Wall Street Unplugged
November 10, 2021

Why Ford made a huge mistake with Rivian

Tesla CEO Elon Musk is once again making headlines, polling his Twitter followers about whether to sell billions’ worth of Tesla stock.

Daniel and I discuss the drama around the famously polarizing CEO… and whether investors should pay attention to his latest tweet storm. [1:09]

Keeping with the theme of electric vehicles (EVs), electric pickup maker Rivian begins trading today… and the numbers are absolutely crazy. I explain what this says about current market conditions… and why Ford made a huge mistake investing in this rival. [8:05]

Crypto exchange Coinbase reported weak earnings this week. While I have some concerns around this company… Daniel makes a case for why investors should buy the stock at current levels. [17:30]

Musk wasn’t the only one causing a stir on social media this week…

Daniel and I wade into Pfizer’s Twitter meme drama… and the uproar over Aaron Rodgers’ vaccination status. [27:00]

In Curzio Research Advisory, I just updated Amazon from a hold to a buy. The move might have surprised members, given Amazon is already boasting over 200% gains for the portfolio… But this is a critical lesson on generating wealth over the long term. [31:35]

Finally, I’m incredibly excited to share some details about our latest product, Big Money Trader—launching next week. [37:35]

Inside this episode:
  • Elon Musk’s latest tweet storm [1:09]
  • Why Ford made a huge mistake investing in rival Rivian [8:05]
  • Is Coinbase a buy at current levels? [17:30]
  • Pfizer’s Twitter meme drama… and Aaron Rodgers’ vax status [27:00]
  • Why Amazon remains a buy, despite impressive gains [31:35]
  • Big Money Trader is launching next week [37:35]
Transcript

Wall Street Unplugged | 818

Why Ford made a huge mistake with Rivian

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 it’s going on out there? It’s November 10th. 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.

Frank Curzio: So Daniel, a lot going on in the market, right? Daniel Creech coming in from, what are you again? What’s your title? I forget.

Daniel Creech: Many, Frank. I’m a cleaning person today in the office, as soon as we get our supplies in.

Frank Curzio: We do, right. The office is small. We’re always cleaning it. Yeah. It is true, right?

Daniel Creech: Oh, yeah.

Frank Curzio: We should hire someone for that. But a lot going on in the markets, right? Fun, people poking fun at Pfizer with the vaccine, and the Rivian IPO, Twitter, and Musk. I mean, let’s start.

Daniel Creech: Twitter’s going to charge now, too. That’s a little rabbit trail, but they’re doing Twitter Blue. It’s like three bucks a month.

Frank Curzio: Oh yeah, really?

Daniel Creech: Competing with your favorite company charging $2 a month. I won’t even say their name.

Frank Curzio: Oh, don’t say their name. Don’t get me started. Don’t get me started. I mean, Twitter’s been on fire, right? Just for Elon Musk. I mean, selling his shares, selling 10% of his shares, which, he had people on Twitter. He’s such a marketing-

Daniel Creech: Tesla, you mean?

Frank Curzio: Tesla. Sorry, what did I say?

Daniel Creech: Twitter.

Frank Curzio: Twitter. I get mixed up.

Daniel Creech: It’s all right.

Frank Curzio: Twitter, Dorsey.

Daniel Creech: They’re all the same. Conglomerates.

Frank Curzio: But you look at Elon Musk, I thought that was great. I thought it was awesome. He’s just a marketing genius, right? When you’re able to get the trolls to go absolutely crazy, it means you’re a marketing genius and that’s… But the whole 10% stock sale, and then also did you see that, who’s the organization that called him out on world hunger and said, “If he sold like a certain percent of his stock, he would be able to solve it.” And he said, “All right, you outline how I could do that and I’ll.” He called them out, of course, they didn’t say. But it’s kind of funny that it’s him, right?

Daniel Creech: Let’s tackle that first. I want to ask you a serious question on the 10% on the Twitter poll, because I’m not sure where I fall on it, but I like analyzing the different perspectives and angles. But, to the world hunger thing, I have to give credit where credit is due because it was some world council, or some kind of global good ole boys club, for lack of a better word. And they basically, they gave it a number. It was like six billion or nine billion. It was something specific and said, “Hey, this would solve world hunger.” And this was from the snake oil salesman type of, “Hey, if you want to tug at people’s emotions, you go after saving children and or saving the climate. That’s just a good rule.” So, that’s what they were saying.

Daniel Creech: And to his credit, he called them out and said, “Hey, you prove to me how this amount will solve world hunger, and I’ll sell enough stock and cut you a check right now.” That’s great. It’s hard for me to believe that they’ve replied because when you’re not searching for stuff like that, and it comes across your newsfeed, you would think that if they sent you a spreadsheet and said, “Hey, here you go, tough guy. Here’s how it is.” You would’ve already heard about that. It’s smoke and mirrors. But I got to give credit where credit is due on that aspect.

Daniel Creech: On the Twitter poll, I want your serious opinion because, I caught a little bit of Fast Money yesterday on CNBC, and one of the guys on there was very upset. You could tell that he was just pissed off about this. And I think, I tried to write it down. He was calling it, “It’s just not cool,” Frank. You know how angry you have to be to go on TV and say, “Just not cool.”

Frank Curzio: That is, it’s holding back a lot, but yeah, you’ve got to be really pissed off.

Daniel Creech: It’s like in the movie, The Hangover, where they’re kicking dirt and stuff and the guy’s like, “Shoot, dang it,” instead of saying F-bombs or anything else. But real quick, I’ll give my take after you, but are you offended or are you embarrassed from a market perspective that, this guy goes on Twitter. What, you could argue 10% would be, well, he’s worth 300 billion. So I mean, it’s billions and billions of dollars of stock. It’s huge implications. Is it okay to go on Twitter and basically flip a coin to all your followers, Frank?

