As many of you know, Frank is in Las Vegas this week attending the 2022 Consumer Electronic Show (CES). In the meantime, I (Daniel) am taking over the mic.
A recent report highlighted why Americans are “unhappy” with the handling of the COVID pandemic. But it does indicate a positive shift for the economy—and the markets. [2:17]
I’ve been critical of Jim Cramer in the past… but credit where it’s due. Cramer recently made a strong argument about the risks we face from China. I explain why I’d steer clear of China as a long-term investment… but it might make a good trade in the short term. [10:15]
With inflation set to ramp up this year, I highlight several “boring” stocks that are set to benefit from an inflationary environment. [17:35]
Finally, I share a few updates from Frank on the most dominant tech trends showcasing at CES 2022… including one that’s “adults only.” [21:46]
- Why these “unhappy” Americans indicate a positive shift for the economy [2:17]
- Why China could make a good short-term trade [10:15]
- “Boring” stocks set to benefit from an inflationary environment [17:35]
- The “adults-only” tech trend causing a stir at CES 2022 [21:46]
Wall Street Unplugged | 839
This ‘adults-only’ trend is creating a stir at CES 2022
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.
Daniel Creech: How’s it going out there? It’s Thursday, January 6th. And you’re listening to the Wall Street Unplugged podcast, which is normally hosted by the one and only Frank Curzio every Tuesday, Wednesday, and Thursday now. But as we alluded to earlier this week, you’re stuck with me. Hi, welcome. Daniel Creech here, Curzio Research senior analyst. Frank is attending and still researching in Las Vegas. He is at the Consumer Electronic Show, the CES, which is not virtual, but thank goodness, they’re in person. So Frank flew out there, got a nice hotel and is roaming the streets of Las Vegas, looking for the best ideas and some huge growth companies and mega trends going into this year and the years to follow.
Daniel Creech: As I alluded to yesterday, he is kind of upset that some of them pulled out over the coronavirus variant, which is aggravating, but he is getting to do a lot of tours, a lot of in-person updates, interviews, et cetera. So be sure and check him out on TikTok. Also, go to the Curzio Research website, where he is going to post videos, pictures, updates, all kinds of good stuff there, as well as our Curzio Research YouTube page. I was talking to him earlier, been texting back and forth with him, checking out some videos. I know he is having a lot of fun and enjoying that, which is all great. And I’ll give you a little bit more detailed update as the podcast unfolds. And just like I did yesterday, going to hit a couple of topics, some headlines or news that has caught my attention and kind of break those down from a macro view, have some fun.
Daniel Creech: I got a little bit of a rant here for you as well. And then we’ll get back to the kind of the regular programming next week as Frank gets back. One other note for all you, paying subscribers, whether or not you… It doesn’t matter how many subscriptions you have with us, if you have the Dollar Stock Club or a backend product, you’ll get Frankly Speaking, and I, Daniel Creech, we’re going to get to do that as well this Friday. So, I’ll be taping that. If you have any questions you like me to grab, you can email me, firstname.lastname@example.org. That’s email@example.com, or go ahead and send them to Frank, firstname.lastname@example.org, and I can touch base and get some with him. Just yesterday, I was explaining about a macro theme that I’m paying attention to on the media narrative and the changing of how things are being sold to us around the coronavirus and the Delta variants.
Daniel Creech: I was talking about the moving of the goal post between the CDC who is… And listen, real quick here. This is a little bit of a rant. I’ll give you a heads up, but it’s okay to change your mind. It’s okay to be wrong, but when you are wrong or when you change your mind, there has to be accountability. You can’t just keep going down the same path and just say, “Oh, well, we were wrong about that, but full speed ahead.” That’s just silliness. What’s the cliche? Hey, the definition of insanity is to continue to do the same thing over and over and expect a different result. And I’ve felt that way for a good while with how things are being handled and the communication is being handled between what to do and what not to do or lockdowns versus no lockdowns or school in session versus virtual learning.
