Wall Street Unplugged
Episode: 806October 13, 2021

Where to find the best ideas during earnings season

William Shatner is heading to space!

Daniel and I open today’s show with some banter about our favorite Shatner roles… and whether we’d go to space for a thrill. [0:40]

Earnings season is officially underway… And now is a great time to sift through company reports for the best ideas…

We discuss what stood out to us about Delta Airlines’ quarterly results… and why this company has a fantastic long-term outlook. [4:10]

On JPMorgan’s earnings call, CEO Jamie Dimon said he doesn’t think supply chains will be a talking point by next year.

While I disagree with this, Daniel believes a recent sign is pointing to the bottom of supply chain woes. [8:50]

On BlackRock’s earnings call, CEO Larry Fink pointed out the obvious—that inflation isn’t transitory… and energy prices will continue rising for the foreseeable future. Daniel and I discuss the factors behind rising costs… and why you need to prepare for higher prices across the board. [15:55]

And finally, the U.S. is now the leader in bitcoin mining. Daniel explains why this is a great teachable moment about innovation… and yet another example of how cryptos are maturing into a dominant asset class. [27:20]

Inside this episode:
  • William Shatner is heading to space [0:40]
  • Why Delta Airlines has a fantastic long-term outlook [4:10]
  • Are we nearing the bottom of supply chain woes? [8:50]
  • Why you need to prepare for higher prices across the board [15:55]
  • The U.S. is now the leader in bitcoin mining [27:20]
Transcript

Wall Street Unplugged | 806

Where to find the best ideas during earnings season

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: What’s going on out there? It’s October 13th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down headlines and tell you what’s really moving these markets. Man, lot going on, especially earning season as 21 companies have now reported, a couple of big names.

Frank Curzio: Next couple of weeks could be crazy. That’s just one of the topics we’re going to talk about right now with the one and only best looking guy in the world, smartest man ever, Frank Curzio. No, I’m going to bring you Daniel Creech. He’s a Senior Analyst. He was smiling as I said it.

Daniel Creech: Well, you were talking about me there for a minute, Frank.

Frank Curzio: How’s it going, man? How’s everything?

Daniel Creech: Good, wonderful. Hey, space or deep blue sea? You know William Shatner’s going to space today?

Frank Curzio: William Shatner is going to space today, and he is 90 years old.

Daniel Creech: Yeah, that’s impressive.

Frank Curzio: 90 years old.

Daniel Creech: It’s today, right?

Frank Curzio: It is today, and I have to tell you, that’s when I want to go to space, when I’m 90-95. I don’t want to go now. I just don’t trust the system yet.

Daniel Creech: In case you die?

Frank Curzio: Yeah. At least I got most of my life over with, but I’m not saying that I won’t live for another 15-20 years, all new technology and stuff. But if I’m going to do it, that’s when I would do it, go to space that late. I don’t know if I’d do it before that.

Daniel Creech: Really?

Frank Curzio: Would you?

Daniel Creech: No, hell no. Two quick things. What do you think about when you think of William Shatner, and then space or ocean, if you had to go to one? Would you go out in outer space, or would you go to the deep sea and look around down there?

Frank Curzio: I would go to the ocean, I think. I think I will go to the ocean. Shatner, Star Trek… And people forget, this was a series. I think it started 1966 and only lasted three seasons. Everybody hated it, and then they just started bringing it back. When the movies came out, that’s when it really took off but man, I remember Shatner. I’m old.

Frank Curzio: People don’t remember the TJ… Do you remember the TJ Hooker days or no?

Daniel Creech: No.

Frank Curzio: No. That’s it. Damn, I’m old. What do you think about with Shatner?

Daniel Creech: Boston Legal.

Frank Curzio: Yeah. Boston Legal is good.

Daniel Creech: I didn’t watch it when it was current. It was several seasons in, or maybe even over, by the time I came across it. A friend of mine was talking to me about it in college and him and… Is it Spader?

Frank Curzio: Yeah.

Daniel Creech: Is it Shatner and Spader?

Frank Curzio: Spader.

Daniel Creech: Man.

Frank Curzio: Spader’s career really took off, right? The Black List.

Daniel Creech: Those are hilarious. Now, I haven’t seen that. I’ve heard nothing good about that.

Frank Curzio: Yeah, it’s got a lot of seasons in.

Daniel Creech: Their back and forth is just amazing on screen. Boston Legal is fantastic, if you haven’t seen it, or go watch some of them again, especially for today’s world. I can’t believe people aren’t going through those old shows and running William Shatner and those guys, because those were hilarious. But politically correct was out the window.

Frank Curzio: Oh, yeah. A lot of things that you watched back then, forget it. Now, again, you look at emails and Gruden got fired.