Frank Curzio: Absolutely. Why not? What’s wrong with it?

Daniel Creech: I’m not saying there is anything wrong.

Frank Curzio: It’s your followers.

Daniel Creech: You got to give me a little bit more than though.

Frank Curzio: It’s well, it’s supposed to be a public platform.

Daniel Creech: From a shareholder perspective, you’re saying, “Hey, this guy’s a CEO. This is going to have huge implication on the stock price.”

Frank Curzio: But that’s why people buy the stock, and it’s selling like 50 cars at what, the trillion dollar valuation. That’s why they love this guy because he’s like this. That’s his personality. The day this goes away is the day they lose their premium.

Daniel Creech: Yeah. That makes sense.

Frank Curzio: Right? I mean, you got to love this if you’re a shareholder. I mean, this guy calls everybody out. He’s out. People don’t understand it because they don’t have that personality. And the personality is funny because it’s not… You could see when you talk to him how, just he’s brilliant, but probably difficult to have a conversation with. But the fact that he goes out of his way to really do some of this stuff. That’s why they love him so much. That’s the power of a brand. Right? They love this guy. They’ll back him.

Frank Curzio: I’ll be honest with you. Tesla cars are ugly. They’re ugly. They’re ugly. Have you ever sat in one? They have a screen. They’re plain. They look terrible. I mean, have you seen the electric cars coming out? They’re not pretty cars. They’re not. People say, “Well, it’s a Tesla.” It’s the brand. It’s you saying, “I own a Tesla.” That’s the allure. That’s why people love this guy. They love the stock and they want to buy it. And he’s delivering, and he’s light years ahead of everybody else, light years ahead of everybody else. Everyone in the world, right? Everyone in the world in this industry is now producing an EV car. Just announce that you’re going to have an EV truck and you get a valuation like Rivian, which we’ll get to in a second, which is insane.

Daniel Creech: Good segue there. But hold on a second, we got to stay here for a minute.

Frank Curzio: Okay. Stay here. I want to hear your thoughts on it.

Daniel Creech: So, I think you’re exactly right in the aspect of, this is just a risk that goes along with Tesla. A part of me wants to say that it’s silly, because I think it’s kind of ridiculous, but it doesn’t upset me because if you’re a Tesla bull, I believe Tesla stock is off 15% from its recent highs. Maybe even closer to 20% now, because it’s taken a few good pullbacks. So, if you’re a Tesla bull, nothing is changing. So, he sells 10%, big deal. That’s a good buying opportunity, if you’re a bull. I just think that the bigger picture here is, know your risk. And this, to your point, this is just part of what you get, if you’re going to invest in this.

Daniel Creech: This guy is Tesla and it’s hard to argue with the results and I’ve totally been dead wrong on this. If I ever had a gun to my head, I would’ve bet against it or just avoided it. So, I’ve missed out on great gains. But yeah, I just think that’s a good overall lesson of, “Hey, this is just one of the risk in there. And if you’re not comfortable with it, don’t own that stock.”

Frank Curzio: This is definitely clear. Okay? Everyone, 100% of the people that criticize this guy and rip this guy apart, are people who don’t own the stock.

Daniel Creech: Or, are shorted, probably.

Frank Curzio: Whatever, but they don’t own it, so they’re going to have everything to say, because they’ve been saying that this stock was overvalued 85% ago. And you know, if you look at the fundamentals, they’re probably right. But to see where this stock goes and what he’s accomplished, I mean, this is a guy that’s unleashed, has more money that he knows what to do with. And I like that, because he’s a change the world guy, and he’s changing the world. You have an opinion about his personality or what he does, but if you’re a shareholder, you love everything this guy does. This guy made fortunes, fortunes, fortunes for so many people.

Daniel Creech: Yeah.

Frank Curzio: You could say, well, the stocks off 15, it’s went from 800 to 1200 in like a week on no news. Okay? So, if you bought at 1100, you deserve to be down 10%, 17%. But, you bought it at any other time in this company’s history, you’re filthy rich. And those aren’t the guys criticizing, those are guys that are backing him. And for me, I love it. That’s what got him here, being that crazy. And just to see what the trolls do and everybody coming out after him, and these are all people you see on TV, now, because they don’t own Tesla. That’s why it’s so funny. Of course, you’re going to criticize him because you didn’t make money. If you made money, you would be like, “Wow, this guy is doing it right.” And now he’s got a massive audience. The whole entire world, even my mother, everyone knows who this person is. You can’t say that for the greatest sports athlete or the best entrepreneur.

Daniel Creech: Oh, yes you can, Frank. Everybody knows Michael Jordan. Get over that.

Frank Curzio: Yeah. Outside of my Michael Jordan and Kobe Bryant.

Daniel Creech: Anyway, yeah. No, I get your point. That’s a great point.

Frank Curzio: I mean, so no, I have no problem with it all. And then you’re going into to Rivian now, holy cow. I mean, what a fun market this is, this is awesome. So, this thing’s coming out, they rate… I mean, I have so much to say about this, it’s funny. I mean, I wouldn’t be surprised if this thing opens like, it’s not open yet. The time you’re going to listen to this or watch it on our YouTube channel, Curzio Research YouTube channel, it would open. They set their price is $78 a share. And they’re like, “That’s higher than the 65, $68 price.” Okay, it’s higher than that 65, $68 price that you put out three days ago. But two weeks ago, this company had a $54 billion valuation. Now, it’s coming out at 78, which is going to give it more like a $70 billion valuation, right?

