I’m back from the 2022 Consumer Electronics Show (CES)… and you might not believe some of the wild tech I saw showcased—from microchips for sexual health… to flying cars… to a thumb-sucking stuffed animal (as in… it sucks YOUR thumb). [1:56]
Inflation is at its highest level in 40 years… but the markets seem to be taking it in stride. Daniel and I discuss the market narrative around inflation—including JPMorgan CEO Jamie Dimon’s recent comments on the strength of the economy and consumer debt levels. [9:00]
I share a great lesson on how to think about debt—based on a popular company that’s unfairly criticized for its debt. [11:40]
Daniel shares why he’s looking to “boring” companies for the current market environment…
Speaking of which, today’s Curzio Research Advisory recommendation is one of my favorite “boring” companies… but its growth story is more exciting than you might think. [15:53]
With Bitcoin bouncing higher after dipping below $40,000, I’m more bullish than ever for crypto. That said, you’ve got to mitigate risk and manage the inherent volatility of the crypto markets. In Crypto Intelligence, for example, we use smaller position sizes to build exposure over time.
Daniel and I discuss one of our favorite portfolio holdings… and why I believe the company’s CEO is the most powerful person in crypto. [24:25]
I close by pounding the table on why you must educate yourself on the crypto industry… and why Crypto Intelligence is the best way to do it. [31:00]
- Why would you want a stuffed animal that sucks your thumb? [5:36]
- The current market narrative around inflation [9:00]
- A great lesson on how to think about debt [11:40]
- Curzio Research Advisory is getting one of my favorite “boring” recs [15:53]
- Crypto’s most powerful person is the CEO of this Crypto Intelligence holding [24:25]
- Why you must educate yourself on the crypto industry [31:00]
Wall Street Unplugged | 841
This CEO is the most powerful person in crypto
Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on main street.
Frank Curzio: How’s it going out there? It’s January 12th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down the headlines and tell you what’s really moving these markets. A lot going on today. Got the CPI going a little nuts, showing 7%, growing year over year. The Fed yesterday saying, going to be aggressive raising rates, going to cut back on that bond buying program, but it could take a while and not really a timeframe. And the market, I guess, saw that as a positive? Also, volatility in Bitcoin, where we saw the cryptocurrency fall below 40,000, hit 39, and then ricocheted, bounced off of that level. And there was a reason why it bounced off of that level. There’s someone that said it was going to bounce off that level, and this person has probably become one of the most powerful people in Bitcoin. Which, I’m going to go over all these stories, bring in the one and only Daniel Creech, senior research analyst at Curzio Research. What’s going on, man?
Daniel Creech: Good morning. Frank. One and only, I like that. Appreciate that. Back from Vegas, how was Vegas? Quickly, I know you’ve talked about it a little bit, but I have to admit on record, I’m pretty jealous when anybody goes to Vegas and I don’t get to go. So, a little bit of me was excited to hear that you were a little frustrated with a few things and limitations. But all in all, no, I’m glad you had a great trip. You had a lot of fun videos. And, I mentioned it on Friday’s Frankly Speaking. It sounds like you were at least flat to up on the tables. You did play a few slots, and have some fun and unwind.
Frank Curzio: Yeah, I played a game of slots, and I literally played for-
Daniel Creech: You were working too much. You sent way too many videos. You were working way too much.
Frank Curzio: I know, we sent too many videos, way too many videos. But yeah, I only played for a couple of hours. Just tried to break it up a little bit. But yeah, it was busy. It was really busy there.
Frank Curzio: I’ll tell you, the Consumer Electronics Show was great. I covered that yesterday. You go to our website, see all the videos that we have, but I didn’t go over… I went over some of the cool things, but some of the crazy things where it wasn’t as crowded. I wish a lot of the majors had showed up when it comes to the auto companies, because that’s where the fun technology was, in showing off all those cars. But, most of those guys didn’t show up either. About 60% of the companies canceled, which left about, I think it got up to 800 companies in total that were there. I’m sorry, it was 800 startups. It was about 1800 companies altogether that were there, which is really cool.
Frank Curzio: But yeah, I didn’t go over some of the things that, that were crazy, like you see these technologies. And, you got to pay a lot of money to go to there, Daniel, but there was one company, because they have a big sex thing now, which is like sex health, they call it. And, some of the stuff is really cool. They had, it was a very big presence. It started in 2019. People don’t really know this, but going back, I think three, maybe four years, every year the CES, that week was the same as the adult awards. So, you do the math with everybody going crazy there and stuff, and it is Vegas. But now, I think they changed that.
