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This may be the most presidential thing Trump has ever done

Andrew Horowitz, president and founder of Horowitz & Company and host of The Disciplined Investor podcast, is back to discuss whether this market rally is sustainable. 

In this wide-ranging interview, Andrew also helps break down the latest news out of the Federal Reserve… and if its policies can continue to prop up the market. Plus, he warns listeners about his biggest fear going forward… and how to position your portfolio for the volatility ahead. And of course, he shares a couple of his favorite ideas he likes right now. [44:22]

But first, research analyst Daniel Creech is back, along with a very special guest—one of our Curzio Research partners—to tackle the biggest headline news: the passing of Ruth Bader Ginsburg… the upcoming presidential election… and why Trump is about to do the most presidential thing he could do. Pay attention—this is how politics can affect your portfolio. [0:55]

Transcript

Wall Street Unplugged | 740

This may be the most presidential thing Trump has ever done

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 September 23rd. 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. So as you know, I’ve been pretty bullish since May, seeing the amount of money our government was willing to throw at the coronavirus problem to prevent an all-out depression as businesses across every state were being forced to shut down. And this is something, an event, that no business prepares for. And you’re talking about a decline in 75% or more in sales. Immediately. In other words, you’re not seeing a slowdown where you’re changing your business model, hiring new people, going through those ebbs and flows like most businesses do. This is something that just, you can’t see coming. There’s no playbook.

Frank Curzio: It was immediate. It was damaging. It was scary having to lay off, furlough employees out of nowhere when businesses… I mean you look at the airlines, how great they were doing. Again no playbook for this is pretty crazy. So the government had to react forcefully, aggressively, spent six and a half trillion dollars, six and a half trillion dollars, including direct payments to families. Fortunately for business loans that were pretty easy to obtain for most businesses. 50 billion of loans to the airlines. 8 billion of loans to air cargo carriers, 17 billion of loans to businesses who are critical to national security. 425 billion for the Secretary Treasury, where they could use that cash to buy basically almost anything they want, which was bonds in terms of backstopping risky debt CLO market, which I was worried about. They backstopped it, it’s fine. Investments, they could buy stock if they want. When you take the full amount, the full amount of money, six and a half trillion, it’s 35% of GDP which is game-changing.

Frank Curzio: So we have struggling businesses that were given a lifeline until the COVID risk would eventually die down, and we’re seeing that. Most states are open at some capacity or another. Gone from 20 to 50 to 70. And on the other end, we have businesses that, that started to thrive because of COVID, which is tech, social media, streaming, healthcare, almost anything e-commerce: Zoom, Overstock, Wayfair, you guys know all the names, all those. Exercise equipment companies since gyms were closed. Of course they have super low interest rates, which the Fed said at its recent meeting, will stay at zero. The short-term rate we stayed there for three years, right? I talked about yield curve control and why the Fed was definitely going to do this. So yield curve control is capping long-term yields so they don’t go high, which is one of the biggest risks of the markets, we have tons of debt, right? Essentially, they initiated yield curve control. They just laid it on the front end of the curve. And the last time they did yield curve control was back in the forties to fund World War II. The next eight, ten years, the market surged because of this policy.

Frank Curzio: But now they just said, well, rates are going to stay low for at least three years, at least three years and so we get full on employment could take longer than that, 2023. So, having super low rates locked in long-term, Fed’s already spending trillions to backstop our economy. They’re going to continue to throw trillions into this market because of the vibe between Wall Street Main Street, we all know it’s going to continue for many years. And now what do we see with COVID? The numbers are getting better every week. Say, wait a minute. I’m hearing increases. You’re right. Half the states have seen increase based on the latest data. And it’s nearly a 40% increase in cases from week over week, which is around 50,000 now, but that’s kind of expected, right? Schools opening back up. It’s getting cold around the nation. More people are staying home.

Frank Curzio: It’s not about the infection rates. It’s about the hospitalization rates and a death rate percentage. That’s the only thing anyone should care about. And unfortunately, a lot of the media, which is all bullshit, is just going to throw headlines at you to scare the shit out of you to get page views. But if you look at the hospitalization rates and looking at an increase of about 13, 14,000 new cases this week, compared to next week, around 40% increase, the hospitalization rate actually moves lower. The death rate as a percentage has continued. We get the week to try lower… than A 2.8%. It was over well over 8%. I think it’s still over 6% for New York city. The people who die or catch COVID now, what does this mean? When I look at this data, the people catching COVID in the U S are young, healthy do not have underlying conditions cause you’re not seeing death rate rise, we’re not seeing lots of hospitalizations. So it’s kind of like the flu to them. Based on low hospitalization rates and death rates, we’re doing a great job right now, protecting the people in a danger zone who are over 65 or who have underlying conditions. So it’s very, very good news and we’ll also get a vaccine from J&J or Pfizer by year end.

Frank Curzio: So the landscape for stocks is super bullish. I sound crazy as that pull back, listen to every single, every single trader, every single one that you know that you follow all called the bottom or actually the actual top on September 2nd. Our models said it, we have to get out. They all have the date, right? It’s like, they all got together in a meeting and said, okay, this is what we’re going to say. It’s awesome.

Frank Curzio: But if you’re looking at the landscape and you’re looking at six, 12 months, it’s super bullish and not all names, some high flyers trading or 50 times sales, you’ve seen a lot of these names pull back like the Teslas, couple of other ones, Apple has pulled back. I’ve seen a lot of great names, especially in small calves that are still down well off their highs, but they’re starting to see the man come back, it’s a great opportunity. It’s why I’ve been bullish, portfolios have benefited. So I continue to be bullish… Up to now. So when it comes to the stock market, and I’ve told you this millions of times, the one thing we know it’s bad for the stock, more bad for equities, the one thing, that one word is “uncertainty.”

Frank Curzio: I’m not usually worried about short term problems, but this election in November is going to be a complete shitshow. It’s not going to be decided right away. If it takes months to determine the winner, which is a possibility we’re going to see a major pullback in stocks, and rightly so, because these candidates have, have different agendas… Not too sure, you know, big flip-flop on what they like, don’t like, what they support, but I really don’t want to own fracking companies if Biden wins but I would think alternative energy, healthcare stocks, biotech will catch a bid, since he said those almost always do well when a Democrat first takes office. So we’re talking about trillions of dollars, sitting idle, looking for an allocation based on who gets elected, because that’s going to determine the policy. It’s important to understand that. If you’re not pushing an agenda, there’s money, it’s not going to flow into certain sectors.

Frank Curzio: Now, why do I suddenly feel this way when I’m mentioning it? And I’m nervous and saying, well, we’re going to see uncertainty to the point where we could see a huge correction in stocks. And just to be clear, it’s kind of the status quo here. A lot of people think the election will be crazy. We won’t have a winner right away. You know, I didn’t feel this way, but now why do I personally feel this way is because of the death of Ruth Bader Ginsburg, who was a Supreme Court Justice, which you all know by now, you know, this story, trailblazer, outspoken, liberal, did things her way. And she had a way about her that even people who were totally against a philosophy or super conservative, like the late Supreme Court Justice Scalia, who is super conservative, had a great friendship with her. They loved busting each other’s balls, after cases, after meetings, and there’s really great stories if you want to do some research and reading, how they just tore each other apart, afterwards, but they were friends and they understand that they had different point of views. But anyway, Ginsburg passed away last week, leaving a door open for President Trump to nominate a new Supreme Court Justice. Now to bring everyone in here who may not understand the process of hiring a Supreme Court Justice or the importance of it, there’s nine Supreme Court Justices, and right now it stands at five conservative and four liberal, progressive, whatever you want to call it. Ginsburg was one of those four liberals and her seat needs to be replaced. So the process of replacing a Supreme Court Justice is approval from the President and approval from the Senate, which the Republicans happen to control both. So Trump will elect a new Supreme Court Justice, who is conservative.

Frank Curzio: He’s going to do this before the election November 3rd. And that’s going to lead to six conservatives and three progressives, which opens the door to big changes, basically ensures that the liberal agenda is going to be impossible to pass, at least in terms of law. Now, Ruth Bader Ginsburg, and this is cool. Her dying wish, according to Democrats, was that her position not be replaced until a new President is installed. That’s awesome. Yeah, the dying wish. Why was this so pressing? Because Ginsburg knew that the Democrats were really going to get to get fucked if she were to die before the November election. Right? She knew that, everybody knows that Democrats know that. So basically she was hoping for a Biden win while she was alive, a Senate win and then they can elect a Liberal Supreme Court Justice, right? Probably the reason why she wasn’t retiring.

Frank Curzio: She was very sick, but that ain’t happening. This is unfortunate for the Democrats. It puts them in a real shitty spot and they know it. And how are they responding? They’re protesting at Mitch McConnell’s house, who is the Senate majority leader, the person who brings a Senate together to vote on issues. Mitch McConnell contradicted himself because this situation arose in March, 2016. We’ll get to that in a minute. It was Obama’s second term. He’s only going to be President for a few more months, but he tried to elect a new Supreme Court Justice Merrick Garland to replace Judge Scalia when Scalia passed away, 2016. It didn’t pass because the Republicans ran the Senate but McConnell said “We need to wait until a new president is elected before bringing a vote to the floor.” And now he’s doing it differently, so Democrats are really pissed. So, hey, let’s protest in front of Mitch McConnell’s house.

Frank Curzio: They’re talking about increasing the amount of States from 50 to 52, thought that was kind of funny. So making Puerto Rico, Washington DC, states, where they can get four new democratic senators… get more power, more votes, talking about getting rid of the Filibuster, which requires a super majority of 60 out of the 100 senators to vote an issue. I mean that wouldn’t happen till next year. And if Biden won, along with the Democrats, controlling the Senate, everything, Don Lemon CNN says, “We need to blow up the entire system, blow up the entire system. We’ll abolish electoral college altogether if Trump elects a Supreme Court Justice.” AOC another Democrat is talking about increasing the number of Supreme Court justices, more than nine so where they have 15, whatever it is, who knows, this way they could have more progressives.

Frank Curzio: CNN GES was on a lot, Reza Aslan tweeted to his 300,000 followers that if the Republicans try to replace Ginsburg before the election, we burn the fucking thing down. That’s what he actually said on his Twitter account. I’m quoting, “We burn the entire fucking thing down,” that’s what he said. If all else fails, you got Pelosi in the pocket, right? But Pelosi is going to launch another impeachment against Donald Trump, which, you know, it’s like a yearly thing now… Which will eat up the Senate floor time and help delay the Supreme Court vote until after the election. The old impeachment thing, you might as well keep bringing it because even when it’s bullshit and you get caught, nothing happens to you. I mean, every president is going to get impeached at least once a year, going forward forever, right? Because, there’s no consequences. You can make up shit. You can say whatever you want. You can destroy lives and even when you get caught, nothing happens to you. So why not, bring an impeachment?

Frank Curzio: My question? What the fuck are we doing here? I mean, has our country actually come to this? If Trump elects a new Supreme Court Justice and believe me, this is going to filter down to your portfolios. The reason why I’m going over it, politics, I know, you guys, we’ll start up here. Trump elects a new Supreme Court Justice. This would be the most presidential thing he’s done since becoming president. This is what 100% of every standing president would do in his shoes, if they controlled the Senate. Obama tried to do it in 2016, tried to elect Garland to replace Scalia when he passed away. It didn’t pass because the Republicans ran the Senate. But if the Democrats ran the Senate, Garland would be a Supreme Court judge right now, even though he would’ve got elected in March and it was Obama’s second term. He was gone… At the end of the year.

Frank Curzio: The only reason why they… Obama tried to push it through, Democrats tried to push it through, and it’s their job to push it through. What Trump is doing is exercising the constitutional right to appoint a Supreme Court Justice, which will strengthen his base, heading into the election. Since its conservatives that don’t like him, I could see that… It’s going to please a lot of these people. But this process is a layup. It’s expected. Every president Democrat, Republican, would do the exact same thing in his position. There’s only two dissenters right now in the Republicans, which, Republicans really don’t need their votes, they have enough votes, but there’s two dissenters. And they’re going to change their mind or risk their political careers because when shit like this happens and it’s unfortunate, but when it happens bases rally together… And there’s never a better time to rally your base, especially with two months left in the election.

Frank Curzio: But to be clear, this is not Trump looking to build a wall, which is controversial. It’s not about Trump issuing tariffs against China, Europe, which he could do by himself without Senate House. Nothing. It’s not about Trump saying stupid shit on Twitter. This is a president exercising, his constitutional right to appoint a Supreme Court Justice that will significantly strengthen his base. Again, every single president before him would and better do, if they want to get reelected, the exact same thing. No Democrats want to impeach Trump for exercising this right, or launch an impeachment against him. They’re calling for more violence from the extreme left, not all Democrats. They want to make Puerto Rico, Washington DC states. Not because they’re deserving. It’s a good idea. It’s simply because they just want more power.

Frank Curzio: And I’ll be honest: It sucks for the Democrats that Ginsburg died just before the election. It’s bad luck. It also sucks she’s being remembered more for the political consequences that her actual achievements right now. But to launch an impeachment when Trump is following the law, it goes to show, you’re not just Democrats, but we’ve seen from Republican, they’re going to go to any length, legal or not legal to maintain power because they only give a shit about themselves. And that’s why this election… It’s not going to be settled on November 3rd. And I didn’t feel that way until last week when Ginsburg passed away and just seeing what they’re doing on TV, it’s like, “Could you please honor her last wish?” They don’t care about her last wish. I guarantee you there’s maybe one or two Democrats in the Senate that spoke to Ginsburg in the past two years. They don’t care. Please honor her last wish! Why? So I can get more power. It’s great. It’s awesome. But it can take weeks. It can take months until we actually settle this.

Frank Curzio: If that’s the case, you better have some dry powder because stocks are going to get nailed, and it’s going to provide a great buying opportunity. I’ll be there for you every step of the way and tell you about what you’re… Which I’m going to go into more detail later on my guest, Andrew Horowitz, awesome, awesome interview, really cover everything. Been on fire with his picks lately. He’s going to give us an amazing short in a little while, but before I get to that interview, I’m bringing in two guests today, that are in the studio, to talk about the political implications and how it can impact your portfolio. One guest, you already know, who’s Daniel Creech, senior analyst at Curzio Research. The other is first time guest, Greg Yenoli, who is a political strategist for the Clinton and Obama administration. I’m just kidding. Greg is our director of copy, partner at Curzio Research. If you are an investor in my company, you’d be very happy that Greg is on board. He was responsible for a lot of the sales for our company because of how good he is and how great he is. Very good friend. And we had an interesting discussion about Ginsburg, the election, and we had different opinions, and I just thought it was very powerful.

Frank Curzio: And again, this is going to help you in terms of increasing your net wealth. We’re going to go, but I wanted to bring in Greg and Greg, let’s hear from you. Thank you so much for coming on the podcast. First time, and both are in studio, I have my whole team here this week, which is awesome. Thanks for coming on, man.

Greg Yenoli: Thanks Frank. Happy to be here. Really exciting for me.

Frank Curzio: Well, I want to bring everyone in here because Greg, Greg is a boxer, right? He boxes, and I’ve been training lately trying to fight him. And he’s been duck- you’ve been ducking me, right, a little bit?

Greg Yenoli: I don’t know. I don’t know about that. I think, I think it might be a little bit of, you’re sending me your videos and trying to taunt me a little bit, and now I showed up and I’m ready to go, and I don’t know how sure you are anymore.

Frank Curzio: Yeah. I sent him videos when I’m hitting the bag and everything saying, “I’m ready for you,” so we’re going to spar. We’ll get that on tape too. It’ll be quick. I don’t know. Hopefully it’s not quick in his favor, in my favor, but it should be fun. But we were talking about, and you had some sort of strong points when we were talking about Mitch McConnell, contradicting himself, so why don’t we talk about that because that’s really something where it’s expected, right? I mean, he’s going to say one thing and when it’s not in favor of his party, when it’s in favor of his party, he’s going to say something else, totally changing his mind. But they’re calling him out on that, and he’s on video and everything, which is pretty funny.

Greg Yenoli: Yeah so I actually went back. I mean I obviously knew about all of this prior, but I only knew kind of the broad strokes, which was basically, he obstructed and was like, I don’t care. We’re not going to even allow hearing of your guy. And his whole rationale was, there’s going to be an election a year from now. And whoever that next president should be, the people should have a voice in deciding who gets to be on the Supreme Court. It shouldn’t be some lame duck president who’s not going to be president again a year from now. It wasn’t like it was… September 23rd, we are, now… It was not like it’s September 23rd and the election’s 40 days away, we’re talking, the next president wasn’t getting sworn in for nearly a year. But his whole rationale was, Obama is going to be gone, he shouldn’t really be allowed to choose who the nominee is, or who the Justice is going to be.

Frank Curzio: And now…

Greg Yenoli: Right. And so of course, now, that was the rationale, and now it’s obviously a complete 180. So I actually went, I went back, and I actually wanted to see what he had said about it because I was curious. Again, I knew the broad strokes, but I was curious about the specifics of what he said. And this kind of tells you everything that you need to know about politics in this country and the status quo and especially the people who are career politicians and the ones who want to stay in power and… They’re all just full of shit. It’s really not about… There are really no guiding principles. It’s really all about, as you said, staying in power and, winning for your team. It’s a team sport, unfortunately, where we are a nation of sports lovers, and we’ve kind of turned politics into a team sport where it’s all or nothing.

Greg Yenoli: So anyway, I found two very interesting quotes. The first was right around the time that all of this brouhaha was going on with Obama. And he said, the quote is, “The American people are about to weigh in on who is going to be president.” Again, we’re talking almost a year from when he made these comments. But, “They’re about to weigh in on who’s going to be the president and that person, whoever that may be is who should make this appointment.” Okay. So that was March of that year, March of 2016 and… Okay, fine. That’s your reason. That’s not really the reason, but we’ll swallow it because we have to swallow it. Later on that same year, in a speech in Kentucky to his supporters, he said, “One of my proudest moments was when I looked Barack Obama in the eye and I said, ‘Mr. President, you will not fill the Supreme Court vacancy.'”

Frank Curzio: Is that really what he said?

Greg Yenoli: That’s what he said. Now that tells you everything that you need to know about the state of politics in this country. He’s not one of his proudest moments… This is his own words, is one of his proudest moments was not participating in the government to which he was elected… It was in obstructing it. And let’s be clear about that, because this isn’t like, “Oh, it’s a Republican Senate and it’s a Democratic president and so we’re not going to approve whoever you put in front of us.” They didn’t even give him a hearing. So there wasn’t even… The process wasn’t even honored. They could have easily just done, like a show trial for this guy, and at the end of it been like, “You know what, screw you,” like they did with Bork. That actually I that’s something that, well, I don’t want to get too far down the rabbit hole, but the point being they didn’t even honor the process, and that he was proud of not honoring the process.

Greg Yenoli: He was proud of that. He said it himself. And my- one of my proudest moments. So for him to now be saying, “You know what, we’re United now. The reason why we didn’t do it in 2016 was because we were divided. We had a Democratic president and a Republican Senate, and the people weren’t unified and, that’s the reason why, and now the people are unified. We have a Republican president and a Republican Senate. And so now the people have spoken, and therefore, we must go forward with whoever Trump picks.” And that’s a bunch of BS. It just flat out is. We can’t look at the facts and argue otherwise.

Frank Curzio: Not only that, everything’s on video now, YouTube, everything gets taped. I mean, so you’re seeing so many of these, it’s probably why Trump got elected in first place, because when you’re outside of that, it’s a lot easier to come in than when you’re seeing the typical politicians that everyone’s kind of sick of that just flip-flop back and forth, depending on the polls. I mean, there’s so many politicians. I won’t get into it because I’ll get tons of emails, feel free to send us at frank@curzioresearch.com, that just are totally different people because they’re supporting different agendas today only because the polls say so, and they want to keep their jobs so they’re not true to themselves, which I hate. I’m going to stay with you before I go to Daniel here, because one of the things that you said surprised me, and you, you said that you think Trump is going to win in a landslide. And I said, I don’t think so because the amount of money that is behind Biden, I mean, it’s incredible, where it used to be that they hated Wall Street, the Democrats. Now they love Wall Street to death because they’re getting billions of dollars from it. So it’s like, if you’re a Democrat, and you’re looking at more and more and more billionaires supporting them, which is kind of weird, right? It’s usually the other way.

Frank Curzio: They used to say, “Don’t want the billionaires.” And you even look at early on with the early Democratic debates, how they were just ripping apart billionaires like crazy, at raising money. Now, they’re all on their side, a lot more of them are.

Greg Yenoli: Well, fortunately, unfortunately, I guess it depends on your perspective. There is no right and left anymore. Not in the traditional sense. The Democrats are not the party of the left, at least the candidates we have now, the candidates that they put forward, which is very frustrating to me. Again, I don’t want to get too far down the political rabbit hole, but this kind of speaks to why I think Trump is going to win. I think Biden has no chance in hell of winning. There’s no chance in hell that he’s going to win. And I thought that he had a very tough road to begin with, just by the fact that he was the Democratic nominee. I really think that the Democrats, they fucked it up two cycles in a row.