Frank Curzio: So, it’s a $70 billion valuation. And what are they doing? They’re doing something, they’re producing something that the whole entire world is producing right now. Right? Everyone’s going to produce three million EV, we’re going to have 25 million, hundreds of millions of EVs by next year, if you listen to every one of these companies. They don’t have the supply chains. They don’t have anything. Just to see the valuation of this company is amazing, because they’re doing one million in sales. Put that in perspective, we’re doing three to four X that. Our valuation isn’t $70 billion. I wish it was.

Daniel Creech: You and I both.

Frank Curzio: But it’s not. They lost $1.3 billion last quarter. So, if you do the math on that, they’re raising 11 billion. That means they’re selling a portion of their company, $11 billion worth, which is the whole company, a $70 billion valuation. That’s 11 billion in cash. That’s why you go public. You’re bringing this cash. Then you have, you can tap the equity market. You have access to capital. You get a higher valuation. That’s why you look at it. Right? So, they have 11 billion. That creates, based on what you’re losing, a 24-month runway with almost no revenue over that time.

Frank Curzio: They think they’re going to sell all these cars by 2023, 2024, over 50,000. It comes with 6,000 plus employees that you have to pay. They say they have a backlog of 55,000 vehicles, which are expected to be delivered to you by 2023. I don’t know how that’s possible. I mean, if you want to put that in perspective, Tesla’s been around for a while now. You see Tesla cars on the road. That’s two and a half times the number of Teslas produced over the past 12 months. But this company’s magically going to produce all those cars. For me, when I look at this, it’s just a sign of the times.

Frank Curzio: It makes me think like a top is coming, when I see a valuation like this on a company that’s doing this much in sales. And so many people are going to be making money. When these insiders open up the doors, when that lock-up period ends, you’re going to see massive, massive sales. This thing could open up at a hundred and go to 120. It can go to 300. This is not Tesla. This is a big difference from Tesla. They have a long, long way to go. And a valuation assumes that these guys are going to be the biggest EV maker on the planet. If you believe that and you buy it now, you still probably might not make money. But that valuation is absolutely in shit. You know the valuation, the market caps for Ford and GM are 80 billion. This thing’s probably going to come out at the same valuation, or a little bit higher than those companies. How old is Ford, Daniel? I don’t know. I mean…

Daniel Creech: I don’t know.

Frank Curzio: Over a hundred years old. They were making tanks for the army in World War II. Right? This is a company, right? So, this is like, all this time, all this time you got a company like this, that’s what, 10, 11, 12 years old that comes out, and already you have companies like Ford and GM looking up to them, which I find interesting.

Daniel Creech: Yeah. So, I have to admit this morning when we were grabbing coffee and BS-ing in the office for a minute, I thought that you were, I don’t know if exaggerating is the right word. I almost thought you were leading me on, in a fun way because you’re like, “Hey, you want to talk about Rivian today?” And I knew the IPO was coming up, but all I think about when I hear in is, “Oh yeah, they got some huge order from Amazon at some point. And I remember seeing headlines about that.” And when you said, “They’re doing like a million in revenue,” I thought you were just kind of like throwing numbers out. So I thought, I go to CNBC and it says, “Yeah, the third bullet point here is Rivian expects to lose 1.28 billion this quarter.” So, we’re in the fourth quarter now, “While generating,” and you got to love this wording because words have meanings here, “Generating no more than a million dollar in revenue for the same period.”

Daniel Creech: And I’m thinking, “Wow.” So, to your point yesterday on Wall Street Unplugged, for those of you who haven’t listened, listen because it’s a good segment. And the conditions right now are as good as they’re going to get. Easy money policies, low interest rates. Yeah, you got a lot of fears, and this wall of worry with inflation and things, but it’s getting very hard to justify stuff like this in a market. I mean, when people ask us what we do, Frank, I mean, hell, we’re going to have to say like a financial circus or entertainment show, because how do you say, “Hey, should I buy Rivian?” “Well, yeah. Fundamentals have proven not to matter for quite a while now, and valuations can always be stretching. You could always do this and that in growth companies.” But wow, this is like laughable to say, “What’s going on here?” Now, the Amazon thing is cool, but it’s still 2030. They’re going to deliver a hundred thousand cars to Amazon by 2030.

Frank Curzio: Hey, listen, I was-

Daniel Creech: It’s not even it’s 2022. Let’s round up people. Right?

Frank Curzio: They made that announcement. I go to The Consumer Electronics Show every year. Okay? And if you haven’t been there, you have to go lease once. It’s unbelievable. Right? So last year they had it virtual, which was horrible. 2019, I was there. We brought a video guy and filming everything. And it was amazing because people were talking about Rivian there. Ford was there talking EVs. This is 2019, January 2019. And I remember, we did an interview with an executive, one of the top guys or the top executive because Amazon, it is a bunch of different areas. Right now, they’re having it in like four different hotels. But the main area in the conference hall, they have this huge area. We have the Intels, and Microsofts, and the Qualcomms when you walk in, right? All these big Chinese cut, massive, massive booths, right? Probably millions and millions of dollars.

Frank Curzio: And then, you have to go to a separate place and they have all the cars and the vehicles there. And they’re have Nvidia there with their technology. So, Nvidia would have two booths, because they have one in that area with Intel, showcasing their stuff with their chips, and then they’ll have the auto segment. Right? So, the auto place has gotten so big that people from the Detroit auto show, because it almost runs at the same time, they were going. All the companies started going there because the crowds were much bigger. Right? They were getting like 25,000, a hundred thousand people.

Frank Curzio: So, it became a big event and the car area’s huge. So, we walk in there and I see Amazon like, “Why is Amazon in the area of cars?” So, we interviewed them and they started talking about this, and we have that interview. And it was, “Rivian and make an investment in this.” And now they’re going to have a Lexus and all this. But investing in this makes sense for Amazon. Right? It makes sense because they’re like, “Okay, we want to have EV vehicles. That’s going to save us money in the future. We want to lock in something that’s good. We did it with a small company, and now, we have a percent.” That makes sense.

