Wall Street Unplugged
Episode: 1023March 29, 2023

Why the ‘drop’ in home prices won’t bring down inflation

It’s great to be back after a chaotic week of moving into my new house…

Today’s podcast starts with a rant about the lazy work ethic here in Florida. I share my recent experience trying to get my TVs hooked up in my new place. I know it sounds petty… but I plan to get a little revenge on the company that was supposed to help me. 

Turning to the markets… stocks are struggling to find a direction following the recent banking crisis. I highlight crypto’s incredible performance (even as regulators target the sector)… and the problems that will result from the government’s crypto crackdown. 

Next, I share some perspective about the recent “drop” in housing prices… and why you shouldn’t believe anyone who says it’s a sign of falling inflation.

Plus, I highlight why art makes a great hedge against inflation… and a revolutionary platform disrupting this $1.7 trillion industry.

I also break down which stocks to buy—and avoid—as we head into the next earnings season… and how to stay invested while protecting your portfolio from the volatility ahead.

Finally, I highlight two “no-brainer” investments as the Fed keeps printing money. For more of my favorite buying opportunities—including a weekly Dollar Stock Club pick—subscribe to WSU Premium. At just $10 per month, it’s an incredible value for anyone trying to navigate this volatile market.

Inside this episode:
Frank Curzio
Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 12 million times.
Transcript

Wall Street Unplugged | 1023

Why the ‘drop’ in home prices won’t bring down inflation

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 March 29th. I’m Frank Curzio, this is the Wall Street Unplugged podcast where I break the headlines and tell you what’s really moving these markets. We’re back in the saddle again.

Want to thank Mr. Daniel Creech filling in last week. Hopefully you all gave him some crap, sent him crazy emails. That’s your job. Always have fun with the new guys. Although Daniel is not that new anymore. He’s used to the podcast. My partner Wall Street Unplugged Premium now, but he filled in because I finally, finally moved into my house.

I know I’ve been talking about this forever. Probably boring the hell out of you. I have to tell you for a second. For one second. I almost forgot I lived in Florida because on Monday I had a vendor coming over to install my TVs. These guys were already at my house. They installed my alarm, wired my house with speakers, put a projector screen, they had to come back to install my TVs mounted to the walls and these TVs were still at my old house, so they couldn’t do it on that day. They were at my old house because I couldn’t take my TVs off my walls and bring them to the new house because my new house wasn’t ready.

My home builders, as you know, as everyone knows, who built their own house, are still taking forever, now we’re living there. They still have people coming in and out of our house, which is amazing. So how to tell them, “Hey, we’ll have the TVs there another day.” Anyway, because of this podcast, you probably know this, but I’m a big TV guy, get into theater rooms, surround sound. This is my man room, which I never had before. Got to teach me how to use everything, hook up everything, which I know most of this stuff, but this is really sophisticated.

I even rented a van so I could pick up my TVs for my house to transport them because TVs nowadays, I mean you go to the Consumer Electronics Show like I’ve been going to every year they’re thinner and thinner and thinner. If you breathe on them, they crack and they’re done. They don’t even crack. You just tap them and a line comes through and the TV’s done. So let me transport them myself. I’ve rented a van, so I took off Monday. Really excited. They were coming at 8:00 AM could probably be there the whole day. I was going to ask them questions. Last time they were there I was having fun asking them so many different questions, but seriously, really, really excited.

And then what happened? 8:00 rolls around. Then 8:15, then 8:20. My phone rings and they call. And a girl says “Hey Frank, how you doing? Sorry, but we can’t make it today because our tech guy called in sick. Last time they came with three or four tech guys. But they say one tech guy called in sick and it wasn’t like this covid thing or whatever. He just called in sick. I could tell you that the conversation did not go well.

I literally went off on this person and I took the entire day off, planned around this whole entire event, have family coming in, now I don’t have any TVs installed, and they canceled. They didn’t cancel the day before. They didn’t cancel two hours before they were supposed to come. They canceled after they were scheduled to come the whole entire day. Because this is an hour away from my office, so I planned everything. I said, “Okay, I can do different things.” You plan the whole day and the whole week around it saying, “Okay, Monday I’ll take off, we’ll do this. But now they’re like, oh, we can’t make it and we’ll be there next Monday.

