It’s the end of an era… sort of. We’re rolling out the new Wall Street Unplugged format next week… and listeners can expect some exciting changes. [00:30]
If you’ve been listening to the podcast for any length of time, you’re probably familiar with Amir Adnani, founder and CEO of Uranium Energy Corp.
Today, Amir explains why, after hitting a five-year high, uranium prices could easily double over the next 12 months… and why he sees more upside potential for uranium than at any other time in his 16-year career. [29:51]
Then, as China implements further crackdowns across industries, Daniel and I discuss the risks to individual companies and investors… [01:10:35]
Using Zoom’s amazing earnings results, we lay out some important lessons for investing in growth stocks… or the kind of stocks Luke recommends in his new advisory, The Big Money Report. [01:20:59]
Finally, we look at the impact of the Delta variant on the travel industry. [01:30:02]
Wall Street Unplugged | 789
Why uranium has more upside potential than I’ve ever seen
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 out there? It’s September 1st. 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.
Frank Curzio: So great news, we’re starting our new podcast format next week. Instead of having a 90 minute podcast every Wednesday, which is the current format, we’re going to separate it into three 30 minute podcasts running from Tuesday to Thursday. And why are we doing that? Because we were listening to you because we saw drop offs going, you know, it goes past a certain limit. And listen, it’s not easy to listen to an hour and a half podcast, everybody’s really, really busy. So, when it comes to these podcasts, as you know, especially those who’ve been listening to me for, man, 14 years, I’ve been doing a podcast. 14 years, just crazy. He’s very, very old, at least, that’s how I feel. But this is something I’m really proud of.
Frank Curzio: As you know, I never ever half-ass one of these things. I mean, I have my opinions, I’m going to provide tons of data, numbers, statistics to support, those opinions. I’m passionate about it. Actually love to do this. I love helping people. Teach you to become better investors, help you avoid making mistakes that I’ve made in the past. Telling you who’s full of shit out there, which you need to hear these days, right? And what stories, especially those big stories and trends that you need to pay attention to. And also this has become a huge network, a real-time network of all you emailing in. I’d say this podcast helped me build one of the best networks in the entire financial industry. You might say it’s crazy, but there’s a reason why we get into trends early. The reason why we get great guests on this podcast, which you have an amazing guest coming up in a few.
Frank Curzio: I feel like I know so many of you to the point where, when I told you my daughter has Crohn’s, many people reached out and shared some of your stories. Your children had, other people had Crohn’s. You’re sharing links. Doctors reached out to share some of the research and new drugs that are on the market. And that’s pretty incredible when you think about it. Hey, look, those listening, I know that you’re not going to agree with everything I say. And I do piss some people off, especially when I talk politics. 90% of the time it has to do with investing, 90%. 10%, sometimes rants. But has to do with how to profit from it. With that said, I think all of you know that I have your back when it comes to making you a better investor and providing you those new ideas. Introducing you to new trends before everyone starts talking about them in the financial media.
Frank Curzio: And again, it has to do with the network. I can’t tell you how many people just continue to email firstname.lastname@example.org, we’re all in this together. You guys own your own businesses. I can help you on the research end, how to research stocks. Introduce you to numerous people, have great people on this podcast, but I’m not going to know someone in the auto industry that owns their own dealership. And tell me what the real-time trends are. That’s how come we were able to spot that trend and a lot of people talking about it, but they weren’t really talking about the way we were saying, guys, these guys are in a lot of trouble, Ford and GM. You’re talking about their EV portfolios. Everybody thinks they are great, and yeah the supply shortages. No, let’s look at 60, 70% production. Those are the declines. Nobody was saying that. The only reason why we knew that it wasn’t, hey, I’ve read something here.
Frank Curzio: No, it’s because across the network and you talk to the right people in the right industries. I want to thank you guys for that. When it comes to Wall Street Unplugged, every episode requires a lot of preparation. I think you guys know that. And from the opening monologue, which is this, time with tons of stats, to my interviews, which I’ve been doing for the better part of 14 years. At The Street, I was doing an interview every single day when I was doing the podcast every day, now we do it every week, at least interview part. But when it comes to those guests, I vet them. I dig into everything that person wrote the past interviews they’ve done over the past few months. I love watching their mannerisms, what they’re passionate about. But more important it’s preparation. It’s, you know, I want to be able to ask these guys questions that nobody else is asking them.