Frank Curzio: Now, let’s go with Ford here because people are saying that they’re high fiving Ford, that they have an investment in this company, which is whatever, 10, 12%. And they’re like, “That’s great.” This is a clear competitor to Ford, Daniel. It’s a clear competitor. Right? So, it’s like us as a publishing company, investing in a competitor and that competitor becoming three, four, five that’s bigger than us. So, but investing in it at the very early stages. So, you have Ford investing in this company in the very early stages. Why not purchase that? That company’s going to have today, it’s going to have a higher market cap than Ford. It’s going to be bigger than Ford, this company. You had the opportunity to buy. They’re coming out with an electric truck and SUVs. That’s what’s exciting. That’s where, believe me, I’m driving SUVs, driving around the world. Gas prices are going through the roof, dying. Right?

Frank Curzio: So, that’s where the market is. Right? People love SUVs. They love pickup trucks. These guys are going to compete directly with the F-150, which is coming out. So, instead of Ford going in and buying this company, and learning about their technology and buying in this company, they decided to say, “Hey, we’re going to invest in this company.” Right? And now, they’re getting a high five for that. Instead of, “Hey, these guys have great technologies. You could poach the engineers, do whatever you want. Y’all Ford. You could tap the debt markets.”

Frank Curzio: But here’s a difference because this company now has its valuation, and you know how much Ford is spending? Because, I don’t know how much Ford spent to invest in them. Maybe a billion dollars. And it’s worth like eight billion now. They’re spending $30 billion over the next few years on EV technology because they don’t know, they don’t have the capacity. They’re only going to be able to sell 10% of the amount of gas trucks. So, they sell whatever. I think it’s like 800,000 of the Ford F-150s. Only 10% of them, they’re going to be able to sell the next two, three years, because for EVs, as they turn to EVs, they just don’t have the capacity. They don’t know where they’re going to get the manufacturing from when it comes to batteries and the technology, and that’s going to get better and better, and infrastructure.

Frank Curzio: 30 billion. So, you got to figure 15 billion that’s going to be wasted. You could have took that 15 billion and bought this company, and look where you are. Now, you’re playing catch up and yes, you have a stake in the company, but this is Ford. You have a stake in a company that’s bigger than you, and it’s 12 years old, when you were making tanks in World War II. It’s just the innovation behind some of these, and GM too, has a similar market cap. For me, I get fired up about this because Ford talks about how great they are, and all this technology. And it’s like, “Here it is. You have this company, you could have bought them. And look at, valuation of this thing is bigger than your company now. And instead, you’re like, ‘Let’s get a stake in this company just in case it turns out to be bigger than us, or this technology’s good.'” And now, look what happens. They might wind up buying Ford, two, three years from now, after this valuation keeps going higher.

Daniel Creech: Yeah. Anything’s possible, especially in this market.

Frank Curzio: I don’t know. I get fired up.

Daniel Creech: Easy segue here, because I do want to talk about this. Another macro item, but Amazon owns 22% of Rivian and Ford owns about 14%, which is valued about eight billion. Yes, you’re right. You want to make a boring announcement about Amazon and our CRA portfolio?

Frank Curzio: Before we get to Amazon, I want to talk about one other thing, which is Coinbase, because it’s interesting.

Daniel Creech: Oh, yeah. Bitcoin in general.

Frank Curzio: Coinbase was in our portfolio. And it felt, I think we took, what did we take? A single digit loss on it. But yeah, I was worried with the SEC coming after them, and the SEC, the way the SEC operates is they usually wait for a division to operate over time, and then you can go after them. And then you can get massive damages. Right? Because if there’s no damages, that makes no sense to come after a company. The SEC, what they did to Coinbase, and their lending division, Lend, they said, “You can’t launch this,” even though Coinbase and their legal department just did everything that, they gave the SEC everything they wanted. The SEC just didn’t want to see. They didn’t want to work with them. They’re like, “Too bad.”

Frank Curzio: So, the fact the SEC has a thing for Coinbase, oh, made me worried. So, we sold that at a small loss, and it’s a little bit higher now. I mean, it was a lot higher, but it’s down about five, 6%. It was down like 12% earlier. I’m looking at it now, it’s going to, it’s down like five, 6%. But, I’m looking at Coinbase and this is a company that makes its profits through trading. And maybe that changes. They got a couple, I think they’re investing 10% of their net income or their profits into crypto investments now. And they’re going to create a whole bunch of products like Galaxy Digital Voyager. Those are really good names in the space, that do lots and lots of stuff. Trading research analytics. And, but right now, it’s all trading.

Frank Curzio: But if you look at Bitcoin and it’s market cap, compared to the entire industry of crypto, it’s about 42, 43%. And if you look at the biggest people in this space, at least, so they say, and they claim, they’re holders, right? That they hold, hold on for dear lifers, right? They hold on forever. And if you’re doing that, you’re not trading the security. It’s almost like, if you have the FAANG names and you’re not trading the FAANG names, which account for 20% of… You could say the market’s still going to do good, and there’s going to be trading and the platforms. But when you take those off and people are just buying Microsoft, and Meta now, Facebook. I can’t Meta. I can’t believe Facebook changed its name. Anyway, and Amazons, and stuff like that, and you’re holding forever, it’s going to result in not as much growth, right? And you need that fast growth.