Daniel Creech: Another thing real quick. How do you fire Chucky in October, Frank? John Gruden is Chucky, for all you non-sports fans out there. He even claims that himself. He does look like Chucky.

Frank Curzio: Yeah, he does look like Chucky.

Daniel Creech: He also dresses up like him at Halloween, I think. Probably on the regular. Yeah, how do you fire Chucky in October? That’s almost just funny.

Frank Curzio: Those emails must’ve been bad; really bad. But he might get off easy. You might not have seen those emails, kind of like Matt Lauer. Remember, he used to have this show, “Where’s Matt?” I wonder where Matt Lauer is now. He used to have a show, “Where’s Matt Lauer.”

Daniel Creech: Oh, I don’t remember that either.

Frank Curzio: I wonder where he is right now because he got off pretty easy for having an automatic lock on your door and all that stuff. Then were just like, “Oh, we couldn’t.” Next thing you know, a day later, he’s gone. No one ever seen that guy again. Everybody else’s career, they dragged for the news forever, whatever. That guy just… Man. Where in the world is Matt Lauer? I’m curious.

Frank Curzio: I will say this, outside of those events that had taken place and a lot going on. This is the best part, right? We love this part of the markets, which is earning season. 21 companies, I think, reporting. You can see hundreds over the next couple of weeks, 2-3 weeks, small caps. Extend that a little bit further, but most S&P 500 companies are going to report.

Frank Curzio: Recently at Delta, JP Morgan, BlackRock. We could start with Delta. Delta is a name in our portfolio, it’s a big name. I’ve given it away. I worked a little bit on. I just love what they had to say. I thought it was a great quarter. All three of those companies pretty much beat them on top and bottom. Great comments from the CEO as well, but I don’t know what you thought about those numbers.

Daniel Creech: Yeah. I saw a headline that just made me scratch my head because there was a headline somewhere about Delta unexpectedly warns about rising fuel costs. I don’t know how you weren’t expecting rising fuel costs with oil going through the roof and everything else, so that cracked me up.

Daniel Creech: Yeah. With the airlines, you’ve been spot on with this. I think it’s down a few percentage points today. This was a good quarter overall. I’m still really nervous about that, just because of the regulations coming down on the vaccine requirements and things like that, but it’s great to see from an investor standpoint and in my opinion, just a human being who’s rooting for freedom.

Daniel Creech: The Delta Airlines CEO basically says people aren’t worried about the Delta variant, and they expect travel to pick up. Yes, rising costs on the fuel side are going to hurt them and maybe not even get them profitable in quarter four, but it’s good to hear that people are, “getting back to normal,” in my opinion on that side.

Frank Curzio: I think the big takeaway here is you’re seeing the difference in airlines because Southwest is getting destroyed. You saw the cancellations. They’re blaming Florida, blaming weather. I live in Florida and it’s been pretty nice here. I don’t know. Maybe they go into other areas of Florida, it’s raining out or not good. I don’t know.

Frank Curzio: You could tell a difference, right? This is an industry we have labor issues and union issues and all this. Southwest is just its own airline that’s not doing good while Delta, the surprise is, they said they’re going to get the profitability this quarter. And just to put that in perspective, Delta is the first major airline to get to profitability and from the CEO, what he said, it’s going to be the only one. He said it might be pushed back a little bit.

Frank Curzio: So, that might be a little bit of a negative because of those fuel headwinds. Corporate travel beginning to pick up to 40% of pre-pandemic levels in Q3, and was it 50% as of last week? That’s what you want. When I talk about supply issues, guys, and all the data I learned, everyone’s sending me emails and looking at the right places for supply chain data. It has not bottomed yet.

Frank Curzio: The numbers keep getting lower and lower and lower. Here, this is a good example. This is why I think it’s great to invest in airlines because you’re seeing the bottom. The bottom was in a 40% corporate travel. Now it’s 50%. I’m starting to travel. I’m starting to see much more people travel. My friends travel. They’re actually going to the major cities now. That’s going to continue to increase, and these guys are already showing amazing numbers.

Frank Curzio: What do you think is going to happen when international opens up a lot more, when people don’t have to wear masks all the time, the boosters or whether you agree with it or not, that was all good news to me and I think just Delta is an absolute steal here. If you have an 18-24 month time horizon, which 99% of people in the world don’t. Everybody wants to be rich tomorrow.

Frank Curzio: Delta is a great play to just put your portfolio. It’s going to be high profit, it’s going to rocket high unless we see another Delta strain type thing, but I don’t see that happening.