Frank Curzio: And you have Jim Rogers. Where’s gold going, where’s commodities going. Had Jim Rogers on, I was asking him, yeah, what’s the best country to invest in? And by the way, I did that interview a while ago and he almost made me really famous because he was walking on a treadmill when he was doing that interview. And all of a sudden he lost his breath and started to cough crazy, and it was like a 15 minute break we had to take. And I told him, I said, “Jim, listen, as good as it’s going to be for me, if you die in this podcast, because this is going to get like millions of page views, I really don’t want you to die.” And he started laughing, and we got the interview back going, and we cut that part.
Frank Curzio: But you know, I love people like Howard Stern. Like Howard Stern, when he asks people, he asked the right questions. I remember he had, this was a while ago and I listen to him all the time, but a good example is James Khan. He’s a fiery guest but, you know, instead of talking about what the next movie is and promoting the movie, which you know he does, but he really gets into him. He said, you know what’s your beef with Harrison Ford? Because Khan hates Ford. I think Harrison Ford took a part from him. And you saw him like really get pissed off. You saw that those strong feelings come out. That’s what I want to hear. When you watch late night TV, it’s all, you know, ass kissing and this movie, oh, this is so great. Challenge them, that’s what I want.
Frank Curzio: Whenever I go on TV or I do interviews, I tell everybody the same thing. Ask me whatever you want. And they’re like, oh, you got to have a script or whatever, this. I said, whatever, whatever you want, whatever you feel. You do the homework on me, you do the research, you’ll see what I’m passionate about. You see I can talk about any industry, whatever you want to ask, ask, and I’ll answer it. That’s the way I am. And plus, it’s authentic, it comes off better than having a script. Because a lot of times when I present a script to people ahead of time, they’ll answer all those questions in the first question I ask. That’s crazy. But a lot of prep goes into every interview. And I have to tell you, whenever I have a first-time guest on, because you know, some of these guys are high profile and they may be a little nervous.
Frank Curzio: And you know, is this guy going to be an asshole when he interviews me? You never know what you’re going to get, right? Because sometimes, I don’t know, you just, you see that on the media channels. Like, they ask someone to be on all of a sudden they just start attacking them. They’re like, what are you talking about? What are you doing? Yeah, this is why you had me on? You asked me to? So, I see they have their guard up. Every time. I’m not even talking about sometimes, every single time. When I finish that interview and then we go offline they say the same thing. They say, man, you really did your homework. That was awesome. I had a great time. So, you came prepared. Why do I do that? Because that’s my responsibility. I mean, you’re coming on my podcast, the least I could do is really prepare.
Frank Curzio: And it’s important for you, that’s why you’re listening. Asking the right questions. I mean, I can’t tell you, and I’m not ragging on anybody in the financial media, but because you know they’ll have two hour segments. And in those two hour segments that host will interview and bring on maybe, you know, 10 guests. So, they don’t know every one of their guests. And I understand that, that’s fine. But when it comes to their guests, it’s, they’ll have a list of questions, pretty much prepared by their producer. And they’ll ask a question and they’ll, you know, they’ll show a picture of the person that they’re interviewing. And sometimes they, you know, bring out the camera, you’ll see both of them and that person isn’t even listening to that answer. They’re looking at the next question to ask. I’m like, man, you need to listen to your guests because my interviews, you know, I’ll have like a list of points, it’s a few things I’m like, okay, here, here’s what I want to really talk about after doing my research on you.
Frank Curzio: And sometimes that first part would be so interesting I’ll stay on that like 20 minutes. Because it’s that important to me, to you, to everybody. But the only way you know that is if you’re listening. For me, I want to learn from that person. I don’t want to just have them on, ask them questions, I want to hear what he has to say. I want to learn from him. Also, want them to become part of my network where they can help me immensely in terms of picking their mind about a particular stock sector, introduce me to other experts. And I’ve leaned on several people, very, very close contacts now that have found me through the podcast when I launched this business, Curzio Research.
Frank Curzio: Run businesses for decades, taking over companies. Teach you how to scale a business, everyone’s starting their own business thinks this is going to happen overnight and you get aggressive and you start wasting lots of money, making stupid short-term decisions, which is kind of normal. You’re excited. Oh, we’re going to be the biggest. We’re going to be the biggest. Believe me, it takes a long time. It doesn’t happen overnight, you have an idea. I mean, we can talk about Zoom later, where that kind of happened overnight. What an amazing company Zoom is.
