniel Creech 22:29

So earnings outside of the Mag 7, outside of the hyperscalers, are holding up and are supposed to grow around that 20% as well. And that is a big shift because while you have all this noise going on, what you need to see, in my opinion, is a broadening out of earnings and net margins.

Daniel Creech 22:52

We know the probabilities or possibilities of the hyperscalers, your Nvidias, your Microns, your Apples. And I know Apple isn’t a hyperscaler. My point is those big stocks, we shouldn’t see any surprises.

Daniel Creech 23:10

The probability or possibility of massive 180-degree changes from the reports that they put out three months ago is very small. If Nvidia comes out and says, “Hey, we got to cut our forward guidance by 20%. Sales just aren’t coming in.” Meta, Google, Amazon say, “Listen, we’re going to scale back CapEx.

Daniel Creech 23:30

We’re not seeing it. Customers are dropping off like a rock.” OpenAI, Anthropic, these guys’ user base is really dropping. That will and all can happen in the future. But thinking that that’s going to happen right now or this is all going to come to an end this quarter, I think, is mismanaged. And as earnings season unfolds,

Daniel Creech 23:51

I want to look at these outside of Mag 7 because if earnings does come in around that 20-ish percent, that is going to be a significant tailwind for higher asset prices once you get through some of this kind of outlier situation, US-Iran oil prices and all that kind of stuff. Because looking ahead,

Daniel Creech 24:11

and we’ll check in for revisions as this unfolds, but in Q3, looking ahead, as of now, and these can change, just like I talked about revisions, earnings per share growth is supposed to be 26.8%, and then Q4, 24.4%. Now, that is absolutely massive.

Daniel Creech 24:29

Now, the PE for our forward-looking price-to-earnings ratio, 12-month, is 20.4. Yes, that’s higher than the five-year average of 19.9. It’s even higher than the 10-year average of 19.

Daniel Creech 24:40

However, take that with a grain of salt because our forward PE has actually been a little bit lower as you see these earnings continuing to grow faster than prices. So hopefully, you guys can buckle up for earnings season. I do expect it to be volatile.

Daniel Creech 24:59

And one last quick note here on earnings season is I do expect some new language. And I’ll go out there on a limb. I have no problem being wrong. Unfortunately, it’s part of it. It’s humbling. But specifically, I’m looking forward to, like, Meta, Meta earnings, and Oracle because,

Daniel Creech 25:19

and even Microsoft, those guys have lagged their peers as far as stock performance. Meta, Oracle is getting absolutely hammered. We’ve talked about that. It’s also in one of our, or it’s in the portfolio as a trade that, because their stock has gotten hammered so hard over worries of this massive CapEx, diverting cash flows to build out AI data centers, etc.

Daniel Creech 25:40

So I want to see if their language at all changes because you kind of have that invisible hand of enforcement and/or steering. And what I mean by that is Meta’s done this in the past. They’ve spent like crazy. Remember the Metaverse? They changed their name from Facebook to Meta.

Daniel Creech 25:58

And then their stock cratered as interest rates were raised in 2022, I believe. However, Zuckerberg got the hint. They said, “Hey, we’ll back off. We’ll control CapEx a little bit better. We’ll manage cash flows.” The stock took off again. Again, I just, I don’t want to get caught up in this, “Oh my gosh, the sky is falling.

Daniel Creech 26:18

It’s over.” It is not over. It’s just an adjustment. And I do want to see some of the language, how management uses language to communicate with Wall Street and kind of explain this return on investment, what yields they’re expecting, all this kind of stuff from this AI buildout. And love to hear about Meta’s possibility as it was reported,

Daniel Creech 26:40

and we talked about in the past about them competing with AWS and Google and all that on selling cloud compute. That’ll be interesting. Okay. So gone through that, let’s switch over to Bitcoin. And I want to see how Bitcoin’s holding up amongst all this volatility. Markets are still down 1% across the board.

Daniel Creech 27:01

Bitcoin’s down, let’s call it one and three quarters, almost 1.73,

Daniel Creech 27:09

it says, 61,600-ish. I continue to be impressed that it’s around the 60,000 and not a 50 handle on it. I’ve talked about that quite a bit in the past. What I want to share with you and ask you is, does Michael Saylor of Strategy,

Daniel Creech 27:30

former MicroStrategy, does he deserve a lot of criticism that’s going on? Yes, absolutely he does. Now, let’s unpack this.

Daniel Creech 27:41

Michael Saylor has put himself in his own box. And I’m not trying to beat him up or praise him. I just want to give you the details in the environment and explain how I’m thinking about this and its influence on markets.