Daniel Creech: You got to weigh the cost and the benefits to everything. So, the CDC has changed the quarantine time from 10 days to five days, which is good, that’s shortening, because the Omicron is looking to be less severe, which is great, even though everybody’s still so hesitant to actually say that it’s not scary and going to kill everybody because that’s what they’ve been doing for a long time with the coronavirus and the variants. But I was explaining yesterday, hey, these goal posts are changing. The definition of fully vaxxed is up in the air now. Dr. Fauci is saying that you can move from fully vaxxed to being “updated.” And yes, when I’m saying “updated,” think of the Dr. Evil from Austin Powers, where he uses the quotations. That’s about as serious as you need to get with all these people. Having a little fun there.
Daniel Creech: But the moving of the goalpost, the media narrative were finally realizing what James Carville made so famous when he said, “It’s the economy, stupid,” during what was it? The Clinton campaigns. And he was right. It is the economy, stupid, and you want to focus on the economy. So, Dr. Fauci is explaining about, hey, let’s not just focus on case counts or the number of coronavirus cases. People just can’t… You can’t keep stopping the economy all the time. I talked enough about that yesterday. Earlier on Wednesday, I believe it was Wednesday on CNBC, keep in touch with the media narrative and the mainstream, they had Arthur Brooks on from Harvard University. So, you must take him seriously there. Those guys are all well smarter than me. But he was talking about how Americans are unhappy and a lot of the direction that we’re heading in seems to be wrong, and it’s around uncertainty.
Daniel Creech: And he was quoted saying about Omicron apparently raging out of control. Again, it’s a much more softer tone, which is a good thing, because again, it’s an election year. We’re realizing that you can’t just continue to print money and not cause inflation. Although, there is rumors in The Washington Post that a mutual, across-the-aisle friendship, Republicans and Democrats are actually talking about, get this, another round of stimulus for coronavirus. So, look for those headlines to have some fun. And of course, it would be targeted and it would be not wasteful like every other government thing or most. I shouldn’t say everyone. Let’s not paint with too broad of a brush. But Arthur Brooks was on there, and he made some really good points, and they were… Andrew Ross Sorkin and Becky Quick were talking about how people were getting fed up with the changing of the rules and the narrative from the CDC and all this.
Daniel Creech: And he said something that really stood out to me. He says, “Hey, capitalism is what we need to work and to make this work?” So, they were talking about testing and getting the cost of tests down because, as they’ve kept saying on TV, you can’t test your way out of this, but people are just hoarding tests. They’re testing all the time. I’ll get to Jimmy, Jimmy Cramer here in just a minute, because I actually have to give him some credit after giving him such a hard time or expressing my frustration and just craziness on some of his earlier thoughts. But Arthur Brooks was saying how the bureaucratic hassle needs to get out of the way and let capitalism run its course and let it do its thing. So, we can drive down the cost of these tests. You can put them in places like Walmarts and everywhere or else. And then people will continue to go out, get those, get their other shopping needs.
Daniel Creech: It’s okay for them to benefit from this because they’re going to provide for a larger macro scale of everybody moving in the right direction quickly, i.e., getting back to somewhat normal. So, I thought that was really cool. The downside to that is, is that Andrew Ross Sorkin and Becky Quick were talking about, hey, does the government need to subsidize these tests? Do they need to be cheaper for everybody to get out there? And now, you’re getting people ridiculed, like here in Florida and around the other places, to where they’re saying, “Hey, if you’re not feeling bad, don’t test.” And somehow, that’s like a dangerous scenario, and I get it. I don’t want anybody to get sick. I don’t want you to be… I understand that you can spread this and not know you haven’t. You can have asymptomatic situations and hey, I don’t feel bad, but you could still have it.
Daniel Creech: But again, you got to weigh the risk and the reward. And lockdowns and virtual learning, all those have massive, massive risk, and we don’t want to go back to that. And think goodness that this variant is, hopefully, the beginning of the end. And we could be to the end of this pandemic, what they’re calling it endemic, sooner than later. And that would all be great. Keeping with CNBC for two more points here. Becky Quick even with switching to another interview with Dr. Scott Gottlieb, the Pfizer board member and genius there… Pfizer, by the way, is still one of the lowest hanging fruits. I’ve talked about that quite a bit. Need to pat myself on the back while I can watch the stock pull back now that I’ve mentioned it a couple times, but still off of its 52-week highs, but still like the idea of just dealing with this basically forever.