Frank Curzio: But anyway, sex health became a pretty big theme, but one of the things was a little crazy. It was a device to stop premature ejaculation. Okay? So, they say this happens into one out of every, I think it’s five men, six men or whatever it is. All right. I get it. Even though that’s not a male problem, that’s more of a woman problem, I think. But which, I don’t know if there’s going to be demand for that techno. But, I know that I would never use it because, Dan, this is a device that you put underneath your friends, in between your legs. Right? I’m trying to be politically correct here, and-
Daniel Creech: Trying is the key word there.
Frank Curzio: Trying.
Daniel Creech: It’s a family show.
Frank Curzio: And when you’re doing it, it shocks you. It shocks you. And apparently you’re like, and I was like, “Do you feel it?” Like, “Yeah, you feel it.” I’m like, “Yeah, but doesn’t, wouldn’t that?” And it comes from an app. So, I guess once it does that and you don’t want it to do it anymore, you have to go on your app. I guess in the middle of intercourse, while you’re doing this, you’re on your app? I have no idea, but apparently it got funded for like one and a half, $2 million. And I’m just looking at that going, “Really?” I don’t know. I don’t know anyone that would use that. I don’t know, but maybe it’s a good product. Maybe, I have no idea, but that was kind of like, I just didn’t get it. I didn’t get it. If I’m in the moment, you don’t want that.
Frank Curzio: Even if you were a premature ejaculator or whatever, I just didn’t understand it. I didn’t understand. Like, “You’re going to shock me. You’re going to shock my balls during sex?” I was like, “Are you kidding me?” I was like, “That’s not.” It’s not actually on your, but it’s below there, in between, but I just, isn’t that going to take away from the fun? And I’m just, I’m going to show Daniel, who’s laughing at this, but that was one of the-
Daniel Creech: You see the kind of research that we do for subscribers, and you, the hell you go through, Frank? That’s got to be an interesting pitch to raise a million or two million bucks on.
Frank Curzio: Yeah. There’s the flying cars. I actually tried both of them out. I didn’t fly in the car obviously, but yeah, you like your pilot’s license. But I don’t think these guys understand the FFA requirements and stuff. One company actually had amazing technology. It was smooth. It was like you’re riding in a plane, and I rode a plane before, and I actually, I won’t say piloted, but it was a four seater and we were up there. He let me pilot the plane, which is very, very simple to do. I wanted to land it. He wouldn’t let me land it. He’s like, “No fricking way,” and it was good. The technology was good, but you kind of, your pilot’s license for some of this stuff.
Frank Curzio: So, it’s a lot of this stuff is concept. And I was just like, “This isn’t coming out anytime soon.” And then you had, they had one other thing, which was a stuffed animal. So, it’s a stuffed animal about this big, right? And it’s, I think it was maybe a bear or something. I couldn’t even tell. But what it does is, you put your finger in its mouth and it sucks on your finger. And, it’s supposed to alleviate stress.
Daniel Creech: Is this still in the adult section or is this like a therapy thing?
Frank Curzio: No. This isn’t in the adult section. It’s weird. It’s weird.
Daniel Creech: Sounds pretty good, Frank.
Frank Curzio: I mean, it actually, it felt pretty good. It seems weird, but it felt pretty good. You put your finger in there. I was like, “This is crazy.” I’m like, “Wait a minute. That does feel pretty freaking good.” Right? But I don’t know who’s actually going to do, because all of us, and I was taking a tour. I usually take a tour before I see what companies I’m going to visit. They take you to the best technologies and the best companies. And, when I did this, I was just like, everybody felt weird in the group like, “Oh, my God, I’m going to stick my finger in this thing?” Stick your finger in and it kind of like sucks on your finger. It has a little massage.
Frank Curzio: But just technology, you’re paying a lot of money for it, to get there. But the wow factor came from BMW, like I said, and that’s what you want to do. You don’t really want to talk about green energy and everything. We all, okay, whatever side you’re on, and how political you want to get, and how concerned you are. Yeah, it’s not the exciting story. And just for proof is if you look at Jimmy Fallon. Jimmy Fallon had his show and he said, “Look at this BMW, changing the color of its car.” And I mean, that’s what you want at the CES.
Daniel Creech: Yeah, that was cool.
Frank Curzio: That’s what you want. Because, it’s the publicity. That’s what you want, because now, not only are you talking about that BMW, you’re talking about their whole EV portfolio, which they let everyone test drive. Which is smart, it was great marketing. But it was pretty good. It was a lot of fun. And, thank you for covering, which was awesome, by the way. And you got some really cool feedback, which they CC’d me on, which is great. And just, as you know, they’re like, “Daniel, you’re great. Do this.” And then the but comes, and everything before but is meaningless. Right? And then they’re like, “But.”
Daniel Creech: I liked it. No, I greatly appreciate all of it. Great. I got a lot of things to work on, but appreciate the feedback, the email, just the time you take. Criticism, encouragement, all good. Yeah, I had a lot of fun. When’s your next trip, Frank? When we doing this again?