Greg Yenoli: I mean, they put forward a candidate and Hillary Clinton that everyone was convinced that she was going to win. And to be honest, I thought she was going to win too. There were so many things that Trump said and did in the course of his running for president that, in my mind, should have disqualified him. And in, maybe, any other year, at any other time and place in history would have disqualified him, but they didn’t. And what did the Democrats learn from that fiasco? Absolutely nothing.

Greg Yenoli: They decided to put forward the candidate that is another Hillary Clinton. The thought process being so antiquated that it’s ridiculous. They decide that… You know what? Center… Really, I don’t even want to call him center-left. I mean, he’s center. A center Democrat would have a better chance at running against… This is going to sound crazy, to call him extreme, I think he is extreme but he’s not extreme like an extremist. But he has an extreme point of view. Biden does not have any extreme points of view. I don’t even know what Biden is. I call him warm milk.

Greg Yenoli: If any of you saw “Gangs of New York,” Daniel Day-Lewis’ character… And it’s actually very fitting because he’s actually talking to Tammany in the movie, the guy who plays Tammany, he’s talking to that character and he says… He’s all pissed off about something. And he’s searing his meat barely enough so that it’s edible. And as he’s chomping into a steak, he’s talking to Tammany’s and he is like, “You are neither hot nor cold and because you are lukewarm, I spew you out of my mouth.” And that is exactly what Biden is. He’s neither hot nor cold. He does not have an opinion.

Greg Yenoli: His running platform, the only thing of any strength that he has that he’s running on is, “I’m not Trump.” That’s what he’s running on. And that’s what he’s hoping will carry him through the election. Because if you look at any other issue of any sort of substance, he does not have a strong opinion. You talk about fracking, you wouldn’t want on fracking companies if Biden were elected.

Frank Curzio: I mean, he’s kind of going, “Well, just on federal land” and this and that.

Greg Yenoli: Yeah, exactly.

Frank Curzio: But if I’m a fracking company I would be worried. I mean, I would be.

Greg Yenoli: So, during the primaries, he was all on the side like, “No more fracking. No new fracking. I’m with Bernie,” whatever. Because that was when Bernie was pretty powerful. And I still to this day… Well, we can maybe talk about that a little bit too-

Frank Curzio: So, you think Bernie would-

Greg Yenoli: Oh, Bernie would have had a much better chance of beating Trump. He actually might have beaten Trump.

Frank Curzio: See, I don’t think so. And I respect him. And this is where we’re going to bring Daniel in here. But I respect him because he truly believes… And I even believe that about Obama, where I think Barack Obama always had a love for this country. I was never nervous about anything in terms of safety or political policy. I disagree with some of the policies. When I look at Bernie, I disagree with a lot of the policies. But I see it like he’s passionate about it to the point where he really believes that that system would work. And I kind of respect that. That’s how I felt.

Greg Yenoli: Absolutely.

Frank Curzio: Let me bring in Daniel really quick, because this is where Daniel and I disagree. And again, this is what we’re doing here. This isn’t everyone agreeing, we’re kind of just having a conversation about it. And this is why I wanted to tape this thing. But you don’t think that Bernie is genuine, right?

Daniel Creech: Nope. Next question. No, that was easy. No, the other night when we were talking and when you introduced Greg, he said something that really stood out to me and it made me really think about it. And I respect his case on the sense that… I don’t want to put words in your mouth, Greg, you can correct me if I’m wrong. But basically, politics have changed. And he believed that Bernie could win because he was real authentic, a lot of authenticity with the perceived voter. And he connected really well. And I really stopped and thought about that. And he did, because the amount of excitement he got in younger voters, generations, millennials… I’m 34 so depending on where you draw that line, I could either be in that group or out of that group. But a lot of people my age were huge Bernie fans. And that’s something that I couldn’t wrap my head around because I don’t. Yeah, I don’t. I have a problem-

Frank Curzio: How would you not be a Bernie fan if you are a student and you don’t have to pay your debt anymore, free healthcare for everyone. I mean, that appeals to a lot… People are obviously going to say, “I want that.”

Daniel Creech: Absolutely.

Frank Curzio: If I didn’t have a job, I’d be voting for Bernie Sanders.

Daniel Creech: Yeah. That totally makes sense. I mean, that’s definitely what he’s going after. I mean, you can buy votes several different ways. You can literally pay for them or like Bloomberg is doing in-

Frank Curzio: A hundred million. A hundred million he’s putting up.

Daniel Creech: Oh my goodness, that’s funny. Well, I mean, I’m talking about paying off the felon’s fines and all that so they can vote. That’s lately. We don’t have to go down that rabbit hole either. But yeah. I mean, you can give free stuff away. Listen, if you’re at the top, I’m all for dictatorship, as long as I’m in the inner circle. Socialism’s? Wonderful, as long as you’re at the top. You’re a Bernie Sanders socialist, you’re a multimillionaire, multiple houses, hell, what’s not to love about that? But again, that’s only for a select few. So, that’s what scares me. And no, I can’t buy him as authentic at all. But that’s me.

Frank Curzio: Now Da-

Daniel Creech: Greg made a great point the other night about how he engages people. I don’t know if they would turn out to vote because millennials are lazy-

Frank Curzio: There’s definitely a much more excitement there compared to Biden.

Daniel Creech: Absolutely.

Frank Curzio: Absolutely. Yeah.

Daniel Creech: Yeah. And it was a carry-over from 2016. He did a lot of good in 2016 generating emotions and getting people to go for it.

Frank Curzio: Now Greg, before we go any further, since you had strong opinions in terms of… What did you call him? Warm milk?

Greg Yenoli: Warm milk, yeah.

Frank Curzio: What’s your email, in case anyone wants to email you?

Greg Yenoli: Greg… No, I’m happy to. I would love to have these. I love these discussions. These are my favorite kinds of discussions.

Frank Curzio: So, with Bernie Sanders, Trump’s going to win a landslide. You really think Bernie Sanders would have gotten more… I mean, maybe he gets more votes. I just think there’s no shot of him winning because he would have had that… For this election, it’s coming down to that middle section, right? I mean, the left and the right are going to vote the way they want to vote. No matter what you do, present any facts, they’re never going to change. But that middle part is what they’re fighting for. And they’re going to extremes, both parties, to get that. And I don’t know if Bernie appeals to that middle part where… I don’t know.

Greg Yenoli: I’m not so sure about that. I think that Trump appeals to extremes and Bernie appeals to extremes. And I think the middles are the ones that… They’re not really… So, let me back up a little bit. The reason why I just said that I don’t think Biden has a chance in hell of winning anymore is exactly because Ginsburg died. I think he would have had a tough time of it anyway. I think what’s going to happen now is everyone’s going to galvanize around Trump. Even the people that wouldn’t have voted for him before are going to vote for him. And I know people that voted for Trump that said, “I made a mistake. I’m not going to vote for this guy again.” They’re going to vote for him now. Precisely because of this issue, they’re going to galvanize around him. Because the bigger picture is they want someone on the Supreme court that thinks like they do.

Greg Yenoli: Now, the six-three court, which is what it’s going to be, Obamacare goes away. And there’s nothing to replace that yet. Right? So, now you’ve got this big hole. And we talk about Bernie having these kind of like these fringe ideas. Universal healthcare is not a fringe idea. 66% of people would approve of universal healthcare. That’s two in three. That’s not a majority, that’s a super majority. And that’s not Democrats, that’s all voters. 66% of people want that. They want it. That is what the people want. So, this is not a far-left fringe idea. This is not one of his ideas necessarily. But universal basic income was something that was discussed a lot during the primaries, Andrew Yang. That’s not a fringe idea either. It’s pretty much split, 40% want it, 40% don’t and 20% aren’t really sure what the fuck it means. These are not fringe ideas.

Greg Yenoli: So, we talk about Bernie as if he’s way off on some island somewhere and that no one’s ever going to go meet him there. That’s not really true. And what I think it comes down to… When it comes to, especially a presidential election, it’s not so much important… With Congress, I don’t think, although it should be, but with the presidential election, it really comes down to… It’s a little bit of policy, but it’s a lot of character. It’s a lot of how relatable you are.

Frank Curzio: Mitt Romney was terrible in that department.

Greg Yenoli: Yes, exactly.

Frank Curzio: And it killed him. And you know what? When you see him, when he’s not on a mic or people that talked to him, you see him in different circles or whatever, he’s cool. When he was on a mic, he was dry. Obama is one of the greatest public speakers I’ve ever seen. I mean, when he speaks, that crowd, it motivates them. And it’s almost you see similar with Trump. But that’s one thing… Yeah, yeah, he’s got to be charismatic. But I think that really, really, really hurt Mitt Romney.

Greg Yenoli: Yes. I agree. And I think it’s destroying Biden. Tell me one person that relates in any way to Kamala Harris, one. None. I don’t even. I mean, I can’t find a single thing about her that I find authentic or interesting at all. I mean, we talked about this off air as well. I mean, six months ago she was calling Joe Biden a rapist and now she’s happy to be his running mate. I mean, that’s ridiculous. That is ridiculous not only on the face of it-

Frank Curzio: But it’s a debate, which means we’re allowed to lie at debates and say whatever we want.

Greg Yenoli: It’s so silly. I mean, it’s-

Frank Curzio: It just wasn’t a good reason, just saying, “Hey, that’s what I thought. And I looked into it.” And it wasn’t that, it was, “It’s a debate.”

Greg Yenoli: I know what she said, and I kind of went back and looked at this too because again, when you’re watching these things in real-time, I’m not sitting there taking notes, thinking one day I’m going to have this deep political discussion about these particular topics necessarily. So, I went back and I watched that again. I listened to exactly what she said. And the quote was… I wrote it down. I’m not going to be able to find it. But the quote was essentially, “Hey, look, I’ve known Joe for a long. I really respect to him. You have family and friends, you have disagreements, but you find common ground or whatever.” Right. Okay. So, let’s follow that to its logical conclusion. What she’s basically saying is, my uncle Joe is a pedophile, but we’re going to find common ground.

Greg Yenoli: That’s crazy. If you believe in your heart that your friend/family member, in the analogy she wants to use, fondles little kids, you don’t hang out with that guy. And you certainly don’t go to run the country with him. So, it’s crazy to me that we let them get away with it. I know why people who are going to vote for Biden are going to vote for Biden, it’s because they hate Trump. And I guarantee you, if you ask them why, that is why. It has nothing to do with policies because-

Frank Curzio: We don’t really know. I mean, obviously before the debates, to say anything is ridiculous. It’s like anointing someone MVP in week two of NFL football, it’s complete waste. So-

Greg Yenoli: Well, it’s going to be very interesting that debate. I can’t wait to watch it.

Frank Curzio: I mean, all debates. There are three debates, the vice president debate, I mean there’s a lot of debates. But I think we’re going to really learn a lot more about Biden. And I like the way it’s set up. Because everyone thinks he’s going to do so terrible expectations are so low. It’s kind of Sarah Palin, I mean, expectations were so low and she did very, very well. I mean, very, very well during that debate. But-

Greg Yenoli: It doesn’t even matter what he says though. It doesn’t even matter what he says, because you can’t trust any of it. You can’t trust any of it. With Trump, even if you think that he’s just a bald faced liar, you can trust the fact that he’s a bald faced liar. Biden, he’s just going to say whatever he thinks he needs to say. And that’s the sad truth of it. It’s just the sad truth of it.

Frank Curzio: So, let’s get Daniel back in here before I start getting hate mail from that. It’s cra… But this is an interesting conversation. There’s a reason why guys. We’re going to bring this all together in a minute. So, Daniel, Greg thinks that Trump is going to win in a landslide. I disagree. I think it’s going to be a lot closer than that. And I think it’s going to go on for a while were their counting these votes. And if that’s true, if it goes on for weeks and months, it is going to impact stocks. There is going to be uncertainty and there’s going to be money on the sideline. Again, it’s going to impact different industries no matter who wins, what side you’re on.

Frank Curzio: But your opinions here, which I love, is say if Biden wins… And right now, it’s showing that Biden’s going to win right now. It’s definitely closer in a lot of states, but right now, based on the polls… And we know what the polls did last time, and it didn’t work too well for Hillary… that Biden’s going to win. And the Democrats are going to control the Senate, as of right now. So, that means they’ll control everything, including the House. And that scares you a little bit, huh?

Daniel Creech: Oh yeah. Frightening Frank, frightening. And it’s because of what you said earlier. I Greg’s point on they’ll say anything to get elected, but you have to pay attention to what they’re saying. And if they take everything, I have no doubt that they would do Washington and Puerto Rico to get two more senators or four, two apiece. And that would basically… You talk about macro, macro, big picture stuff here. So, let’s say the Supreme court justice goes through. So, it goes six, three, conservative. If Trump were to lose and then lose the Senate, you would have a six, three there, but then the Senate would basically never go Republican again. Because you would have a majority. It’s like California. There is no way California is going to elect a Republican Senator. There was no way in New York… There’s probably no way that… Pick up one of the most conservative states, some of them are just entrenched. So, if they would gain those territories, they talk about stacking the court, increasing that. Yeah. I mean, that’s just scary stuff.

Daniel Creech: Doing away with the electoral college, now that hits home for me. And everybody’s perspective goes back to their individualism. I’m a Midwest kid. So, basically you have the East Coast and West Coast telling everybody in the middle, “Aye, you don’t count because we have more people in our state.” So, if you do away with the electoral college, those are big deals. I mean, those are massive, massive changes. And yeah, I would say go west young man. And I would run for the hills.

Frank Curzio: Are you saying that you hate new Yorkers?

Daniel Creech: No. No, but I am saying-

Frank Curzio: They don’t give a shit about us in the West. In the Midwest-

Daniel Creech: Or in the Midwest.

Frank Curzio: Yeah.

Daniel Creech: No. Yeah, I know. We joke about that. It’s like, man, I feel bad for you when you get fired up. And everybody does about their hometown and that’s great. But no, I don’t think… This is going to sound a lot worse than what I actually mean, so, I don’t have the right vocabulary. But I don’t necessarily think it’s a terrible thing that you’re so divided in one sense. It’s okay for me to be favorable towards a small town because I’m from there and I had it great growing up. That doesn’t mean I think the city is stupid. But it’s also like, I would be fine if most city dwellers go through one-stoplight towns and think, “What the hell does this place even exist for?” And that’s okay. I wouldn’t take that as an insult. But when it comes to voting like, “Well, your vote don’t mean any more than mine.” And just because you guys live in a city, doesn’t mean you should pick them versus somebody that doesn’t or some country folk or whoever.

Frank Curzio: Mm-hmm. No, it is interesting. And I want to thank both of you guys for coming on. And I wanted to do this segment because one, it’s going to really relate to your portfolio, what’s going to happen here. It was an interesting conversation. But there’s so much hate out there. And you can no longer express your opinions without losing friends or even sometimes losing your business these days, losing credibility, everything, your reputation. But everyone should be able to express their opinions, even though there’s things I disagree and agree on. Even with people within my job. At the end of the day, be like Ginsburg and Scalia where, man, it doesn’t get more opposite than that. Yeah, you bust each other’s balls about their opinions. We all get along. That’s how you get better, right? By hearing those criticisms.

Frank Curzio: But for my business Curzio Research, I always hire people with strong opinions. I never want anyone to kiss my ass. Even in my research, and you guys know from following me so long, I always want to hear the other side. And I want to hear why you don’t like my idea because it could lead to something that could change my mind. There is nothing more powerful than changing your mind on the topic you felt so strong about. That’s incredibly powerful. You’re like, “Wow, wait a minute, this guy has a point. Let me look more into it.” At the end of the day, it’s going to save me, it’s going to save my subscribers. But that’s how you get better, that’s how you achieve perfection, by listening to both sides, by listening to the criticism.

Frank Curzio: And we’re in a world right now, where I have a lot of Democratic friends that are cool. I just don’t agree with some of their policies. They don’t agree with some… But to the point where it’s hate. And I’ve lost friends, some friends, I mean, that just have such strong opinions. And it’s so crazy. And it’s, man, what the hell are we doing out there?

Frank Curzio: But I’m hoping this change. I don’t think it’s going to change. Maybe it will change after election, it will die down a little bit. But right now with the emotions and everything, just seeing what’s going on to the point where you’re talking about impeachment of a… There’s a million reasons to hate Trump, there’s a million reasons to go after the guy. I get you. So many reasons go after him. He’s doing what every single president would do in his shoes right now. And he’s doing it based on law, the constitution. And like I said, it’s one of the most presidential things that he’s doing in his whole entire term so far.

Frank Curzio: And I would say, if any president, that’s what he’s supposed to. He’s doing exactly what he’s supposed to do. He’s doing it by law. The Democrats would do it. The Republicans would do it. Every president would do it. And just the fact that you’re going to throw everything… You get disagree and yell, but impeachment, I mean, adding more states. I mean, holy cow. Honoring the last wishes of someone that’s dying, that they don’t really care about. It’s pretty crazy out there. So, really great stuff.

Frank Curzio: And I want to transition here into my interview with Andrew Horowitz, Disciplined Investor. He’s also going to talk about how the election is going to impact your portfolio. I’m going to come back to you after this as well, just to discuss a few more points of how to set up your portfolio and why politics matters, because it does matter to your portfolio.

Frank Curzio: So, Andrew is also going to share two picks with you. So pay attention. He’s had some big winners for our Dollar Stock Club portfolio. That’s where I track my guest picks that some of them you’ll hear and some of them… I talk to these guys before and after. And we’ll share ideas and everything. So, I put some of those in The Dollar Stock Club portfolio, which has been doing very, very well, good track record. But a lot of home runs from Andrew, and he’s going to share two picks. One of them is a pretty crazy short, which I think… But it’s going to be interesting. And let’s get to the interview right now. Andrew Horowitz, thanks so much for coming back on Wall Street Unplugged!

Andrew Horowitz: Hey, thanks for having me, Frank. Appreciate it.

Frank Curzio: Well, let’s start right at the beginning with track record because we’re two people in this business… I believe in accountability. Even when I have winners, you highlight them in your podcast when I have losers. I got GE a couple of years ago, I came on explain. I’m a big believer in accountability, whether you’re right I’m wrong. And I want to just give you a credit because we pay attention to this now, everyone that we put in front of people for their picks. And one of the picks you gave us is Trane Technologies on July 2nd, last time you were on. And that’s up 32%, easily outperforming the market. So, really, really good job on that. You know what they say? A broken clock is right twice a day so-

Andrew Horowitz: Yeah, well. Yeah, that’s it. Let’s stop there. The record is good. I’m one for one.

Frank Curzio: But I just wanted to highlight. Seriously, nice job on that.

Andrew Horowitz: Thanks.

Frank Curzio: So, I love when my listeners make money, But let’s go through what we always go through when we do this, right? We’ve been doing this for so long. You have a podcast, it’s just as long as me, a little bit longer. Probably the longest running podcast in the financial industry if I had a guess, at least one of them-

Andrew Horowitz: I mean, gee, they’re called the OG of podcast in the financial area.

Frank Curzio: How many years? How many years have you been doing this?

Andrew Horowitz: Back in 2007.

Frank Curzio: Wow.

Andrew Horowitz: Yeah.

Frank Curzio: Isn’t it amazing? I never thought that the industry of podcasts would be like it is today, right?

Andrew Horowitz: Now everybody has a podcast.

Frank Curzio: Yeah, everybody. It’s common. Yeah. I’m like, “Hey, I got a podcast.” Like, “Me too.” I was like, “Yeah, I got one for 13 years.

Andrew Horowitz: Right. Back then it was like, “Hey, I’m doing a podcast.” “What’s a podcast?” Right. I mean, that was kind of what the thought was back then. But it’s really expanded. And we talked about the Amazon now has a whole podcasting network. And you got Spotify popping up with a real move into that area as well and other companies that are really pressing that whole thing. And obviously there’s incredible amount of talent that has really come into this.

Andrew Horowitz: A lot of it is back to the same story we talk about all the time, Frank and it’s, what’s really pushing all this? And it’s technology, right? It’s the ability to shrink down the required technical components of what you need to actually make this happen. Because back then, the qual… I mean, I listen to some of the stuff back in 2007 and 2008 I did, it sounded awful. And it was really difficult to do. And you had a worry about, okay, well the file size can’t be too big because people can’t download it. Now you can pop up a four gig video up to YouTube and it’s ready within a couple of hours after it processes into high def. And it’s available for everybody to look at infinitum.

Frank Curzio: It is pretty incredible. And for me, it’s never lost on me, the global impact of how many people globally. Because it’s on iTunes, just one of the platforms that we’re on and you’re on. But I get emails all over the world, all over the world. And it’s really helped me tremendously in places where… And you know how the media is. Almost every media has an agenda, whatever side you’re on. I won’t get into that part. But it’s nice to know for getting information from the sources and just people that live boots on the ground across the world. And I can’t tell you, I would say about 20% of listeners are outside the US. It’s pretty incredible let’s say. “Wow, you listen to me. Are you crazy? Where are you from?”