Daniel Creech: And you’ll notice some of the vaccines like Moderna, the vaccine makers have pulled back more in recent days, and the ongoing or Pfizer’s ongoing treatment is continuing to have tailwinds. But Becky Quick asked if we need a coronavirus czar in the government. So, here you have people on a very liberal network, in my opinion, talking about how bad testing has screwed up, how bad the communication is, how bad the CDC communication flip-flopping, goal post moving has been and how frustrated the American people are. And yet, you want to put somebody else in power to fix all this. No. Arthur Brooks had it right, capitalism. Let the free market decide and go to work. We’ll get cost. It will get cost down for testing, and give people freedom back to make those choices to go out in a responsible manner and keep the economy going because the economy is, I don’t want to say all we got, but damn is it important, people.
Daniel Creech: And I’m the biggest capitalist here outside of Frank. We’re big capitalists. We want to educate you on that and why, and why that’s so prosperous for all Americans, and that’s what we want. So, a little bit of a rant there. I just don’t understand how people can question all this, get so frustrated and then want to give the same entity, the government, who is creating these problems, even more power and oversight over our lives. It’s absolutely crazy. So, the takeaway there is, you’re going to have to deal with this a lot longer than I want to, and therefore you should have some exposure to Pfizer.
Daniel Creech: All right. So, Frank and I were talking about… We’re going to switch to China here real quick on a macro theme. And this caught my attention too, because Jimmy, Jimmy Cramer on CNBC, who Frank and I talked about at least a couple months ago, because he made some crazy comments, in my opinion, where he is wanting the military, the United States military to be used to enforce vaccinations and he also wants to drag you, individuals, in front of or make sure that you have to go to court and defend yourself if you don’t want to get vaccinated. Those are his words. You can go look that up. And Frank and I had a little bit of field day. That was crazy. But just to show you that I’m an open-minded person, I have to give some credit where credit is due because Jimmy, Jimmy Cramer took a few moments off of cheerleading and bragging about how many times he’s been jabbed and why you should get jabbed and vaccinated.
Daniel Creech: And then, he still got coronavirus, but he was so happy. He didn’t feel too bad about it. And he put on this sad face when he was on TV in his own separate room, and he wasn’t around his friends. He took time off of that, which I have to give him credit for. And he was talking about China. And there’s some headlines this week about Charlie Munger, who you may have heard of, Warren Buffet’s business partner, a brilliant, brilliant, witty guy, multi, multibillionaire has been buying Alibaba shares. Alibaba, basically the Amazon of China. And it is a lot closer to its 52-week lows versus its 52-week highs. And whenever these headlines make it across the airwaves and different websites, it does get your attention because hey, not that you should follow anybody blindly, but when you got successful people like that make moves, I found a lot of good ideas going through 13Fs, which is where the biggest money managers have to disclose holdings. And you can come across a lot of great ideas.
Daniel Creech: So, Charlie Munger was making headlines about continuing to buy Alibaba, which fits it. I mean, he’s not a trader unless he’s really changed recently, which I doubted. So buying overtime, buying for the long-term, that doesn’t shock me, but I have to give credit to Jim Cramer because he was talking about how he believes that China is just basically uninvestible. He thinks it’s irresponsible because of the risk you have to take on because of their government, President Xi who you could argue loosely that he’s much more of a dictator/communist runner than a “president,” because they can basically snap their fingers over there and get things to do happen overnight.
Daniel Creech: So, zero COVID cases is their litmus test. You get a COVID case, they can snap their fingers and lock down an entire city. And over there you got millions of people all over the place. So lot different than what we’re used to here and the bureaucratic process, as I joked about earlier. But Cramer was thinking or expressing, hey, he doesn’t want to recommend those, any Chinese stocks basically, because you have this huge overhang and you have this huge risk of the government. They could change their mind. And Frank and I were talking about this and I can’t remember… I was kind of saying to stay away in months past because of this very same thing. I mean, look at China’s crackdown on technology. Alibaba Jack Ma basically disappeared for a while. Don’t think that’s a coincidence. DiDi, the Uber of China went through a whole bunch of rigamarole and ridiculousness. Investors got absolutely crushed shortly after the listing and the IPO here in America. Then they had to de-list. Uber is even getting… The actual Uber here is either attempting to or already did sell their stake in that. So, a lot of pain and a lot of money lost there.