Frank Curzio: So, I wonder if that’s an indicator, because they rarely miss estimates by a lot. They’re the premier company, but we also know that people love free trading. And this, these guys charge a lot. If you’re trading 10, 15, $20,000 in crypto, they nail you. A few hundred dollars here, few hundred dollars, three, four, whatever it is, they nail you. And for the bigger accounts, that’s they can go to other platforms. But I wonder if you’re looking at Coinbase, is it overvalued? They’re going to have to innovate, but the current model where they’re generating most of their profits off of trading, and the fact that we probably will go that way in trading, where it will be free, just like it is for stocks on most of these online platforms, it makes me a little skeptical.

Frank Curzio: And, I’m not surprised that they missed by a mile, but let’s see what they do going forward. Again, it’s hard to predict cryptos all over the place, but with crypto at all-time highs, these guys should have had a good month last month, month and a half. And it didn’t show up in their results, which I don’t know if it’d be a buy here.

Daniel Creech: I would, if you are comfortable long term with this. I’m going to go out on a little bit of a limb here. And I’ll even hand you the saw, Frank. I agree with everything you said on the trading concept, because if the majority of Bitcoin holders are going to hold forever, that’s going to be detrimental to your business model. That’s why they have a lot of other coins, even though, even the meme coins and things like that, because they just want those fees. They want activity. I don’t think it’s a far stretch on Coinbase, but you got to be patient, because it has run higher. I think it’s near, well before the earnings report, I think it was basically near where it opened up.

Frank Curzio: Around their IPO, but it was, I think it was around the first.

Daniel Creech: Yeah, it was around 350 or yeah. I mean it spiked, but it wouldn’t, I don’t think it’s a long stretch to think of Coinbase as evolving into a holding company over time, but I could be dead wrong on that. So, you’re right. I think that over time, your trading platform revenue is going to go down. I think it’s going to be like stocks and be more free, or go towards that race towards zero. But when you have 10% of your net income or operating income, however they’re doing that investing, you’re turning into a Galaxy Digital or a Goldman Sachs to where you could be valued at, “Hey, we got a lot of swings at bat here. We’re going to invest in all these companies. They obviously have a great pulse on the market, and they’re the only game in town.” One of the only of games in town, from a standpoint of a lot of institutional money, can flow into Coinbase.

Frank Curzio: Clearing, clearing.

Daniel Creech: Yes. And it can flow into Coinbase a lot easier than it can Galaxy Digital right now, which is over the counter stocks and all that. I think that’ll all change, but it’s hard for me not to… If somebody’s like, “Hey, would you buy Coinbase here?” Yeah. I’d probably have exposure to it if you’re bullish on crypto and you don’t want to play crypto in general. I don’t know why you wouldn’t, but this is more of an interesting stock to pay attention to. I was going to buy it when it came out, but then I thought we were going to recommend it. I haven’t bought it since we sold it. It did kind of spike on us a little bit, but it’s a great thing to look at. Yeah.

Frank Curzio: So my question to you is, why buy Coinbase as a play on crypto when you could buy Bitcoin, and Bitcoin’s easily outperforming it?

Daniel Creech: Because, that’s a good question. You would want to, you have to buy into that holding company mentality. So, “Hey, what-“

Frank Curzio: Yes. And the innovation.

Daniel Creech: Yeah. And, that’s a big, I mean, you’re betting on management to make good decisions. That’s not, I’m not saying that’s a layup. I’m simply saying how I would view that is to say, “Okay, you got this core business model on your trading, and you’re doing these other products. But, I need to bet on you taking some of that profit and finding the next whatever, and it blowing up.” And then all of a sudden you report earnings and you say, “Hey, oh, by the way, we got $10 billion in this stake that we’re going to IPO later on.” And it’s more of a holding company like that. And that’s a long way away.

Frank Curzio: And this is my opinion, right? Obviously, but I’ve had two of my contacts who would deep in crypto that helped me tremendously get in front of trends that were incredible. And, it resulted in amazing performance and some amazing points in our Crypto Intelligence newsletter, which we just got a lot of people signed up to, which I’m very happy about. But they were disagreeing with me when I said this, because I posted this on Twitter, @FrankCurzio. And they’re like, “Frank, what are all these shit coins, and Dogecoin, that’s what you’re trading.” But the big money really comes from those institutional trades. But the one thing that scares the hell out of me, is the SEC has really, really fallen behind on this. Has fallen behind tremendously. They have to come out, right? And they did this for Ripple. These things are securities.

Frank Curzio: They’re securities. They trade like securities, they’re securities. They meet the definition of securities. Right now, if the SEC comes out and deems these securities, what that means is they’re going to have to show their financials, show their cash balances, show the insider holdings, they’re going to have to report financials. None of these companies will do that. They’ll run. They’ll run to Binance. They’ll run to overseas platforms immediately, which a lot of these things are already trading on, and they’ll come off Coinbase immediately. But the SEC is going to do that sooner or later. Why they didn’t do it yet? I don’t know, because that’s going to make the security token industry absolutely boom. Right? Because that’s going to be a great outlet, because these are for the companies that are doing it right.

Frank Curzio: Now, you could raise money, come up with ideas, say, “I’m building a metaverse platform and I’m hiring a guy where after he builds it, I’m going to fly him to space. And then, when we get back down, we’re going to build an EV,” and say all the right buzz words. And my valuation would be tremendously high. Put this on a platform, create this. You need a utility token in order to come to space with me, and to go into my EV that I’m going to build 15 years from now. And then, I could sell that whole entire thing, make a fortune. And I don’t have to report anything right now. That’s this industry. That’s the shit coin industry. And it’s very, very dangerous. It’s great technologies. But, the coin itself doesn’t, is not attached to the company a lot of times. You have to have a utility feature. And, if you don’t have a utility feature, you’re not using the coin. So these guys are going to keep producing coins, right?