Frank Curzio: I know it crashed and it fell, but wait till you see the growth in those numbers is pretty incredible. But I’ve leaned on a lot of these people to help me with my business. And the advice is priceless. Help me avoid big mistakes, right? We’re a publicly traded company to our CEO, which is important. You know how to structure deals when we start acquiring companies, when we start growing, like looking at the next steps. And these guests, they also know they can rely on me since they asked me questions about stock, sectors. And I can introduce them to someone else in their network. But all of this together, guys, leads to new ideas. Ideas that could be life changing, which a lot of subscribers have saw over the decades of following me. Even a past 24, 36 months in our Crypto Intelligence newsletter. And today we have four, 10 baggers.
Frank Curzio: I have one that’s up 16X, another pair crypto that’s up 20X. Another one that’s up 32X, and then we have another 15X winner. And all these picks have been made since 2019. So, a lot of these gains happen over the past 30 months. I’m not talking about, oh, well you have Netflix 15 years ago, Microsoft, this is 30 months. Imagine having a 16, 20X, 30X plus winner in 30 months, holy cow, that doesn’t happen often. Believe me, I’ve been doing this for over 25 years. It doesn’t happen often. Which, by the way, my new Crypto Intelligence pick comes out today. It’s a backdoor way to play the booming NFT market, non-fungible tokens, you guys are learning a lot about that. An industry, I think, is in its infancy and incredibly valuable. But also, like most things in crypto, you’re going to realize they’re probably 90% a shit.
Frank Curzio: If you need someone to help you dissect the industry, avoid scams, that’s what we’ve been doing. But this new pick is also a play on the metaverse megatrend. If you’re not familiar what that is, start learning. Look it up. Mark Zuckerberg mentioned it 20 times on his last conference call. I’m just telling you, once you start researching it, trust me on this, definitely be prepared because you’re going to go down a rabbit hole. The next thing you know, three, four hours are going to go by. It’s absolutely incredible. I mean, combining virtual reality with augmented reality where you’re not just viewing content, but you’re in a virtual world, exploring, buying real things, real assets, NFTs, digital commerce. And the younger generations growing up in this world, the world of Fortnite, ROBLOX. But this isn’t about gaming.
Frank Curzio: Yes, it’s incredibly entertaining. But for Zuckerberg to say that in five years Facebook will go from a social media company to being a metaverse company, that’s insane. This is the same guy who bought Instagram for a billion dollars, which critics laughed at. It’s now worth over a hundred billion. WhatsApp in 2014 for 19 billion. What’s that worth? That has about 2.5, 2.8 billion users. I mean, bold statement. Facebook, third, more than 30% of the world’s population has a Facebook account. And you think your company is going to go be a metaverse company, something to research. He could be wrong. He could be wrong, I could be wrong. But once you start digging, you’re going to understand. You’re going to stay on how you’ll have virtual colleges where you have your avatar, which are real people that are behind the scenes that are, you know, walking through the hallways, talking to the teachers. Could watch live games in a virtual world, walk around the stadium and this stuff is happening now.
Frank Curzio: It’s really, you have the speeds. You have the graphics. There’s a reason why it’s a metaverse ETF coming in the works. And when you see the amount of money being put behind this, not Facebook, you’re looking at Microsoft, you’re looking at Amazon, you look at the FAANG names are going into this trend. This is how you get into things early. But it’s pretty cool. And that’s a latest CCI pick. But talking to people and listening to the right people, I mean, these ideas don’t come on my own. These ideas that have been given to me from other people where I researched them to death, and that’s a network effect. But getting back to the format of the podcast, we have that last segment I do every week with Daniel Creech. To see Curzio Research, right? You guys know him by now. We break down the top stories of the week.
Frank Curzio: And in this segment, we always share a ton of actionable ideas. And last week alone, if you listen to that segment, at least 15 individual stock ideas, where do you get that for free? You know? So, my point is, there’s a ton of information in every single one of these podcasts. And I want to make sure that you’re able to listen to everything. This is my job, this is my field, but a lot of different areas like you probably never heard of metaverse. Maybe you just learned about NFTs. Maybe you’re just learning about Bitcoin. But the amount of information in each one of these podcasts is tough to consume in one day in 90 minutes on a Wednesday night, especially if you’re like me, where I own my own business, work 10, sometimes 12 hours a day, write three newsletters, do several podcasts, travel around the world, find new ideas.