And for me, just again, I forgot I lived in Florida. I guess this is kind of normal. They just don’t show up. They don’t. I’m surprised they even called, but I couldn’t believe that. I said, “No effing way. There is no effing way this happened.” My kids are going to school and my wife’s driving. Again, lots of plans, lots of moving parts. And for someone to call when they’re supposed to be there and they just don’t show up. I’m like, “Is this person fired? I mean, usually you have to call in ahead of time when you call in sick, they just call in sick. How come you just letting me know now?”

“Oh, sorry.”

I said, “Sorry. That’s it. You’re just sorry. That’s it. So what do you do for me? Do you repay me the money I’m losing for not working today? No, of course not.”

“Sorry. We’ll be there Monday.” That was it.

But again, for that one second, I forgot that I live in the lazy piece of I won’t curse. Loser, working state. Everybody hates to work here. It’s amazing. And now the population’s growing like insanity, crazy in Florida. I know you’ve seen the same thing in Texas, crazy. I mean you’ve seen the statistics too. You’ve seen where the home prices are coming down. I’ll talk about that in a minute. Where they’re coming down from places that people are leaving, that they hate, San Francisco, Seattle, Portland. Look where Miami prices are. There are 13, 14%, Atlanta is through the roof. If you look at almost any place in Florida, through the roof.

If you live any place outside of Florida and you want to make a hundred grand a year, come here, you could do that cutting lawns because nobody shows up. Nobody ever, ever, ever shows up, ever, ever. This is like a hundred percent guaranteed. I mean this isn’t like, oh, sometimes people show up, oh maybe, never, never. They may show up once or twice and that’s it. That’s it, then they’re done. I mean, it is so consistent and it is the culture here.

But how do you run businesses like this? I just don’t know. And New York, I mean they would be put out of business. There’s always grinding. If someone drops the ball, someone’s there to pick it up and run with it. Here, no way. To like, “Oh, we’ll come next Monday.” Like the final four is not this weekend. Are you out of your mind?

“Oh, we’ll come next weekend. Oh, on Monday we’re going to miss the weekend.” You can have family coming in and when I’m not at work, there’s no TV’s working, nothing.

Now for me, I’m normally not a spiteful person, normally, but this time I’m actually going to enjoy being that way. Because what I needed to do, is I had to get the TVs installed. And I called someone else that was working on the house and said, “Look, could you install these.” And installing them look, is a matter of putting in screws. You have to get the beams and stuff like that. You don’t want to mess it up, especially if you have flat screen, nice TVs, right? And it’s not like they’re great and beautiful, but still they’re heavy. If they fall, they done. So you really want to get it done professionally, plus they’re insured. And I had a guy come over and he installed in the same day and he’s going to finish the rest of it on Wednesday.

So now the original guys are supposed to come over. I’m not telling them that. I’m going to have them come over. I’m going to be spiteful. I’m always a nice guy and I want to be an asshole for once. I’m always a nice guy and it feels good, right? It’s refreshing when you’re like that sometimes. And this is going to be really refreshing when they ring my doorbell with their whole crew and they’re like, “Okay, we’re ready.”

And I’m like, “Oh, you know what? I’m good. My TVs are done. Sorry.”

I know it’s spiteful, it’s childish. But man, that’s going to feel so good. That’s going to feel so good. And I don’t care if you disagree with it, but oh man, I can’t wait to see their face, it is going to feel so good. It really is. It’s nice to be a child sometimes, right? But I mean maybe that’s what they need to see because they don’t realize, and again, I don’t want to curse here, but I mean you’re taking the whole day off. The whole entire day, your schedule from early through 5:00 PM, 6:00 PM. You have the whole house, teach me how to use everything. Really. Are you kidding me? And you canceled after the time you’re supposed to be there? I’m waiting for you. I’m waiting for you. Are you kidding me?