Daniel Creech: Yeah. I saw a meme a couple of weeks ago where it said, “I survived the ’10-’15 market crash,” because everything happens overnight and instantly right now. You’re right, nobody has a 12-18 month outlook. That’s way too long.

Frank Curzio: Nobody.

Daniel Creech: To your bigger point that you’ve talked about a lot of times, just in general, when companies have to go through tough times, cut a lot of costs, then when demand or anything, it just starts bottoming out. Like you said, things don’t have to get great or back to normal. They just have to get better or stop getting worse.

Daniel Creech: So, domestic passenger revenue was only 72% compared to September of 2019. However, that’s good because it’s heading in the right direction, and that’s amazing because they’ve cut so much cost that now, they’re more lean, efficient and all that kind of stuff. So, you don’t have to get back to a hundred percent or wait that from an investing standpoint.

Daniel Creech: That’s a good point, this was a good quarter. It’ll be interesting to see going forward. I’m still cautiously long on this, but I think this is low hanging fruit out there.

Frank Curzio: Then you have JP Morgan came out, blew out the numbers. Expected. We’re going to see that from every bank. There’s so much money flooded into the system, there’s so much spending. So, you’re going to see a lot of these banks beat and maybe pull back a little bit because they’ve been outperforming the market, which is normal. If you’re running up strong into the market, even if your report numbers are great, you might see a little bit of a pullback and then gradually over the next couple of weeks, you see it start rising again.

Frank Curzio: That’s been the trend for the past few years. Instead of looking at these numbers, this is why I just tell everyone, “You have to listen to the conference calls. If you don’t have time to listen to conference calls, you could buy services like Fly on the Wall, briefing.com, where they’ll provide bullets for you.

Frank Curzio: We’ll get bullets of every single company and what the CEO is saying. That’s relevant across all industries, especially what Jamie Diamond has to say outside of what he’s saying about Bitcoin, which is a market he clearly doesn’t understand or why people are buying it. Consumer credit card spending up a lot, expected. Supply chain issues, he believes, are going to end soon which I’m surprised to hear because they are not a supply chain company.

Frank Curzio: I don’t know if he’s looking at the same data I’m looking at. I don’t know if he’s seeing Apple and all the supply. Bloomberg came out, I think, with Apple lowering their iPhone’s demand because… Not demand, but just supply chain issues.

Daniel Creech: Production, yeah.

Frank Curzio: Right? So production, they’re low in production and that was Bloomberg saying it. I don’t think Apple came out and said it, but I saw about four or five sell side firms lower their numbers on the component makers. We’re talking about the largest ones at the parts that go into the iPhone, which is Skyworks, Broadcom, Texas Instruments. So, they are all struggling to deliver their components for the Apple phone, the new phone, 13.

Frank Curzio: So, you’re seeing that. But Jamie Diamond says, “Hey, it’s not a big deal,” but he’s not really… He hears from these companies. I’m listening to these companies too. They’re coming out publicly and they’re saying… He lists every CEO, they all have supply chain issues. I think it’s going to last through 2022 and even longer. I hope he’s right, but I don’t agree with it there.

Frank Curzio: Another comment that he said, and this is why it’s important. You’re not just listening to that conference call for just JP Morgan because I want to buy it or sell it. It’s listening of how you can get ideas. He said, “M&A is going to remain active,” which tells me it’s a very strong market. That’s when you see M&A and credit losses, they didn’t say low. Credit losses, very low. That’s what you have to consider. We’re taking on loads of debt. There’s a lot of companies out there and everybody talks about debt.

Frank Curzio: It doesn’t matter how much debt we have, as crazy as that sounds, as long as we’re able to pay it. I you’re not able to pay it, that’s when you’ll see things go haywire in the bond market, credit default swaps. You’ll see it. When you see credit losses, very low, means most businesses are still doing very good and they’re not concerned for now.

Frank Curzio: Maybe that changes in a quarter from now. Maybe we see higher inflation and raw material prices really take off. But for now, to me, I was surprised that they used the word “Very, very low.” That was a big deal.

Daniel Creech: Yeah, it is a big deal and it’s good to see from an investor and just a consumer standpoint. More to the point, he did say… We’re looking at briefing here, Frank, is he doubts he will be talking about supply chain issues in a year. So, we’ve got to give him some slack there. Maybe it’s a year from this quarter, which is a lot.

Frank Curzio: I thought he said next year.

Daniel Creech: Well, I’m just saying. It says in a year but that’s like the Fed. You can move the goalpost on that. That’s good in the sense of, “Hey, they do have their…” They have a great pulse on the economy, right? They’re the biggest bank by assets for consumers and all that stuff. So, you would think that they have their ear to the railroad, so to speak. That’s encouraging. They get a lot of boosts from trading and all that kind of stuff.