Frank Curzio: Which I’m going to start traveling this month. And I’m going to be going to consumer electronics show, which by the way requires that you get the vaccine. So, I am going to have to get the vaccine and we’ll go to a lot of these places. But a lot of business meetings set up a lot of things going on, especially with the CEO token next few months. And you’re going to hear about that right here. But also I have two girls going to school where I drop off my youngest every morning, and my oldest go to school 45 away. You heard me rant about that.
Frank Curzio: Then afterschool, my youngest goes to gymnastics four times a week, three hours a day. That’s in Georgia, 35 minutes from my house. So, I’m busy, you’re busy and I get it, and we’re listening to you. At the end of the day we’re all just trying to make better lives for our children, for ourselves. And it’s not easy for anyone to listen to a 90 minute podcast on Wednesday night. So, I’m going to separate into three podcasts starting this new format next week. Where Tuesday, it’s going to be similar to this, my monologue. Then I’m going to take some time to answer some of your questions. So, feel free to email me, email@example.com, if you have questions. This is going to take away from the paid version. Anyone who is a paid subscriber gets Frankly Speaking for free, which is a Q and A, get into more detail. It’s going to be a little different.
Frank Curzio: As you know, I’ll throw it out there, since you guys should know this. I can’t give personal advice. I can’t answer an email if you say, hey, Frank, you know what about this stock XYZ? And I can’t reply to that email and say, well, XYZ, I would buy or sell that. I can’t do that. I could talk to an audience like I’m doing now and mention stocks. So, if you ask question, I could repeat the question here and then answer it to a group, right? It’s kind of like what Cramer, if you watched the lightning round, same thing. When he can’t answer an email personally, telling you what to do to specific stock, but he could answer on Mad Money where there’s tons of people watching. A lot of you already know that.
Frank Curzio: So, on Wednesday, and this might be Wednesday or Thursday, I’m going to publish the interview. And I’m not too sure because it’s just weird. Someone has, I’ve been doing this for a long time, interviewing people, again, 14 years, later in the week, every time I say, “Hey, I usually tape on Tuesdays or early Wednesdays. This way I can get that interview.” It’s timely. And I always book my interviews pretty much that week because I want to see what’s going on and get the right person in, that’s what we did this week. A sector that’s really booming right now, it’s incredible. And so we’re in the middle of it, the smartest guy that you probably know in this sector, that’s who I’ll interview in a minute. But a lot of times they say, “Hey, can I do it Thursday?” And I’m like, “Well, as long as it’s not timely and I could publish it the following week.” But a lot of times I do it, you know?
Frank Curzio: And it’s funny because when I’m on other people’s podcasts, they’ll book me and they’ll have me on like three, four weeks later. I’m like, man, we talk about it, stuff that’s not relevant. For me, I book them Monday, you know, maybe the weekend or Monday I don’t have like a schedule going out too far. Because I always want it to be timely. I want to get someone on that’s, if something big is going on market, that’s important. I think it’s important. That’s what I want. I’m sure you guys want that.
Frank Curzio: So, Wednesday, Thursday, you know, we’re going to be doing the interview. That’s going to be interview only, again for 30 minutes. And that’s where you’ll hear from stock analysts, portfolio managers, scientists, doctors, economists, billionaires, politicians across the whole board. If you were interviewed. Even young influencers. Since I believe in giving young hardworking kids a shot to talk to a large audience. Actually, those are some of my favorite interviews. You see the passion, the work ethic in these kids. Plus, my dad told me, “Always be nicer to people on the way up, because it’s the same people you’re going to meet on the way down.” So, hopefully, some of these kids, maybe one of them becomes next Mark Zuckerberg. And if this Curzio Research thing doesn’t work out, they can give me a job.
Frank Curzio: But I love giving them the platform to talk on too sometimes, which is, which is cool. But then on Thursday, and again, we might switch Wednesday and Thursday. Whatever it’s going to be 30 minute podcasts, Tuesday, Wednesday and Thursday. On Thursday, then Daniel and I are going to be talking about the markets. And if something’s really relevant on Tuesday into Wednesday, I might publish a segment on Wednesday. But you know, we break down the biggest stories, the best way to make money off of those themes, sharing lots of ideas. And I think having those segments at 30 minutes each is going to be pretty cool, which you can listen to iTunes, you can hit the subscribe button, this way you automatically get every podcast uploaded to your podcast app. You can watch through our Curzio Research YouTube channel, where we’ll be broadcasting every one of those podcasts. And you can go to Wall Street Unplugged, or wsupodcast.com and enter your email in the box. It says follow weekly Wall Street Unplugged podcast.