But I can’t wait for them to ring the bell. I just can’t wait. Sorry. It’s so bad to say that. I know you guys are probably like, “Oh, you’re crazy busy. Don’t waste your time.” No this time I’m going to waste my time. I’m going to really, really enjoy this because this has happened to me so many times, so many times, so many times. And again, I feel like I’m always a nice guy and always giving people the benefit of the doubt. I don’t want to be nice. I don’t want to be nice. It’s nice not to be nice. Sometimes it’s just a little bit.

Anyway, speaking of nice, it’s nice to be back in the hot seat where we’re seeing the markets have absolutely no direction. Does anybody know what’s going on? I’ve been doing this for 30 years. I have no clue. The Fed has no clue.

Fed has absolutely no clue what’s going on. No clue. How the hell’s the south market now coming down. Earnings are still, haven’t been revised. They’ve been revised lower, but they still have to come down a lot more. I mean, expectations are high and where are you going to invest in. I mean the banks were really, really bad. You got to get out of them. Holy cow. Special commute. Now all of a sudden they’re good. The Fed’s back stopping them. Tech was great over the past month. This is the place to save, heavy good balance sheets. Last two days it got wrecked. Oil. Oil was terrible. Horrible. Now it’s going back up. Not just the oil price. Oil price was at $73, $74 fell to sixties. But oil stocks have really rammed tire, outperform spot.

Yeah, Bitcoin is good and bad on the same day. Hey, what do you have? Lawsuits being filed everywhere against Binance. You had Paxos, you have Coinbase, the Wells Letter.

You guys aren’t familiar with Wells Letter. It’s basically this. He’s saying, “Hey, we’re coming after you and we’re going to fine you.” That’s the last step, Wells. I don’t know why they have that. It’s kind of like they just, “All right, here’s a Wells Letter, okay?” And then a couple weeks later, “Now we’re going to fine you.” And just, it’s the way it’s been like for a hundred years and they keep doing it. But they’ve come after Binance, Paxos, Coinbase, every crypto bank said, “No longer do business in the US.

And you look at the government, you say, “Well, the government’s trying to regulate the sector.” No, they’re not trying to regulate the sector. If they were trying to regulate the sector, they would’ve provided rules. There’s no rules.

If you’re looking at Coinbase, you’re looking at Paxos, you’re looking at Binance. Even CZ said this in one of his tweets. I mean, and I know from being in this industry and knowing the people behind the scenes here, they’ve been talking to the government for the last two years saying, “What do we need to do? We’re one of the big players in the industry. What do we need to do? Tell us what to do.” And the government was kind of working with them.

And then mid-January the government said, F you and we’re not, you can’t talk to us anymore. This is what really happened. Now they’re going after everyone. So they’re not trying to regulate this industry. They’re trying to wipe Crypto off the map.

I mean, you don’t go to a bank that’s fully regulated, that does not have fraud or fraud has not been proven. Think about that. A bank where fraud has not been proven.

If you look at Silver Gate and you tell them that you can no longer accept deposits ever again. You forced all the, as soon as the government said that, all of their big players, Coinbase, Paxos, they all had accounts there. That’s where they did the banking. They all left the same day.

It was like in February. Same with Signature. You can’t do business. You checked off all the boxes, but too bad. No, all the major banks. No, you don’t do that when you’re regulate. You’re trying to destroy crypto.

Yet Bitcoin and Ethereum have held up well Bitcoin’s what? 27,500. Ethereum’s 18 hundreds below 1,000, Bitcoin was 15,000. It’s 27,500.

Now the rest of the world is going to innovate much, much faster. Again, this is where the innovation’s coming from. The US is just too stupid, and for our regulators to understand this. To actually go in and regulate the right way, which is an industry that has to be regulated. Of course it has to be regulated. You could be going after so many companies. Is Coinbase the one that you’re going to go after, the one that’s trying to work with the government, the one that’s saying, “Hey, we’re in good standing here. We’re doing the right thing. We’re a publicly traded company.” Just like Signature Bank, publicly traded company.