Frank Curzio: I don’t know. I think this is the first time we’re actually on in, it feels like a month, right? What’d you take, three week vacation in December or something, right? To go to Ohio, three, four, I forget how many times. And then I went to CES last week, but this is the first time we’re doing this definitely in a few weeks. So, it’s cool to get together.
Daniel Creech: It is, it’s great to be back.
Frank Curzio: Back and forth, and go over it.
Daniel Creech: Back in the saddle.
Frank Curzio: Back in the saddle.
Daniel Creech: Speaking of, turning of inflation, did you notice inflation, higher prices in Vegas? Was everything through the roof?
Frank Curzio: Oh, they’re charging you fees galore. I don’t know if this is inflation or not, if this is normal. But, I got a bottle of Aquafina water, about twice the size of your normal bottle. And, I got breath mints that I’ll carry around with me, since I’m talking a lot during this thing. And it cost me $11.50. $11.50, I think. $11, 12 bucks it was. It was $12 for that water, which is probably a dollar in a store, maybe $1.75. I mean, so it was basically $2 in products. I paid, it was $12. And I even said when they told me about it, Daniel, I was like, “Holy shit.” I was like, “12 bucks?” I was like, I get it. It’s a casino and you got to go. But they, if you’re on the strip, they bang you out a lot.
Frank Curzio: And, we were able to go to a nice restaurant off strip, which is an unbelievable restaurant. Italian food, it was great. And, I couldn’t believe the price. It was like half the price of every place else. So it’s just like every touristy place where they bang you out. But yeah, you saw the inflation, and you’re seeing the CPI, right, Daniel? I mean, that number was 7%, highest since 1982.
Daniel Creech: Year-over-year, yeah.
Frank Curzio: People might say, “Well, the market’s doing well on that.” I mean it, the Fed and everybody did a great job preparing and saying, “It’s going to be at least at 7%.” They did a good job. Powell knew that number before the testimony yesterday, but 7% is serious. And just to put that in perspective, Daniel, their number for the CPI, for the last seven, eight years to keep rates low, they said, “If we see it go above 2%,” that was the benchmark, 2%, they were going to raise rates. It’s at seven and we’re still sitting at zero. Yes, we’re going to see those rate hikes come.
Frank Curzio: And, everybody’s raising that rate hike forecast now, even though the Fed, Powell said three, at his testimony yesterday. Goldman Sachs said, “It’s going to be four.” Now, they changed from three when we actually did our last podcast, about three or four weeks ago. And now, Jamie Diamond said, “I’ll be surprised if it’s just four.” So, you’re seeing inflation. I think the market’s expecting it. And hopefully, if it moderates, it’s probably going to be a positive. And maybe that’s why you’ve seen the markets go up right now.
Daniel Creech: I think that’s exactly why. You hit it on the head with the narrative, and they got in front of this. They’re trying to manage expectations. You hear this term a lot. This soft landing versus hard landing. A hard landing would be where they’re jacking interest rates up, and really shocking or surprising people of how quickly and how fast they’re doing it. The soft landing would, think of the concept of, “Hey, we can guide this lower. We’re going to have some bumps and volatility, but overall, it’s all going to manage out smoothly. And then, we’ll turn back to growth and all that kind of stuff.” Whether or not you, whatever side of the argument you take on there, the reality is, everything is up, Frank. Markets are up, crypto’s up, oil’s up. Gold is even up today. And, the takeaway there is, you have to pay attention to the narrative because to your point, when things are… Everybody hates uncertainty, markets hate uncertainty.
Daniel Creech: I don’t agree with everything they’re trying to do, and I don’t think they’re going to have a lot of success. But to your point, Jamie Diamond made a great comment. He thinks the consumer is very strong. This year’s going to be great, too. One of his comments he made recently at the healthcare conference was, “The consumer balance sheet has never been in better shape. They’re spending 25% more today than pre-COVID. Their debt service ratio is better than it’s been since we’ve been keeping records in 50 years.”
Daniel Creech: One more thing for you. You constantly pound the table in a good way about debt servicing. Don’t just look at the amount of debt somebody has or a corporation has, but look at the ability that they have to pay that. So, AT&T, everybody likes to talk about, all billions of dollars in debt, but they have billions dollars in free cash flow to cover all those debt expenses. He’s saying the consumer does. That’s a big deal. That also helps the narrative of, “Hey, higher prices are here, but we’re in good shape to handle this, as long as they can control this 800-pound gorilla.”