Frank Curzio: So, this way, we can update you and you could see reports on it. Again, that’s not marketing, that’s us just letting you know that, hey, this podcast is coming out and we have timestamps and what it’s about. This way, you could look at it, some of them might be relevant to you and some of them you’re like, ah, you’re interviewing a guy that I hate. I don’t want to hear it. I get it. Either way, we want to hear from you. Watch your feedback. I say this all the time. This podcast is about you, not about me. I think this format is going to provide tons and tons of value to you, doing it several days instead of packing everything into one long podcast.
Frank Curzio: So it’s, again, format’s going to start next week and before I get to an amazing interview, with a familiar guest, it’s going to be fantastic. So, I book less than 24 hours ago. Actually for selfish reasons, I was talking about my business and asking them for some advice about things I’m going to do in the future. And then he started talking about this industry and said something that was incredible. And next thing you know, we were talking 20 minutes about it. I said, you know what? You need to come on the podcast. We need to talk about this right away.
Frank Curzio: Because the industry you guys email me about all the time. Before I get to that, and by the way, finally, that sector is breaking out where prices just pass through five-year highs. I’m throwing out so many hints you guys could guess it, but I’m not going to give it to you yet. But it’s breaking out, and I think it’s just the beginning. But before I get to my interview, I have a quick favor to ask you.
Frank Curzio: So, over the years, you have sent me amazing feedback. There’s positive, negative. And sometimes, negative ones are much more powerful because it helps us understand you, what you like, what you don’t like, how to make our products better. I mean, some people hate that stuff when they, you know, they don’t like to be criticized. We don’t mind. We want it, to really have a great brand you have to listen to your customers. So, those emails are important. And I think you really, it shows great character. If you could win over someone who’s really pissed off about something and you make that change, and then they come back and say, “Hey, you know what you guys did right.” They’re going to be with you for life. I know that for a fact because there’s people that have been listening to me for decades.
Frank Curzio: And a lot of that is getting that constructive criticism in those emails, but a lot of them are also positive. And as you know, we made a full push into video with Curzio Research. And I want to say we were one of the first financial publishers to do this. While others provide video, but we are going all in on video. Where we have our own studio here. We have cameras, everything. Other places have studios as well. But doing our newsletters, if you notice with my newsletters, all three of them that I write, you’re going to see me in a 30 to 40 minute interview, it may sound long but I make it interesting. I bring up the sites, research, I educate you. You see me doing, you see me doing the research. Instead of just getting a 10-page report that could pretty much be written by anyone. Where the animals could be on the golf course, hanging out with the clubhouse members.
Frank Curzio: No, you don’t get that. You see me doing the research. And a lot of people that we hire are also going that route because, you know, it provides tons of value. I mean, it’s not just giving out picks to you guys, right? It’s educating you, going over our mistakes. Right? Which is a shame. I mean, I watched Biden speak yesterday and I think both sides could agree that this whole Afghan thing and the exit was pretty much a big fuck up, right? But yet, he just went on TV yesterday and said, “Hey, this was exactly, this was a huge success. Exactly what we planned.” And I’m like, holy cow, really? I mean, both sides and just like going, you know, just go on TV and say, “Listen, you know, I made mistake, we thought we had this right.” Whatever. I know in a political playbook, you’re not allowed to do that. Right?
Frank Curzio: Rule number one, never, ever admit it. But when both sides, I mean, you got to look at the polls, both sides, Democrats and Republicans. I mean, there’s a pride in America that we’re powerful and we’re better. And, you know, you kind of lose that when you see a country like Afghanistan just making fun of us and leaving and the way that whole thing went down and leaving Americans, holy shit. I mean, number one rule ever, never leave anyone behind. Right? It’s just, anyway, anyway. It’s just crazy. But getting back to the newsletter after I had that little rant there, but for us, it’s, you know, using video and seeing all this stuff and talking about it, even politics and things like that, it just, it shows how authentic we are. It shows that we’re really doing the research.
Frank Curzio: It shows that, you know, hey, we’re going to educate you again and teach you what we could learn from that. Even if it’s politics, how do you make money off of it? And that’s what we’ve done a great job of, but going totally into video has been a huge boom to us and has resulted in incredible growth, to the point where we have the highest revenue per user in the industry. And it’s about 40%, 35% higher than our nearest competitor. The only reason why I know is because one of our competitors just went public to respect, and they said that they have the highest, and they don’t. So, what that means when people come into our products, when people come into our ecosystem, they buy a lot of our products because they know we have some of the best research out there.