Daniel Creech: Yeah, overall people are healthy. Like you said, there’s a lot of cash floating around and sloshing around the system, which is good. Consumers are strong. The Apple news that… I don’t know if you have that Bloomberg article up, but I think you’re right. They cut production by 10 million phones or something. How is that not the bottom?

Daniel Creech: Apple is the biggest, best, one of the most recognizable brands. They can control markets. They are influencers, they are leaders. If they’re finally starting to get hit by supply chains, we have to be much closer to a bottom than not, right Frank? If you’re affecting Apple, what the hell else is there?

Frank Curzio: I would think so. I would think so and I have that article, “Apple set to cut iPhone production goal due to chip crunch.” Yeah, they’re talking about suppliers but I don’t know. With Apple, you could say it’s the bottom, but I can tell you, if you listen to CEO’s and the car companies that were lying through their teeth, which they were lying through their teeth because if I’m seeing the data, they’re seeing the data.

Frank Curzio: There was a lot of data, a lot of good reports, industry reports telling them how bad it was. All you got to do is go to try to buy a car and you saw how bad it was. So, they thought it was the bottom in Q2. Not even close.

Daniel Creech: Right.

Frank Curzio: Right? Now, we’re in Q3, we’re seeing the numbers continue to go low. On Q4, those numbers have been brought down even further. I don’t know if I’m with you on that one where I can say this has to be the bottom because it’s Apple. What I do know is we do not have a lot of fabs, right? We have basically Samsung and you have Taiwan Semi. Those companies make most of the chips.

Frank Curzio: Intel has a few fabs as well, but try to get out of that business. There’s capacity, there’s certain capacity. That capacity is 100% maxed out. It’s very difficult, even for the autos who have a real-time supply management thing. When they’ll see demand and then go to those companies, Taiwan Semi. They get their chips and say, “Hey, we need them.” And unfortunately, it was too late because a lot of capacity was taken up by Apple and other components. Use it in tons of electronics, right? Orders got screwed.

Frank Curzio: It takes five years to build a fab plant. Five years. You’re not going to do it before that. Maybe three, four, whatever. But until these things are built, I cannot see with the demand that we’re seeing right now. I have no idea how these guys think they are going to just solve this problem, unless demand comes down tremendously, but there’s huge demand right now. This could be even stronger demand.

Frank Curzio: I’m saying with infrastructure, if that bill passes, there’s going to be more demand, but just with the supply issues: If it’s chips, if it’s raw materials, I don’t see this unclogging anytime soon especially in a chip industry because you’re at full capacity. It’s not like, “Hey, we’re at 70%.” It’s like the airlines. You got 50%, and all of a sudden, corporate travel comes back. They have the planes available. They’ll get them out there.

Frank Curzio: How are you going to expand that? How do you make more chips when you don’t have enough room to make the chips? That’s an interesting thing to me when you see these new fab plans. I think Taiwan Semi’s opening up one in Arizona. They’re starting to open up in the US. We’ll see how this plays out, but the good news is, we’re talking about it. Everybody knows about it, everybody’s warning about it, and usually when you see that, it’s starting to get priced into the markets.

Frank Curzio: That’s the good news. I just think that it could be a little bit longer and to be clear, this is a temporary problem. Doesn’t mean temporary in three months, six months, nine months. They’re going to solve this and be much stronger on the way out. But you just don’t want to buy a company if this is going to be… Or a stock that’s going to be dragged out because you’re going to be down 20-30% before you know it, before you see the market roll back.

Daniel Creech: Yes. I didn’t mean that it was the bottom today. Yeah, you’re right. We’ll see how long this lasts, but my point is that, man, if it’s finally effecting Apple, the big juggernaut, the optimist in me says, “Hey, that’s a good thing.” Hopefully, another quarter or two. That’s the new normal. People are just going to have to get used to higher shipping costs, longer wait times, et cetera, et cetera.

Daniel Creech: It is what it is and like you said, we’ll get through it and these are “temporary.” We’re like the Fed here and moving our goalposts. It might be a quarter. It might be two quarters.

Frank Curzio: It could be two quarters.

Frank Curzio: Transitory. Everything’s okay, everything’s okay. I will say another company I’ve reported is BlackRock. 10 straight quarters of inflows. Reported 5 billion in sales for the quarter. What do you think their assets under management is now? Do you have any idea?

Daniel Creech: I would guess 10 because I feel I saw eight to nine. So, it’s got to be higher than that.

Frank Curzio: They have 9.4 trillion. I think it’s more 10 trillion.