Daniel Creech: You have the ever grand situation with huge amounts of over-leverage to the real estate sector. And the government controls basically everything there. They can wipe out the rich people. And Cramer, to his point, was pointing out, listen, they don’t seem, the government doesn’t seem to have a lot of problems with the middle class and things that they do as far as what they’re purchasing. They haven’t cracked down too much on Apple yet. So, they’re in bed with them, thank goodness. If you’re an Apple, if you’re an Apple long, which is low hanging fruit, because they are a great company and I highlighted how they hit the $3-trillion mark. But China’s governments clearly doesn’t like too rich of people. They don’t like that capitalist side even though they’re trying to merge capitalism and communism to keep power and to grow their power. So, I have to give credit there for Jim Cramer on giving the risk there.
Daniel Creech: I have been bearish on them and just say, hey, to avoid, you don’t have to short it and make money, although their stocks have continued to go down. So, you probably would have if you were short. But remember this just from an investing standpoint, the lower something goes in price, the less risk it has. And that may sound either stupid or so simple that it doesn’t provide value, but think about that. The lower in price, the less risk, because you’re only going to zero. So, if you buy something at 10 versus 20, there’s less risk because you’re closer to zero at 10 than you are at 20. So, China stocks have gotten smashed. A lot of companies have gotten smashed. And what’s coming up that would make me put on a trader’s hat and think, well, it’s not that big of a stretch to think that you could get a bounce in some of these.
Daniel Creech: So, maybe you play the big Tencents or the Alibabas of the world. But this winter, we have the Winter Olympics and they are in China. So, put on your political hat here. You are a communist leader and you’re over there and you’re thinking, hey, we’re going to put on the biggest show of winter sports, the Winter Olympics, and we’re going to be on the grandness of stage, even though the Biden administration is not… They’re diplomatically boycotting it. Tough stance there, big red line being drawn in the sand. But you’re going to be on the world stage. I don’t see how they don’t do everything they can to try to make things look as good as they can. And it wouldn’t shock me if you see… And maybe, we can have that as a fun trade, or just kind of timestamp this and we can see if I either have egg on my face or if I could take a victory lap if China stocks perform well into coming up to the Olympics, whenever the hell they are, sometime in February.
Daniel Creech: February is a great month by the way. It’s my birthday. I’ll be a year older obviously than I was last year. So, I liked Jim’s thoughts on China. I liked how he was highlighting the risk and the macro risk. I would still stay away from that. You can look at playing the big ones through ETFs. There’s one that you can go short or you can go long. FXI, FXP, I believe they are, might have those backwards, but I would definitely look at that from a trading mindset, not a buy and hold, not an investing mindset, unless you’re Charlie Munger and you have plenty of time and billions and billions of dollars.
Daniel Creech: Let’s see here. Just going through some notes. One other… I want to get to Frank’s update because that’s why you’re listening to this. That’s the focal point here. Ah, I did see a great report. UBS came out with 22 stocks for 2022, kind of a fun little idea there. And I’m not going to give them all to you. It was good work there. It was an extensive report, but a couple of them jumped out at me because it fit another kind of theme I was working on, and that’s just basically big boring quality. So, a couple of their stocks that they have highlighted was Coca-Cola. All right. Everybody’s heard of that one. W. R. Berkley, which is a wonderful, great management team, insurance company, property and casualty insurance company, Ulta Beauty, which was one of my first recommendations as I’ve kind of grown up on the podcast and here working for Frank, becoming a better analyst and still have absolute ton to learn.
Daniel Creech: I made a couple picks for our Curzio Research Advisory. My first one was WWE, which we got smacked. I apologize for that if you followed me in on that. I know a couple of you did because I’ve heard from you. I will get better. That was a tough loss. But Ulta Beauty was another one of mine, because it’s just an absolute well run business. Their stores, even though I walked into one to do some boots-on-the-ground research, the stores are just very well set up. They’re very clean. In the business, that’s called channel checks. Maybe I could do that, go into some more of those. But just top name brands, great brand ambassadors as far as publicity. The Kardashians were involved on that. And those companies are huge. They’re well-known brands and they’re not exciting.