Frank Curzio: They know we’re not full of shit. They know that here they can trust us. And that’s huge. So, where am I going with this? I have tons of written testimonials, and I’m always humble when I read them. They’re just really incredible. And my marketing team asked if there’s any way that you can get some of these on video. Anyone willing to do a one minute video testimonial about how we helped them become a better investor, educated you? Some of you who are Crypto Intelligence investors actually wrote in to say that being a subscriber to that product changed their life. They never say gains like that. I mean, I’ve never saw gains like that either. It’s just, you know, we see stock in 30 months and you’re getting 10X at 30X returns.
Frank Curzio: You know, why venture capital poured a billion dollars into it so far this year, which is more money than they poured in the last four years. You could see why so many people are pushing into crypto with these gains. I mean, if you’re going to risk money, it’s better if the reward is 3X, 4X. Isn’t it better if the reward is 10X, 20X, 30X? Yes. So, risk-reward, it provides a much better risk reward if you’re looking to be aggressive with the money. And we show that in that newsletter, it made a lot of people money.
Frank Curzio: That’s really powerful when I get things like that. And it’s my job. Like I said, that’s what we love to do here. That’s what people pay me for. But my marketing team will make it a major push because we are seeing strong growth. We are a publicly traded company and you don’t see a lot of those video testimonials. So, if anyone’s interested in doing that, you could tape it on your iPhone, Galaxy, webcam, freestyle it. Even if you’re mad at me, you can send an interview of you being pissed off, which would be pretty funny. But again, that would be a favor to us if you want to do it. I know how busy you guys are. Believe me, I know. But if that’s something that you’d like to do, you could send it to firstname.lastname@example.org. Frank@curzioresearch.com. No longer than like a minute, maybe a little bit longer than that, something. And you know, again, we won’t use your last name or anything.
Frank Curzio: But if that’s something that we helped you, or did anything for you, again, we’ve received so many testimonials. I’m always humbled by them, and I never want to ask anyone to do something like this. It’s actually uncomfortable, but the fact that we’re growing, and what makes me want to say this to you, and I’ll be honest, is I want people who’d never heard of us to come to Curzio Research, because I know we can help them. And if I’m not doing that, and making that marketing push, that means other people with shitty marketing campaigns are marketing to these people, they’re using their platforms, and they’re getting their ass kicked. Okay. And that’s when I view the industry like that, that gives me motivation to say something like this. So, if that’s something you’re interested in, again, it’s just video interview, or a video, a quick video, one minute thing, if you want to do it, if not, no worries. Pretty cool.
Frank Curzio: But my marketing team has really stressed. I said, okay, I’ll mention the podcast and see the response we get. Either way, I love you guys. Thanks so much for all the support, and looking forward to the new format. Now my interview today is with, someone you’re familiar with, Amir Adnani. Okay. Amir, get I book this less than 24 hours ago, I call him to pick his mind in relation to something I plan, very, very big transaction that we’re going to do, and I asked his advice, and then also we started talking about uranium. And Amir, maybe one of the smartest persons that you’ll ever see in uranium industry, as far as people, or persons, whatever it is. But this is a person, who’s Iranian, and started and launched, UEC, Uranium Energy Company in the U.S., as a U.S. producer. You know how hard that is to do? Just that alone, and the political collections and the people he had to meet.
Frank Curzio: I mean, just going through this industry and being through boom and bust markets, I mean, you’re looking at 2004, 2005, when he did this, and now he is chairman of Uranium Royalty. But really big news, especially from Sprott and Participation Uranium, where they provide an entity with where they’re raising money just to buy physical uranium, and it’s resulting in prices now going a lot higher because there’s not a lot of supply. You’re taking some of the supply off the market, which is great. They’re going to be able to sell that at higher prices, but the electricity companies have not locked in anything, and those, that’s where the demands from. And you’re seeing supply extremely low. We always knew the fundamentals in this industry, but right now, when you finally see prices breaking out, it’s going to force these electricity companies to go in and start thinking about buying.
Frank Curzio: And that’s where you could see massive, massive gains. I know a lot of you are in uranium, I have big positions in uranium. I’ve been saying, be patient. Some of you have gone all in and I told you, just be careful, cause you probably lost out on some gains in the last four, five, years as everything else went higher, this is an industry, outside of coal, or whatever, that’s just at a secular decline, but this is an industry that’s been in such a decline. That’s a real industry, and a bear market for probably longer than I’ve ever seen any market be in, I mean, since Fukushima now it’s finally breaking out. Prices are low. They can go a lot higher. And I think the gains of some of these stocks going to be incredible.