Andrew Horowitz: Yeah, I’ve got people from all of Asia that write me, in Australia and South Africa. So, it is really cool that it’s so easily accessible these days. And that’s good for us too, in our business. Right? I mean, as you were saying, it’s boots on the ground. But it’s also… The information is much different today to gather. Whereas back 20 years ago, you’d have to go to the newspapers, the dailies and do your research or the corporate reports of course, to get any kind of information. Now, it’s just typing a symbol, and there’s 25 different ways from Sunday to get information on whatever you want.

Andrew Horowitz: So it’s been pretty good. And that is exactly what’s been driving the markets these days, right? Same thing, it’s just this whole technology revolution and a renaissance, if you will have, has been condensed down because it’s due to necessity in times where we have lockdowns and stay at home orders. And we’ve seen companies after companies come up with new solutions to make life relatively easy to continue working, which we all got to do something, right?

Frank Curzio: It’s true. I talked about this on our last podcast and my opening, how this is a behavioral change. You don’t really, Oh, total sales again. When you look at total retail sales, which include gasoline and everything. Online e-commerce only counted for 11% of the total sales and that was last year. This year, it’s already up to 16%, which is a drastically game-changing move and that statistic. But it just shows you how much growth it has going forward and you don’t realize how many people weren’t on Amazon when everybody knew about Amazon. But now, how many people talk about, “I got packages all over my house, I didn’t know I could get towels and whatever.” Milk delivered to my door next day. And when you’re forcing someone into doing something a better way, and they’re like, “All right,” now, it’s resulting in so many of these online businesses.

Frank Curzio: Because, I want to talk to you about that, we can talk about the overall market. But we can just get right in since it’s a good segue way is when I’m looking at these technology companies and people talk about valuations and how crazy they are there, they right. Evaluations are crazy, but you can’t deny the massive growth numbers. These companies are putting up in certain sectors where tech, biotech, e-commerce, right? And I see numbers of Amazon, Walmart, Zoom, Microsoft companies in the auto and housing sectors. Did you see AutoZone’s numbers today? Yes, it’s pulling back a little bit, but it’s near its all-time high. Toll brothers, the numbers were amazing, again a stock that run tremendously and pull back a little bit, but then the numbers, these guys are putting up. If you’re in the right industry, the right time, is amazing. Is that going to continue? Is it already played out? it’s just smart. What are you expecting, here?

Andrew Horowitz: That’s a great question because it all, I think, is going to be based on, this is obvious what the future holds. Let’s just stay at that point, but are we going to have a change in our habits so dramatically and drastically that we will continue to do what we’ve done? Listen, I’ve changed my habits, it’s been ‘Christmas’ in my office over the last five years, every single day. There are packages delivered always because it makes it so easy through an Amazon or an office Depot, whatever it is. If I need paperclips, I don’t think about it I put it on the list and next time I get out there, click free delivery, $3 and 50 cent pack of paperclips comes the next day or ink. The old days of having to go out and do this stuff, whereas today, it’s so much easier. So I think there is the continuation of the retail boom, which is good for online.

Andrew Horowitz: And those more importantly, not only that have the product, but make the process easy for the individual, for the user and the experience for the user to be one that’s just click, click, click done, right? Like Amazon has mastered. On the other hand, you look at the places like malls, as the other side of the equation or some of those big box retailers that didn’t have their act together to begin with. For years was having a lot of problems to begin with what was going on but now they were overrun by the online process. Especially once people realize that there are free returns, that’s the big issue. If I don’t have free returns, I can’t get three or four different sneakers to see which one I like. But now I just go shopping online, okay, that’s a size 11, I’ll take that one. I’ll take the size 10 and a half and this one.

Frank Curzio: Do you do that? You buy like four pairs and then send three back. My wife does that and it drives me crazy, trust me.

Andrew Horowitz: Absolutely. Why not? It’s so easy.

Frank Curzio: Because, Amazon has the great… That separates themselves from everybody. It’s not like the Amazon show here, it sounds like we just talked. We got a plastic cups delivery, which just on schedule to, and they came like all messed up or whatever, they were just like sticking together. And we said hey, they send us like two for free the next day. It wasn’t even like a question or anything. They just send it and they see what a good customer. It’s really cool to get that kind of service too.

Andrew Horowitz: There’s a problem with this also because it does hurt some businesses that need to keep up with this. Fortunately, Amazon’s not just Amazon retail, it’s AWS. They have a lot of other components, I just bought some shirts from a company called Roosevelt RSVLTS, and they have some crazy shirts. There was a couple that I really liked for backyard barbecuing. You’ll see the shirts if you look at them and that’s a backyard barbecue shirt. You know what I mean? You got to have a beer in one hand and a spatula in the other. And I got the size in and it was too small, I got another size was too large. And I took theirs, tried it on and sent it back, and it’s all free.

Andrew Horowitz: So, that’s got to cost them a little bit on the bottom line. But it’s good for certain companies and clearly we saw the numbers from FedEx and UPS and other delivery. There is a lot in there, but I still question whether or not we’re going to want to go back to the days where we can actually browse for example, store like Bed Bath & Beyond. Right now you can get a lemon squeezer, or you can get a knife from any online or online at Bed Bath & Beyond, for that matter, or Walmart, depending on the quality you want, what you want. But there’s something about going and saying that lemon squeezer, it’s plastic and I don’t know if it’s going to let me kind of feel it and touch it, see what the story is. I prefer to get the metal one or that knife. You know what? I only like the handle, the way I hold it in my hand, that you could do by going back and forth.

Andrew Horowitz: But if somewhere has a selection of things, while they have the carrying cost for that inventory, it still has a little bit of appeal for the shopping experience. And there is, I don’t necessarily think that’s ever going to go away entirely, but some businesses should like the automobile industry. I’ve talked about this for years, the floor planning model, where they have thousands of cars in the lot and they’re paying while some of the companies themselves are paying back to the individual owners at the various franchises. Some of the costs for carrying the cars. It’s just no reason to be doing that anymore when you can have an environment where you have a just in time process of delivery and what’s happening with AI involved in your ordering process. And look what Tesla did? Tesla, you go there, they have four cars. You can look at them or whatever it is, five cars, whatever the number is. But there’s not much going on. They have a little storefront. There’s not a lot of things.

Frank Curzio: That’s not even their choice. They just won’t let them select the car company. They said third party dealerships for them. So they said, we’ll have to open up our own stores, basically.

Andrew Horowitz: Beautiful model. That’s what they do in Europe. That’s what they do a lot around in Europe. You don’t see these gigantic. Where else other than America, do you see the opportunity to have 25 acres worth of cars? It just doesn’t exist. So?

Frank Curzio: That’s definitely true, but it’s interesting, like you said, there’re some industries that are thriving. We know there’s some that aren’t, whether it’s gyms, whether it’s travel companies, even though some of them coming back. Let’s talk about everything as a whole, because everyone’s so focused about short-term, we’ve seen since September the market has come down, people are nervous. It’s up tremendously to put things in perspective up tremendously. Right? So, the pullback I think is healthy. But when I look at the underlying conditions with the Fed said, basically, I was like, they’re going to implement yield curve control, which they basically did. So they said that they did it on short-term instead of long-term, but if rates go high, they’re going to implement that and put a cap on long-term. But they said, we’re going to keep short term rates to zero for three years.

Frank Curzio: That it will automatically what that does to the account, it forces money into the market. There’s no place that you could generate income, more people going to be taking out loans, interest rates, lower. It’s a stimulant to the economy that’s going to be there. So for me, when I look at pullbacks, I’m not saying that the market’s going to come back. You don’t have to worry, but I feel like I could always find opportunities when I see pullbacks like this, because the underlying conditions, not just the Fed itself, but we have interest rate policy. Right? Were we talk about fiscal policy as well, because the separation between main street wall street is going to get water and water that they’re going to continue. Eventually politicians, throwing more money at this, the amount of money flooding the markets, COVID getting better and better in terms of statistics where they’ll go away, maybe not a hundred percent. But just seems like the underlying factors, the long-term drivers are still in place for positive results in the stock market.

Andrew Horowitz: I think there was two things you don’t talk about the Fed for a second. I think it was two ways to look at what the Fed was saying. And the one was, you know what, we’re going to go from 2022, and we’re going to expand our zero interest rate program, the ZIRP to 2023. So wow, that’s great! And so the markets react pretty positively on that news. On the other side of that, is this, wait a second. I thought the recovery was going to be happening a little bit faster. There was a lot of discussion about V-shape or maybe a check Mark, or at least a kind of a reasonable recovery over a year or so. And all of a sudden, they’re really concerned and stretching out their zero interest rate policy, 2023. What do they know that we don’t know?

Andrew Horowitz: The second thing the Fed did was the Powell was a little weird in this last discussion where he talked about, well we believe we can get our interest rates, inflation rate back to 2% through our inflation averaging process and letting the economy run a little hot and the growth rate up there, but we’re not necessarily going to do anything different right now. It’s kind of like sitting in a car and saying, hey, I’m going to zero to 60 in three seconds sitting there and not putting a foot on the gas pedal, just hoping, willing the car to go faster. So there was no real structural change in their last discussion about how they were going to get to this point in the future. But the other thing I’ll mention Frank is that there’s something that’s kind of underneath the surface that I really believe is happening and that’s inflation now while they may not be actually increasing rates because they said so, right.

Andrew Horowitz: They said until 2023, that’s what’s going to be. The problem is the inflation averaging discussion, which is something that we knew about. They were talking about a year and a half ago. And they implemented this because they know they want the markets to be set for the fact that there is inflation coming and as such, they don’t want the markets to believe they’re going to be immediately raising rates in order to combat this. The only reason that they’re utilizing this inflation averaging is not because they really want to make up for something it’s so that they don’t split the markets because inflation is coming. I don’t think there’s any question about that. So now you have to reset yourself. Okay. Well, what does that mean for certain areas of the market?

Frank Curzio: And for those of you who think we haven’t had inflation for forever. Seems like that, but people compare this to pass stimulus’s. And if we look at the credit crisis, we have to remember, this is different. This is very different where you’re looking at, first of all, the amount of money we’re looking at less than 500 billion when all of a sudden done for TARP, but that went directly to the banks, it’s differently or they could lend us to whoever they want to. And we all know what happened they got bigger and bigger and bigger. The money that’s being delivered right now, which is 12, 13 X bigger than TARP. What’s up trillion, over 6 trillion, it’s going directly to consumer, they’re getting checks in the mail.

Frank Curzio: This is money going directly to them, bypassing the economy, bypassing me working, just going from the government to the actual person. And I remember I think it was last month or the month before, when I looked at the statistics. I look every single month, it was funny to see what was it? Personal income lower than a personal spending higher. So, that is going to cause inflation and it’s just a matter of time. And it’s funny, I got the same thing where they’re like, well, 2% that rate, but if it goes high, they keep mentioning it. Because, they love to prepare and they love to let everyone know upfront this rate it doesn’t come out of nowhere. But I agree with you. And let’s say, if we get inflation and we go above the 2% threshold, we see stocks do well early on in an inflationary environment, do you switch portfolios? Are you allocation wise? What are you looking to do to set up where there’s high population?

Andrew Horowitz: You would think that you’d have to go for more of away from it in theory, you’d go away from your growth orientation. Once you get into that mode into more of the value. You’d think that in an inflationary environment, you should see a yield curve that starts to spread out a little bit more, you think, and then banks should do well. The banks are horrible, Wells Fargo down 55% this year, bank of America down 31%. Morgan Stanley and Goldman a little bit better because they have obviously trading, but those banks that are front-facing to the consumer and that have very little trading components to them or investment banking for that matter, not doing well at all. So, is that one area that you would want to look at?

Andrew Horowitz: And I think that you have to right now, and I heard a really interesting discussion yesterday, it’s all about a rate environment. What are the rates mean? What areas will do well? Should you be in long-term bonds right now? Or do you have the chance to say, Hey, maybe I should shorten those maturities. We shortened our maturities a year ago, two years ago, we’ve been kind of shortening up our maturities in all of our bond components for the last couple of years, thinking that how much lower are rates going to go? They’ve gone lower, but how much more am I going to squeeze out of the total return versus the yield? And it makes sense to be on the shorter side of the yield curve right now, the other problem is, and I’ll tell you this, this is an observation.

Andrew Horowitz: And it’s something that we implemented because there is a valuation issue that you get to the end of the possible stretching of multiples. And what happened in the beginning of this year, that multiples before all this COVID multiples were kind of a little bit weird. Remember that, before they started this year, we started seeing that big stretch out. We came into this year, light on equities in our long short strategy, the TDI managed growth strategy. We had a 38% position in equities. Three months later, I found this really interesting after the whole drop of the markets and all that. Our screening strategy, which we don’t change, we had a 67% equity allocation. Which I was like, how’s that going to work through all this? But it worked out really well.

Andrew Horowitz: Now, September 1st, what was interesting was that same exact screening process, which we’re looking for growth of earnings and growth of revenue, high ROE. We’re looking at a margin expansion, a whole host of fundamental data on September 1st. This is really, we’ll call it lucky. Well, the clock was right twice, right? So this is my second time. On September 1st, we dropped that equity allocation to 27% because we could not find names that met the criteria because it was so out of range or not even on a valuation standpoint, we couldn’t find the growth across the board that met with…

Frank Curzio: You right, there’re some companies that, if you look at like the Zooms, I’ll throw in there, Lavanya Health, if I’m saying that right. But there’re companies in there that are seeing tremendous growth, but Tesla’s not really seeing the growth to drive that stock price. There are companies that.. Yeah, I agree with you a hundred percent get.

Andrew Horowitz: So, the thing is that I thought it was really interesting that the fundamentals are not playing out now, which kind of makes sense. We’re checking on a quarter of a quarter basis from last year, this year, et cetera. And what happens is we expand and contract the equity core equity exposure dependent on all this. So what’s interesting is our core equity is down, let’s say 1% now because we only have 27% versus the S&P was down in 7.5 in September already. So my theory is right now that we have to be very careful, cause we’ll walk you through a little bit of a minefield that doesn’t mean don’t be invested. So I’m not coming, I’m never totally bearish or totally bullish. We’re kind of in the middle all the time. I like to kind of play both sides to a degree. And when we look at our equity allocation, we have a little bit of a slant in our other portfolios towards valley, which has not been working out. However, in September, you’ll notice that this big train wreck that hit the growth, which was probably precipitated by that Weltrade once again.

Andrew Horowitz: And these are the problems where we’re seeing asymmetrical bulging of that balloon. It’s not necessarily an oil areas, we’re seeing that, we see a big bulge in real estate, right. But that’s in single family homes in rural areas, but we’re seeing that commercial real estate. And we’re seeing that multifamily homes problematic. You’re seeing that certain technology that is front facing to the consumer that is oriented towards cloud is doing really well. And then you have other areas of the market, like banks or leisure and travel, not doing so well. So it’s kind of like this, if you think about a balloon, it’s kind of like a blowing up, so it’s not a balloon or a bubble that we’re in right now. It’s a blown up latex glove. But we have certain areas, you follow what I’m saying? Certain areas are way out of line where other areas of kind of like it didn’t get that whole pop from all this.

Frank Curzio: Yeah. And you know what, let’s get into it this because I know you love giving picks and usually send me a couple of them before and say hey, these are coming picks I like or I want a short and I want to get the boat to a few of them because they’re interesting. The first one is I know no one’s going to take your advice on this because it’s big the company name and tell me that by Amazon like 900 and people like, “Ah, you said.” No, listen it’s not because, I know you pay me to recommend stocks that you don’t know about. But when I looked at everything cloud related outside of Microsoft, that was the best company by a mile. And we’re able to have great gains on it, but you like Microsoft here right?

Andrew Horowitz: Microsoft is kind of like this. First of all, the management is great compared to what it was years ago. It’s really well positioned from the work from home, it’s cloud, it’s got gaming motor company this week to really shore up their gaming and they do Xbox is coming out. And the Xbox S I believe it’s called, thank you for not calling it Xbox plus by the way. Every company is like Apple plus or this plus, Apple news plus. That’s what they pay millions of dollars to their advertising company to come up with a new name, for a new service. And they say, just put a plus on it. So, Wall Street Unplugged plus. So Microsoft is a great recovery play, I think the balance sheet is just, it’s pristine. They’re doing everything right across the board.

Andrew Horowitz: The problem you may have is a little bit of a situation. If unemployment stays up for a long period of time, possibly they lose some of their income with relation to the seats that they sell in terms of either office or windows. But that is just a part of the whole process. So Microsoft, I can’t find a whole, except from a little bit maybe evaluation, but long-term, I just don’t see a hole there, unless we come up with some totally different OS and get away from Microsoft. But we’ve tried, it’s just not happening. I don’t know if you see any holes there?

Frank Curzio: No, I don’t see any holes there. It’s Microsoft, Amazon, Google. These companies are so large, so big and controlling everything. It’s out of control right now and you can’t stop it. It’s funny, where Trump’s been angry about them. They’re suppressing certain information, not others whatever. So both sides could get a little pissed off, but even if you’re looking to break up, these companies are going to be so much bigger. But I wouldn’t be surprised if that happens to some of these, especially with some of the things that they’ll just suppress things on one side, not the other. And it’s interesting because it’s a free speech platform and you don’t want negative stuff on it, but, or just people lying, but it’s hard to filter that out. You filter out one way, you got to filter out, but we know technology is really back in Biden here.

Frank Curzio: We all know that. And but it should, I think the political one, what did the risks that they’re running is if Trump does win. I think he might be that pissed to have the justice department go after these guys, they’re really trying to break them up. I think they great buys if you do that, but they’re just so huge and so big and know everything. There’s a great show. There’s a great documentary on Netflix about this, about telling them, forgot what it was called. But how they actually track you out, they know exactly what you’re going to do and that guiding.

Andrew Horowitz: You talking about the social network or something like that?

Frank Curzio: So, yeah, I think it’s called social networks.

Andrew Horowitz: I start watching it but halfway through, I got my hair on the back of my neck was standing up. I’m like…

Frank Curzio: It’s things you know but it’s real, and it had real people on it who worked in some of the biggest companies in the world that no longer work for them. This isn’t just people but you’ll see how they track, how they completely control you. They know everything about you, they know what you’re going to do, and they steer you towards whatever direction they want. And as big as they are, it’s pretty crazy.

Andrew Horowitz: But Microsoft a little bit different. I think Microsoft has a lot of that and they may look to break it up. But again, if Microsoft, the breakup value, if you look at splitting off, what are you going to split off? You can split off.

Frank Curzio: It’s able to break off social media that then Microsoft or Amazon, I don’t see because they’re just diversified enough.

Andrew Horowitz: I think Microsoft’s a good, interesting play. Long-term and it’s one of those plays that right now, I feel comfortable because there is the potential for so much volatility and there is a potential for, like you said, election or political risk in some of the names out there and what’s happening. And also we have, let’s not, I know you’ve been all over this whole virus thing about, Hey, let’s get them back to school. And these numbers are all going another, I’m not going to argue with you about it Frank. I can just tell you that, listen, we’re seeing lockdown in UK, we’re seeing lockdown in Israel. I don’t know how that relates to the poor residential, trying to get Trump out of office. But nonetheless, there’s something going on around the world. This thing is not over yet. This is not over.

Andrew Horowitz: And it may be blown up to a bit for some things, but you know what, in some regards, people are not taking it seriously on the other side. There’s kind of both sides. The craziness that we see some from some media, but the kind of I’m not wearing a mask no matter what, which is just rude.

Frank Curzio: There’s such a big medium there, isn’t that we understand that more than 90% of these deaths occurred with people who were over 65 years old, who had underlying conditions. We know that it’s fact, we know if you’re under 15 years old, you have a better chance of dying in a car accident than your kids getting COVID and dying just from COVID and any underlying conditions, right? These are the facts that are out there, but everyone’s different, we’re all seeing the statistics, but it’s not like you don’t have to wear a mask or be an extreme, you can’t go outside. And in extreme, any media site wants to be extreme because you’re going to watch it, putting fear into you or just whatever it is. But for me wearing a mask, I don’t wear it for me. I’m not worried about catching it.

Frank Curzio: I don’t have any underlying conditions, but I wear a mask because I know that older people are at risk. They are at risk. And if I see someone walking towards me, like in a store and I have a mask, I actually, if they’re older, I’ll go do a different aisle just to make them feel comfortable, because they are at serious risk of this and the people who are making the policy decisions all over 70 years old, who are in that danger zone, making these policy decisions when the school and the kids and the infections are going crazy. And a thousand people in Alabama got infected. None of them went to hospital, none of them.

Andrew Horowitz: I get it. But what I’m saying is, comparing it to the car accidents and the car, the only thing I will tell you is when you’re in a car, you’re not going to necessarily purposely go down and drive the wrong side of the street. Right? And that’s what I think it’s like when people are purposefully not doing the things that you know, could prevent some of this, that’s all I’m saying.