Frank Curzio: Yeah. And, it’s funny that you bring up AT&T, because Joe is my nephew. I’ve had him on the podcast a few times, and I was just going over a lesson with him saying, “You got a look at the numbers.” And, AT&T, I went over it with him yesterday and said, “Listen, everyone says AT&T, they’re going to go out of business. They have so much debt.” Whatever, $170 billion in debt, and that’s all people’s cite, but they don’t look at the full balance sheet or the free cash flow coming in. And when I went over the numbers with him, I said, “You’re looking at the next five.” Most of his long-term debt due in the thirties, forties, fifties, whatever that they took out. It’s investment grade debt, which is the easy way out, saying it’s okay.
Frank Curzio: But when you really look at the numbers, to service their debt over the next five years, I think it’s 30 billion, or something like that. And they got 21 billion in cash. They’re generating on average, every single year, 25 billion of free cashflow, right? So, 25 billion in free cashflow over the next five years is $125 billion. That’s easily going to cover all of their debt due in the next five years, which is, I think it was like 30, 35 billion due. And they have 56 billion on top of that in liquidity. So, revolving credit lines and stuff. So, you have to look at the full picture. I know it’s a great story to say, “Holy shit, they got more debt than anything,” but AT&T just gets checks every single month, free cash flows. The money you get back when everything else is paid, it’s remarkable. It’s cable companies. It’s that constant payment coming in, and you have to look at both sides.
Frank Curzio: And that’s Jamie Diamond was talking about, where you look at the consumer, their house, home prices are up 18%. The average price, just to go over, Daniel. So, basic human needs such as food, heat, shelter, global food prices are up an average of 27%. Lumber prices, remember lumber prices was supposed to come down. Yes, they did come down, but they’re up 40% in the past four months. Not a good sign with interest rates going higher. And we’re looking at mortgage rates for 30 year at what? 3.6, 3.7. There were three. I locked in at 3.2, not too long ago. So, it shows you how rates are going up. You’re looking at heating costs, up 30%. Oil, 43%. This is oil, year over year. And again, we’re hoping this moderates.
Frank Curzio: The consumer is in good shape. I mean, you’re looking at, household wealth is at record highs. And a lot of that has to do with money being tied up in your house, and that home value going higher. Wage growth is up as well, at 5%. But, how long can this continue where, what happens if we put price controls in? Which was done, when we had massive inflation. That means you’re limiting the amount of money you could make, which is limiting the margins. Now, you’re not making those margins. Companies are able to pass off the higher costs, but what if they can’t? And you’re seeing that. You’re seeing people change their habits right now, not going to certain restaurants. They’re not going on vacation, and saying, “Okay, maybe we’ll wait.”
Frank Curzio: When you’re changing those habits, that’s what you have to worry about, because the prices stay high. Consumers may be saying, “Okay, our expenses are up through the roof. Let’s play it safe, and let’s cut back.” And, that could happen, and it is going to happen if inflation stays high. But I could tell you, the Fed’s really worried about it, Daniel, and they should be. I like what they’re doing now, because what did they do nine months ago, six months ago, three months ago, which we said, “This is a joke.” They’re like, “It’s transitory, transitory, it’s transitory, don’t worry about it.” And we were like, “F that.” And we were like, “There’s no.” Everybody, you don’t have to be a genius. All you had do is not be an economist and you got this right. Right? Oh, that’s all you had to do. Don’t be an economist, and you got this right, because they’re going to look at other things in the past.
Frank Curzio: This has never happened before, when you handed money directly to people. Most economists have a lot of money. They don’t understand the markets. I don’t even know if they do their own shopping or their own driving. Everyone out there saw the higher prices, and every single thing that they did, and that wasn’t going away. You handed checks directly to businesses. It wasn’t like the credit crisis, where you backstop the banks. This money flowed directly, directly into the system. It bypassed the whole working angle. It’s, “Hey, you need money? Here you go. Here’s a check. You got a couple kids. Here’s a check. You got a business. Here you go. You don’t have to pay it back in a PPP loan.” And it was going to result in inflation.
Frank Curzio: We’re hoping that we don’t see higher inflation, and looking for moderation of this thing to come down a little bit, and that’s going to be a positive. And there’s a lot of hope there, but at least the Fed now, now finally, is going over the top saying, “We got to do this quicker. Inflation is a problem. It’s not transitory.” So now that sentiment has changed, and it’s resulted in a lot of volatility in the markets, but at least a sentiment is right now, where they’re freaking worried, because they weren’t worried nine months, six months, even three months ago. Now you can tell they’re worried.