Frank Curzio: I’m pretty sure it’s 10 trillion. If you look it up, it’ll say 9.49-9.5. But I think it’s over 10, and I think that when Larry Fink came on, he made a purpose of not to mention that number when you’re hitting $10 trillion.

Frank Curzio: Not only is that higher than GDP of 60 countries, but I don’t know why he… I don’t know if it’s just showing how big they are, whatever. Usually, he always says-

Daniel Creech: Exactly. He used to be a cheerleader about it.

Frank Curzio: Then when you get too big, “No. You can’t mention that anymore.” 9.4 trillion in assets under management, if you’re listening to this and Larry Fink, I’ll get to his comments. He had some great comments on CNBC. Squawk Box was fantastic today, by the way. Those guys interviewed so many guys from Starwood as well. They did a great job this morning. Had these guys on for a long time, which is what you’d like to see when you’re interested in brilliant people.

Frank Curzio: You want to hear more from them and a lot of times they get cut off in a minute or two minute segment. These guys went on for 15 minutes each. It was great. One of the things BlackRock said which… I mean, a great piece of investing here where you can invest in these companies, is ESG.

Frank Curzio: He said huge demand for ESG. So, that’s ETFs, it’s a small company… Everybody’s getting into this. We talked about it. So, we talked about carbon credits is a great way. We talked about a couple of names. Start looking at ESG companies. You’re seeing Plug Power come back a little bit. Some of these things are wildly expensive, but money has to be pushed into these names no matter what.

Frank Curzio: That’s what they’re creating, these ETFs. They’re going to go crazy on them. Companies have to invest. They have to tap everyone on the shoulder and let them know that they’re investing in it and saying, “Here, see? We are investing in this,” and they make announcements that they’re investing in. They have to. They have to make a big deal out of it, and tons and tons of money is going to flow into this, and I still think there’s great opportunities in this space as every company is forced to spend tons of money, billions, and it’ll be trillions in 10 years combined.

Frank Curzio: A lot of this is going to ESG, which is pretty crazy. I thought that was one of the biggest takeaways while listening to BlackRock.

Daniel Creech: I didn’t see the interview. I’ll have to go find it. I saw some bullet points from him. Larry Fink is a good character, in my opinion. I think he’s a giant hypocrite and I can’t really… That’s the nicest thing I can say about him. The reason he doesn’t brag about the assets under management now are because through him and the other elites that look down their nose at everybody else on the common person, is because that now people are getting pissed off about it, and you can only push people so far until you say, “Hey, these are our rules and these are your rules.”

Daniel Creech: Now, trillionaires and trillions under management isn’t popular. It’s kind of, “Hey, what happened to this? Help out everybody else.” One of his comments is funny about inflationary pricing and energy will be with us for a long time. Yeah, no kidding. He says, “We’re working with oil and gas firms.” Now remember, this is the same guy that is throwing their political weight because they’re huge and they own basically everything through their funds and things.

Daniel Creech: They have tremendous influence. These are the guys that voted for engine number one to help get on ExxonMobil’s board and change them. When they’re working with them, that’s just good code language for, “We’re forcing them, and we’re telling them what to do for political correctness.” That’s why inflationary prices and energy are going to be with us for a long time. It is good to pay attention to this guy.

Daniel Creech: They are a huge player and they can move markets, but just remember, he is not looking out for you. We are, Frank. We’re looking out for everybody, but he is not. That’s the nicest thing I can say, Frank.

Frank Curzio: I know. I know, right?

Frank Curzio: Tell me how you really feel. Tell me how you really feel.

Daniel Creech: Yeah, exactly.

Frank Curzio: I will say this, and some of these guys, I have my personal feelings about. Even if I don’t like someone, there’s a lot of brilliant people out there that listen to them.

Daniel Creech: Oh, absolutely.

Daniel Creech: Yeah.

Frank Curzio: I know you do and I do, a lot of people… Not a lot of people do. They’re just like, “Oh, I hate that guy. He doesn’t know what he’s talking about.” Some people are brilliant in some areas, and they could be pretty much an asshole in person, but you want to learn from them. That’s the goal. Learn as much as you can.

Frank Curzio: It’s all about information. The more information you have, the better decisions you’re going to make investing and you want to have access to that as quick as possible. Not inside information, just knowing what’s going on and you can identify trends a lot quicker than everybody else, which we’ve done a lot through my years.

Frank Curzio: Larry Fink, getting back to it, says inflation is definitely not transitory. It sounds familiar. He says he’s still bullish in the long run. Expects higher highs in the equity market but there will be a transition period in the markets as cost of companies increase, the companies will likely pass on those extra costs to consumers. It sounds he’s worried in the short-term. I hate people who say that actually, who say, “Long-term, we’re going to be fine. Short-term, we could crash.”