The crypto, back and forth, back and forth, back and forth. Should I invest, should I not? And we had super high rates. Remember those days? That was such a long time ago. Three weeks ago. Then they crashed when the banking crisis hit and everyone said, “That’s awesome.” A banking crisis is absolutely awesome because every single time it causes deflation and that’s exactly what we need. So they spun that into a positive and that theory lasted for five days. For about five days. Now rate’s starting to pop again. Two years back over 4%, 4.1% to be exact.

You’ll get it past 30 days. 30 days. The Fed, 30 days. Look at the Fed. Went from disinflation high-fiving, we’re cool to holy shit inflation’s coming back to now the Fed’s like, “We don’t know what’s going on.”

Okay. We can’t really say that. We’re going to say, “We’re going to be data dependent because we have no clue what’s going to happen. We didn’t see the banking crisis. We fell asleep at the wheel. We didn’t see this bank crisis happen. We had no idea what was going on. Even though we raised rates so fast, we just didn’t even see this.” Even though if you look at how much deposits are insured, you could find that information out. An analyst could find that information out in about 15 seconds of every bank. If you have Bloomberg or Capital IQ, it’s available for everyone to see. It’s available for the bank.

It’s not, this isn’t the credit crisis. I mean nobody had a clue is going, these guys are hiding everywhere, these banks. And synthetic, of synthetic, of synthetic loans and they were covering themselves and they all cover themselves through AIG. Nobody knew AIG had this much. I mean there was stuff going on nobody knew. This is stuff that’s, this is the Fed’s job. This is a bank regulator’s job to understand what was going on. And they missed it. They clearly missed it.

So now it’s not like, “Oh, well are they going to lower rates sooner? Are they going to raise rates soon? Are they going to continue to raise rates? What’s happen?” We’re data dependent because we have absolutely no clue what’s going on. Absolutely no clue. And they have had no clue what’s going on. Just flip-flopping back and forth. Transitory, it’s not transitory, it’s transitory. It’s not transitory.

We’re going to raise rates right away and then we’re going to lower rates right after we raise them. Seriously. How about you don’t do anything? Why raise them really, really fast by the most in history and then a couple months later we’re going to start lowering them. That’s what the Fed futures is pricing in right now.

How about you do nothing? Let the markets be themselves. Let shit work itself out. People are too aggressive, then they deserve to fail. But not if you’re a connected bank. Absolutely not. You’re not allowed to fail, not if you’re connected. I don’t care if you don’t have a Chief Compliance Officer, you do have a Chief Diversity Officer. That’s more important, Silicon Valley, much more important. But we have to bail these guys out. Of course you have to bail those guys out. Absolutely. Good job.

Look at housing. Housing stocks have soared. Yet the Case-Shiller Index for January was just released showing that home prices fell for the seventh straight month. Awesome. Means inflation’s finally cooling. A big deal, since housing, especially rents, are a big component of CPI. It’s over 30%. But let’s take a closer look at this because fact, home prices have declined for seven straight months. Fact, the percentage of that total decline is 5.2% from their June highs. Yet the average home price is up 37% from January, 2020. That’s over three years. You mean to tell me that a 5% decline in home prices, you showing that inflation is cooling?

I mentioned earlier you have cities like San Francisco, Seattle, Oregon, Portland, seen home prices fall sharply. You can only wonder why people leaving these states in droves, you could determine why they’re doing this. Depending on if you’re a Liberal or if you’re a Conservative or whatever, you have a different opinion of it. But it’s fact. People are leaving these cities in droves. That’s why home prices are coming down.

But when you take the whole pie and you look at Miami, Miami’s up, price is up 14%, Tampa 11%, Atlanta up 8 1/2%. So should we celebrate this number like it’s the end of inflation. Yes, it’s the end of inflation. It’s great. Seven straight months. Jeremy Single’s going to go on TV and, “I told you. I told you we have deflation now.” Like the guy, does that guy pay a bill? Does he buy anything? I mean seriously, there’s not one bill that that guy is paying that’s cheaper than it was a month ago, three months ago, a year ago. Based on my data, that would show in. Where? By a 5% decline in home prices.

This means that the Fed should be turning around and lowering rates. Really? You out of your mind? You really think there’s no inflation in the market right now? Are you crazy? Should we celebrate this? Again, it’s the end of inflation and things are great. The Fed is going to suddenly start lowering rates. Really? You think the Fed’s going to start lowering rates anytime soon?