Daniel Creech: Absolutely. And you make a lot of good points there for investors to take away from that. Be boring. And Frank and I have joked about this, and I say this as a compliment, but today’s, for Curzio Research Advisory subscribers, the new pick I would say, is boring. Frank, you’re going to, I mean, hell it’s not that anybody hasn’t heard of the company you’re recommending. But it’s very easy to overlook the forest from the trees type deal. And it’s okay to be boring. I need to get better, Frank, and beef up the marketing site on how to be boring and sell that idea. Because, last week when I was filling in for you, I talked about, can you think of a better stock in general to be boring, and keep things as simple as possible for an inflationary time other than Berkshire Hathaway?
Daniel Creech: Inflation protection across railroads, transportation, insurance, not to mention, I liked what you said earlier about AT&T and going out of business. As an investor, and I’m not talking about trading here, but as an investor, you want to talk about, total risk of loss is your ultimate risk. Going out of business, going to zero. Berkshire has, how many hundred and some billion dollars on their balance sheet? Google, real quick here. When I was in Ohio on my three week vacation, as you pointed out earlier, a friend of mine said, “Man, I want to be in the stock market. I’m tired of thinking. I’m just, I put a bunch of money in Google.” And he was half asking my opinion, more just telling me. And, I thought, “Well, that’s smart because you’re picking a great, well-known, great business. And you’re just going to camp out there.”
Daniel Creech: Frank, Google’s trading at around 25 times forward earnings for next year. Its three year average, and again, take all this with a grain of salt, is 27. So, you’re getting it a little bit below its three year average. Again, are you worried about Google going out of business? And I’m not saying put all your eggs in one basket. I’m simply saying, this is how to keep it simple, and it’s okay to be boring. It’s trading below its three year average on its forward PE. It’s about 20% higher than the market of 21, but yet, it’s blown out earnings and revenue growth. And it has the optionality, because of all the strength on its balance sheet, its huge high margins. It can do whatever it wants.
Daniel Creech: Thinking about it and investing during tougher times, inflationary times, that’s what I want to get across. And hopefully, I think we can provide a lot of value to investors to think about that. Hey, tougher times, more tough environments are coming ahead. Inflation is a huge shift for the last several years in markets, and that’s going to funnel down in the markets, but you can still make a lot of money. And I don’t want to say it’s easy and sound arrogant, but you can make a lot of money off boring businesses, that to your point, just like, unless you’re an economist or overthinking it, you can put yourself in a great position to benefit.
Frank Curzio: Yeah. And also, Daniel, when you’re looking at comparing this to the eighties and where inflation was, it’s a different time. To the point where, you’re looking at high double digit inflation in the eighties, but you know what the savings rate was? It was eight, 9%. I mean, that’s pretty cool. So, if you have money, right? One, if you have money in the bank, higher rates are good. Your banking companies, your margins are going to expand. Insurance companies, it’s good for, so you’re looking at even, you see the oil companies do well, right? And that’s, maybe not so much a function of interest rates, but more of a function of just supply/demand issues. So, things do work in this environment, but now you’re looking at rates skyrocketing, and let’s see. With savings rates, and inflation, we’re still negative. In the negative, but people failed to mention that when in the eighties, “Holy shit, getting a mortgage, 18%,” whatever it was back then, in the early eighties. But, your savings rate, I mean, 8, 9% is pretty cool, so.
Daniel Creech: Well not to mention, I mean, we’re not huge bond guys, but hell, if interest rates spike and you could go park money in something and earn 8%, why the hell wouldn’t you? I mean, we love stocks. We’re always going to find great stocks like that, but hell, we’ll be the first to tell you, “Yeah, go buy a CD for three years and earn 8% annually.” Absolutely. It’s about compounding money. It doesn’t matter what vehicle you use.
Frank Curzio: Listen guys, it’s if you look back at history, it’s been value, then sometimes growth value, sometimes growth. It’s been a pure growth market, right, Daniel? It’s been a pure growth market since the credit crisis. Growth stocks just outperforming and that’s fine, because you had interest rates super low, more money into the system. But now, you’re seeing the transition into the value. You’re not seeing the transition out the market completely. S&P’s not getting smoked. There’s certain areas that are getting smoked, right? So, you have to be careful, but when I look at, you mentioned the stock being, boring to the point where people know it. But when you see the story, and you see the video for CRA, which comes out today, it’s very, very exciting, because this is a company that’s growing tremendously.
Frank Curzio: It’s trading at a much cheaper valuation in the overall market, yet it’s going to be competing. And right now, taking market share from Nvidia, which is a $800 billion company. Right? So, plus seeing this company at CES, it was remarkable. But more importantly is, they’re paying a dividend. Dividends are going to come into play now. Dividends are going to be huge now. So, if you’re paying a nice yield, you have lots of free cash flow, you’re buying back your stock, which you’re going to see massive buybacks. A lot of these companies have a lot of cash on their balance sheet. Buybacks are good. I mean, you look at where the market is. Where’s S&P? It’s up 3% off its highs. All the companies have bought back their stock. For how many years, it was a great buy on average, right? I mean, a lot of these guys, Apple’s buying back their stock.