Frank Curzio: Yeah. And I agree with that too. I mean, we have to be smart about it. We can’t just say, “No masks!” No. But, I just think, lockdowns are insane, and Europe, I’m seeing not locking down, but have restrictions. They place it in… They’re closing early in some places and lowering the restrictions from 50 to 30%, whatever it is, but not full lockdowns, but I’d like to see –

Andrew Horowitz: Well, if they are saying they encourage people to work from home now. That was today.

Frank Curzio: Oh, they’re encouraging people to work from home?

Andrew Horowitz: Boris Johnson saying, hey, we’re going to close this down, with schools stay open, will non-essential workers, please start working from home. So all I’m saying is there’s some weirdness going on and whether it’s a second wave or whether it’s not a second wave, it’s the first wave, it’s just continuation. It’s not that… I don’t really care. Here’s what I do care about: that is effecting the psychology of the individual.

Frank Curzio: Exactly. Just like a vaccine will, even though people will be crazy to take it under 40, but that’s going to change the sentiment, especially of older people that we have an actual vaccine that, hopefully, it is a 100% safe and proven to be safe before they release it.

Andrew Horowitz: Exactly. Exactly.

Frank Curzio: All right. So let’s get to the next pick too, because it’s a short. And it’s a short that… Wayfair. And I’ve seen people try to short it, one of our analysts here, definitely. They did it a good way. They didn’t short it actually bought puts on it. So they have lots of money put in.

Andrew Horowitz: But not as much.

Frank Curzio: Yeah. So Wayfair is a company that goes tremendously high. I actually started using it cause we were looking for furniture and it was a million times better experience than anyone else that I used, because it was the first time I’ve ever used them. I didn’t end up buying anything though, but it was great in terms of the service. I just found something on a different site that was a little bit better, but I was just interested to see it. And it was pretty good. Like just the emails to follow up the funnels and stuff like that.

Andrew Horowitz: Here’s a couple of things that are, that most of this stuff is made not in the US which I’m not saying that’s good or bad, but I’m just saying the quality of, most of the merchandise is pretty low. They do, in fact, you can find the same exact pieces on other places cheaper. So you’ve got to say, well, that lends itself to the margin of what Wayfair is making on it. I’ve gotten many things, like little things like planters and things. Almost every single time I had to send it back. Somethings chipped, it’s, you know, not what was… I ordered something that was white, it came in beige, you know, almost every time. And they’ll do like, “Hey, keep that, we’ll send you another one,” so here’s the thing. I just don’t believe this in the sustainability of the price.

Andrew Horowitz: I think a lot of that was due to the fact that people were rushing when we had the stay-at-home orders. When we had the lockdown so, like “Okay, I have a laptop, that’s fine. For a few days. I can put it on my lap in my chair and I can work and I could sit in bed and do it. But wait a minute, I may be here for how long?” And a lot of people went out and started to set up small offices in their homes, as well as buying desks and things like that. But also saying, “You know, what, if I’m going to be in my house and maybe I should get a new couch, maybe something a little bit.” Now, I think some of that day has passed a little bit, especially if we’re not going to have necessarily these lockdowns.

Andrew Horowitz: Prices up about 300% since January, 2020, it’s a low cost and again, a questionable quality of goods. There’s still running an operating loss annually, they’re 185x forward PE at this point. And you know, what’s the barrier to entry on this? I don’t know. Maybe they have products from everywhere. Do we see other companies getting into this game? Possibly. We’ve even seen companies that are in the high-end space like RH or Restoration Hardware do extremely well in this, but I just don’t see that if we are on the tail-end of all this, how this is a sustainable model of growth at any price, right? You know, at 185 times forward losing money on an operating basis. I just don’t get it.

Frank Curzio: You know, what’s funny though, I don’t get it either, but I can say this and I don’t get it. I don’t get it. Like I didn’t have Wayfair, I didn’t get the move in Zoom, but I do know that companies are going to trade at a huge premium for growth. And if they continue blowing out those numbers on the growth and like Zoom, I’ve never seen growth like that in any company ever within a year stretch. And of course it took a pandemic, everybody coming home, but those numbers, whatever, 200 million users from like a million, it’s just like, whoa. But when I look away from it, the only thing that worries me here is, you’re right, 185 times forward PE. I looked at this at 70 times, 100 times, 120 times. And it’s now at 185 times which, guys, means the stock keeps going up and up and up.

Frank Curzio: So I don’t know if I’m willing to even, no matter what the valuation is to say, it’s at a certain valuation that now you have to worry. Cause I would think that valuation was 70X, 100X, 185X. Right. There’s got to be that, like you said, has this been, just drawn out long enough where we’re getting to that tail-end or… But for me I don’t look at it as valuation, because anyone that tried to short these things, the valuation has been so wrong the whole time.

Andrew Horowitz: That’s just one part of it. It’s just one part. They’re still running an operating loss. You know, why are they still losing money on an operating basis, and why it, that they can’t, with all the cheap products they have right now, they may also run into supply issues depending on also who’s in the next president and how much the screws we tighten on China and other countries around the world, tariffs that go into play on this.

Andrew Horowitz: I just, I think it was really well set up for the pandemic idea of, “Okay, what could really do well, well, I got to have a computer,” so Dell and those companies did really well and Microsoft and Apple, from all the sales of the phones and the laptops, et cetera. And then, “Well, I need to sit somewhere.” Okay. “I got desks and I’ll do something to my house because I’m not going out.” All I’m saying is if we get that vaccine, if we get something where people are going to be like, “Okay, you know what enough of this,” I mean, do you think RV sales are going to continue to be crazy like they are forever? Boat sales?

Frank Curzio: It depends because you know what? Even with a vaccine, the market’s going to be different for a restaurants. Who goes to restaurants the most? I would say the demographic, it’s going to be 60 and over, like to go to restaurants, you know?

Andrew Horowitz: That they talk about the millennials. They don’t know how to cook! What are you talking about? Seriously!

Frank Curzio: I mean the expensive restaurants that I see in the city, but when people go out, it’s usually an older clientele, they like to go out on Fridays and Saturdays, retired couples. It’s whatever retirees like to do, if it’s cruises or whatever it’s are they actually going to do it, even with a vaccine, remember these are people that really have to worry. I mean, those, those statistics are telling us, so –

Andrew Horowitz: I don’t think the older people are buying this furniture. I think it’s a younger crowd, it’s cheaper, I think it’s, again… listen, it is possible that it will continue going along with the new home sales and all that, when people are moving out of an apartment in New York that has 420 square feet where they have, one couch, one bed, a little table with four seats. Whereas they go into a house, they’re going to have to refurnish, a whole different situation than moving out to Jersey or something like that. Right? So that may be something, but it just appears to me that this is the poster child, like Zoom is, the poster child of the potential pandemic stay at home, and once that kind of rolls, I just don’t know if we’re going to be willing to pay that much up for this kind of a name, especially when they are having such a extraordinary expense related to getting everything out there at this point. I don’t know.

Frank Curzio: Really quick. I want you to go over before you go here. I just want to make sure we get this in, but you also talked about a couple of fundamental things and operating losses and MP. I mean, a lot has to do with technicals. You look at technicals a lot. I’m sure you’re looking at technicals here. Like that. That’s what I was getting to where you look at valuation. And valuation has not been something that you could look at and say, now it’s time to short. But if you’re looking at charts, you’ve may have seen something combined with this that you’re saying, when I combined everything together, this is a great short.

Andrew Horowitz: Yeah. I mean, when I look at the chart right now, I don’t have in front of me, but I kind of have it engraved in my mind right now. When I look at the chart, there’s definitely a level that it came up into kind of blew out that top end, start to come down with the rest of the market right here. This is kind of a hole we call it, or a fast zone. Where we go vertically through price in a quick manner that looks like, right now, there is that opportunity and settle back probably about 20% lower from where we are right now. So if you can look at the chart and you can see that you’ll see about 20% lower.

Andrew Horowitz: Again, I don’t have it right in front of me. I think it’s about 20 to 21% lower. There’s kind of a support level there. And I wouldn’t be inclined to take it below that point, unless something really fundamentally breaks with everything. But you know what they’re going to have also a lot of weak hands that possibly got it on that real big upswing that happened last month or so. I mean, it’s been going up, but that really big move that happened over the last month or so, two months. And it just seems to me that on a technical basis, this is very vulnerable. Not a lot of support down from here.

Frank Curzio: No, I love that. I’ll love that you combine everything. So, I mean, we talked about a lot. We talked about ideas, guys, you know, sometimes it gets lost when we talk about the economy and it’s so important just from that, to us talking about inflation to me, you’re always looking for ideas, just, I want you to expand it where sometimes you can be, well, the Fed and the interest rates I put, but that leads to so many individual stock ideas when, when you have that outlook. So hopefully that comes across and, and we’re not putting people to sleep, because to me, that’s interesting, to you that’s interesting. And the whole point is it’s interesting to the audience, cause it really doesn’t matter. We can talk about the economy all day… But Andrew if someone wants to get in touch with you, learn more about you, how could they do that?

Andrew Horowitz: Yeah, you go over to thedisciplinedinvestor.com. That’s one place where we have all the information about our various strategies and what we do, from investology to the long short strategy with TDI managed growth strategy, to our global allocations. Of course the podcast on all fine podcast networks. You can find that as well as the disciplined investor, just look me up online. Just click it into any, well, everybody uses Google, nothing else. I mean Dogpile, whatever it is out there these days.

Frank Curzio: I still see a picture up there from like what? Like 20 years ago you look good.

Andrew Horowitz: Of course. Why would I put anything else up?

Frank Curzio: You lost weight! You look good! What are you talking about?

Andrew Horowitz: I’m not stupid! So, thedisciplinedinvestor.com.

Frank Curzio: All right, great stuff, always love having you on. Everybody loves you, you always have great ideas. Your performance track record has been great last few times you were on, man. So I really, really appreciate that. And as always open invitation, man. So…

Andrew Horowitz: Appreciate it. Let’s keep it up. Thanks.

Frank Curzio: Great stuff from Andrew. Love having him on, how he shares his ideas. We go everywhere and let me, I want to hear from your Frank, curzioresearch.com, especially that one segment on politics. I mean, look, for me, when I look at this, especially… what I care about, I don’t care what party you are. What I care about is making you money. That’s all I care about, right?

Frank Curzio: That, and you, I think everyone listens to the podcast, understands that, and I need to understand COVID it helped me get out of the market and tell you guys, listen, you got to really be careful. We sold out a lot of positions. I’m not saying, “Pat myself on the back,” you know, and I highlight my losers all the time. More than my winners, because that’s where the biggest lessons are learned. But I haven’t… I didn’t see one other person tell you to get out of the market in February because we’re going to see… A market crash was imminent.

Frank Curzio: You know, so understanding COVID stats. And when I post them on Twitter and just seeing the negative comments come in every time I’m posting something positive, which should be great. I don’t want to rush a vaccine to the market before the election. That’s bullshit, but we all need a vaccine. It’s really going to help the older population. It’s sentiment wise it, Hey, we have something that can really, help us.

Frank Curzio: You know, that’s good news for everybody. And you have to sometimes put these things aside and difference of opinions. And listen, you can say “Frank, I don’t agree with you.” I always say that my research I’m like, “Hey, if you don’t agree, if it makes you feel better calling me an asshole, call me whatever.” Tell me why you don’t agree with my thesis on something because I want to hear it. I want to hear it. You may be right. You may be someone engulfed in an industry where I don’t work in this industry, but you know, I research it to death. You’ll see my videos, research videos and all my newsletters, how much research I put into these stocks and teach you what I’m looking at to help you guys out, outside of the Curzio Research picks and become great investors.

Frank Curzio: But that’s what we’re about here. And a quick story about Greg is that this was the first time he was on a podcast and you heard from him, I love the strong opinions. So forward all the emails to him. He’s great. But Greg is a very, very close friend, one of my best friends. And he launched my first package at Stansberry. It was a natural gas package did very, very well, launched his first package. He wrote the first package for me, for a small stock specialist. And you know, that launched the product and it was a successful launch.

Frank Curzio: So, we became close and usually you do that with good copywriters, right, who market your products and write these copy packages and make it exciting. And I always thought he was the best in the entire industry. So in every company, you kind of get attached to certain copywriters. And I got along with a lot of good ones, but Greg was the one that always went to different places with me and you know, like boots on the ground. And he came with me this way. He listened to the conversations. We brought film crews with us. When we toured the… we went to Vancouver, one the largest natural gas engine providers. We had access to the whole entire company, CEO, CFO, sample, everything was cool, jumped in the trucks, powered by natural gas.

Frank Curzio: And that was in Vancouver. We went to the Bakken and North Dakota together. And you know, you spend time and just, it’s funny when you talk about it or you’re having drinks afterwards and bullshit, and you get close to people, but he sees me in there and he understands. So he’s able to write a package much better that’s true to me, compared to just writing something that’s going to sell, which is bullshit, which sometimes we see with our kind of a package. But when I left, well not when I left Stansberry, when Stansberry let me go, he was one of the first to call me and say, “Hey man, I’m really sorry,” and whatever. And then when I started my own business, we just launched our first package and he said, “Look, I’m looking to make a move.” I said, all right, let me know what’s going on. I’ll try to put something together. And he decided to come over to Curzio Research.

Frank Curzio: When he came over… You’re coming over from one of the biggest and the best and for him to take that leap over here, and he’s just starting a family, and now he has more kids, twins and everything. Yeah. It was a huge, huge leap of faith. I was surprised he actually did it. Again, even now, when we’re generating more revenue, millions of revenue, we’re still a dot on the radar in terms of the publishing industry, that’s just one of our, numerous growth markets we have right now, which is great for our company.

Frank Curzio: But just to see that, is really special, you know, and a lot of my partners and people who joined me like very early on, that’s not an easy decision to join a small company. Things are different, especially when you work for a big company and they’re spending money and it doesn’t matter if they lose money here, it’s different, it’s a lot more work. You’re doing things outside your scope when it’s a small company, everyone has more responsibilities. I try to make sure they do an 80% of what they’re good at, but that 20% is going to overlap with a lot of bullshit that comes along with running a small company and building it up.

Frank Curzio: And, to see how much they trust me, that is a massive, massive, massive driving force for me, massive, in terms of our security token, we’re going to become a publicly traded company in a few weeks. I’m very excited where we give it, we did it, right. We structured a token, right? Where, we’re paying a dividend, we paid a first dividend to our shareholders. Now, any amount of pop investors are going to be able to buy this token and exchange, we’re going to give you details and videos of exactly how to do it.

Frank Curzio: It’s going to be difficult, but you get to own an equity stake in our company. And that’s what I want. You know, cause it’s the shareholders, it’s you getting in on the ground floor. We’re still really, really small right now. And we’re risky. It’s basically just a new way to go public that’s much cheaper and more favorable for individual investors. I think this industry is going to take off. The fact that where, pretty much first to launch something like this, you’re not going to see a token structure like us, where it’s very, very close to a stock in terms of compliance and in terms of transparency, there’s nothing, no security token on the market, believe me, I analyzed all of them, that you get to see that compared to ours. And it’s going to draw a lot of interest in people because it is really set up for the best interest of the shareholders and it should reflect how big we grow, and our growth markets and the revenue we generate and earnings we generate.

Frank Curzio: So, you know, I’m really, really excited about that. But the motivation to make this work has a lot to do with employees, trusting me, with you guys, trusting me, for decades. 102 investors, think about how many things that you invested in. 102 investors, every one of them are clients. Every one of them subscribers. I mean, it doesn’t get a better endorsement than that. And I see that personally, these are people that have followed me that said, no, I’m going in. And they invest in a security token at a time when no one even knew what a security token was. Now, the industry is really starting to develop, and they trusted me on that. But to do it, I joke around with the first a hundred investors, I’m like, you guys are crazy, to actually do this. But it’s really exciting stuff.

Frank Curzio: We worked really, really hard. And I know that anyone else is going to launch security tokens that really do the proper structure, they’re going to come through us because it’s a very difficult process. It’s going to open a door for so many different revenue opportunities, especially for our business where… if it’s not consulting fees that we generate through a different division or a subsidiary, it’s taking a stake in these businesses very early on that the ones that we like is, are going to come to us and that’s a way for them to pay us. So it’s going to open up so many opportunities in terms of our company in general, in terms of everyone that’s following us, in terms of, if you’re a subscriber to our Curzio Crypto Intelligence newsletter, where you’re going to see a lot of security token recommendations, is probably about 14, 15 that you could buy right now, it’s going to get bigger and bigger.

Frank Curzio: There’s going to be 100 six months from now, and there’s going to be thousands three to five years from now. So, it’s very early in the industry, but at least we’re going to see a lot of these names in the early stages of growth. It’s going to be a lot, a lot of fun. So I’m excited about that. So yeah, I just want to give you guys a little insight into Greg in joining us and what he’s done and you know, the fact that he took that chance because I really consider him the best, the best copywriter in the financial industry and for him to join such a small company. You know, I was really proud of that. And just seeing the team that we built very early on to come here and still be here and be excited. It’s nice, but that’s the motivation to really get this thing right and I appreciate all the support.

Frank Curzio: Let me know what you thought about that segment too. I know it was political. I know that we were going to get lots of emails, but remember, we should be able to talk politics and not hate each other. We should have strong opinions. We all have strong opinions, but not to the point where we hate each other. We don’t talk to each other. That’s not America. That’s not what we do. And at the end of the day, you got to worry about yourself. You got to worry about your portfolio, worry about your family. And that’s what I’m here for, to really help you out in terms of that. And hopefully, you know, we’ve been doing that with our newsletters, you got pretty good performance. It can always be better. I’ll never be satisfied.

Frank Curzio: We just recommended a great stock. And Curzio Venture Opportunities that if you listen to this right now, you should have it. You should have that issue. So, I would say if you listen to this after 6:00 PM on Wednesday, and you’re a subscriber, it’s a great opportunity, really good name. One of the greatest investors acquired a huge stake in the company, it’s only two and a half billion dollar company, enormous potential. And I’ll tease a little bit, saying it is in the biotech sector and you’ve seen some gains in there. And this is one that hasn’t participated in, I think could really take off. It’s not a COVID play. It’s going to be much, much bigger. It’s not short-term oriented like that, but I’m very, very excited. It’s under the radar name, but I told you guys about yield curve control. A lot of subscribers have come in.

Frank Curzio: I discounted that newsletter by 60% for you. That ends Friday. Curzio Venture is our signature product. We don’t discount it by that much, almost ever a 60% discount, but Friday night at midnight, that’s it, that offer is over. And you know, you’re probably not going to see that offer for very, very, very long time, anything close to that offer. So if you’re interested, definitely subscribe the yield curve control part, the Fed actually kind of implemented yield curve control. So yield curve control is capping the rates, like I said earlier, for me, interest rates are going to be very, very low. And if they’re super low, then it’s going to be great for a lot of these small caps, it’s going to be great for equities. And instead of capping it long-term and the long-term rate on the back of the curve, it’s the front of the curve.

Frank Curzio: They say, “Hey, you know what, next few years we’re going to stay low.” And if it does, on the backend, start getting high, then they’ll initiate yield curve control. But the point of it, if interest rates are going to stay low considerably, and you have that timeframe and the Fed comes out and says it, which they did 2023 until we get full employment, which you won’t have for a long time because of COVID, it’s going to provide a spark to a lot of companies that haven’t participated yet. And there’s a lot of small cap names that are starting to see huge growth. And it’s an opportunity. I think that can make it a lot of money in small caps. That’s what I want to sell my products to most. So if you’re interested in Curzio Venture Opportunities, it’s fine. We’re going to have it for one more week, we kept that up probably for a month.

Frank Curzio: Usually we only keep things up for two weeks and we don’t discount all of our products often, but this is one time we do. If you want to take advantage again, we have that new recommendation. We have three new ones that are under our buy up to price that I recommended last week that I think are all going to take off, all great companies, all US-based. A lot of the market has been coming down because COVID cases are surging in Europe, but these are companies that do most of the business in the US small cap or reported very, very solid quarters and all down from their recent highs because of COVID and having participated in this rally. So very, very excited about these names, I to see a huge upside potential. Not just in those names, but in small caps in general, not the whole Russell 2000, but a lot of individual names are coming up on my list that I really, really liked that a growing very, very fast and are still trading at low multiples compared to the market and compared to their peers.

Frank Curzio: So if you’re interested in that, you can go to our website, you’re going to get a few more emails on it. If you’re on our list again, Curzio Venture Opportunities. It’s 60% discount, if not, no worries. And again, I want to hear from you, frank@curzioresearch.com. Let me know what you thought about that segment. I can’t wait. It’s got to be crazy, new format, more people coming in, we’re going to have more high profile guests. It’s going to be really cool, going to be videotaping all of this going forward. We have the studio almost completely set up. So really exciting stuff. You’ll see a lot of this stuff through our YouTube page if you want to follow us, tweet @FrankCurzio, or through our Curzio Research YouTube page, which you’ll see a lot of videos and a lot of interviews on there, which will be exclusive to that. So really, really cool stuff. And that’s 100% for free guys. You can sign up for those free, just like this podcast is free.

Frank Curzio: So, thank you so much for listening. Really, really appreciate all your support. And I’ll see you guys in seven days. Take care.