Frank Curzio: So, it’s dilution, dilution, dilution, dilution, and they’re selling into the market. They’re making a fortune. You have no idea who’s selling, when 10% of reporters have to report with the SEC. That’s one of the things that scares me right now. And, the SEC, just based on what they did with Lend, with their Lend division. They don’t like Coinbase. It’s clear. They don’t like them. It’s going to be interesting to see how this plays out, but the SEC, the more further they fall behind, the more crypto gets integrated into the world. Everybody’s getting, is being part of this now. And, it will be interesting to see how they do this. And then Coinbase is, again, they took out the proper licenses to go to security tokens. They’re going to do that. If they see the future, they should do that.

Frank Curzio: But the SEC has a lot of control here, with a lot of these garbage coins. And if they deem securities, which they are securities by definition, watch out, because you’re going to see a massive exodus of these names. Everyone’s going to be forced to sell them, and buy them on other platforms. But, Coinbase could be in a lot of trouble if that happens. And that’s why they really need to innovate and find other ways to make money off their crypto. I don’t know, that’s just my two cents, but.

Daniel Creech: Well the SEC can be bought off. And the time to buy this stock on that would be, as soon as they announce the fee that they have to pay, you could buy them because they hate uncertainty. So, just like Ripple and everybody else.

Frank Curzio: Thanks for saying that, with my company and the SEC. They’ll can be bought off. We’re going to get a knock on the door.

Daniel Creech: Oh, that’s silly. Did I say bought off? I meant contributed campaign still.

Frank Curzio: I know, with fees, and everybody else paying those fees and stuff. But yeah, I mean, you pay your fees, you get slapped on a wrist. Again, they have slush funds for this stuff. Most of the financial companies where, and that if done, admit no fault. It’s just, it’s a big game and everything. So anyway, want to get into two more things here? I don’t know if you want to talk about the Pfizer thing, which I thought we were playing around with that, which is funny with the vaccine stuff, with Pfizer CEO’s coming out.

Daniel Creech: I don’t know if you have a picture of it with the meme. That was just so funny. Just, I just when I saw it, I thought it was fake. And then I thought, “Man, maybe this is real.” It just cracked me up that their corporate account put a Twitter post on basically trying to insult people that are not even anti-vax, but I don’t know. It just came across very weird from a huge giant pharmaceutical company doing that. And then, how they had to basically, and I should know more about this when it comes to Twitter, but you can turn off the ability to comment on it, Frank. So, you can shut that. So why would you do that if you weren’t getting made fun of and poked fun of? So they, social media took the Twitter, or the meme and ran with it, or the post and ran with it. And, it’s just hilarious PR. So, you have to have a picture of it though. I’m not, I’m doing it.

Frank Curzio: I did, I put it up.

Daniel Creech: Okay. I was going to say, I’m doing a terrible job about this.

Frank Curzio: No, no, it’s funny. It is funny.

Daniel Creech: If you’re not seeing it, actually.

Frank Curzio: I just like the fact that, I don’t know how to pronounce his last name, Albert Bourla, or whatever that this, the Pfizer CEO came out and basically said that, “People who spread misinformation on COVID vaccines are criminals.”

Daniel Creech: Criminals. Yeah.

Frank Curzio: They’re all criminals, says the guy with the company that got how many fines by the FDA, and tried to buy off the FDA. I mean, how many fines? Just go look at it, just Google, says the guy.

Daniel Creech: Now this is how gossip starts.

Frank Curzio: Billions in fines that these guys paid, to actually pay off the FDA.

Daniel Creech: I’m going to be guilty here, but this is how gossip starts. But, they hold the record for the largest fine for pharmaceuticals. Is that right?

Frank Curzio: I think it, yeah.

Daniel Creech: I think that-

Frank Curzio: I think it’s close to two billion, or whatever, but.

Daniel Creech: Because, somebody put a great question out that says, “Remind me, who has paid the largest pharmaceutical fine in the industry?” And I believe it was Pfizer. That was like the-

Frank Curzio: And it was Pfizer. It was great. So, yeah, but everybody else is criminal. Criminal. If you report, and again, you’re reporting misinformation, if you say that, yeah. Like, look at Aaron Rodgers. Look what happened to Aaron Rodgers. I mean, cast out of society because he’s not taking the vaccine. By the way, he got the vaccine from someone that’s vaccinated. Everyone in the NFL is vaccinated. Oh, I mean, he got the COVID from someone who was vaccinated. Right? So, when I look at what has taken place and how they are going after this guy, and he says he’s allergic to something with an mRNA vaccine, and he didn’t want to take it. And he wants to have kids and he’s not sure. And I don’t blame him, because there isn’t enough data. Isn’t enough long term data on this. I’m just a believer.

Frank Curzio: And he says, “I’m not anti-vax,” or whatever. I’m a believer that I was forced to get it. Forced to get it, if I want to go to The Consumer Electronics Show and travel, I’m going to Baltimore next week. In these areas, I have to have the card. But still, why haven’t we come out with studying in the US, showing how long we have these antibodies for, for the people who have COVID? And how many people have got Delta that had COVID, because I don’t know too many people that got COVID twice. And if you know people that have COVID twice, it’s very few and it’s probably because they got a false reading. So seeing people get COVID twice, it’s not off. It’s people who have vaccinated, who never got COVID. Those are the people that are getting it Delta, and even the people who are non-vaccinated.