Frank Curzio: A lot of these guys buy back their stock, right? Reduces the shares outstanding, increases your share percentage wise of ownership. And you’re seeing that, that benefit of these companies, lots and lots of buybacks are going to come over the next year. You’re going to see, probably record buybacks this year, which are going to put a floor in some of the companies. Which means, be careful buying high growth names that are expected massive growth, five, seven years ESG companies. You’re looking at marijuana companies, you’re looking at EV companies, right? Tesla’s going to get away with it. It’s fine. They’re growing still. Tesla’s the only company out there, that really has a car on the road. All these are coming. Let’s see if they come, and how they do the manufacturing part in getting these things out. I still don’t know how they’re going to do that, in the year timeframe that they’re expected. The year, 18-month timeframe.
Frank Curzio: But a lot of these companies in their growth models, going out really, really far and not worrying about earnings, and just saying, “Hey, we’re going to see sales growth, but we’re going to report huge losses.” Those are the ones that are getting hit the hardest right now, because it’s not going to be easy to borrow money. It’s not going to be easy to raise money, as capital’s going to get harder to come by, as you see higher rates. It’s not going to be as much as an easy monetary policy, but that’s what’s going on now. It’s more of a shift in allocation, not, “Hey, run away, run for the exits. Holy shit.” But, a lot of you are probably sitting on companies that are down 35, 40% that just got wrecked, if you were a little aggressive. However, those are the same companies that are probably up two, 300% off their lows during COVID. So, you have to look at it that way.
Daniel Creech: Well, doesn’t that depend on when you bought? Tell that to the people that bought recently and are down.
Frank Curzio: I know, hey.
Daniel Creech: That’s the world we live in. I get it.
Frank Curzio: Look, we’ve done great in our crypto recommendations. Our average crypto stock is down 20% over the past month. However, two of the last three that we recommended are up huge. And the ones that did cut, which is good, because we had a lot of subscribers over that time frame. And the ones, Daniel, that are down, are the ones that we were up 30X, 35X, 20X on that took a breather. And the ones also, some of the new recommendations that we got into, we have small positions where we can add to it. Now, you’re seeing Bitcoin come back. So, a lot of it is being smart about your allocation, not going all in, limiting your losses. Nobody likes to take losses. But, you got to limit your losses. You’re going to be… More than taking a massive loss, you’re going to be focusing on that loser more than anything, instead of focusing on the new ideas. Some other names that may have come down 30, 40% that you’re like, “Holy shit.”
Frank Curzio: Maybe you love Rivian here at, in the 80s, which was whatever, 130, 40, 50, wherever it was. Some of these really good names that makes it, Roblox, metaverse. One of the few companies that actually has applications for the metaverse, where Nike signed up for them, and that’s come down. That is reporting solid earnings, and stuff like that. But some of these names, you’ll be focusing on new ideas instead of focusing on that one loser, and going, “Why the hell is it down?”
Frank Curzio: I mean, a good example of this really quick is Under Armour. We recommended Under Armour, they blew out the quarter twice. We’re down about 5% on our position. Amazing company. But if you look at all apparel makers on a whole, that industry was down 7%, as on yesterday’s low for the year. Apparel retailers, right? So, it’s not, you can’t look at it and say, “Well, Under Armor, what the hell happened?” It’s not that. It’s more sector related or industry related, but those are the things that you’re going to have to look at this year. It’s different. There’s fundamental things going on with the market, fundamental changes. It’s a different landscape, rising interest rates, tighter monetary policy. It’s going to take money out of the system and you’re seeing it. You’re seeing it in certain stocks, certain sectors, but not everything is crashing. Some things are really, really doing well. And allocation is going to be a very, very big thing for this year, and probably over the next 18 months as the Fed is in this tightening cycle.
Frank Curzio: But, we wanted to talk about Bitcoin real quick because we saw that come down a ton, but it was interesting there because it stopped at a certain level at around 39,000. And what’s interesting to me is Novogratz, Mike Novogratz of Galaxy Digital. And this is when it was, I think it was 50, 47, 48. And he was on, he’s been on CNBC a lot. They interview him, and it’s a good interview. Politics aside, I like the guy. But he said, “The interesting level’s around 39, 38.” And he was saying, “It’s an interesting level, because institutions want to come in.” And sure enough, it hit that level and it ricocheted, it’s up 10%. It’s like 43 to 44,000 right now. It’s interesting that he knew those levels.
Daniel Creech: Yeah. I, I believe it’s closer to 44 right now than 43.
Frank Curzio: 44 yeah. It’s closer. It’s 43 to 44, yeah.