Announcer: The information presented on Wall Street Unplugged is the opinion of its hosts and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility. Wall Street Unplugged, produced by the Choose Yourself Podcast Network. The leader in podcasts produced to help you choose yourself.

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 September 23rd. 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. So as you know, I’ve been pretty bullish since May, seeing the amount of money our government was willing to throw at the coronavirus problem to prevent an all-out depression as businesses across every state were being forced to shut down. And this is something, an event, that no business prepares for. And you’re talking about a decline in 75% or more in sales. Immediately. In other words, you’re not seeing a slowdown where you’re changing your business model, hiring new people, going through those ebbs and flows like most businesses do. This is something that just, you can’t see coming. There’s no playbook.

Frank Curzio: It was immediate. It was damaging. It was scary having to lay off, furlough employees out of nowhere when businesses… I mean you look at the airlines, how great they were doing. Again no playbook for this is pretty crazy. So the government had to react forcefully, aggressively, spent six and a half trillion dollars, six and a half trillion dollars, including direct payments to families. Fortunately for business loans that were pretty easy to obtain for most businesses. 50 billion of loans to the airlines. 8 billion of loans to air cargo carriers, 17 billion of loans to businesses who are critical to national security. 425 billion for the Secretary Treasury, where they could use that cash to buy basically almost anything they want, which was bonds in terms of backstopping risky debt CLO market, which I was worried about. They backstopped it, it’s fine. Investments, they could buy stock if they want. When you take the full amount, the full amount of money, six and a half trillion, it’s 35% of GDP which is game-changing.

Frank Curzio: So we have struggling businesses that were given a lifeline until the COVID risk would eventually die down, and we’re seeing that. Most states are open at some capacity or another. Gone from 20 to 50 to 70. And on the other end, we have businesses that, that started to thrive because of COVID, which is tech, social media, streaming, healthcare, almost anything e-commerce: Zoom, Overstock, Wayfair, you guys know all the names, all those. Exercise equipment companies since gyms were closed. Of course they have super low interest rates, which the Fed said at its recent meeting, will stay at zero. The short-term rate we stayed there for three years, right? I talked about yield curve control and why the Fed was definitely going to do this. So yield curve control is capping long-term yields so they don’t go high, which is one of the biggest risks of the markets, we have tons of debt, right? Essentially, they initiated yield curve control. They just laid it on the front end of the curve. And the last time they did yield curve control was back in the forties to fund World War II. The next eight, ten years, the market surged because of this policy.

Frank Curzio: But now they just said, well, rates are going to stay low for at least three years, at least three years and so we get full on employment could take longer than that, 2023. So, having super low rates locked in long-term, Fed’s already spending trillions to backstop our economy. They’re going to continue to throw trillions into this market because of the vibe between Wall Street Main Street, we all know it’s going to continue for many years. And now what do we see with COVID? The numbers are getting better every week. Say, wait a minute. I’m hearing increases. You’re right. Half the states have seen increase based on the latest data. And it’s nearly a 40% increase in cases from week over week, which is around 50,000 now, but that’s kind of expected, right? Schools opening back up. It’s getting cold around the nation. More people are staying home.

Frank Curzio: It’s not about the infection rates. It’s about the hospitalization rates and a death rate percentage. That’s the only thing anyone should care about. And unfortunately, a lot of the media, which is all bullshit, is just going to throw headlines at you to scare the shit out of you to get page views. But if you look at the hospitalization rates and looking at an increase of about 13, 14,000 new cases this week, compared to next week, around 40% increase, the hospitalization rate actually moves lower. The death rate as a percentage has continued. We get the week to try lower… than A 2.8%. It was over well over 8%. I think it’s still over 6% for New York city. The people who die or catch COVID now, what does this mean? When I look at this data, the people catching COVID in the U S are young, healthy do not have underlying conditions cause you’re not seeing death rate rise, we’re not seeing lots of hospitalizations. So it’s kind of like the flu to them. Based on low hospitalization rates and death rates, we’re doing a great job right now, protecting the people in a danger zone who are over 65 or who have underlying conditions. So it’s very, very good news and we’ll also get a vaccine from J&J or Pfizer by year end.

Frank Curzio: So the landscape for stocks is super bullish. I sound crazy as that pull back, listen to every single, every single trader, every single one that you know that you follow all called the bottom or actually the actual top on September 2nd. Our models said it, we have to get out. They all have the date, right? It’s like, they all got together in a meeting and said, okay, this is what we’re going to say. It’s awesome.

Frank Curzio: But if you’re looking at the landscape and you’re looking at six, 12 months, it’s super bullish and not all names, some high flyers trading or 50 times sales, you’ve seen a lot of these names pull back like the Teslas, couple of other ones, Apple has pulled back. I’ve seen a lot of great names, especially in small calves that are still down well off their highs, but they’re starting to see the man come back, it’s a great opportunity. It’s why I’ve been bullish, portfolios have benefited. So I continue to be bullish… Up to now. So when it comes to the stock market, and I’ve told you this millions of times, the one thing we know it’s bad for the stock, more bad for equities, the one thing, that one word is “uncertainty.”

Frank Curzio: I’m not usually worried about short term problems, but this election in November is going to be a complete shitshow. It’s not going to be decided right away. If it takes months to determine the winner, which is a possibility we’re going to see a major pullback in stocks, and rightly so, because these candidates have, have different agendas… Not too sure, you know, big flip-flop on what they like, don’t like, what they support, but I really don’t want to own fracking companies if Biden wins but I would think alternative energy, healthcare stocks, biotech will catch a bid, since he said those almost always do well when a Democrat first takes office. So we’re talking about trillions of dollars, sitting idle, looking for an allocation based on who gets elected, because that’s going to determine the policy. It’s important to understand that. If you’re not pushing an agenda, there’s money, it’s not going to flow into certain sectors.

Frank Curzio: Now, why do I suddenly feel this way when I’m mentioning it? And I’m nervous and saying, well, we’re going to see uncertainty to the point where we could see a huge correction in stocks. And just to be clear, it’s kind of the status quo here. A lot of people think the election will be crazy. We won’t have a winner right away. You know, I didn’t feel this way, but now why do I personally feel this way is because of the death of Ruth Bader Ginsburg, who was a Supreme Court Justice, which you all know by now, you know, this story, trailblazer, outspoken, liberal, did things her way. And she had a way about her that even people who were totally against a philosophy or super conservative, like the late Supreme Court Justice Scalia, who is super conservative, had a great friendship with her. They loved busting each other’s balls, after cases, after meetings, and there’s really great stories if you want to do some research and reading, how they just tore each other apart, afterwards, but they were friends and they understand that they had different point of views. But anyway, Ginsburg passed away last week, leaving a door open for President Trump to nominate a new Supreme Court Justice. Now to bring everyone in here who may not understand the process of hiring a Supreme Court Justice or the importance of it, there’s nine Supreme Court Justices, and right now it stands at five conservative and four liberal, progressive, whatever you want to call it. Ginsburg was one of those four liberals and her seat needs to be replaced. So the process of replacing a Supreme Court Justice is approval from the President and approval from the Senate, which the Republicans happen to control both. So Trump will elect a new Supreme Court Justice, who is conservative.

Frank Curzio: He’s going to do this before the election November 3rd. And that’s going to lead to six conservatives and three progressives, which opens the door to big changes, basically ensures that the liberal agenda is going to be impossible to pass, at least in terms of law. Now, Ruth Bader Ginsburg, and this is cool. Her dying wish, according to Democrats, was that her position not be replaced until a new President is installed. That’s awesome. Yeah, the dying wish. Why was this so pressing? Because Ginsburg knew that the Democrats were really going to get to get fucked if she were to die before the November election. Right? She knew that, everybody knows that Democrats know that. So basically she was hoping for a Biden win while she was alive, a Senate win and then they can elect a Liberal Supreme Court Justice, right? Probably the reason why she wasn’t retiring.

Frank Curzio: She was very sick, but that ain’t happening. This is unfortunate for the Democrats. It puts them in a real shitty spot and they know it. And how are they responding? They’re protesting at Mitch McConnell’s house, who is the Senate majority leader, the person who brings a Senate together to vote on issues. Mitch McConnell contradicted himself because this situation arose in March, 2016. We’ll get to that in a minute. It was Obama’s second term. He’s only going to be President for a few more months, but he tried to elect a new Supreme Court Justice Merrick Garland to replace Judge Scalia when Scalia passed away, 2016. It didn’t pass because the Republicans ran the Senate but McConnell said “We need to wait until a new president is elected before bringing a vote to the floor.” And now he’s doing it differently, so Democrats are really pissed. So, hey, let’s protest in front of Mitch McConnell’s house.

Frank Curzio: They’re talking about increasing the amount of States from 50 to 52, thought that was kind of funny. So making Puerto Rico, Washington DC, states, where they can get four new democratic senators… get more power, more votes, talking about getting rid of the Filibuster, which requires a super majority of 60 out of the 100 senators to vote an issue. I mean that wouldn’t happen till next year. And if Biden won, along with the Democrats, controlling the Senate, everything, Don Lemon CNN says, “We need to blow up the entire system, blow up the entire system. We’ll abolish electoral college altogether if Trump elects a Supreme Court Justice.” AOC another Democrat is talking about increasing the number of Supreme Court justices, more than nine so where they have 15, whatever it is, who knows, this way they could have more progressives.

Frank Curzio: CNN GES was on a lot, Reza Aslan tweeted to his 300,000 followers that if the Republicans try to replace Ginsburg before the election, we burn the fucking thing down. That’s what he actually said on his Twitter account. I’m quoting, “We burn the entire fucking thing down,” that’s what he said. If all else fails, you got Pelosi in the pocket, right? But Pelosi is going to launch another impeachment against Donald Trump, which, you know, it’s like a yearly thing now… Which will eat up the Senate floor time and help delay the Supreme Court vote until after the election. The old impeachment thing, you might as well keep bringing it because even when it’s bullshit and you get caught, nothing happens to you. I mean, every president is going to get impeached at least once a year, going forward forever, right? Because, there’s no consequences. You can make up shit. You can say whatever you want. You can destroy lives and even when you get caught, nothing happens to you. So why not, bring an impeachment?

Frank Curzio: My question? What the fuck are we doing here? I mean, has our country actually come to this? If Trump elects a new Supreme Court Justice and believe me, this is going to filter down to your portfolios. The reason why I’m going over it, politics, I know, you guys, we’ll start up here. Trump elects a new Supreme Court Justice. This would be the most presidential thing he’s done since becoming president. This is what 100% of every standing president would do in his shoes, if they controlled the Senate. Obama tried to do it in 2016, tried to elect Garland to replace Scalia when he passed away. It didn’t pass because the Republicans ran the Senate. But if the Democrats ran the Senate, Garland would be a Supreme Court judge right now, even though he would’ve got elected in March and it was Obama’s second term. He was gone… At the end of the year.

Frank Curzio: The only reason why they… Obama tried to push it through, Democrats tried to push it through, and it’s their job to push it through. What Trump is doing is exercising the constitutional right to appoint a Supreme Court Justice, which will strengthen his base, heading into the election. Since its conservatives that don’t like him, I could see that… It’s going to please a lot of these people. But this process is a layup. It’s expected. Every president Democrat, Republican, would do the exact same thing in his position. There’s only two dissenters right now in the Republicans, which, Republicans really don’t need their votes, they have enough votes, but there’s two dissenters. And they’re going to change their mind or risk their political careers because when shit like this happens and it’s unfortunate, but when it happens bases rally together… And there’s never a better time to rally your base, especially with two months left in the election.

Frank Curzio: But to be clear, this is not Trump looking to build a wall, which is controversial. It’s not about Trump issuing tariffs against China, Europe, which he could do by himself without Senate House. Nothing. It’s not about Trump saying stupid shit on Twitter. This is a president exercising, his constitutional right to appoint a Supreme Court Justice that will significantly strengthen his base. Again, every single president before him would and better do, if they want to get reelected, the exact same thing. No Democrats want to impeach Trump for exercising this right, or launch an impeachment against him. They’re calling for more violence from the extreme left, not all Democrats. They want to make Puerto Rico, Washington DC states. Not because they’re deserving. It’s a good idea. It’s simply because they just want more power.

Frank Curzio: And I’ll be honest: It sucks for the Democrats that Ginsburg died just before the election. It’s bad luck. It also sucks she’s being remembered more for the political consequences that her actual achievements right now. But to launch an impeachment when Trump is following the law, it goes to show, you’re not just Democrats, but we’ve seen from Republican, they’re going to go to any length, legal or not legal to maintain power because they only give a shit about themselves. And that’s why this election… It’s not going to be settled on November 3rd. And I didn’t feel that way until last week when Ginsburg passed away and just seeing what they’re doing on TV, it’s like, “Could you please honor her last wish?” They don’t care about her last wish. I guarantee you there’s maybe one or two Democrats in the Senate that spoke to Ginsburg in the past two years. They don’t care. Please honor her last wish! Why? So I can get more power. It’s great. It’s awesome. But it can take weeks. It can take months until we actually settle this.

Frank Curzio: If that’s the case, you better have some dry powder because stocks are going to get nailed, and it’s going to provide a great buying opportunity. I’ll be there for you every step of the way and tell you about what you’re… Which I’m going to go into more detail later on my guest, Andrew Horowitz, awesome, awesome interview, really cover everything. Been on fire with his picks lately. He’s going to give us an amazing short in a little while, but before I get to that interview, I’m bringing in two guests today, that are in the studio, to talk about the political implications and how it can impact your portfolio. One guest, you already know, who’s Daniel Creech, senior analyst at Curzio Research. The other is first time guest, Greg Yenoli, who is a political strategist for the Clinton and Obama administration. I’m just kidding. Greg is our director of copy, partner at Curzio Research. If you are an investor in my company, you’d be very happy that Greg is on board. He was responsible for a lot of the sales for our company because of how good he is and how great he is. Very good friend. And we had an interesting discussion about Ginsburg, the election, and we had different opinions, and I just thought it was very powerful.

Frank Curzio: And again, this is going to help you in terms of increasing your net wealth. We’re going to go, but I wanted to bring in Greg and Greg, let’s hear from you. Thank you so much for coming on the podcast. First time, and both are in studio, I have my whole team here this week, which is awesome. Thanks for coming on, man.

Greg Yenoli: Thanks Frank. Happy to be here. Really exciting for me.

Frank Curzio: Well, I want to bring everyone in here because Greg, Greg is a boxer, right? He boxes, and I’ve been training lately trying to fight him. And he’s been duck- you’ve been ducking me, right, a little bit?

Greg Yenoli: I don’t know. I don’t know about that. I think, I think it might be a little bit of, you’re sending me your videos and trying to taunt me a little bit, and now I showed up and I’m ready to go, and I don’t know how sure you are anymore.

Frank Curzio: Yeah. I sent him videos when I’m hitting the bag and everything saying, “I’m ready for you,” so we’re going to spar. We’ll get that on tape too. It’ll be quick. I don’t know. Hopefully it’s not quick in his favor, in my favor, but it should be fun. But we were talking about, and you had some sort of strong points when we were talking about Mitch McConnell, contradicting himself, so why don’t we talk about that because that’s really something where it’s expected, right? I mean, he’s going to say one thing and when it’s not in favor of his party, when it’s in favor of his party, he’s going to say something else, totally changing his mind. But they’re calling him out on that, and he’s on video and everything, which is pretty funny.

Greg Yenoli: Yeah so I actually went back. I mean I obviously knew about all of this prior, but I only knew kind of the broad strokes, which was basically, he obstructed and was like, I don’t care. We’re not going to even allow hearing of your guy. And his whole rationale was, there’s going to be an election a year from now. And whoever that next president should be, the people should have a voice in deciding who gets to be on the Supreme Court. It shouldn’t be some lame duck president who’s not going to be president again a year from now. It wasn’t like it was… September 23rd, we are, now… It was not like it’s September 23rd and the election’s 40 days away, we’re talking, the next president wasn’t getting sworn in for nearly a year. But his whole rationale was, Obama is going to be gone, he shouldn’t really be allowed to choose who the nominee is, or who the Justice is going to be.

Frank Curzio: And now…

Greg Yenoli: Right. And so of course, now, that was the rationale, and now it’s obviously a complete 180. So I actually went, I went back, and I actually wanted to see what he had said about it because I was curious. Again, I knew the broad strokes, but I was curious about the specifics of what he said. And this kind of tells you everything that you need to know about politics in this country and the status quo and especially the people who are career politicians and the ones who want to stay in power and… They’re all just full of shit. It’s really not about… There are really no guiding principles. It’s really all about, as you said, staying in power and, winning for your team. It’s a team sport, unfortunately, where we are a nation of sports lovers, and we’ve kind of turned politics into a team sport where it’s all or nothing.

Greg Yenoli: So anyway, I found two very interesting quotes. The first was right around the time that all of this brouhaha was going on with Obama. And he said, the quote is, “The American people are about to weigh in on who is going to be president.” Again, we’re talking almost a year from when he made these comments. But, “They’re about to weigh in on who’s going to be the president and that person, whoever that may be is who should make this appointment.” Okay. So that was March of that year, March of 2016 and… Okay, fine. That’s your reason. That’s not really the reason, but we’ll swallow it because we have to swallow it. Later on that same year, in a speech in Kentucky to his supporters, he said, “One of my proudest moments was when I looked Barack Obama in the eye and I said, ‘Mr. President, you will not fill the Supreme Court vacancy.'”

Frank Curzio: Is that really what he said?

Greg Yenoli: That’s what he said. Now that tells you everything that you need to know about the state of politics in this country. He’s not one of his proudest moments… This is his own words, is one of his proudest moments was not participating in the government to which he was elected… It was in obstructing it. And let’s be clear about that, because this isn’t like, “Oh, it’s a Republican Senate and it’s a Democratic president and so we’re not going to approve whoever you put in front of us.” They didn’t even give him a hearing. So there wasn’t even… The process wasn’t even honored. They could have easily just done, like a show trial for this guy, and at the end of it been like, “You know what, screw you,” like they did with Bork. That actually I that’s something that, well, I don’t want to get too far down the rabbit hole, but the point being they didn’t even honor the process, and that he was proud of not honoring the process.

Greg Yenoli: He was proud of that. He said it himself. And my- one of my proudest moments. So for him to now be saying, “You know what, we’re United now. The reason why we didn’t do it in 2016 was because we were divided. We had a Democratic president and a Republican Senate, and the people weren’t unified and, that’s the reason why, and now the people are unified. We have a Republican president and a Republican Senate. And so now the people have spoken, and therefore, we must go forward with whoever Trump picks.” And that’s a bunch of BS. It just flat out is. We can’t look at the facts and argue otherwise.

Frank Curzio: Not only that, everything’s on video now, YouTube, everything gets taped. I mean, so you’re seeing so many of these, it’s probably why Trump got elected in first place, because when you’re outside of that, it’s a lot easier to come in than when you’re seeing the typical politicians that everyone’s kind of sick of that just flip-flop back and forth, depending on the polls. I mean, there’s so many politicians. I won’t get into it because I’ll get tons of emails, feel free to send us at frank@curzioresearch.com, that just are totally different people because they’re supporting different agendas today only because the polls say so, and they want to keep their jobs so they’re not true to themselves, which I hate. I’m going to stay with you before I go to Daniel here, because one of the things that you said surprised me, and you, you said that you think Trump is going to win in a landslide. And I said, I don’t think so because the amount of money that is behind Biden, I mean, it’s incredible, where it used to be that they hated Wall Street, the Democrats. Now they love Wall Street to death because they’re getting billions of dollars from it. So it’s like, if you’re a Democrat, and you’re looking at more and more and more billionaires supporting them, which is kind of weird, right? It’s usually the other way.

Frank Curzio: They used to say, “Don’t want the billionaires.” And you even look at early on with the early Democratic debates, how they were just ripping apart billionaires like crazy, at raising money. Now, they’re all on their side, a lot more of them are.

Greg Yenoli: Well, fortunately, unfortunately, I guess it depends on your perspective. There is no right and left anymore. Not in the traditional sense. The Democrats are not the party of the left, at least the candidates we have now, the candidates that they put forward, which is very frustrating to me. Again, I don’t want to get too far down the political rabbit hole, but this kind of speaks to why I think Trump is going to win. I think Biden has no chance in hell of winning. There’s no chance in hell that he’s going to win. And I thought that he had a very tough road to begin with, just by the fact that he was the Democratic nominee. I really think that the Democrats, they fucked it up two cycles in a row.

Greg Yenoli: I mean, they put forward a candidate and Hillary Clinton that everyone was convinced that she was going to win. And to be honest, I thought she was going to win too. There were so many things that Trump said and did in the course of his running for president that, in my mind, should have disqualified him. And in, maybe, any other year, at any other time and place in history would have disqualified him, but they didn’t. And what did the Democrats learn from that fiasco? Absolutely nothing.

Greg Yenoli: They decided to put forward the candidate that is another Hillary Clinton. The thought process being so antiquated that it’s ridiculous. They decide that… You know what? Center… Really, I don’t even want to call him center-left. I mean, he’s center. A center Democrat would have a better chance at running against… This is going to sound crazy, to call him extreme, I think he is extreme but he’s not extreme like an extremist. But he has an extreme point of view. Biden does not have any extreme points of view. I don’t even know what Biden is. I call him warm milk.