Frank Curzio: So, why don’t we have this data? Why can’t we publish it? I mean, we all want to know the facts, right? And just come out, we know that the vaccine is safe. It is safe. But if you don’t have to take it, like kids, why would any kid under 11 years old, under 15 years old, need to take this at all? Not to mention, if you go back to Aaron Rodgers, could you name a professional athlete? Could you name one professional athlete that’s died of COVID, that’s playing, that’s in any sport? I mean you would think they’re dying like crazy, right? For them to go after him. There’s nobody. You’ll see athletes who was 75 years old, and you have Colin Powell. Colin Powell had what, pancreatic cancer. He had, I mean, he was on his way out. Colin, but he got COVID. He died of COVID.

Frank Curzio: So I mean, when you have that, the misinformation that’s being spread, I hear you. But, again, nobody cares about facts. Nobody cares about that stuff. If you get vaccinated, get vaccinated. If you don’t, you don’t. But to go after this guy the way that the left is going after him, and the mob’s going after him, is absolutely crazy. I

Daniel Creech: I don’t think it’s so much about the vaccine comments. I think it’s more about his hair and his style this year in football. Hell, I saw a picture of Aaron Rodgers. I don’t pay very close attention to the NFL. And I was like, “He’s got a new look going on, man. He’s got long hair, and a man bun, and all kinds of stuff.”

Frank Curzio: I’m not the biggest fan of him.

Daniel Creech: Dude’s awesome though, I mean, as a quarterback.

Frank Curzio: I think he’s an unbelievable quarterback. I just, I think it’s personality. I’m not really a big fan of him, but I support him on this where, man, you’re going after this guy, you’re going after this guy, whatever.

Frank Curzio: But there’s one last thing I want to talk about, which is Amazon. Amazon’s stock got hit after earnings and they missed earnings by a lot. And right away, traders, Wall Street are quick to sell the stock. But one of the things that I could teach you right now, and this is a great lesson is, you have to look at why a company missed. If they missed because they’re seeing less demand, that’s not good. Okay? But if they missed because they’re spending more money to invest in something, that’s going to create a ton of value in the future, it’s an amazing buying opportunity. Amazon missed because they spent a ton of money on what? The most valuable asset you could possibly spend in this market, and that’s people. To pay people, to make sure they’re fully staffed, to pay them more money, and going into the holiday season. Amazon did not miss a beat during COVID, one of the few companies, and demand I would say, quadrupled for them. Everyone, you could go down any block and you see Amazon packages everywhere, right, during COVID. The first five, six months.

Frank Curzio: This is a great investment. And what we did, we recommended Amazon a long, long time ago, right? 2017. And it was up, I think it’s up like whatever, 225%, whatever it is, Daniel. Right? So, and this is a Curzio Research Advisory, and the stock hasn’t moved much in a year, while the rest of the FAANG names are up. And now this pullback, I actually issued a buy rating. So, you should buy it now, even though we’re up. And we were talking about that, and we wanted to go over that lesson there, Daniel. I’ll let you take it from here, because I just wanted to set that up. But we talked about this and you thought it’d be a good idea to explain on the podcast. That’s why I’m going a couple minutes late here. Go ahead.

Daniel Creech: Yeah. It’s just, it’s a macro picture and I’ll be honest. It’s difficult. I find this difficult as an investor, and a stock picker and analyst, because when you feel, there is emotions in investing. And so, when you’re right about something, when you recommend something or you buy something, and your thesis is playing out and the price is going up, that feels good. Don’t get me wrong. It’s great, but it can be mentally tough to continue buying that and not feel like, “Hey, now I got to go look elsewhere,” or “Hey, I got a big winner. Now, if I buy more, increasing my cost basis, my gain’s going down a little bit here.” And you kind of just reopen that box of emotions. However, you have to continue to stay focused on your thesis and to your point.

Daniel Creech: Yeah, the stock pulled back. It hasn’t done anything in a year, but looking at the price to earnings ratio, yeah, it trades a high valuation. Probably what, 80 times earnings. But it’s growing like crazy. It’s one of the best brands and you got to focus on the business. So look, it’s in cloud. It’s going to continue to dominate cloud, which is a high margin business. It’s operating income is, Frank, I don’t even know a goofy analogy to try to even be funny about this, but who else can guide for two billion in losses, or 10 billion in gains in a given quarter? I mean, you talk about just the opportunity and the many ways to win. So, and over time, if you look at the greatest companies, they continue to move higher because they continue to operate and produce results. Amazon is just one of those stapled companies that, “Hey, yeah, it looks great that we got a big winner in the portfolio.”

Daniel Creech: And now, if you buy it today, that didn’t help you if you’re buying it today or if you’re a new subscriber, but it’s a bigger lesson on, “Hey, when you have great companies and your thesis is intact, you want to continue buying these over time.” And one more, and I’ll get off my soapbox here, unless you’re retired and drawing income out to live off of, you need to have the mindset of saving every single month and investing. You don’t have to buy the same stuff every single month, but continue to have that mindset of, “Hey, I got to save.” You want to continue to invest over the long-term. You just don’t put some money into one thing and then let it forget. It’s okay to continue buying as long as your thesis is intact. And I think this is a great segue or a great, easy opportunity to point that out.

Frank Curzio: Yeah, no.

Daniel Creech: And, and nobody will listen, because it’s boring and it’s Amazon. It’s not exciting.

Frank Curzio: But, that’s the thing. You have to be careful here, because most young investors I see are not interested in making money. They’re not. They’re really not interested in making money. I mean, for the last 10, if you take the last 10 years of people asking me, “Frank, you follow stock market, what stock you like? What stock you like? What stock you like?” And, a lot of times I told them Amazon, and they’re like, “Amazon? I could buy that by myself,” and they didn’t buy it. They’re more interested in the game. They’re more interested in that gambling aspect. They’re more interested in, and a lot of times they’ll hit, no buy options and they’ll hit, and then they wind up losing their money because it’s gambling.