Frank Curzio: What does that mean? What does that mean? Come on, you could get a five-year-old to say that. When? Timing. So, if the market crashes, you’re going to take credit for it. If it doesn’t and goes higher and higher and higher, you going to be like, “Hey, I told you it’s going higher.”

Frank Curzio: Come on, you’re already rich. 10 billion, 10 trillion assets under management. It doesn’t matter if you’re wrong anymore, right? You just go out there and make a prediction, be bold. I don’t know. Anyway, one thing he did say, rising inflation and rate of inflation from energy will be with us for a long time. The US cannot restrict supply without changing the demand curve or without finding alternative sources of energy.

Frank Curzio: Translation: You’re reducing supply. When do you reduce supply? When you see demand slow. We’re reducing supply when we’re not seeing demand slow. Demand is staying constant. Maybe it’s going to go higher and higher and more people are going to be out driving more planes, whatever. That results automatically in much higher prices. Everybody wants to say, “Hey, alternative energy and the environment is clean.” We don’t have enough alternative energies to make up for taking that much supply off the market, which is why you’re seeing prices skyrocket here.

Frank Curzio: How is that going to stop? I don’t know. How do oil prices don’t go to a hundred? I’m not too sure. Do you know? I don’t know. Maybe it’s me.

Daniel Creech: Well, no. I don’t know where they’re going exactly but the thing there with… I would guess higher than lower, his point there on the demand side Frank, how do you change demand? You stop doing something. How do you change demand without telling people, “Hey, keep your AC low,” or “Don’t heat your house,” or “Don’t travel.” Think about what it means to change demand and find alternative sources, which to your point on the fab plants and semiconductors, you don’t just switch over from coal and oil and gas to clean energy right away.

Daniel Creech: You don’t build a nuclear power plant overnight. You don’t build a solar panel or install a solar panel overnight. You can do it quickly, but that’s just not the reality. What he’s saying in a very nice way again, for all us peons out there is you’re going to have higher energy prices for a long time and you need to deal with it.

Daniel Creech: You know what? Because they’re going to tell you it’s okay, you ought to be happy with it. That’s the actual tone from these influencers in the market and it’s ridiculous.

Frank Curzio: The cure for demand to slow down is pricing, right? As prices go higher. I could tell you, in Florida, it’s about 3.10 for gas and other places. I know in California, it’s much higher. I think it’s 3.50 or 3.40 in New York right now, which is very high, very high.

Frank Curzio: It’s not to the point where people aren’t driving it. If you go to four or if you go to five, people are going to be like, “All right, I’m not driving.”

Daniel Creech: Right.

Frank Curzio: That’s when you see demand come down, but it’s not at this level right now. People are not choosing not to go out or not to drive or not to do things or travel. That’s just what your car. You’re going to be taking flights. You’re going to have to travel, you’re going to do different things, you have to heat your home, turn your air conditioners.

Frank Curzio: Higher prices is going to hurt, but they’re probably going to go higher since we’re taking a lot of this stuff offline, even though we’re the number one energy producer in the world. We were, which is something unheard of. No one in the world thought we would ever achieve that. That wasn’t even on the table 10-12 years ago. Now, we’re basically… Which keeps us out of a ton of wars, which makes us absolutely powerful when you have your own war materials and stuff in your country.

Frank Curzio: Could be the largest energy producer for a very long time. And now, we’re dialing that back, which I understand. But if you’re going to dial it back, you have to have the alternatives to replace them, which we don’t. That’s why it’s just very interesting what’s going on.

Daniel Creech: Just remember everybody. When you’re paying a lot more for energy or gas or anything like that, just remember that we deserve it and it’s worth it to save the planet, Frank.

Frank Curzio: Yeah, we’re all going to die tomorrow.

Daniel Creech: CNN had a great story. It’s comical but it’s, “Our underwater future: What sea level rise will look like around the globe.” What they’re talking about, at least at least these guys are getting halfway smart because they quit the 10-year and the short timelines because even though they have no conscience or spine about being wrong, it’s okay. Remember, the world was already going to be underwater 10 years ago.

Daniel Creech: AOC is on that same warpath and all that kind of thing. Now, they’re at least pushing this out to 2050, 2060 stuff like that to give them plenty of time. Frank, they have a great… They have a couple of these doctored up photos where they show Buckingham Palace and how it’s going to be not underwater completely, but it’s going to be flooded.

Daniel Creech: They have all these different big popular areas of the earth and they’re split in half. So, it shows what it’s today and how much water it’s going to be underneath and all that stuff. It’s really comical, but yeah, just remember that people. When you’re paying through the nose for higher energy prices, invest in stocks to offset that and make some money, put yourself in a position to gain and just know you’re saving the world. So, give yourself a pat on the back.