Greg Yenoli: If any of you saw “Gangs of New York,” Daniel Day-Lewis’ character… And it’s actually very fitting because he’s actually talking to Tammany in the movie, the guy who plays Tammany, he’s talking to that character and he says… He’s all pissed off about something. And he’s searing his meat barely enough so that it’s edible. And as he’s chomping into a steak, he’s talking to Tammany’s and he is like, “You are neither hot nor cold and because you are lukewarm, I spew you out of my mouth.” And that is exactly what Biden is. He’s neither hot nor cold. He does not have an opinion.

Greg Yenoli: His running platform, the only thing of any strength that he has that he’s running on is, “I’m not Trump.” That’s what he’s running on. And that’s what he’s hoping will carry him through the election. Because if you look at any other issue of any sort of substance, he does not have a strong opinion. You talk about fracking, you wouldn’t want on fracking companies if Biden were elected.

Frank Curzio: I mean, he’s kind of going, “Well, just on federal land” and this and that.

Greg Yenoli: Yeah, exactly.

Frank Curzio: But if I’m a fracking company I would be worried. I mean, I would be.

Greg Yenoli: So, during the primaries, he was all on the side like, “No more fracking. No new fracking. I’m with Bernie,” whatever. Because that was when Bernie was pretty powerful. And I still to this day… Well, we can maybe talk about that a little bit too-

Frank Curzio: So, you think Bernie would-

Greg Yenoli: Oh, Bernie would have had a much better chance of beating Trump. He actually might have beaten Trump.

Frank Curzio: See, I don’t think so. And I respect him. And this is where we’re going to bring Daniel in here. But I respect him because he truly believes… And I even believe that about Obama, where I think Barack Obama always had a love for this country. I was never nervous about anything in terms of safety or political policy. I disagree with some of the policies. When I look at Bernie, I disagree with a lot of the policies. But I see it like he’s passionate about it to the point where he really believes that that system would work. And I kind of respect that. That’s how I felt.

Greg Yenoli: Absolutely.

Frank Curzio: Let me bring in Daniel really quick, because this is where Daniel and I disagree. And again, this is what we’re doing here. This isn’t everyone agreeing, we’re kind of just having a conversation about it. And this is why I wanted to tape this thing. But you don’t think that Bernie is genuine, right?

Daniel Creech: Nope. Next question. No, that was easy. No, the other night when we were talking and when you introduced Greg, he said something that really stood out to me and it made me really think about it. And I respect his case on the sense that… I don’t want to put words in your mouth, Greg, you can correct me if I’m wrong. But basically, politics have changed. And he believed that Bernie could win because he was real authentic, a lot of authenticity with the perceived voter. And he connected really well. And I really stopped and thought about that. And he did, because the amount of excitement he got in younger voters, generations, millennials… I’m 34 so depending on where you draw that line, I could either be in that group or out of that group. But a lot of people my age were huge Bernie fans. And that’s something that I couldn’t wrap my head around because I don’t. Yeah, I don’t. I have a problem-

Frank Curzio: How would you not be a Bernie fan if you are a student and you don’t have to pay your debt anymore, free healthcare for everyone. I mean, that appeals to a lot… People are obviously going to say, “I want that.”

Daniel Creech: Absolutely.

Frank Curzio: If I didn’t have a job, I’d be voting for Bernie Sanders.

Daniel Creech: Yeah. That totally makes sense. I mean, that’s definitely what he’s going after. I mean, you can buy votes several different ways. You can literally pay for them or like Bloomberg is doing in-

Frank Curzio: A hundred million. A hundred million he’s putting up.

Daniel Creech: Oh my goodness, that’s funny. Well, I mean, I’m talking about paying off the felon’s fines and all that so they can vote. That’s lately. We don’t have to go down that rabbit hole either. But yeah. I mean, you can give free stuff away. Listen, if you’re at the top, I’m all for dictatorship, as long as I’m in the inner circle. Socialism’s? Wonderful, as long as you’re at the top. You’re a Bernie Sanders socialist, you’re a multimillionaire, multiple houses, hell, what’s not to love about that? But again, that’s only for a select few. So, that’s what scares me. And no, I can’t buy him as authentic at all. But that’s me.

Frank Curzio: Now Da-

Daniel Creech: Greg made a great point the other night about how he engages people. I don’t know if they would turn out to vote because millennials are lazy-

Frank Curzio: There’s definitely a much more excitement there compared to Biden.

Daniel Creech: Absolutely.

Frank Curzio: Absolutely. Yeah.

Daniel Creech: Yeah. And it was a carry-over from 2016. He did a lot of good in 2016 generating emotions and getting people to go for it.

Frank Curzio: Now Greg, before we go any further, since you had strong opinions in terms of… What did you call him? Warm milk?

Greg Yenoli: Warm milk, yeah.

Frank Curzio: What’s your email, in case anyone wants to email you?

Greg Yenoli: Greg… No, I’m happy to. I would love to have these. I love these discussions. These are my favorite kinds of discussions.

Frank Curzio: So, with Bernie Sanders, Trump’s going to win a landslide. You really think Bernie Sanders would have gotten more… I mean, maybe he gets more votes. I just think there’s no shot of him winning because he would have had that… For this election, it’s coming down to that middle section, right? I mean, the left and the right are going to vote the way they want to vote. No matter what you do, present any facts, they’re never going to change. But that middle part is what they’re fighting for. And they’re going to extremes, both parties, to get that. And I don’t know if Bernie appeals to that middle part where… I don’t know.

Greg Yenoli: I’m not so sure about that. I think that Trump appeals to extremes and Bernie appeals to extremes. And I think the middles are the ones that… They’re not really… So, let me back up a little bit. The reason why I just said that I don’t think Biden has a chance in hell of winning anymore is exactly because Ginsburg died. I think he would have had a tough time of it anyway. I think what’s going to happen now is everyone’s going to galvanize around Trump. Even the people that wouldn’t have voted for him before are going to vote for him. And I know people that voted for Trump that said, “I made a mistake. I’m not going to vote for this guy again.” They’re going to vote for him now. Precisely because of this issue, they’re going to galvanize around him. Because the bigger picture is they want someone on the Supreme court that thinks like they do.

Greg Yenoli: Now, the six-three court, which is what it’s going to be, Obamacare goes away. And there’s nothing to replace that yet. Right? So, now you’ve got this big hole. And we talk about Bernie having these kind of like these fringe ideas. Universal healthcare is not a fringe idea. 66% of people would approve of universal healthcare. That’s two in three. That’s not a majority, that’s a super majority. And that’s not Democrats, that’s all voters. 66% of people want that. They want it. That is what the people want. So, this is not a far-left fringe idea. This is not one of his ideas necessarily. But universal basic income was something that was discussed a lot during the primaries, Andrew Yang. That’s not a fringe idea either. It’s pretty much split, 40% want it, 40% don’t and 20% aren’t really sure what the fuck it means. These are not fringe ideas.

Greg Yenoli: So, we talk about Bernie as if he’s way off on some island somewhere and that no one’s ever going to go meet him there. That’s not really true. And what I think it comes down to… When it comes to, especially a presidential election, it’s not so much important… With Congress, I don’t think, although it should be, but with the presidential election, it really comes down to… It’s a little bit of policy, but it’s a lot of character. It’s a lot of how relatable you are.

Frank Curzio: Mitt Romney was terrible in that department.

Greg Yenoli: Yes, exactly.

Frank Curzio: And it killed him. And you know what? When you see him, when he’s not on a mic or people that talked to him, you see him in different circles or whatever, he’s cool. When he was on a mic, he was dry. Obama is one of the greatest public speakers I’ve ever seen. I mean, when he speaks, that crowd, it motivates them. And it’s almost you see similar with Trump. But that’s one thing… Yeah, yeah, he’s got to be charismatic. But I think that really, really, really hurt Mitt Romney.

Greg Yenoli: Yes. I agree. And I think it’s destroying Biden. Tell me one person that relates in any way to Kamala Harris, one. None. I don’t even. I mean, I can’t find a single thing about her that I find authentic or interesting at all. I mean, we talked about this off air as well. I mean, six months ago she was calling Joe Biden a rapist and now she’s happy to be his running mate. I mean, that’s ridiculous. That is ridiculous not only on the face of it-

Frank Curzio: But it’s a debate, which means we’re allowed to lie at debates and say whatever we want.

Greg Yenoli: It’s so silly. I mean, it’s-

Frank Curzio: It just wasn’t a good reason, just saying, “Hey, that’s what I thought. And I looked into it.” And it wasn’t that, it was, “It’s a debate.”

Greg Yenoli: I know what she said, and I kind of went back and looked at this too because again, when you’re watching these things in real-time, I’m not sitting there taking notes, thinking one day I’m going to have this deep political discussion about these particular topics necessarily. So, I went back and I watched that again. I listened to exactly what she said. And the quote was… I wrote it down. I’m not going to be able to find it. But the quote was essentially, “Hey, look, I’ve known Joe for a long. I really respect to him. You have family and friends, you have disagreements, but you find common ground or whatever.” Right. Okay. So, let’s follow that to its logical conclusion. What she’s basically saying is, my uncle Joe is a pedophile, but we’re going to find common ground.

Greg Yenoli: That’s crazy. If you believe in your heart that your friend/family member, in the analogy she wants to use, fondles little kids, you don’t hang out with that guy. And you certainly don’t go to run the country with him. So, it’s crazy to me that we let them get away with it. I know why people who are going to vote for Biden are going to vote for Biden, it’s because they hate Trump. And I guarantee you, if you ask them why, that is why. It has nothing to do with policies because-

Frank Curzio: We don’t really know. I mean, obviously before the debates, to say anything is ridiculous. It’s like anointing someone MVP in week two of NFL football, it’s complete waste. So-

Greg Yenoli: Well, it’s going to be very interesting that debate. I can’t wait to watch it.

Frank Curzio: I mean, all debates. There are three debates, the vice president debate, I mean there’s a lot of debates. But I think we’re going to really learn a lot more about Biden. And I like the way it’s set up. Because everyone thinks he’s going to do so terrible expectations are so low. It’s kind of Sarah Palin, I mean, expectations were so low and she did very, very well. I mean, very, very well during that debate. But-

Greg Yenoli: It doesn’t even matter what he says though. It doesn’t even matter what he says, because you can’t trust any of it. You can’t trust any of it. With Trump, even if you think that he’s just a bald faced liar, you can trust the fact that he’s a bald faced liar. Biden, he’s just going to say whatever he thinks he needs to say. And that’s the sad truth of it. It’s just the sad truth of it.

Frank Curzio: So, let’s get Daniel back in here before I start getting hate mail from that. It’s cra… But this is an interesting conversation. There’s a reason why guys. We’re going to bring this all together in a minute. So, Daniel, Greg thinks that Trump is going to win in a landslide. I disagree. I think it’s going to be a lot closer than that. And I think it’s going to go on for a while were their counting these votes. And if that’s true, if it goes on for weeks and months, it is going to impact stocks. There is going to be uncertainty and there’s going to be money on the sideline. Again, it’s going to impact different industries no matter who wins, what side you’re on.

Frank Curzio: But your opinions here, which I love, is say if Biden wins… And right now, it’s showing that Biden’s going to win right now. It’s definitely closer in a lot of states, but right now, based on the polls… And we know what the polls did last time, and it didn’t work too well for Hillary… that Biden’s going to win. And the Democrats are going to control the Senate, as of right now. So, that means they’ll control everything, including the House. And that scares you a little bit, huh?

Daniel Creech: Oh yeah. Frightening Frank, frightening. And it’s because of what you said earlier. I Greg’s point on they’ll say anything to get elected, but you have to pay attention to what they’re saying. And if they take everything, I have no doubt that they would do Washington and Puerto Rico to get two more senators or four, two apiece. And that would basically… You talk about macro, macro, big picture stuff here. So, let’s say the Supreme court justice goes through. So, it goes six, three, conservative. If Trump were to lose and then lose the Senate, you would have a six, three there, but then the Senate would basically never go Republican again. Because you would have a majority. It’s like California. There is no way California is going to elect a Republican Senator. There was no way in New York… There’s probably no way that… Pick up one of the most conservative states, some of them are just entrenched. So, if they would gain those territories, they talk about stacking the court, increasing that. Yeah. I mean, that’s just scary stuff.

Daniel Creech: Doing away with the electoral college, now that hits home for me. And everybody’s perspective goes back to their individualism. I’m a Midwest kid. So, basically you have the East Coast and West Coast telling everybody in the middle, “Aye, you don’t count because we have more people in our state.” So, if you do away with the electoral college, those are big deals. I mean, those are massive, massive changes. And yeah, I would say go west young man. And I would run for the hills.

Frank Curzio: Are you saying that you hate new Yorkers?

Daniel Creech: No. No, but I am saying-

Frank Curzio: They don’t give a shit about us in the West. In the Midwest-

Daniel Creech: Or in the Midwest.

Frank Curzio: Yeah.

Daniel Creech: No. Yeah, I know. We joke about that. It’s like, man, I feel bad for you when you get fired up. And everybody does about their hometown and that’s great. But no, I don’t think… This is going to sound a lot worse than what I actually mean, so, I don’t have the right vocabulary. But I don’t necessarily think it’s a terrible thing that you’re so divided in one sense. It’s okay for me to be favorable towards a small town because I’m from there and I had it great growing up. That doesn’t mean I think the city is stupid. But it’s also like, I would be fine if most city dwellers go through one-stoplight towns and think, “What the hell does this place even exist for?” And that’s okay. I wouldn’t take that as an insult. But when it comes to voting like, “Well, your vote don’t mean any more than mine.” And just because you guys live in a city, doesn’t mean you should pick them versus somebody that doesn’t or some country folk or whoever.

Frank Curzio: Mm-hmm. No, it is interesting. And I want to thank both of you guys for coming on. And I wanted to do this segment because one, it’s going to really relate to your portfolio, what’s going to happen here. It was an interesting conversation. But there’s so much hate out there. And you can no longer express your opinions without losing friends or even sometimes losing your business these days, losing credibility, everything, your reputation. But everyone should be able to express their opinions, even though there’s things I disagree and agree on. Even with people within my job. At the end of the day, be like Ginsburg and Scalia where, man, it doesn’t get more opposite than that. Yeah, you bust each other’s balls about their opinions. We all get along. That’s how you get better, right? By hearing those criticisms.

Frank Curzio: But for my business Curzio Research, I always hire people with strong opinions. I never want anyone to kiss my ass. Even in my research, and you guys know from following me so long, I always want to hear the other side. And I want to hear why you don’t like my idea because it could lead to something that could change my mind. There is nothing more powerful than changing your mind on the topic you felt so strong about. That’s incredibly powerful. You’re like, “Wow, wait a minute, this guy has a point. Let me look more into it.” At the end of the day, it’s going to save me, it’s going to save my subscribers. But that’s how you get better, that’s how you achieve perfection, by listening to both sides, by listening to the criticism.

Frank Curzio: And we’re in a world right now, where I have a lot of Democratic friends that are cool. I just don’t agree with some of their policies. They don’t agree with some… But to the point where it’s hate. And I’ve lost friends, some friends, I mean, that just have such strong opinions. And it’s so crazy. And it’s, man, what the hell are we doing out there?

Frank Curzio: But I’m hoping this change. I don’t think it’s going to change. Maybe it will change after election, it will die down a little bit. But right now with the emotions and everything, just seeing what’s going on to the point where you’re talking about impeachment of a… There’s a million reasons to hate Trump, there’s a million reasons to go after the guy. I get you. So many reasons go after him. He’s doing what every single president would do in his shoes right now. And he’s doing it based on law, the constitution. And like I said, it’s one of the most presidential things that he’s doing in his whole entire term so far.

Frank Curzio: And I would say, if any president, that’s what he’s supposed to. He’s doing exactly what he’s supposed to do. He’s doing it by law. The Democrats would do it. The Republicans would do it. Every president would do it. And just the fact that you’re going to throw everything… You get disagree and yell, but impeachment, I mean, adding more states. I mean, holy cow. Honoring the last wishes of someone that’s dying, that they don’t really care about. It’s pretty crazy out there. So, really great stuff.

Frank Curzio: And I want to transition here into my interview with Andrew Horowitz, Disciplined Investor. He’s also going to talk about how the election is going to impact your portfolio. I’m going to come back to you after this as well, just to discuss a few more points of how to set up your portfolio and why politics matters, because it does matter to your portfolio.

Frank Curzio: So, Andrew is also going to share two picks with you. So pay attention. He’s had some big winners for our Dollar Stock Club portfolio. That’s where I track my guest picks that some of them you’ll hear and some of them… I talk to these guys before and after. And we’ll share ideas and everything. So, I put some of those in The Dollar Stock Club portfolio, which has been doing very, very well, good track record. But a lot of home runs from Andrew, and he’s going to share two picks. One of them is a pretty crazy short, which I think… But it’s going to be interesting. And let’s get to the interview right now. Andrew Horowitz, thanks so much for coming back on Wall Street Unplugged!

Andrew Horowitz: Hey, thanks for having me, Frank. Appreciate it.

Frank Curzio: Well, let’s start right at the beginning with track record because we’re two people in this business… I believe in accountability. Even when I have winners, you highlight them in your podcast when I have losers. I got GE a couple of years ago, I came on explain. I’m a big believer in accountability, whether you’re right I’m wrong. And I want to just give you a credit because we pay attention to this now, everyone that we put in front of people for their picks. And one of the picks you gave us is Trane Technologies on July 2nd, last time you were on. And that’s up 32%, easily outperforming the market. So, really, really good job on that. You know what they say? A broken clock is right twice a day so-

Andrew Horowitz: Yeah, well. Yeah, that’s it. Let’s stop there. The record is good. I’m one for one.

Frank Curzio: But I just wanted to highlight. Seriously, nice job on that.

Andrew Horowitz: Thanks.

Frank Curzio: So, I love when my listeners make money, But let’s go through what we always go through when we do this, right? We’ve been doing this for so long. You have a podcast, it’s just as long as me, a little bit longer. Probably the longest running podcast in the financial industry if I had a guess, at least one of them-

Andrew Horowitz: I mean, gee, they’re called the OG of podcast in the financial area.

Frank Curzio: How many years? How many years have you been doing this?

Andrew Horowitz: Back in 2007.

Frank Curzio: Wow.

Andrew Horowitz: Yeah.

Frank Curzio: Isn’t it amazing? I never thought that the industry of podcasts would be like it is today, right?

Andrew Horowitz: Now everybody has a podcast.

Frank Curzio: Yeah, everybody. It’s common. Yeah. I’m like, “Hey, I got a podcast.” Like, “Me too.” I was like, “Yeah, I got one for 13 years.

Andrew Horowitz: Right. Back then it was like, “Hey, I’m doing a podcast.” “What’s a podcast?” Right. I mean, that was kind of what the thought was back then. But it’s really expanded. And we talked about the Amazon now has a whole podcasting network. And you got Spotify popping up with a real move into that area as well and other companies that are really pressing that whole thing. And obviously there’s incredible amount of talent that has really come into this.

Andrew Horowitz: A lot of it is back to the same story we talk about all the time, Frank and it’s, what’s really pushing all this? And it’s technology, right? It’s the ability to shrink down the required technical components of what you need to actually make this happen. Because back then, the qual… I mean, I listen to some of the stuff back in 2007 and 2008 I did, it sounded awful. And it was really difficult to do. And you had a worry about, okay, well the file size can’t be too big because people can’t download it. Now you can pop up a four gig video up to YouTube and it’s ready within a couple of hours after it processes into high def. And it’s available for everybody to look at infinitum.

Frank Curzio: It is pretty incredible. And for me, it’s never lost on me, the global impact of how many people globally. Because it’s on iTunes, just one of the platforms that we’re on and you’re on. But I get emails all over the world, all over the world. And it’s really helped me tremendously in places where… And you know how the media is. Almost every media has an agenda, whatever side you’re on. I won’t get into that part. But it’s nice to know for getting information from the sources and just people that live boots on the ground across the world. And I can’t tell you, I would say about 20% of listeners are outside the US. It’s pretty incredible let’s say. “Wow, you listen to me. Are you crazy? Where are you from?”

Andrew Horowitz: Yeah, I’ve got people from all of Asia that write me, in Australia and South Africa. So, it is really cool that it’s so easily accessible these days. And that’s good for us too, in our business. Right? I mean, as you were saying, it’s boots on the ground. But it’s also… The information is much different today to gather. Whereas back 20 years ago, you’d have to go to the newspapers, the dailies and do your research or the corporate reports of course, to get any kind of information. Now, it’s just typing a symbol, and there’s 25 different ways from Sunday to get information on whatever you want.

Andrew Horowitz: So it’s been pretty good. And that is exactly what’s been driving the markets these days, right? Same thing, it’s just this whole technology revolution and a renaissance, if you will have, has been condensed down because it’s due to necessity in times where we have lockdowns and stay at home orders. And we’ve seen companies after companies come up with new solutions to make life relatively easy to continue working, which we all got to do something, right?