Daniel Creech: And I don’t mean that as a negative towards them. I’m just pointing that out that you’ve all heard of these companies, and they’re just great quality companies. They make good money. They have wonderful products that people love. They have huge presences across either the US or globally, like Coke. And getting away from the report real quick, the other theme that I was talking about, about big boring quality, is as we gear up for this year in inflation, higher expectations, higher interest rates. The Fed just came out this week, the Fed minutes, and kind of spooked the market a little bit on, what was it, Wednesday when the market was up, I think, going into the Fed minutes. And then basically, hey, the Fed’s pretty hawkish and people are leaning towards the odds of them. Hiking, either more frequently in 2022 or earlier than expected, are continuing to rise. So, that’s why the market sold off a little bit.
Daniel Creech: I think it was down about 1% across the board, excuse me, 1% across the board on Wednesday. So, as you gear up for this higher interest rate environment, higher non-transitory inflation, one of the biggest, most boring companies, I don’t know why we’re not recommending Berkshire Hathaway, so obviously, the B shares for us individual folks out there, but they’re just in great inflationary time. They’re in insurance. Hell, knock on wood, and I know we’re just audio only, but my insurance premiums went up this year for the pickup truck that I have, even though I still have the same record and everything I did. So, insurance is inflationary. You have pricing power there. They’re in railroads, which it’s a very high capital intensive business. Yet, as costs go up on everything, you’re not going to have a new company competing on railroads anytime soon.
Daniel Creech: The replacement costs are going to be going through the roof. So, the ability to own those assets and those pricing power that comes from that on transportation is going to be immense. They’re an energy. They also have just billions and billions and billions of cash. Talk about a rock solid balance sheet, arguably the greatest investors, capital allocators of all time at the helm. So, I know that’s not exciting. I know none of you are paying to basically hear about Berkshire Hathaway, but I’m going to start digging into that, more so I’ve done it a little bit. I’ve never really done a deep dive into it, just because it’s like, eh, it’s Berkshire, but boring makes money and that’s what it’s all about. So, just wanted to highlight that because that’s been something that’s in the back of my head and something I’m working on.
Daniel Creech: Last thing here, let’s get to the good stuff. Little shorter podcast than normal with me behind the mic and at the helm, but let’s get to Frank’s update because I know he is having a blast. Frank loves chaos. He likes controlled chaos to his sense. But as you guys can tell, Frank doesn’t have but one speed, and that’s on and basically pedal to the metal. And I know he is just having a time, a great time out in Vegas. So, we were talking earlier, like I said, on text and catching up, and he’s been in and out of tours a lot. I hope he has a Fitbit or… No, he’s an Apple. I think he has an Apple Watch. So hopefully, he’s tracking his steps and we can see… I know he is not working out while he is there, but he probably is because he is walking around so much. And I wonder how many miles he’s tracking right now.
Daniel Creech: But one of the biggest I highlighted yesterday, the metaverse, and he was going on about that today. And I’m sure he is going to have a lot of more kind of supply companies or smaller companies outside of your big Qualcomms, your Facebooks. Unity is another one I saw. The ticker is U, letter U. I saw that on CNBC. Frank didn’t mention that, but just as a big metaverse player… Or no, not on CNBC. It was TD Ameritrade feed, but that’s in Roblox. Frank has talked about that. He was just saying how the metaverse, augmented reality and virtual reality is absolutely huge. I hope if he hasn’t already, I haven’t seen each video or picture just yet, but I hope is trying some of those. I know he bought a headset over Christmas. So, we’ll talk about that some more.
Daniel Creech: But he was just going on and on and on about that, and you could tell he is excited. I know we’re going to have some picks related to that outside of, like I said, the Facebooks and the lowest hanging fruit. One sector here now, I’m going to give you, you parents, if you’re in the cars and your kids just happen to be with you, I’m going to give you an advisory here because we are a family show here at Wall Street Unplugged in Curzio Research. And this cracked me up because he says one of the biggest, a huge trend is sex tech. Okay? And this is for both men and women. And he says there was a company… He didn’t name it, but there’s one device, which is a chip, that’s inserted into the man’s leg and it’s to help him, for lack of a better term, basically continue or become the Energizer bunny and just keep going and going and going and going and going.