And then we get to earnings? I have no idea, and this is what I do. I love covering earnings. I have no idea how companies are going to meet their earnings estimates going into this earning season. I have no idea. They’re going to be buying back stock. They’re cutting costs as much as they can and yeah, you might be able to meet them. But what about the top line, right? So you’re going to see the top line go down and maybe the bottom line hang in there for a little bit, but you’re seeing demand destruction. You’re seeing companies cut back, they see it coming. I’ve see it across all industries. You’re not seeing it in jobs, you’re not seeing it in services. But man, you’re seeing it in technology.

And people are thinking. NVIDIA is like, oh, we are 7 trillion marketing, 10 years AI. NVIDIA is a god. They’re going to grow. Good luck. Good luck with that thesis because man, the tech companies are raining and spending like crazy. And they’re talking about NVIDIA like it’s going to top their all-time high, yet revenues are still off 20% year over year. Good luck because man, expectations for the stock trading at 60 times forward earnings. Man, they better get 30% of that pie, because if they don’t, especially going into the next couple quarters, showing we’re seeing massive growth in AI. And gaming bottomed like they said. Even though every gaming company if you cover didn’t say that, they don’t believe it’s bottomed. NVIDIA does though. Interesting.

But what about earnings? Have been revised low but not nearly enough. Past month, they haven’t been revised that much lower. They’re still exceptionally high. Exceptionally high. So this crazy back and forth, even in sentiment indicators, which is showing extreme pessimism, which is supposed to be a bullish sign, a contrarian indicator. Yet, do you want to buy stocks in this market?

Because we all see earnings come down, they’re going to come down even more. We have a debt ceiling debate coming, where we could see America’s credit rating and get downgraded, which is going to happen. It’s going to happen. They’re not going to come to a solution. I hope you know that. It’s not a terrible thing since this would be really, really deflationary. Good luck with the community banks, when that happens, to get that crisis covered. Good luck. I mean they actually say, they actually come out and say that, “The US is going to think about the US. If we don’t get this deal done, the US is going to run out of money.” Just let that sink in for a minute.

The US is going to run out of money, right? We’re supposed to be stopping the printing presses, right? We’re supposed to be halting the printing. No more printing. And they’re telling us the US going to run out of. It shows you that no matter what, they have to print money. No matter what, they have to print money. And not to mention how China, Russia and Saudis are partying, hanging out with hookers, hanging out together, having fun high-fiving each other, right? Nobody’s talking about that. That’s a pretty big deal. By themselves it’s not a big deal, but together, that’s a pretty big deal.

Not to mention how our Federal Reserve really has no idea if the banking crisis is contained. It’s contained. It’s just limited to a couple of banks. We’re okay and credit’s supposed to happen well after that, it’s okay. It’s Deutsche Bank, it is still okay. Every week, it’s like another bank. This is a global problem. It’s not contained. Everything’s okay? Again, the days of the Fed printing their way out of things, the consequences are dire now. You don’t have that luxury with inflation. It’s like running in front of a freight train to buy stocks right now, all over the place. I mean really if you look at the markets, I kind of feel bad for people going, what the hell should I do? Should I be buying stocks, should I not be buying stocks? I don’t even know what to do, but it’s just back and forth. So how do you play this market?

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So how do we play this market? I can tell you a few things. One, own large caps, not just any large caps, but you have to own large caps and industry leaders. These are companies that have strong balance sheets, great management teams who always take market share during recessionary times. Also if they don’t do as well, a lot of these things are conglomerates and what are they going to do in times like this? They’re going to do what Alibaba just did. We’re going to split into a bunch of units and the stock pops 15%. And you may say, holy shit, that’s a lot. But I mean, what was it?

800 billion dollar market cap and it went below 200 billion. You got to try to extract value somehow, and that’s a great way of doing it for Alibaba. But you’re going to see a lot of companies do that. Saw AT&T do it a little bit. You’re going to see other companies do it, these conglomerate owned, GE did it recently. But in a market like this, when you’re not seeing the value, that value that you think your stock deserves or the company deserves, you may see that and you’re going to get that. That’s a catalyst for large caps because when they announced that, that provides more value and allows them to raise money for each separate division.