Daniel Creech: 43, yeah. And it was somewhere around 38 or 39.
Frank Curzio: It’s at 43,470 to be exact.
Daniel Creech: I typically, I try not to be a cheerleader, but everybody knows that. And I talked about this more last week when I was filling in. Galaxy Digital is by far, my biggest holding personally. I’m down on it, because I had to start buying after we recommended it, which is fine. I like the long-term thing. Mike Novogratz, to your point, has to be the most, one of the most well-connected guys. He’s brilliant from the investment banking, to bridge that crypto investment world in my opinion. And yeah, he’s talking to everybody. He knows what’s out there, and it’s encouraging to see the bounce, and who knows what could happen?
Daniel Creech: That doesn’t mean it couldn’t turn around and go down further, but it is encouraging to know this is still early in the adoption stage, even though it’s high in price, and it’s great to see people step up and start buying. And I know people that are buying. I’ll continue to add to certain positions. It’s hey, it’s emotional. It’s doing what we preach, and we’ll see how that turns out. But the odds, the reasons that I’m still bullish on Bitcoin haven’t changed, and lower prices being backed up by action, by bigger money is great to see. So, color me still bullish, Frank.
Frank Curzio: I have to say, that Novogratz, and there’s a lot of people who are Bitcoin crazy out there that have been in this thing for a very long time. I’m going to say that Novogratz is probably the most powerful person in Bitcoin. I may get some pushback on that, but I’m going to tell you why. Because through Galaxy Digital, that’s where the institutions go to learn about Bitcoin, to see what their allocation to Bitcoin’s going to be, to understand how to do it. And that’s why he knew at that level of 38, 39, 38, we could break through those levels. But he said, “It’s an interesting level,” because he… Look, Goldman Sachs goes to Galaxy Digital to trade futures. They trade their futures through Galaxy. Morgan Stanley, right? Those are the two biggest investment banks on the planet, right? Everybody goes to them when they’re going to do the biggest deals in the world. Morgan Stanley’s partnered with Galaxy to offer their clients access to their Bitcoin funds.
Frank Curzio: They have partnerships with tons of institutions. This is where they go, where especially, when it comes to banking and everything else is, “Hey, let’s go through Galaxy Digital.” And that’s why I said, this company is more like the Goldman Sachs of Bitcoin, but the access that they have, when I say most powerful, I’m not saying that he’s been in it the whole time. But the fact that there’s, the people he talks to has trillions in assets. They have to allocate money to alternative assets. They’re looking at certain levels to do it and saying, “Hey, if this comes to this level, this is what we want to do. This is how much he’s going to be injected in it.” That makes him an incredibly, incredibly one of the most powerful men in Bitcoin, whether you like it or not, because he’s the one that’s directing institutional capital right now.
Frank Curzio: Now, that company’s going to get bigger and bigger. He’s got a good reputation in this space. Almost all the companies that I look at in Crypto Intelligence, Daniel, is whenever I look at their financings, or it seems like every good name that I’m looking at, Galaxy is on, and they’re one of the early backers. And now, you’re seeing a bunch of venture capital get in it. But even for our token, if want to invest, you want Galaxy. Galaxy has access to everybody. It’s almost like having Goldman Sachs as a partner, Morgan Stanley as a partner, and that power behind you. And they have that. So, when he would say, “Well, 39, 38’s going to be a very interesting level,” when it was at 50, 48, 47, to see, as soon as it hit that level, bounce right off it. Look, nice call.
Frank Curzio: I’m not saying it can lower, but there’s tons of demand right now for Bitcoin from the institutional level. They were late to the party. It’s a $2 trillion market. It’s liquid. And most importantly, if you’re looking at the hiring from JP Morgan, to Wells Fargo, to Citigroup, to all these banking companies that used to hate, they’re all hiring like crazy for crypto and crypto experts. They’re going to build out these divisions, because they have to. Because their clients want it. They want alternative assets. I think more people understand what’s going on with the dollar at a young age than ever. And, when I was 25, I didn’t. I couldn’t tell you anything about the dollar or anything. Again, I was in the industry and stuff, and stocks and stuff, but to hear this from mom and pop investors of how the dollar’s getting destroyed, all this money printing, and stuff like that, and the younger generation growing up in digital, a hundred percent digital, just growing up in the streaming world, growing up in everything digital, it’s Bitcoin is their currency.
Frank Curzio: So, this is here. This is going to happen. My prediction was always like, “Hey, this is going a hundred thousand.” I didn’t say this year. I didn’t say next year. I said, “I know it’s going to a hundred thousand.” Probably the next three years. When it does, the companies we have in this portfolio are going to do great. A lot of them have great. And now they’ve come down. We’re going to be adding to these positions in our next newsletter, which is going out, probably around Friday. It was supposed to go out last week. I was at CES. I met with a couple of companies in the industry.