Daniel Creech 27:57

Saylor is a great salesman. He has been a Bitcoin salesman for years since Strategy really took on to be a Bitcoin treasury company. And they are a big player in the market because they’re one of the largest holders. They own about 4% of all the Bitcoin, I guess I’d say, in circulation.

Daniel Creech 28:17

We know there’s some Bitcoin that’s lost forever, but they own about 4%. So they are a big player. They’ve been a massive buyer. So they are increasing the demand side because they’re constantly buying. And Saylor has been this all-on-Bitcoin. It’s going to take over the world. It’s digital, real estate, Manhattan. I’ve heard him say all kinds of things.

Daniel Creech 28:37

And he gets a lot of publicity. He’s also said to never sell your Bitcoin. And there’s all kinds of things out there about him. And I’m going to give him some of the benefit of the doubt on joking about selling kidneys or mortgaging, all this kind of things. In the world of our AI, take everything with salt. I don’t know if he said everything.

Daniel Creech 28:58

I’ve seen a lot of tweets that look real and a lot of videos. We’ll see. However, you get to this point where you’re not ever supposed to sell, and now Strategy has sold a few times. They sold years ago. They sold a little bit a while ago. And then here they sold 3,588 Bitcoin for $216 million.

Daniel Creech 29:19

This is a post that Mr. Saylor put out. Strategy sells Bitcoin to fund its digital credit dividends. Total holdings of Bitcoin is still high. It’s 843,775. And then they have $2.55 billion in cash.

Daniel Creech 29:39

Now, Mr. Saylor does deserve criticism here. I have seen him respond. He was on stage somewhere. And I didn’t hear the question, but it had to be something relevant to, “Hey, you’re flip-flopping. You’ve been telling people never to sell their Bitcoin. Now you’re selling it.” And I get what he was saying.

Daniel Creech 29:58

I don’t think it came across well. He said, “Listen, I’ve been telling individuals, you, the individual, never sell your Bitcoin. You buy it, you hold it. It’s going to go up.” As a company and as a fiduciary responsibility in the position that he holds to the shareholders and company that he runs,

Daniel Creech 30:19

you cannot just never sell anything. You have to actually do whatever is best for the underlying company and shareholders.

Daniel Creech 30:27

Therefore, what they’re doing here is they’re selling some to boost their cash reserves to be able to afford to pay all the dividends on their other preferred shares and different

Daniel Creech 30:40

avenues or products they’ve created. Now, I’ve talked about the SRTC, and I’ll pull that up here. And it has rebounded. This thing absolutely sold off. They want this to trade around 100. They want to pay around a 10% dividend. Obviously, when the price plummets,

Daniel Creech 31:01

they have to increase the dividend to try to attract people back to that price. When the price rises, if it ever does over 100, they will cut the dividend. This is around $85. Now, it’s up significantly since 70. So if you bought the low, you have a good trade. You’re earning a good dividend.

Daniel Creech 31:18

What I want to point out here is I’m not telling you to go buy STRC just yet. If you want more volatility, I think it would be better to look as a buyer here than a seller. Obviously, don’t ever short anything like this.

Daniel Creech 31:32

And the reason here is because just like I mentioned with Meta and Oracle and the language that I am expecting or want to see how they handle in upcoming earnings, it’s the same thing with Strategy here on managing and getting, not pushed around, but being guided by the street and your investors. So Strategy,

Daniel Creech 31:53

I think, got a little bit over their skis, obviously. And when Bitcoin started selling off, this strategy, this flywheel doesn’t work as well. And now they’re on the hook to pay a lot of these dividends, preferred share, these dividends and such. Now, does he deserve criticism?

Daniel Creech 32:13

Absolutely. He’s out there saying, “Never do this, never do this.” With the inclination and kind of representing himself that Strategy is going to do all this and that and in line with everybody. Then he can take the easy way out and say, “Well, I’m a fiduciary. Okay, I get that.” What he’s actually doing here, Strategy aside,

Daniel Creech 32:32

because Bitcoin is bigger than Strategy, you could say, “Oh, well, if they had to dump all their Bitcoin, it could hurt the market.” Yeah, it could. But another buyer might step in, retail investors, whoever. Again, get the idea that it’s game over out of your head. It is not game over, people.

Daniel Creech 32:51

The other side to this that I find really interesting is Strategy just sold a lot of Bitcoin in its terms. And yet Bitcoin is holding in there. So somebody funds other players, big whales, whoever is playing. But it’s also showing something interesting to me.