But great plays during recession every time, which is where we’re heading. Learn how to buy puts, sound like a broken record. Long data puts. We do it through our MFT product. Genia’s the best at finding great names to bet against over a nine or 12 month period. I watched some of her recommendations go up 5X plus when many recommendations wind up shitting the bed and when I say shitting the bed, they’re going lower and that means she’s doing good because she’s buying puts against them. She’s able to see this. Buy the right puts. It’s not that easy. It’s very easy for you to do through the newsletter. Just do exactly what she says. Go to your account. It’s very simple. But to find out, look at implied volatility, see which options are best or where the retracements go back to, how much the stock could lose and what’s the best value of those options.

It takes a little bit more than that. You need an analyst and she’s the best of the best at doing this. And people describe that service like crazy, they love it, mtoffer.com, if you’re interested. Again, we push it down to $500 for three months and a lot of people renew and renew and renew and renew it again. The last three months, not so crazy. Then you see the banking crisis, you’re like, holy cow. So all these stocks go down in February, terrible month. The next thing you know, you’re up in your portfolio because you own some of these. You’ve seen the value of these things really take off. It’s important. It shouldn’t be your whole portfolio, it should be 5%, maybe you go a little aggressive at 10%, depending on where the market is and how high it is.

Right now stocks are more expensive than they’ve ever been when you’re factoring interest rates since the.com era, think about that. I mean trading at 18, 19, 20 times total earnings is not bad when you have 0% interest rates. We don’t have that anymore. We don’t have that anymore. But with some of our recommendations, again, it’s not just, “Oh, I’m protecting my portfolio, you kick ass.” It’s a greedy product that you make a lot of money when companies shit the bed. And it’s a lot of fun because, and I’ll say it, okay, I say the truth, there’s no better feeling than making money when everyone else that you know and your friends are losing money. That’s what this product does. And I hate to say that, but deep down it is true. It’s not like, “Oh, we’re making money together and buy this and high-five.” It’s nice to say, “Hey, I was smart enough to do this.” And when everyone’s getting wrecked, you’re making a lot of money. And most people that do that keep quiet and not going to tell everyone, because someone’s going to like them, but it’s true.

And you need to protect yourself in this market, in this market that’s more uncertain and a credit crisis I felt like was more certainty. You didn’t really know what was going on, but you avoided it. You said, “Okay, I got to get out of this market.” You know, Covid, even before that, I was like, “You got to get out of this market right now.” This is a market where there’s things that are working and you’re like, “Should I stay in the market?” But it’s extremely, extremely dangerous.

“There’s just so much uncertainty. Uncertainty is a death ball in stocks” I said that a million times over the past 15 years I’ve been doing this podcast. Uncertainty is the worst thing to happen in stocks and it’s never been more uncertain than right now, especially with the Fed. The Fed really has no clue. The Fed has no clue what they’re going to do. You never see the Fed flip-flop on a monthly basis like they have the past 30 days, ever.

So you look at some of those recommendations, MFT will like to see a lot of these companies go lower, especially heading into earning season, if they warn. I mean you’re looking at a lot of these names. Expectations are very, very high, especially with some of these technology companies that have rebounded this year.

I suggest owning gold and Bitcoin, don’t fight each other. Both of you own it for the same reason. So own it for the same reason. You think of gold back and forth, is that the right investment? Now it should be good. It should be going good. Then a dollar goes up and dollar goes down. And again, an inverse relationship for gold back and forth. If you’re looking long term, look, the Fed is going to continue to print money forever. They’re going to, no matter what they tell you, they have to. And it’s evident just from the recent backing crisis. You think that that’s it. You think it’s over, that that’s the only thing that’s going to happen. What do you think is going to happen with the commercial real estate?