Daniel Creech: So he says, he’s not kidding. And we were texting over this. So, you can imagine just the laughter there, but that’s a huge deal. I don’t know if we’re going to get into recommending too much there. Can you imagine doing a promo or something around that? Probably get a lot of clicks. But he’s just highlighting what he’s seeing at the CES there. Smart homes, he says, is absolutely huge. And there’s been this huge alliance between different companies to basically allow all appliances, cameras, washer-dryers, just appliances in general, to work across and speak to one another, which is massive because you talk about the connectivity, the opportunity to have a platform devices and allow everybody… Alexa can talk to everybody else or your other devices and things like that. So, when you think of the adapters, the communicators, the suppliers, the manufacturers of different devices, a lot of that is just going to continue to create value and create a lot of opportunities for investors there.
Daniel Creech: Numbers are a little tough to follow just on audio over the podcast. So, I’m not going to… He did give me some really cool stats on some spending, but I won’t get into a lot of that detail. A lot of the spending that the Consumer Electronic Show is highlighting and companies there were upgrades for consumers in 4K ultra high definition TVs, smart home products, so doorbells, like I said, washer-dryers, dishwashers, household appliances. And this makes sense, right? Because all the new homes, the new homes being built still a massive tailwind, not only as people leave cities and the coronavirus and all that, that kind of pulled forward, but if interest rates are rising, you’re going to try to get those people to lock in those gains beforehand that could… While it’ll ebb and flow, still very bullish on real estate and housing in general, and the newer houses being built are going to be smart homes.
Daniel Creech: They’re going to have smart devices. I’m talking about HVAC systems, heating and air appliances, everything like that. That’s really a great idea in general for convenience, and again, it’s going to be great investment opportunities. He went back, he sent me some of his notes. Again, I’m really excited about the metaverse, and real quick on the metaverse here. We were talking a few months ago about Zuckerberg and Facebook, now called Meta platforms, or Meta holding or whatever, and they’re spending tens of billions of dollars per year to build this out. Nobody knows who’s exactly going to be the big winner or whatever. There’s going to be a lot of ways to win. You don’t need to pick just one and the world’s big enough for several. But even if it doesn’t grow into what Zuckerberg said in five to 10 years about people living in this world all the time or visiting this world, the extension of social media and spending billions and billions of dollars a day, it doesn’t even have to get that big to be that profitable for a lot of companies.
Daniel Creech: So, this is just a new trend. This is going to… We’re still in the very early innings of that. So, just keep that in perspective, and it doesn’t have to be the next massive, massive thing, even though I think it’s going to be huge, to be a very large opportunity for investors. One last thing here, I know what Frank really likes to visit and kind of get the vibes and the adrenaline and just the pulse of everything is Eureka Park. So, Eureka Park at the CES is for startups. And he said, it’s about 800. I don’t want to… I think he said around 800 startups that were there, and he says, it was just absolutely amazing. It’s something like he hadn’t seen in all the years he had gone to. And he said, it’s a huge part this year.
Daniel Creech: And now, think about that. You have money in general sloshing around, a lot of money out there, a lot of people have made a lot of good investments, and you have 800 people there just sharing ideas, looking at the next big thing, and everybody’s… These are consumers trying to invest in these companies as well. So, it’s great to see the capitalist spirit, the entrepreneurship. I know Frank’s actually with his crew with Garrett, our wonderful sound guy, and continue to look at the Curzio Research page, follow him on TikTok and Curzio YouTube, because I know he is going to be putting a lot of things there of Eureka Park. So, just a lot of great stuff. Big takeaway is metaverse, AR, VR, and sex tech as he texted to me.
Daniel Creech: All right. Well, that pretty much wraps it up for today. It’s been fantastic hosting for Frank and sitting behind the mic for two out of three days this week for Wall Street Unplugged. Be sure to follow him on social media. Send in your questions and your feedback. Love us. Hate us. Just don’t ignore us. My email is email@example.com. And of course, Frank’s is firstname.lastname@example.org. I will talk to you soon. You guys 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.
Once CES 2022 has ended, Frank will compile the top tech trends and stocks to watch in a free report. Go here now to sign up for your copy.