Daniel Creech 33:12

As Bitcoin, as Strategy has to sell its Bitcoin and raise cash,

Daniel Creech 33:17

and now they go into this whole management mode or whatever, how does this not prove that Bitcoin is doing exactly what it’s supposed to do? Obviously, Strategy can buy it. They’re buying Bitcoin all the time. But now they’re selling it. Well, that’s fine.

Daniel Creech 33:36

That makes a market. Buying, selling, exchanges. Who’s facilitating this? Who’s monitoring this? And I don’t mean monitoring as in, “Oh, are you doing something right or wrong?” I’m simply saying, “Who is Strategy working with to coordinate and also execute these trades?” Now, I don’t know that, and it’s not really important off the cuff.

Daniel Creech 33:55

What’s important is that it’s working and that they are not only buying hundreds of thousands, they have 800-plus thousand Bitcoin, but then they’re selling, whether it be 32 or 3,000 and change. If, and I know there wasn’t a whole lot of people worried about this, but if people were thinking, “Oh, well, it’s not liquid.

Daniel Creech 34:16

You can’t make a market in it,” or, “How is this all going to work?” It’s working just fine. And I think that that has to be some of the market realizing, just like I believe the market needs to realize the Fed is halfway serious, which they’re not going to be able to continue down that road of getting their financial house in order.

Daniel Creech 34:35

They have to grain that credibility. The community, and I think the environment, has gotten caught up a little bit too much at times in strategy and what’s Strategy doing and how much they’re buying and all that. And they thought, “Well, so goes Strategy, goes the market.” No. The Bitcoin crypto market is much bigger than one player.

Daniel Creech 34:53

I get that they own a huge portion of Bitcoin. But that doesn’t mean that you need Strategy to be able to just hold forever. And I think that, honestly, this is a good situation for the entire market. And it’s good for investors because you can say, “Hey, it’s okay to sell some of this because the market can absorb it. The market can handle it.

Daniel Creech 35:12

The trading is facilitated.” And I think that that’s a very popular thing, and it’s kind of going unnoticed. The big headline is, “Oh, man, Strategy is selling 3,000 and change Bitcoin.” Yeah. But the more important thing is, it can and it will. And if they get over their skis and they do stupid stuff and they screw retail investors, which that’s the game, then,

Daniel Creech 35:31

hey, they have to deal with that, and we’ll see how retail responds. But that doesn’t mean that Bitcoin is any more different than it was. It just means that this guy’s been a better salesman than most people, and they’ve accumulated a lot. Now, if Bitcoin rallies and continues to go higher, the strategy works.

Daniel Creech 35:46

If not, they’re going to have to continue to pull levers and different things and see how long they can keep people with an appetite for risk and yield. And that’s honestly a good game for them to play because people are always going to want higher yield, and we’re risk takers. That’s the way markets work. So yes, he does deserve a lot of criticism.

Daniel Creech 36:06

Yes, he’s put his foot in his mouth several times. However, that should not deter you from thinking about Bitcoin in general. As I’ve said, Bitcoin and gold, nothing has changed about the fundamental thesis on Bitcoin or gold. The price is going to change. The environment’s going to change. The receptiveness of that is going to change. But the store of value, the hard money,

Daniel Creech 36:27

the limited quantity, so Bitcoin is fixed at 21 million, gold increases in, how am I going to say that?

Daniel Creech 36:39

Gold, the amount of gold increases slowly over time because of the process of mining it and such like that. So it is not as inflationary as the printing press that we have and Kevin Warsh is now having fun with. All right. Love me, hate me, don’t ignore me.

Daniel Creech 36:58

Daniel@Curzioresearch.com. That’s daniel@Curzioresearch.com. Continue to watch oil prices. Buckle up for another crazy July. We had some great fireworks. It was beautiful. Happy birthday, 252 America. Hope you guys all had a great time. But now we’re going to have to deal with a lot of fireworks for the rest of this month,

Daniel Creech 37:17

in my opinion, as Q2 earnings season unfold, starting with the big banksters. Tomorrow, tune in for an excellent interview between Frank Curzio and Meb Faber. That’s wonderful. Frank, as I said, is at the Rick Symposium in Boca Raton. You guys go visit him there.

Daniel Creech 37:36

I’m off to Ohio. If something comes up on an update, we’ll send you a quick write-up if we have to sell or if we have a buy alert. But I will be gone until next week. So you guys have a wonderful, great rest of the week. Have a safe weekend, and we’ll see you back next week. Cheers.

Announcer 37:46

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.