Frank Curzio: But Bitcoin, I’m bullish than ever. These conditions, what’s going on right now is very, very bullish for Bitcoin. You might say, “Well, higher rates, that’s too good for gold.” The negative real interest rate, when you count for inflation is well, well into the negative. That’s why gold is going higher now. I think gold’s going to have a great year. And, I think Bitcoin is providing an unbelievable opportunity for you to buy, down at these levels.
Daniel Creech: Well said. It’s an exciting story with Galaxy Digital. One last point, it’s great. It’s a great opportunity in the present to invest in a business mindset that I believe has many ways to win. You covered those, from venture capitalists to everything else, connectivity. And, if you believe in that, you can either recommend it as we’ve done and invest in it. And if not, no big deal. But yeah, it’s great to take advantage of this as it unfolds from an investing standpoint, in a business over time as the adoption kicks in. And it’ll be exciting. And let’s hope we’re right.
Frank Curzio: And guys, listen, learn. Just, if you can, learn as much about Bitcoin, about cryptocurrencies. There’s so many different sites. You can learn through our site at curzioresearch.com, which is fine. We have a lot of free information, especially with our token and everything, because we have a security token, which going to be trading in just a couple weeks. We were going to trade it towards the end of the last year, but we want to do a nice marketing campaign on it, and launch it at the right time, which is good. Which is really, really exciting. So we didn’t want to launch it in between the holidays of New Year’s and Christmas, which we’re not going to see a lot of people knowing about it, finding out about it. So now, we’re going to do it in the next couple weeks, which is very, very exciting, but try to find a place where you could find free stuff on it.
Frank Curzio: We have an expensive newsletter. We’re going to try to come out with a very low price newsletter on this, so that people can learn more, because there is a learning curve. It’s not that easy. With us, we do videos. I do specific videos. I’m showing you the sites that I use, free sites. But just start learning about it, because it’s here. It’s a real trend, it’s not going anywhere. There’s a lot of shit in this industry, so you need to listen to someone who knows what they’re talking about. But this is an industry that’s here. Technologies and innovation, that’s where it is coming from. That’s where you’re going to see metaverse come from, you’re seeing DeFi, which is massive. A lot of these stocks are getting hit a little bit as Bitcoin is sold off, but you’re looking at Dow, you’re looking at just so many different technologies, security tokens, NFTs. It’s really, really exciting stuff, and it’s got to be around forever. So, definitely starting educating yourself, because there’s going to be tons and tons of ideas. And, I’m going to bring you lots of those ideas with our Crypto Intelligence newsletter.
Frank Curzio: So, Dan, I want to say thank you so much for coming on. Nice to see you after a month, so pretty cool. Don’t take too many more vacations because we need you around here.
Daniel Creech: Hey, wonderful. Always great. Cheers, everyone.
Frank Curzio: And also, it was a great job with the podcast. Really appreciate you filling in. I might have you fill in early next week, since I’m going on another business trip to find new ideas. It’s an awesome business trip I’m looking forward to, in The Bahamas. Little bit of a pain in the ass to get there. A little bit of a pain in the ass to get there, since you got to take, have a negative test before you go, negative test when you get back. And now, it’s just a little crazy, but still I may have you fill in on Tuesday, and I should be back Wednesday. Back in the saddle, having fun, and new ideas to share. So thanks a lot, Daniel, for covering for me. And yeah, I know that a lot of people appreciate it, and you got a lot of good feedback. Seriously. Most of it was positive.
Daniel Creech: Yeah. Thank you. Happy to do it. Look forward to the next time.
Frank Curzio: All right, man. So that’s it for me. Questions or comments, you know the email. Frank@curzioresearch.com. If you want to say something to Daniel, and give him feedback, or yell at him or whatever, what’s your email, Daniel?
Daniel Creech: Daniel@curzioresearch.com.
Frank Curzio: I love making you say it. I don’t do it justice when I say it. So anyway, again, firstname.lastname@example.org, questions and comments. Be on the lookout for the free report. It’s absolutely free, and it outlines the biggest trends at CES, along with seven stops on my watch list that I like. Again, it’s going to be absolutely for free, just a recap of everything. And you can go to our Curzio Research website to look at all the videos, which I encourage you to, because it’s entertaining as hell. And you’re going to see some ideas there, and then different trends that we will cover in metaverse, smart homes, lots and lots of good stuff. But, I’ll have that report out early next week for you. And again, It’ll be absolutely free. It’ll be on our website, and I’ll let you guys know. So, really appreciate all the support, and I’ll see you guys tomorrow. 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 this broadcast. Remember, it’s your money and your responsibility.