Frank Curzio: So, we’re going to break that down with Amir, a lot to talk about, again, one of the most respected people out there in the uranium industry, one of the smartest people that you will know. So much so, he landed Spencer Abraham, who’s on the board, who’s served as Secretary of Energy from 2001 to 2005. So… And he’s also someone I interviewed in a podcast who’s really, really cool. Also, he has Scott Melbye, the president of Uranium Producers of America, on his boards, and past chair, board of governors of the World, Nuclear Fuel Market, who’s also served as the president of Cameco. These are the people that Amir talks to. These are the people that are involved in his company, directors, and help him run his companies. This will be a fantastic interview. Guys, listen up because I think this industry could really, really take off, and I know there’s a lot of you who have positions in uranium company. So, you know what? Let’s get to this interview with Amir right now. Amir Adnani, thanks so much for joining us on Wall Street Unplugged.
Amir Adnani: What a timely, and almost historic, time to connect. Historic in my world, Frank, because my world is so much about uranium. Today’s a bit of a historic day, so I’m glad we’re connecting this morning.
Frank Curzio: And historic, because you know, I say for selfish reason. I called you yesterday, because asking you about a couple of things, about curves of research, and things we’re going to do in the future, which you have a lot of experience with. And next thing I know, we just started having a conversation on uranium, and you said something that was very interesting. One is that we’re going to be five, I think it’s six year highs, right? Six-year highs, we just broke out. But you said that, and I don’t know if I’m quoting directly here, but you’d never been more bullish on this market since pre-Fukushima. And once I heard that, I’m like, you know what? You should come on. We have a lot of people that own uranium. We’re seeing this breakout finally on positive news, not some speculation or anything else, let’s start from there. Why we break it out here? What’s going on with the markets?
Amir Adnani: Well, really two things. I think the two Achilles heels of, of the uranium market, or uranium investing, for as long as I’ve been in it, right? Has been number one, the fact that the sectors just hate it. People just hate the sector for some reason. Maybe it’s because of the nuclear accidents, and a Fukushima, or Chernobyl. But for the first time, and because of the fact that we’re seeing so much greater concern being placed on de-carbonization and just the need to really address what’s happening would, would reduce in global temperatures that we’re seeing a serious embracing of nuclear power, and, and the sentiment shift that if you’re an ESG investor, if you really are focused on recognizing that nuclear power has these incredible. That should have been recognized all along in terms of its ability to generate enormous amounts of emission free electricity, that’s getting registered now more than ever before.
Amir Adnani: And this, so that was the first problem was just the fact that sentiment about the sector I think was always so bad. And the other issue about the sector all along was how opaque the physical uranium market was. And bit of a trade by appointment type of market frame, mainly because the utilities who buy uranium to consume uranium, to generate electricity, they’re not trading it every day. They’re just, there’s no daily price discovery. They like to come into the market, buy a whole bunch of uranium for running their nuclear fleet, and go back to their offices.
Amir Adnani: And over the last couple of weeks, we’ve seen the development with the Sprott Uranium Trust, which I think is a game changer. And it’s a game changer because Sprott introduced a very innovative structure here, and you got to remember the Sprott team and organization, these guys are commodity experts, right? The firm was founded by a billionaires, Eric Sprott and Rick Rule, and they are very focused on commodities. They have a silver trust, they have a gold trust in terms of physical entities that buy, and store, and provide exposure to investors for that commodity, and now they’ve taken over the management of uranium participation, and they’re running it the Sprott way, and they introduced an ability to buy physical uranium on a daily basis using an at-the-market equity program.
Amir Adnani: Well, we’ve never had something like this in the uranium market before. In the 16 years I’ve been in it, we’ve never had a structure like this, and the 45 years existence of the uranium market, there’s never been a structure like this, where you’ve got daily price discovery. And they launched this literally 10 days ago, the uranium market and the uranium price has just come to life. And we’re talking about this being really the dog days of the summer, like end of August, who’s around, yet the uranium market’s moved from $30 per pound to now $35 per upon just this morning. Daily purchases by the Sprott Physical Uranium Trust. And that combined with the first point I made about the sector going from just being totally hated to now starting to get embraced, and recognition from ESG investors, I think there’s a really potent one, two, punch there, Frank.