Frank Curzio: It’s great because usually the people who are making that claim, and usually they’re in high profile areas because they’re on the coastline, there’s always limited coastline real estate. Those are the people that are usually buying those houses over there, you know they’re predicting it’s going to be in the water? Hey, we’re going to buy a $9 million mansion pretty close, but you’re okay.

Frank Curzio: Everybody else, if I was going to impact everyone else, except for you. I love it. I love it. We only got a little more time left, and I’m running on fumes here because I won’t tell you why.

Daniel Creech: Yeah. No, let’s go ahead. I can’t believe he told me this morning. This is hilarious. What’d you do last night?

Frank Curzio: I have a very good friend. I have a very good friend who’s in town who comes here every year. He didn’t come here last year because of COVID, and we go see a football game, Jacksonville. He’s one of the best friends that I know of 25-30 years. We went out, we had beers yesterday. I had some fun, it was 11:00 and two guys walked in that who we know. They used to play basketball with. I decided to say, “Hey. Right now 2v2. let’s play basketball.”

Frank Curzio: We went to a park where they had lights and we played to 12 o’clock, with beers in us, which wasn’t a good idea. We lost because my friend actually was… He was a mess. He’s a mess. He couldn’t cover anybody. He couldn’t cover anybody. This guy is covering… Just kept hitting threes, I’m like, “Go around the pick. Go on the pick, around the pick.” He keeps going underneath. The guy keeps shooting threes. I’m like, “You’re killing me.” He said, “I can’t even move.” I’m like, “Great.”

Frank Curzio: Anyway.

Daniel Creech: I’m prepping for the podcast this morning having a coffee. I said, “Hey, how was your evening last night?”

Daniel Creech: “Oh, good. We played basketball last night.” I’m thinking, “What in the hell did you just say to me?” That’s impressive. That makes me tired. Now, I’m worn out.

Frank Curzio: Hey, you got to get your exercise in any way possible. All right, we got two minutes left. I wanted to get into one last story because this is Unplugged. Actually, CNBC. The US is now a top destination for Bitcoin miners, eclipsing in China for the first time ever, which makes sense because China completely banned cryptos and probably because they don’t want anybody to leave with Evergrande. A lot of stuff. Real estate going on there.

Frank Curzio: Again, they banned it six times. I think they issued it up to six times Daniel or something. They keep banning it.

Daniel Creech: Probably.

Frank Curzio: We’re going to ban it again. We’re going to ban it again. Anyway, Bitcoin miners. This is one third of Bitcoin’s hash rate in the US and this is going to Cambridge Center for Alternative Finance, did this study, is at 428% increase from last year September 2020.

Frank Curzio: As of July, 35% of Bitcoin’s hash rate, that’s the term that’s used describe the power collectively, that computing power of miners when you’re mining for Bitcoin, is in the United States. We saw this trend coming. We have some of these in our portfolio and in our CCI portfolio, Crypto Intelligence portfolio. It’s not a surprise. It’s just you have to get cheap energy. I’ve been to these, I want to say plants, but you’re seeing all these servers, the computing power.

Frank Curzio: It is 120 degrees in there. They need fans or they want to put them in areas that are cold. If you don’t have cheap electricity, now you can go a little bit further because this all depends guys. This all depends on where Bitcoin is trading. When Bitcoin is at 7,000, 8,000, 10,000, 12,000, it wasn’t as easy to break even because this isn’t something that’s scalable. This industry is not scalable.

Frank Curzio:

So, what it means is in order for you to mine more, you need to buy more machines. You’re going to use more electricity. You need to find more space where electricity is cheaper, right? You just can’t turn on and all of a sudden, boom. Everything’s good. It’s going higher. It’s a reflection of Bitcoin and its price. If you’re a miner, you need to see the price of Bitcoin go higher and if you’re a believer, that’s going to go to 100,000.

Frank Curzio: Whether it’s a year from now, two years from now, three years from now, these miners are printing money, exploding profits, numbers that you thought weren’t even possible and that’s going to continue as long as Bitcoin continues to go higher or even stays at this level. That was a pretty cool story. It was on CNBC. I’m seeing more and more CEOs even talking about crypto.

Frank Curzio: We started with talking about crypto today and Bitcoin as a store value. More and more people, more and more important people are getting in. We already knew that it’s here, but now all these stories are coming out on CNBC, things we’ve been talking about for a while and that’s good. It gets more mainstream, right?

Daniel Creech: Yeah. The big takeaway for me on this and why everybody should be excited is because this would just show… This is just a great present example of how innovation, capital and freedom leads to solving a problem or producing something of value that people want. China has crackdowns. A lot of the mining was going over there because it was cheaper back then to mine. They shut that down. They move operations. They go to a friendly area.