Frank Curzio: It’s true. I talked about this on our last podcast and my opening, how this is a behavioral change. You don’t really, Oh, total sales again. When you look at total retail sales, which include gasoline and everything. Online e-commerce only counted for 11% of the total sales and that was last year. This year, it’s already up to 16%, which is a drastically game-changing move and that statistic. But it just shows you how much growth it has going forward and you don’t realize how many people weren’t on Amazon when everybody knew about Amazon. But now, how many people talk about, “I got packages all over my house, I didn’t know I could get towels and whatever.” Milk delivered to my door next day. And when you’re forcing someone into doing something a better way, and they’re like, “All right,” now, it’s resulting in so many of these online businesses.

Frank Curzio: Because, I want to talk to you about that, we can talk about the overall market. But we can just get right in since it’s a good segue way is when I’m looking at these technology companies and people talk about valuations and how crazy they are there, they right. Evaluations are crazy, but you can’t deny the massive growth numbers. These companies are putting up in certain sectors where tech, biotech, e-commerce, right? And I see numbers of Amazon, Walmart, Zoom, Microsoft companies in the auto and housing sectors. Did you see AutoZone’s numbers today? Yes, it’s pulling back a little bit, but it’s near its all-time high. Toll brothers, the numbers were amazing, again a stock that run tremendously and pull back a little bit, but then the numbers, these guys are putting up. If you’re in the right industry, the right time, is amazing. Is that going to continue? Is it already played out? it’s just smart. What are you expecting, here?

Andrew Horowitz: That’s a great question because it all, I think, is going to be based on, this is obvious what the future holds. Let’s just stay at that point, but are we going to have a change in our habits so dramatically and drastically that we will continue to do what we’ve done? Listen, I’ve changed my habits, it’s been ‘Christmas’ in my office over the last five years, every single day. There are packages delivered always because it makes it so easy through an Amazon or an office Depot, whatever it is. If I need paperclips, I don’t think about it I put it on the list and next time I get out there, click free delivery, $3 and 50 cent pack of paperclips comes the next day or ink. The old days of having to go out and do this stuff, whereas today, it’s so much easier. So I think there is the continuation of the retail boom, which is good for online.

Andrew Horowitz: And those more importantly, not only that have the product, but make the process easy for the individual, for the user and the experience for the user to be one that’s just click, click, click done, right? Like Amazon has mastered. On the other hand, you look at the places like malls, as the other side of the equation or some of those big box retailers that didn’t have their act together to begin with. For years was having a lot of problems to begin with what was going on but now they were overrun by the online process. Especially once people realize that there are free returns, that’s the big issue. If I don’t have free returns, I can’t get three or four different sneakers to see which one I like. But now I just go shopping online, okay, that’s a size 11, I’ll take that one. I’ll take the size 10 and a half and this one.

Frank Curzio: Do you do that? You buy like four pairs and then send three back. My wife does that and it drives me crazy, trust me.

Andrew Horowitz: Absolutely. Why not? It’s so easy.

Frank Curzio: Because, Amazon has the great… That separates themselves from everybody. It’s not like the Amazon show here, it sounds like we just talked. We got a plastic cups delivery, which just on schedule to, and they came like all messed up or whatever, they were just like sticking together. And we said hey, they send us like two for free the next day. It wasn’t even like a question or anything. They just send it and they see what a good customer. It’s really cool to get that kind of service too.

Andrew Horowitz: There’s a problem with this also because it does hurt some businesses that need to keep up with this. Fortunately, Amazon’s not just Amazon retail, it’s AWS. They have a lot of other components, I just bought some shirts from a company called Roosevelt RSVLTS, and they have some crazy shirts. There was a couple that I really liked for backyard barbecuing. You’ll see the shirts if you look at them and that’s a backyard barbecue shirt. You know what I mean? You got to have a beer in one hand and a spatula in the other. And I got the size in and it was too small, I got another size was too large. And I took theirs, tried it on and sent it back, and it’s all free.

Andrew Horowitz: So, that’s got to cost them a little bit on the bottom line. But it’s good for certain companies and clearly we saw the numbers from FedEx and UPS and other delivery. There is a lot in there, but I still question whether or not we’re going to want to go back to the days where we can actually browse for example, store like Bed Bath & Beyond. Right now you can get a lemon squeezer, or you can get a knife from any online or online at Bed Bath & Beyond, for that matter, or Walmart, depending on the quality you want, what you want. But there’s something about going and saying that lemon squeezer, it’s plastic and I don’t know if it’s going to let me kind of feel it and touch it, see what the story is. I prefer to get the metal one or that knife. You know what? I only like the handle, the way I hold it in my hand, that you could do by going back and forth.

Andrew Horowitz: But if somewhere has a selection of things, while they have the carrying cost for that inventory, it still has a little bit of appeal for the shopping experience. And there is, I don’t necessarily think that’s ever going to go away entirely, but some businesses should like the automobile industry. I’ve talked about this for years, the floor planning model, where they have thousands of cars in the lot and they’re paying while some of the companies themselves are paying back to the individual owners at the various franchises. Some of the costs for carrying the cars. It’s just no reason to be doing that anymore when you can have an environment where you have a just in time process of delivery and what’s happening with AI involved in your ordering process. And look what Tesla did? Tesla, you go there, they have four cars. You can look at them or whatever it is, five cars, whatever the number is. But there’s not much going on. They have a little storefront. There’s not a lot of things.

Frank Curzio: That’s not even their choice. They just won’t let them select the car company. They said third party dealerships for them. So they said, we’ll have to open up our own stores, basically.

Andrew Horowitz: Beautiful model. That’s what they do in Europe. That’s what they do a lot around in Europe. You don’t see these gigantic. Where else other than America, do you see the opportunity to have 25 acres worth of cars? It just doesn’t exist. So?

Frank Curzio: That’s definitely true, but it’s interesting, like you said, there’re some industries that are thriving. We know there’s some that aren’t, whether it’s gyms, whether it’s travel companies, even though some of them coming back. Let’s talk about everything as a whole, because everyone’s so focused about short-term, we’ve seen since September the market has come down, people are nervous. It’s up tremendously to put things in perspective up tremendously. Right? So, the pullback I think is healthy. But when I look at the underlying conditions with the Fed said, basically, I was like, they’re going to implement yield curve control, which they basically did. So they said that they did it on short-term instead of long-term, but if rates go high, they’re going to implement that and put a cap on long-term. But they said, we’re going to keep short term rates to zero for three years.

Frank Curzio: That it will automatically what that does to the account, it forces money into the market. There’s no place that you could generate income, more people going to be taking out loans, interest rates, lower. It’s a stimulant to the economy that’s going to be there. So for me, when I look at pullbacks, I’m not saying that the market’s going to come back. You don’t have to worry, but I feel like I could always find opportunities when I see pullbacks like this, because the underlying conditions, not just the Fed itself, but we have interest rate policy. Right? Were we talk about fiscal policy as well, because the separation between main street wall street is going to get water and water that they’re going to continue. Eventually politicians, throwing more money at this, the amount of money flooding the markets, COVID getting better and better in terms of statistics where they’ll go away, maybe not a hundred percent. But just seems like the underlying factors, the long-term drivers are still in place for positive results in the stock market.

Andrew Horowitz: I think there was two things you don’t talk about the Fed for a second. I think it was two ways to look at what the Fed was saying. And the one was, you know what, we’re going to go from 2022, and we’re going to expand our zero interest rate program, the ZIRP to 2023. So wow, that’s great! And so the markets react pretty positively on that news. On the other side of that, is this, wait a second. I thought the recovery was going to be happening a little bit faster. There was a lot of discussion about V-shape or maybe a check Mark, or at least a kind of a reasonable recovery over a year or so. And all of a sudden, they’re really concerned and stretching out their zero interest rate policy, 2023. What do they know that we don’t know?

Andrew Horowitz: The second thing the Fed did was the Powell was a little weird in this last discussion where he talked about, well we believe we can get our interest rates, inflation rate back to 2% through our inflation averaging process and letting the economy run a little hot and the growth rate up there, but we’re not necessarily going to do anything different right now. It’s kind of like sitting in a car and saying, hey, I’m going to zero to 60 in three seconds sitting there and not putting a foot on the gas pedal, just hoping, willing the car to go faster. So there was no real structural change in their last discussion about how they were going to get to this point in the future. But the other thing I’ll mention Frank is that there’s something that’s kind of underneath the surface that I really believe is happening and that’s inflation now while they may not be actually increasing rates because they said so, right.

Andrew Horowitz: They said until 2023, that’s what’s going to be. The problem is the inflation averaging discussion, which is something that we knew about. They were talking about a year and a half ago. And they implemented this because they know they want the markets to be set for the fact that there is inflation coming and as such, they don’t want the markets to believe they’re going to be immediately raising rates in order to combat this. The only reason that they’re utilizing this inflation averaging is not because they really want to make up for something it’s so that they don’t split the markets because inflation is coming. I don’t think there’s any question about that. So now you have to reset yourself. Okay. Well, what does that mean for certain areas of the market?

Frank Curzio: And for those of you who think we haven’t had inflation for forever. Seems like that, but people compare this to pass stimulus’s. And if we look at the credit crisis, we have to remember, this is different. This is very different where you’re looking at, first of all, the amount of money we’re looking at less than 500 billion when all of a sudden done for TARP, but that went directly to the banks, it’s differently or they could lend us to whoever they want to. And we all know what happened they got bigger and bigger and bigger. The money that’s being delivered right now, which is 12, 13 X bigger than TARP. What’s up trillion, over 6 trillion, it’s going directly to consumer, they’re getting checks in the mail.

Frank Curzio: This is money going directly to them, bypassing the economy, bypassing me working, just going from the government to the actual person. And I remember I think it was last month or the month before, when I looked at the statistics. I look every single month, it was funny to see what was it? Personal income lower than a personal spending higher. So, that is going to cause inflation and it’s just a matter of time. And it’s funny, I got the same thing where they’re like, well, 2% that rate, but if it goes high, they keep mentioning it. Because, they love to prepare and they love to let everyone know upfront this rate it doesn’t come out of nowhere. But I agree with you. And let’s say, if we get inflation and we go above the 2% threshold, we see stocks do well early on in an inflationary environment, do you switch portfolios? Are you allocation wise? What are you looking to do to set up where there’s high population?

Andrew Horowitz: You would think that you’d have to go for more of away from it in theory, you’d go away from your growth orientation. Once you get into that mode into more of the value. You’d think that in an inflationary environment, you should see a yield curve that starts to spread out a little bit more, you think, and then banks should do well. The banks are horrible, Wells Fargo down 55% this year, bank of America down 31%. Morgan Stanley and Goldman a little bit better because they have obviously trading, but those banks that are front-facing to the consumer and that have very little trading components to them or investment banking for that matter, not doing well at all. So, is that one area that you would want to look at?

Andrew Horowitz: And I think that you have to right now, and I heard a really interesting discussion yesterday, it’s all about a rate environment. What are the rates mean? What areas will do well? Should you be in long-term bonds right now? Or do you have the chance to say, Hey, maybe I should shorten those maturities. We shortened our maturities a year ago, two years ago, we’ve been kind of shortening up our maturities in all of our bond components for the last couple of years, thinking that how much lower are rates going to go? They’ve gone lower, but how much more am I going to squeeze out of the total return versus the yield? And it makes sense to be on the shorter side of the yield curve right now, the other problem is, and I’ll tell you this, this is an observation.

Andrew Horowitz: And it’s something that we implemented because there is a valuation issue that you get to the end of the possible stretching of multiples. And what happened in the beginning of this year, that multiples before all this COVID multiples were kind of a little bit weird. Remember that, before they started this year, we started seeing that big stretch out. We came into this year, light on equities in our long short strategy, the TDI managed growth strategy. We had a 38% position in equities. Three months later, I found this really interesting after the whole drop of the markets and all that. Our screening strategy, which we don’t change, we had a 67% equity allocation. Which I was like, how’s that going to work through all this? But it worked out really well.

Andrew Horowitz: Now, September 1st, what was interesting was that same exact screening process, which we’re looking for growth of earnings and growth of revenue, high ROE. We’re looking at a margin expansion, a whole host of fundamental data on September 1st. This is really, we’ll call it lucky. Well, the clock was right twice, right? So this is my second time. On September 1st, we dropped that equity allocation to 27% because we could not find names that met the criteria because it was so out of range or not even on a valuation standpoint, we couldn’t find the growth across the board that met with…

Frank Curzio: You right, there’re some companies that, if you look at like the Zooms, I’ll throw in there, Lavanya Health, if I’m saying that right. But there’re companies in there that are seeing tremendous growth, but Tesla’s not really seeing the growth to drive that stock price. There are companies that.. Yeah, I agree with you a hundred percent get.

Andrew Horowitz: So, the thing is that I thought it was really interesting that the fundamentals are not playing out now, which kind of makes sense. We’re checking on a quarter of a quarter basis from last year, this year, et cetera. And what happens is we expand and contract the equity core equity exposure dependent on all this. So what’s interesting is our core equity is down, let’s say 1% now because we only have 27% versus the S&P was down in 7.5 in September already. So my theory is right now that we have to be very careful, cause we’ll walk you through a little bit of a minefield that doesn’t mean don’t be invested. So I’m not coming, I’m never totally bearish or totally bullish. We’re kind of in the middle all the time. I like to kind of play both sides to a degree. And when we look at our equity allocation, we have a little bit of a slant in our other portfolios towards valley, which has not been working out. However, in September, you’ll notice that this big train wreck that hit the growth, which was probably precipitated by that Weltrade once again.

Andrew Horowitz: And these are the problems where we’re seeing asymmetrical bulging of that balloon. It’s not necessarily an oil areas, we’re seeing that, we see a big bulge in real estate, right. But that’s in single family homes in rural areas, but we’re seeing that commercial real estate. And we’re seeing that multifamily homes problematic. You’re seeing that certain technology that is front facing to the consumer that is oriented towards cloud is doing really well. And then you have other areas of the market, like banks or leisure and travel, not doing so well. So it’s kind of like this, if you think about a balloon, it’s kind of like a blowing up, so it’s not a balloon or a bubble that we’re in right now. It’s a blown up latex glove. But we have certain areas, you follow what I’m saying? Certain areas are way out of line where other areas of kind of like it didn’t get that whole pop from all this.

Frank Curzio: Yeah. And you know what, let’s get into it this because I know you love giving picks and usually send me a couple of them before and say hey, these are coming picks I like or I want a short and I want to get the boat to a few of them because they’re interesting. The first one is I know no one’s going to take your advice on this because it’s big the company name and tell me that by Amazon like 900 and people like, “Ah, you said.” No, listen it’s not because, I know you pay me to recommend stocks that you don’t know about. But when I looked at everything cloud related outside of Microsoft, that was the best company by a mile. And we’re able to have great gains on it, but you like Microsoft here right?

Andrew Horowitz: Microsoft is kind of like this. First of all, the management is great compared to what it was years ago. It’s really well positioned from the work from home, it’s cloud, it’s got gaming motor company this week to really shore up their gaming and they do Xbox is coming out. And the Xbox S I believe it’s called, thank you for not calling it Xbox plus by the way. Every company is like Apple plus or this plus, Apple news plus. That’s what they pay millions of dollars to their advertising company to come up with a new name, for a new service. And they say, just put a plus on it. So, Wall Street Unplugged plus. So Microsoft is a great recovery play, I think the balance sheet is just, it’s pristine. They’re doing everything right across the board.

Andrew Horowitz: The problem you may have is a little bit of a situation. If unemployment stays up for a long period of time, possibly they lose some of their income with relation to the seats that they sell in terms of either office or windows. But that is just a part of the whole process. So Microsoft, I can’t find a whole, except from a little bit maybe evaluation, but long-term, I just don’t see a hole there, unless we come up with some totally different OS and get away from Microsoft. But we’ve tried, it’s just not happening. I don’t know if you see any holes there?

Frank Curzio: No, I don’t see any holes there. It’s Microsoft, Amazon, Google. These companies are so large, so big and controlling everything. It’s out of control right now and you can’t stop it. It’s funny, where Trump’s been angry about them. They’re suppressing certain information, not others whatever. So both sides could get a little pissed off, but even if you’re looking to break up, these companies are going to be so much bigger. But I wouldn’t be surprised if that happens to some of these, especially with some of the things that they’ll just suppress things on one side, not the other. And it’s interesting because it’s a free speech platform and you don’t want negative stuff on it, but, or just people lying, but it’s hard to filter that out. You filter out one way, you got to filter out, but we know technology is really back in Biden here.

Frank Curzio: We all know that. And but it should, I think the political one, what did the risks that they’re running is if Trump does win. I think he might be that pissed to have the justice department go after these guys, they’re really trying to break them up. I think they great buys if you do that, but they’re just so huge and so big and know everything. There’s a great show. There’s a great documentary on Netflix about this, about telling them, forgot what it was called. But how they actually track you out, they know exactly what you’re going to do and that guiding.

Andrew Horowitz: You talking about the social network or something like that?

Frank Curzio: So, yeah, I think it’s called social networks.

Andrew Horowitz: I start watching it but halfway through, I got my hair on the back of my neck was standing up. I’m like…

Frank Curzio: It’s things you know but it’s real, and it had real people on it who worked in some of the biggest companies in the world that no longer work for them. This isn’t just people but you’ll see how they track, how they completely control you. They know everything about you, they know what you’re going to do, and they steer you towards whatever direction they want. And as big as they are, it’s pretty crazy.

Andrew Horowitz: But Microsoft a little bit different. I think Microsoft has a lot of that and they may look to break it up. But again, if Microsoft, the breakup value, if you look at splitting off, what are you going to split off? You can split off.

Frank Curzio: It’s able to break off social media that then Microsoft or Amazon, I don’t see because they’re just diversified enough.

Andrew Horowitz: I think Microsoft’s a good, interesting play. Long-term and it’s one of those plays that right now, I feel comfortable because there is the potential for so much volatility and there is a potential for, like you said, election or political risk in some of the names out there and what’s happening. And also we have, let’s not, I know you’ve been all over this whole virus thing about, Hey, let’s get them back to school. And these numbers are all going another, I’m not going to argue with you about it Frank. I can just tell you that, listen, we’re seeing lockdown in UK, we’re seeing lockdown in Israel. I don’t know how that relates to the poor residential, trying to get Trump out of office. But nonetheless, there’s something going on around the world. This thing is not over yet. This is not over.

Andrew Horowitz: And it may be blown up to a bit for some things, but you know what, in some regards, people are not taking it seriously on the other side. There’s kind of both sides. The craziness that we see some from some media, but the kind of I’m not wearing a mask no matter what, which is just rude.

Frank Curzio: There’s such a big medium there, isn’t that we understand that more than 90% of these deaths occurred with people who were over 65 years old, who had underlying conditions. We know that it’s fact, we know if you’re under 15 years old, you have a better chance of dying in a car accident than your kids getting COVID and dying just from COVID and any underlying conditions, right? These are the facts that are out there, but everyone’s different, we’re all seeing the statistics, but it’s not like you don’t have to wear a mask or be an extreme, you can’t go outside. And in extreme, any media site wants to be extreme because you’re going to watch it, putting fear into you or just whatever it is. But for me wearing a mask, I don’t wear it for me. I’m not worried about catching it.

Frank Curzio: I don’t have any underlying conditions, but I wear a mask because I know that older people are at risk. They are at risk. And if I see someone walking towards me, like in a store and I have a mask, I actually, if they’re older, I’ll go do a different aisle just to make them feel comfortable, because they are at serious risk of this and the people who are making the policy decisions all over 70 years old, who are in that danger zone, making these policy decisions when the school and the kids and the infections are going crazy. And a thousand people in Alabama got infected. None of them went to hospital, none of them.

Andrew Horowitz: I get it. But what I’m saying is, comparing it to the car accidents and the car, the only thing I will tell you is when you’re in a car, you’re not going to necessarily purposely go down and drive the wrong side of the street. Right? And that’s what I think it’s like when people are purposefully not doing the things that you know, could prevent some of this, that’s all I’m saying.

Frank Curzio: Yeah. And I agree with that too. I mean, we have to be smart about it. We can’t just say, “No masks!” No. But, I just think, lockdowns are insane, and Europe, I’m seeing not locking down, but have restrictions. They place it in… They’re closing early in some places and lowering the restrictions from 50 to 30%, whatever it is, but not full lockdowns, but I’d like to see –

Andrew Horowitz: Well, if they are saying they encourage people to work from home now. That was today.

Frank Curzio: Oh, they’re encouraging people to work from home?

Andrew Horowitz: Boris Johnson saying, hey, we’re going to close this down, with schools stay open, will non-essential workers, please start working from home. So all I’m saying is there’s some weirdness going on and whether it’s a second wave or whether it’s not a second wave, it’s the first wave, it’s just continuation. It’s not that… I don’t really care. Here’s what I do care about: that is effecting the psychology of the individual.