And that’s the next shoe to drop. And after that, things that we can’t foresee, you think that we’re able to raise rates by the fastest pace, the most in history, in the Fed era in such a short period and there’s going to be no consequences. You think this is the only thing that’s going to happen and when it does, especially going to earning season a lot of these names, if it’s not this earning season, it’s going to be next earning season. Expectation is just too high and they’re going to get nailed. But tomorrow’s Wall Street Unplugged Premium, Daniel and I are going to go more depth, right? We’re not just going to give you sectors to own. We’re going to give you individual names. Stocks are going to be beneficiaries and those that you better avoid. In fact, if you look back a couple weeks ago, we created a list, it was 31 stocks.

This was Wall Street Unplugged Premium members. Many of these names are most likely in your portfolio or in your 401Ks, very, very popular names. Some of the largest companies that we believe can see 15% plus pullbacks in the coming months. Why? Because they have operations. More than 50% of their sales come from overseas. So you saw the dollar come up and yes, the dollar did pull back a little bit, but it’s been much, much higher after declining a lot, which is not expected. And you’re seeing downgrades and several stocks even from JP Morgan. So the big banks that are saying research firms that hey, we’re going to see earnings come down even further because of the dollar and make no mistake, that’s a big deal. We saw that. We saw that from the technology companies.

We’re talking about Nike as well, where 20% of the operating profits came from the dollar crashing and it hurt them. The stock fell 13%, 14% one day. It was the largest one day decline, I think since the eighties for Nike, if I wasn’t mistaken. That’s what you’re going to see. So now you have high expectations. You have companies that have leveraged at a dollar when a dollar has gotten higher, can’t pull back a little bit, but still higher from last quarter. And man, you can’t afford to miss. And if you do, you’re going to see a lot of these names. These are very expensive stocks that are trading at 23 times total earnings or more. Your 31 stocks at more than 50% of the business they do overseas. So they can’t afford to do anything wrong. And if you own these stocks and they go down 50%, just remember, remember we told you to be careful because you have to be careful with some of these names.

The ones with those high expectations where valuations are incredibly high and you’re going into the quarter, look out because those earnings are going to have to come down. Because if you look at NVIDIA, every one of NVIDIA’s customers are cutting costs. Every one of them are cutting costs and they’re cutting costs dramatically. They’re probably increasing costs for AI, but it’s still a small percentage of their overall business at 60 times forward earnings. They have to be perfect and they could be perfect. Netflix was perfect, Apple was perfect. They traded 60, 70 times solid earnings. People said you’re crazy to buy them. However, back then you had a low interest rate environment. You didn’t have companies laying off. You have technology on fire, business booming.

Right now you’re seeing the banks slow down lending. Can we go into a little bit of a banking crisis here? It’s a different environment to be that optimistic, to be buying these stocks at those crazy valuations. 31 names to Wall Street, Unplugged Premium, they have that list. We’re also going to single out one specific name that’ll make its way into our Dollar Stock Club portfolio. WSU Premium members, they get a trading idea from us every single week. That includes a buy option price, a stop loss, a one page writeup, which includes detailed analysis and callous why we think it’s going to go high or lower. It’s taped every single Thursday. That membership is just $10 a month, which is an incredible bargain considering most trading products in our industry. If you know, and I know you guys know, unless you buy financial newsletters, not just from us, but from everybody else out there trading products, they sell for thousands of dollars.

This is $10 a month. This product I wanted to make affordable for everyone. I want to be able to educate everyone and it has so much good content in it that we have to charge for it. I don’t want to give away stuff for free anymore, and I’m being honest with you, there’s just too much great volume of material that deserves to be behind a paywall. But I didn’t want to bang it out for $100 a month, $300 a month, which you see for a lot of trading products, but it’s $10 a month. So if you’re interested, fine. If you can subscribe, you can cancel any time. It’s up to you.

But thus far, since we launched this just a couple weeks ago, based on your feedback, it’s a huge, huge, huge hit. And people love it. And once you listen to that, you’ll realize why you get research analysis. We share all of our research engines with you, everything that you’re not really going to find any place else, especially for that price. So to learn more, go to wsuoffer.com. That’s wsuoffer.com, if you want to learn more. This, guys, is it for me. Okay. Very, very happy to be back. I’ll see you guys tomorrow. Take care.

Announcer:

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

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