Daniel Creech: They’re using more efficient energy to not only scale, but to make a profit. Everything is driven by profit and that’s a good thing because that’s where charitable acts come from. This is just another amazing story of capitalism and it’s involving in front of our eyes. That’s something to be excited about that we get to experience that.

Frank Curzio: You bring up a good thing, and we’ll end on this. You always want to look when there’s negative news on something, it can be positive for someone else. I think the negative news of Southwest is going to result in more people going to Delta, because if you listened to the stories of these people that had to pay over $2,000 to change their flights, they’re really pissed off.

Frank Curzio: There was massive delays, they had to stay at hotels. They got stuck in airports. You know what, if that’s me, I’m not using Southwest anymore. When you see China say, “We’re banning crypto,” you need miners. So, what are they going to do? A lot of them are coming to the US, the companies we recommend that are in the US, but that’s how you should always look at stories, negative or positive.

Frank Curzio: There’s usually companies that are going to benefit and other companies that aren’t. For me, you’ll see three or four stocks. I think it occurs in your research advisory portfolio that game changes, where the government made a specific change that created a huge tailwind for a certain company because they were in a certain industry and they’re restricting a lot of small players, right?

Frank Curzio: So, you always want to look for that advantage because that could result in tons and tons of more business going into another name when you see bad news. The miners in China, it’s great for US-based miners, and that’s what I would focus on going through earnings season. Pay attention to what the CEOs are saying, what the comments are, the geographies, what’s doing well.

Frank Curzio: You can always find tons of ideas, not necessarily the idea of the conference call that you’re listening to, whatever large cap that is. But you can listen to that and trust me, you’ll have so many different ideas in different areas with your research and find better names. That’s why I love earning season, and it’s officially here.

Frank Curzio: Daniel, any last comments?

Daniel Creech: No. Cheers.

Frank Curzio: That’s it?

Daniel Creech: Good time.

Frank Curzio: Good time. Earning season, busy.

Daniel Creech: Yeah, I know.

Frank Curzio: If you are subscribed to any of our portfolios, expect lots of updates over the next couple of weeks, as all of our companies are going to be reporting, which is really cool. Daniel, thanks so much for coming on. I really appreciate it.

Daniel Creech: All right.

Frank Curzio: One last note here, guys. The first Big Money Trader that the beta version is out. This goes to our Curzio One members, which have access to everything. But they get the chance to take a first look at all of our new products and give us feedback before we launch, which includes a couple of early trays. This is going to be written by Luke Downey. This is back-end newsletter. Somewhat, I’m a huge fan of. I’m going to have them on probably in a couple of weeks on the podcast. It’s similar philosophy to his current with The Big Money Report, except there’s going to be a lot more trading.

Frank Curzio: We use a system that track the big money and gets it alongside, not after. They’re doing fantastic. He’s got a great track record. He’s been doing this for a very long time. Every one of his subscribers has been incredibly impressed. I won’t say everyone, but I would say 98%. Using this system, he’s able to get in and out very quickly, in and out of these positions.

Frank Curzio: I’m excited for this newsletter. He’s excited to write it and we’re going to launch it pretty soon. Right now, the beta versions go out first and we will have two or three of those. Those go to Curzio One members. Let us know how you feel. Again, that’s a premium membership here and really cool. Just came out with that first issue. I read it, it’s awesome. Just explaining exactly what it was going to do. A couple of new recommendations. Really cool stuff, but we want to hear from you and that product’s going to be launching really soon.

Frank Curzio: That’s our first new product in a long time. We’re really excited to launch that, our first back-end product, a new backend product in a long time. So, I’ll report back to you with stuff, where I always try to discount products as much as I can to our listeners, of course, to our subscribers. So, we’ll figure that out when it comes around, but really excited to launch this product, which you’ll probably see in about two weeks.

Frank Curzio: You’ll get emails from me. I’ll be mentioning it on the podcast if you are interested. Okay, guys. That’s it for me. Really appreciate all the support. And I’ll see you guys tomorrow. Take care.

Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its hosts and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.

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 9 million times.

P.S. This morning, Curzio One members got a first look at Luke’s newest advisory, Big Money Trader… and a chance to earn quick gains on a tremendous growth stock. 

Regular listeners have heard me talk about the benefits of Curzio One… like invitations to member-only events, exclusive private deals, and access to all Curzio publications—including new services like Big Money Trader BEFORE they launch to the public. 

If you’d like to join Curzio One, join the waitlist at the bottom of your member dashboard. When a space opens, I’ll send you a personal invitation.

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