Frank Curzio: Exactly. Just like a vaccine will, even though people will be crazy to take it under 40, but that’s going to change the sentiment, especially of older people that we have an actual vaccine that, hopefully, it is a 100% safe and proven to be safe before they release it.

Andrew Horowitz: Exactly. Exactly.

Frank Curzio: All right. So let’s get to the next pick too, because it’s a short. And it’s a short that… Wayfair. And I’ve seen people try to short it, one of our analysts here, definitely. They did it a good way. They didn’t short it actually bought puts on it. So they have lots of money put in.

Andrew Horowitz: But not as much.

Frank Curzio: Yeah. So Wayfair is a company that goes tremendously high. I actually started using it cause we were looking for furniture and it was a million times better experience than anyone else that I used, because it was the first time I’ve ever used them. I didn’t end up buying anything though, but it was great in terms of the service. I just found something on a different site that was a little bit better, but I was just interested to see it. And it was pretty good. Like just the emails to follow up the funnels and stuff like that.

Andrew Horowitz: Here’s a couple of things that are, that most of this stuff is made not in the US which I’m not saying that’s good or bad, but I’m just saying the quality of, most of the merchandise is pretty low. They do, in fact, you can find the same exact pieces on other places cheaper. So you’ve got to say, well, that lends itself to the margin of what Wayfair is making on it. I’ve gotten many things, like little things like planters and things. Almost every single time I had to send it back. Somethings chipped, it’s, you know, not what was… I ordered something that was white, it came in beige, you know, almost every time. And they’ll do like, “Hey, keep that, we’ll send you another one,” so here’s the thing. I just don’t believe this in the sustainability of the price.

Andrew Horowitz: I think a lot of that was due to the fact that people were rushing when we had the stay-at-home orders. When we had the lockdown so, like “Okay, I have a laptop, that’s fine. For a few days. I can put it on my lap in my chair and I can work and I could sit in bed and do it. But wait a minute, I may be here for how long?” And a lot of people went out and started to set up small offices in their homes, as well as buying desks and things like that. But also saying, “You know, what, if I’m going to be in my house and maybe I should get a new couch, maybe something a little bit.” Now, I think some of that day has passed a little bit, especially if we’re not going to have necessarily these lockdowns.

Andrew Horowitz: Prices up about 300% since January, 2020, it’s a low cost and again, a questionable quality of goods. There’s still running an operating loss annually, they’re 185x forward PE at this point. And you know, what’s the barrier to entry on this? I don’t know. Maybe they have products from everywhere. Do we see other companies getting into this game? Possibly. We’ve even seen companies that are in the high-end space like RH or Restoration Hardware do extremely well in this, but I just don’t see that if we are on the tail-end of all this, how this is a sustainable model of growth at any price, right? You know, at 185 times forward losing money on an operating basis. I just don’t get it.

Frank Curzio: You know, what’s funny though, I don’t get it either, but I can say this and I don’t get it. I don’t get it. Like I didn’t have Wayfair, I didn’t get the move in Zoom, but I do know that companies are going to trade at a huge premium for growth. And if they continue blowing out those numbers on the growth and like Zoom, I’ve never seen growth like that in any company ever within a year stretch. And of course it took a pandemic, everybody coming home, but those numbers, whatever, 200 million users from like a million, it’s just like, whoa. But when I look away from it, the only thing that worries me here is, you’re right, 185 times forward PE. I looked at this at 70 times, 100 times, 120 times. And it’s now at 185 times which, guys, means the stock keeps going up and up and up.

Frank Curzio: So I don’t know if I’m willing to even, no matter what the valuation is to say, it’s at a certain valuation that now you have to worry. Cause I would think that valuation was 70X, 100X, 185X. Right. There’s got to be that, like you said, has this been, just drawn out long enough where we’re getting to that tail-end or… But for me I don’t look at it as valuation, because anyone that tried to short these things, the valuation has been so wrong the whole time.

Andrew Horowitz: That’s just one part of it. It’s just one part. They’re still running an operating loss. You know, why are they still losing money on an operating basis, and why it, that they can’t, with all the cheap products they have right now, they may also run into supply issues depending on also who’s in the next president and how much the screws we tighten on China and other countries around the world, tariffs that go into play on this.

Andrew Horowitz: I just, I think it was really well set up for the pandemic idea of, “Okay, what could really do well, well, I got to have a computer,” so Dell and those companies did really well and Microsoft and Apple, from all the sales of the phones and the laptops, et cetera. And then, “Well, I need to sit somewhere.” Okay. “I got desks and I’ll do something to my house because I’m not going out.” All I’m saying is if we get that vaccine, if we get something where people are going to be like, “Okay, you know what enough of this,” I mean, do you think RV sales are going to continue to be crazy like they are forever? Boat sales?

Frank Curzio: It depends because you know what? Even with a vaccine, the market’s going to be different for a restaurants. Who goes to restaurants the most? I would say the demographic, it’s going to be 60 and over, like to go to restaurants, you know?

Andrew Horowitz: That they talk about the millennials. They don’t know how to cook! What are you talking about? Seriously!

Frank Curzio: I mean the expensive restaurants that I see in the city, but when people go out, it’s usually an older clientele, they like to go out on Fridays and Saturdays, retired couples. It’s whatever retirees like to do, if it’s cruises or whatever it’s are they actually going to do it, even with a vaccine, remember these are people that really have to worry. I mean, those, those statistics are telling us, so –

Andrew Horowitz: I don’t think the older people are buying this furniture. I think it’s a younger crowd, it’s cheaper, I think it’s, again… listen, it is possible that it will continue going along with the new home sales and all that, when people are moving out of an apartment in New York that has 420 square feet where they have, one couch, one bed, a little table with four seats. Whereas they go into a house, they’re going to have to refurnish, a whole different situation than moving out to Jersey or something like that. Right? So that may be something, but it just appears to me that this is the poster child, like Zoom is, the poster child of the potential pandemic stay at home, and once that kind of rolls, I just don’t know if we’re going to be willing to pay that much up for this kind of a name, especially when they are having such a extraordinary expense related to getting everything out there at this point. I don’t know.

Frank Curzio: Really quick. I want you to go over before you go here. I just want to make sure we get this in, but you also talked about a couple of fundamental things and operating losses and MP. I mean, a lot has to do with technicals. You look at technicals a lot. I’m sure you’re looking at technicals here. Like that. That’s what I was getting to where you look at valuation. And valuation has not been something that you could look at and say, now it’s time to short. But if you’re looking at charts, you’ve may have seen something combined with this that you’re saying, when I combined everything together, this is a great short.

Andrew Horowitz: Yeah. I mean, when I look at the chart right now, I don’t have in front of me, but I kind of have it engraved in my mind right now. When I look at the chart, there’s definitely a level that it came up into kind of blew out that top end, start to come down with the rest of the market right here. This is kind of a hole we call it, or a fast zone. Where we go vertically through price in a quick manner that looks like, right now, there is that opportunity and settle back probably about 20% lower from where we are right now. So if you can look at the chart and you can see that you’ll see about 20% lower.

Andrew Horowitz: Again, I don’t have it right in front of me. I think it’s about 20 to 21% lower. There’s kind of a support level there. And I wouldn’t be inclined to take it below that point, unless something really fundamentally breaks with everything. But you know what they’re going to have also a lot of weak hands that possibly got it on that real big upswing that happened last month or so. I mean, it’s been going up, but that really big move that happened over the last month or so, two months. And it just seems to me that on a technical basis, this is very vulnerable. Not a lot of support down from here.

Frank Curzio: No, I love that. I’ll love that you combine everything. So, I mean, we talked about a lot. We talked about ideas, guys, you know, sometimes it gets lost when we talk about the economy and it’s so important just from that, to us talking about inflation to me, you’re always looking for ideas, just, I want you to expand it where sometimes you can be, well, the Fed and the interest rates I put, but that leads to so many individual stock ideas when, when you have that outlook. So hopefully that comes across and, and we’re not putting people to sleep, because to me, that’s interesting, to you that’s interesting. And the whole point is it’s interesting to the audience, cause it really doesn’t matter. We can talk about the economy all day… But Andrew if someone wants to get in touch with you, learn more about you, how could they do that?

Andrew Horowitz: Yeah, you go over to thedisciplinedinvestor.com. That’s one place where we have all the information about our various strategies and what we do, from investology to the long short strategy with TDI managed growth strategy, to our global allocations. Of course the podcast on all fine podcast networks. You can find that as well as the disciplined investor, just look me up online. Just click it into any, well, everybody uses Google, nothing else. I mean Dogpile, whatever it is out there these days.

Frank Curzio: I still see a picture up there from like what? Like 20 years ago you look good.

Andrew Horowitz: Of course. Why would I put anything else up?

Frank Curzio: You lost weight! You look good! What are you talking about?

Andrew Horowitz: I’m not stupid! So, thedisciplinedinvestor.com.

Frank Curzio: All right, great stuff, always love having you on. Everybody loves you, you always have great ideas. Your performance track record has been great last few times you were on, man. So I really, really appreciate that. And as always open invitation, man. So…

Andrew Horowitz: Appreciate it. Let’s keep it up. Thanks.

Frank Curzio: Great stuff from Andrew. Love having him on, how he shares his ideas. We go everywhere and let me, I want to hear from your Frank, curzioresearch.com, especially that one segment on politics. I mean, look, for me, when I look at this, especially… what I care about, I don’t care what party you are. What I care about is making you money. That’s all I care about, right?

Frank Curzio: That, and you, I think everyone listens to the podcast, understands that, and I need to understand COVID it helped me get out of the market and tell you guys, listen, you got to really be careful. We sold out a lot of positions. I’m not saying, “Pat myself on the back,” you know, and I highlight my losers all the time. More than my winners, because that’s where the biggest lessons are learned. But I haven’t… I didn’t see one other person tell you to get out of the market in February because we’re going to see… A market crash was imminent.

Frank Curzio: You know, so understanding COVID stats. And when I post them on Twitter and just seeing the negative comments come in every time I’m posting something positive, which should be great. I don’t want to rush a vaccine to the market before the election. That’s bullshit, but we all need a vaccine. It’s really going to help the older population. It’s sentiment wise it, Hey, we have something that can really, help us.

Frank Curzio: You know, that’s good news for everybody. And you have to sometimes put these things aside and difference of opinions. And listen, you can say “Frank, I don’t agree with you.” I always say that my research I’m like, “Hey, if you don’t agree, if it makes you feel better calling me an asshole, call me whatever.” Tell me why you don’t agree with my thesis on something because I want to hear it. I want to hear it. You may be right. You may be someone engulfed in an industry where I don’t work in this industry, but you know, I research it to death. You’ll see my videos, research videos and all my newsletters, how much research I put into these stocks and teach you what I’m looking at to help you guys out, outside of the Curzio Research picks and become great investors.

Frank Curzio: But that’s what we’re about here. And a quick story about Greg is that this was the first time he was on a podcast and you heard from him, I love the strong opinions. So forward all the emails to him. He’s great. But Greg is a very, very close friend, one of my best friends. And he launched my first package at Stansberry. It was a natural gas package did very, very well, launched his first package. He wrote the first package for me, for a small stock specialist. And you know, that launched the product and it was a successful launch.

Frank Curzio: So, we became close and usually you do that with good copywriters, right, who market your products and write these copy packages and make it exciting. And I always thought he was the best in the entire industry. So in every company, you kind of get attached to certain copywriters. And I got along with a lot of good ones, but Greg was the one that always went to different places with me and you know, like boots on the ground. And he came with me this way. He listened to the conversations. We brought film crews with us. When we toured the… we went to Vancouver, one the largest natural gas engine providers. We had access to the whole entire company, CEO, CFO, sample, everything was cool, jumped in the trucks, powered by natural gas.

Frank Curzio: And that was in Vancouver. We went to the Bakken and North Dakota together. And you know, you spend time and just, it’s funny when you talk about it or you’re having drinks afterwards and bullshit, and you get close to people, but he sees me in there and he understands. So he’s able to write a package much better that’s true to me, compared to just writing something that’s going to sell, which is bullshit, which sometimes we see with our kind of a package. But when I left, well not when I left Stansberry, when Stansberry let me go, he was one of the first to call me and say, “Hey man, I’m really sorry,” and whatever. And then when I started my own business, we just launched our first package and he said, “Look, I’m looking to make a move.” I said, all right, let me know what’s going on. I’ll try to put something together. And he decided to come over to Curzio Research.

Frank Curzio: When he came over… You’re coming over from one of the biggest and the best and for him to take that leap over here, and he’s just starting a family, and now he has more kids, twins and everything. Yeah. It was a huge, huge leap of faith. I was surprised he actually did it. Again, even now, when we’re generating more revenue, millions of revenue, we’re still a dot on the radar in terms of the publishing industry, that’s just one of our, numerous growth markets we have right now, which is great for our company.

Frank Curzio: But just to see that, is really special, you know, and a lot of my partners and people who joined me like very early on, that’s not an easy decision to join a small company. Things are different, especially when you work for a big company and they’re spending money and it doesn’t matter if they lose money here, it’s different, it’s a lot more work. You’re doing things outside your scope when it’s a small company, everyone has more responsibilities. I try to make sure they do an 80% of what they’re good at, but that 20% is going to overlap with a lot of bullshit that comes along with running a small company and building it up.

Frank Curzio: And, to see how much they trust me, that is a massive, massive, massive driving force for me, massive, in terms of our security token, we’re going to become a publicly traded company in a few weeks. I’m very excited where we give it, we did it, right. We structured a token, right? Where, we’re paying a dividend, we paid a first dividend to our shareholders. Now, any amount of pop investors are going to be able to buy this token and exchange, we’re going to give you details and videos of exactly how to do it.

Frank Curzio: It’s going to be difficult, but you get to own an equity stake in our company. And that’s what I want. You know, cause it’s the shareholders, it’s you getting in on the ground floor. We’re still really, really small right now. And we’re risky. It’s basically just a new way to go public that’s much cheaper and more favorable for individual investors. I think this industry is going to take off. The fact that where, pretty much first to launch something like this, you’re not going to see a token structure like us, where it’s very, very close to a stock in terms of compliance and in terms of transparency, there’s nothing, no security token on the market, believe me, I analyzed all of them, that you get to see that compared to ours. And it’s going to draw a lot of interest in people because it is really set up for the best interest of the shareholders and it should reflect how big we grow, and our growth markets and the revenue we generate and earnings we generate.

Frank Curzio: So, you know, I’m really, really excited about that. But the motivation to make this work has a lot to do with employees, trusting me, with you guys, trusting me, for decades. 102 investors, think about how many things that you invested in. 102 investors, every one of them are clients. Every one of them subscribers. I mean, it doesn’t get a better endorsement than that. And I see that personally, these are people that have followed me that said, no, I’m going in. And they invest in a security token at a time when no one even knew what a security token was. Now, the industry is really starting to develop, and they trusted me on that. But to do it, I joke around with the first a hundred investors, I’m like, you guys are crazy, to actually do this. But it’s really exciting stuff.

Frank Curzio: We worked really, really hard. And I know that anyone else is going to launch security tokens that really do the proper structure, they’re going to come through us because it’s a very difficult process. It’s going to open a door for so many different revenue opportunities, especially for our business where… if it’s not consulting fees that we generate through a different division or a subsidiary, it’s taking a stake in these businesses very early on that the ones that we like is, are going to come to us and that’s a way for them to pay us. So it’s going to open up so many opportunities in terms of our company in general, in terms of everyone that’s following us, in terms of, if you’re a subscriber to our Curzio Crypto Intelligence newsletter, where you’re going to see a lot of security token recommendations, is probably about 14, 15 that you could buy right now, it’s going to get bigger and bigger.

Frank Curzio: There’s going to be 100 six months from now, and there’s going to be thousands three to five years from now. So, it’s very early in the industry, but at least we’re going to see a lot of these names in the early stages of growth. It’s going to be a lot, a lot of fun. So I’m excited about that. So yeah, I just want to give you guys a little insight into Greg in joining us and what he’s done and you know, the fact that he took that chance because I really consider him the best, the best copywriter in the financial industry and for him to join such a small company. You know, I was really proud of that. And just seeing the team that we built very early on to come here and still be here and be excited. It’s nice, but that’s the motivation to really get this thing right and I appreciate all the support.

Frank Curzio: Let me know what you thought about that segment too. I know it was political. I know that we were going to get lots of emails, but remember, we should be able to talk politics and not hate each other. We should have strong opinions. We all have strong opinions, but not to the point where we hate each other. We don’t talk to each other. That’s not America. That’s not what we do. And at the end of the day, you got to worry about yourself. You got to worry about your portfolio, worry about your family. And that’s what I’m here for, to really help you out in terms of that. And hopefully, you know, we’ve been doing that with our newsletters, you got pretty good performance. It can always be better. I’ll never be satisfied.

Frank Curzio: We just recommended a great stock. And Curzio Venture Opportunities that if you listen to this right now, you should have it. You should have that issue. So, I would say if you listen to this after 6:00 PM on Wednesday, and you’re a subscriber, it’s a great opportunity, really good name. One of the greatest investors acquired a huge stake in the company, it’s only two and a half billion dollar company, enormous potential. And I’ll tease a little bit, saying it is in the biotech sector and you’ve seen some gains in there. And this is one that hasn’t participated in, I think could really take off. It’s not a COVID play. It’s going to be much, much bigger. It’s not short-term oriented like that, but I’m very, very excited. It’s under the radar name, but I told you guys about yield curve control. A lot of subscribers have come in.

Frank Curzio: I discounted that newsletter by 60% for you. That ends Friday. Curzio Venture is our signature product. We don’t discount it by that much, almost ever a 60% discount, but Friday night at midnight, that’s it, that offer is over. And you know, you’re probably not going to see that offer for very, very, very long time, anything close to that offer. So if you’re interested, definitely subscribe the yield curve control part, the Fed actually kind of implemented yield curve control. So yield curve control is capping the rates, like I said earlier, for me, interest rates are going to be very, very low. And if they’re super low, then it’s going to be great for a lot of these small caps, it’s going to be great for equities. And instead of capping it long-term and the long-term rate on the back of the curve, it’s the front of the curve.

Frank Curzio: They say, “Hey, you know what, next few years we’re going to stay low.” And if it does, on the backend, start getting high, then they’ll initiate yield curve control. But the point of it, if interest rates are going to stay low considerably, and you have that timeframe and the Fed comes out and says it, which they did 2023 until we get full employment, which you won’t have for a long time because of COVID, it’s going to provide a spark to a lot of companies that haven’t participated yet. And there’s a lot of small cap names that are starting to see huge growth. And it’s an opportunity. I think that can make it a lot of money in small caps. That’s what I want to sell my products to most. So if you’re interested in Curzio Venture Opportunities, it’s fine. We’re going to have it for one more week, we kept that up probably for a month.

Frank Curzio: Usually we only keep things up for two weeks and we don’t discount all of our products often, but this is one time we do. If you want to take advantage again, we have that new recommendation. We have three new ones that are under our buy up to price that I recommended last week that I think are all going to take off, all great companies, all US-based. A lot of the market has been coming down because COVID cases are surging in Europe, but these are companies that do most of the business in the US small cap or reported very, very solid quarters and all down from their recent highs because of COVID and having participated in this rally. So very, very excited about these names, I to see a huge upside potential. Not just in those names, but in small caps in general, not the whole Russell 2000, but a lot of individual names are coming up on my list that I really, really liked that a growing very, very fast and are still trading at low multiples compared to the market and compared to their peers.

Frank Curzio: So if you’re interested in that, you can go to our website, you’re going to get a few more emails on it. If you’re on our list again, Curzio Venture Opportunities. It’s 60% discount, if not, no worries. And again, I want to hear from you, frank@curzioresearch.com. Let me know what you thought about that segment. I can’t wait. It’s got to be crazy, new format, more people coming in, we’re going to have more high profile guests. It’s going to be really cool, going to be videotaping all of this going forward. We have the studio almost completely set up. So really exciting stuff. You’ll see a lot of this stuff through our YouTube page if you want to follow us, tweet @FrankCurzio, or through our Curzio Research YouTube page, which you’ll see a lot of videos and a lot of interviews on there, which will be exclusive to that. So really, really cool stuff. And that’s 100% for free guys. You can sign up for those free, just like this podcast is free.

Frank Curzio: So, thank you so much for listening. Really, really appreciate all your support. And I’ll see you guys in seven days. Take care.

Announcer: The information presented on Wall Street Unplugged is the opinion of its hosts and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility. Wall Street Unplugged, produced by the Choose Yourself Podcast Network. The leader in podcasts produced to help you choose yourself.

Inside this episode:
  • Guest: Andrew Horowitz, president of Horowitz & Company and host of The Disciplined Investor [44:22]
  • Educational: How politics can affect your portfolio [0:55]
Frank Curzio
Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His weekly Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 8 million times.

Editor’s Note:The Fed actions during last week’s FOMC meeting could skyrocket a few key small caps… making early investors a fortune. And Curzio Venture Opportunities subscribers will be perfectly positioned to reap the gains…

That’s why we’re offering this premium small cap service for an incredible 60% off—but only until Friday at midnight.

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