Frank Curzio: It’s just like a gambler with, you bet the one o’clock games and you say, “I really love this game. This is a great game.” And you win. You’re going to bet the four o’clock game, because you’re a gambler. You’re going to, even though you didn’t even look at the four o’clock game, you’re like, “Wow, hey, I’m up.” And it’s the mentality there that buying Amazon, and we’re talking about Amazon. It’s split, just the basis is probably, where is it? 3,300 today, and probably around 400, 300, 400. Again, people thought that was too high. So, you have a 10 X winner easily. They don’t want that. They don’t want to buy and hold. They want to trade. They want to be in the game. They want to be in these meme stocks and going up and down, and buying obvious stuff like that. You have to get your ass kicked to get out of that, unfortunately, because otherwise when you’re making money and you bought Bitcoin, you think you’re in shit.

Frank Curzio: But that’s the biggest lesson here is, buy stocks that make sense. Even if they’re big, it doesn’t matter what their price. The percentage is going to be the same. Whether you put a thousand dollars into a stock at, that’s three cents or a thousand dollars in stock at 3000. A 10% gain’s, a 10% gain on your money. But just most people love the penny aspect and say, “Wow, this stock can go from a dollar to $7, and I can make a fortune,” but to get them out of the mentality is very, very difficult. And you usually have to go through losses. And, the other thing that you said with Amazon is, being able to buy it now, and you might look at it and say, “Wow, we’re up like 225%.” Okay, that’s the past. I mean the stock could go up a thousand percent in two years, and be cheaper than it was when you first bought it, if their earnings are surging higher than in that.

Frank Curzio: And it’s something you have to realize, because it’s hard, mentally thinking, “Wow, I missed this.” That’s one of the biggest mistakes I ever, I missed a stock. I missed a stock. I missed a stock, and it goes higher, and higher, and higher. You might have bought Ford and said, “I missed it at 12. I missed it at 16. It came out with good results, and now it’s 2021.” You want to be able to buy these names and that’s a great segue into this, Daniel. And I’m glad you brought that up, because we are launching a new product, and it’s Big Money Trader, and it’s by Luke Downey. And that’s what this newsletter focuses on, because that’s something I think we’re missing here at Curzio Research, where his Big Money Trader follows the big money. He’s doing great. That’s a low price newsletter.

Frank Curzio: Now, it’s drawing option strategies on top of this, buying a lot of these growth needs, but you’re going to see names show up in that portfolio, names that you wouldn’t think of buying. And some of them are good, and some of them you have to worry about, right? I wouldn’t be telling you to buy Rivian here, though it’s probably going to go higher after it opens. But this is a product and anyone that has bought his front end product, his old price product, The Big Money Report, is probably going to subscribe to this because the performance is great. And you’re seeing names that, and I covered this in his interview last week. You’re singing names in there that you probably wouldn’t buy, because you’d think you missed it. And that’s how the big money is made for so many investors.

Frank Curzio: So, and it’s one of the hardest things to do, buy stocks as they’re going higher, or buy these stocks that are in big growth trends, or buying stocks that are expensive. They’re expensive for a reason, they’re expensive because they have massive, massive growth potential. That’s why Rivian’s coming at this valuation. They think they’re going to sell two million cars by 2030. Maybe they do. If they don’t, it’s wildly overvalue, but maybe they do. I thought Moderna was overvalue at 30. And then, I didn’t know, every one of the world has to get the shot, and that stock went to 400 and pulled back now. But it’s something to think about, and Big Money Trader, we’re coming out with that, probably next week. I’m very, very excited about that product.

Frank Curzio: Curzio One members already have that product. So, you offer beta versions. I guess, two or three of them. We get feedback from them before we launch a product. But we’re very excited to launch this product. I think a lot of people are going to be interested in it, because it’s something that I don’t out of newsletters cover. You’re going to see lots of names show up in that portfolio. Names that you normally wouldn’t buy, because you think you missed. And when you see the performance and what Luke has been doing, for his 15-plus-year career, I’m very excited to launch that thing. But that goes into the whole Amazon argument, Daniel, as well. So yeah, I’m glad you brought that up. I’m not saying it to pitch the product, but I know that’s something, even based on the emails and doing this a long time, where people miss those moves. And they believe they miss them, and you didn’t buy Amazon at a thousand, you didn’t buy Amazon at 2000. It’s 30.

Frank Curzio: See, you think you’re missing. You’re missing, missing. Not only can you be buying these things on the way up, but you’re getting into the biggest growth trends. And, he has a system where he is not just following the big money, investing alongside the big money. I think it’s going to do very, very well. But thanks for bringing up Amazon, because it is, it’s something, it’s an investment lesson I think everybody can learn.

Daniel Creech: Yeah. And, like I said, I mean, it’s fun for me to kind of grow up and be honest or share on the podcast. But, yeah. I mean, those are things that you deal with, and that’s just part of it. So investing’s difficult, but just keep it simple and sometimes stupid simple, to my level, Frank.

Frank Curzio: No, I hear you. I hear you, man. So listen, thanks so much for coming on, Dan. I appreciate it. That’s it for me. We covered a lot. I’ll be back tomorrow with a great, great interview. So, definitely tune in, but I say this all the time, really mean it guys. Appreciate all of the support, everything you guys are doing. The brand is growing. It’s getting bigger. It’s a lot of fun right now. It’s cool. And yeah, I’m just looking forward for the next chapter in Curzio Research, which is cool. Which also includes our token trading on the tZERO platform, where anyone could invest in our company and have an equity stake in our company, just like a stock. That’s going to be within the first couple weeks in December. We’re really looking forward to that, and getting that done. So guys, thank you so much. Couldn’t have been there without your support. And I’ll see you tomorrow. Take care.

Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely 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.

Editor’s note:

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