Frank Curzio: Yeah. And I’m going over this now too, and just showing this chart of how you broke out now, could you explain, because some people might not understand, buying the physical and how important that is, and maybe the amount that they’re actually buying and how this is influencing prices, because it all sounds fine and dandy, and people are used to seeing, daily price discovery, but you don’t have that. It’s great that you mentioned that, but what amount are they buying? I know that it’s like, hundreds of thousands of pounds daily.
Frank Curzio: How they do it, in terms of, are they just easily raising money? So many people believe in this strategy, it’s almost like buying oil when oil prices, whatever it was couple of years ago, not even a couple of years ago, two years ago, right, when we were storing it, right, because it went below a couple of dollars for oil, and everybody knew was going to go a lot higher, and now look where it is today, but they’re able to store it. It kind of reminds me of that, where you see such a big disconnect. Hey, this makes the most sense, but are they buying enough? How are they doing it? Are they raising money? Are people, is it easy for them to continue doing this? Could you explain that? Because I think if this is sustainable, there’s no place else for uranium prices to go but up.
Amir Adnani: Yeah. So, let’s kind of cover a couple of, let’s say foundational pieces of information here, right? To get our head wrapped around this whole thing. Number one is for investors I think to understand what an equity at-the-market program is. And Frank, I don’t know if you’ve talked about it on the, on your podcast in the past, but in a quick nutshell, really this is actually an innovative concept and a very low-cost way for larger companies, and it was really founded in the U.S. as a platform for raising capital, where instead of a traditional offering where a big company comes out and basically there’s an overnight deal, or, or basically does financing that takes weeks and weeks to complete and pays five, 6% commission on it. With an at-the-market equity program, you’re able to basically sell shares on a daily basis of the company, and you’re selling agent is basically selling their shares into the market, and raising cash for you.
Amir Adnani: And so what the Sprott Uranium Trust is doing, so I don’t want people to get confused. You’re not going to be able to call them up and say, I want to buy shares from you because you’re selling shares. They’re selling agents is simply executing that for them in the market. So, you and I will never see it. We’ll get to see it the next time they update their shares outstanding, and their holdings. But what we do know is that they look at their share price, and their share price, because their business is to buy and hold uranium, their share price reflects at certain price of uranium. So, it’s the market value of their company represented by their share price divided by how many pounds they hold in inventory.
Amir Adnani: So, you might look at their share price and see that their share price reflects the uranium price of, let’s just say, as even right now, as we speak, they’re reflecting a price of $36 per pound. You and I just said, the spot uranium price is that $35 per pound, a six year high, but the Sprott shares are telling you that they’re trading at a premium to even today’s six year high. So, what the Sprott guys are most likely doing, this is what they’ve given guidance to the market, is that if they’re trading at a premium to the spot market, they’re going to probably be issuing stock under their ATM arrangement and raise money. Which means as you and I speak, there’s a chance that they are issuing more stock to buy more uranium tomorrow, almost given us a guaranteed bid and tomorrow morning’s spot market. This is, that’s one end of kind of just getting our head wrapped around it.
Amir Adnani: Not let’s just bring it back to another thing. What does it mean to show up every day and buy a couple of hundred thousand pounds of uranium. Take one reactor, and there’s 94 reactors in the U.S. alone, 440 reactors in the world, but just the 94 reactors in the U.S. One reactor consumes around 500,000 pounds of uranium annually. Okay, that’s its lunch. That’s what it needs to consume to generate electricity. If Sprott is buying 500,000 pounds a week, they’re eating someone’s lunch every week. They start buying 300,000 pounds a day, every couple of days, they’re eating one nuclear reactors lunch. At some point, the utilities, the ultimate end users of uranium, I believe, are going to wake up and say, geez, we just, we can’t allow these guys over here to just keep buying uranium on a daily basis.
Amir Adnani: They’re eating our lunch, they’re storing it away. We’re never going to see that again. We’re not going to see the prices of the low $30 per pound environment, and what’s fascinating, is in today’s $35 price that we started the interview with, we’re not seeing really any participation by utilities in the market. They’re still either on their summer vacation, or they’re getting maybe they’re just dazed and confused by how quickly this market is moving. You’re talking about a market globally that consumes 200, almost 200 million pounds per year for running nuclear fleet. And the U.S. alone is 50 million pounds per year.
Amir Adnani: There’s, we’re not mining enough uranium globally to meet that demand. Like in the U.S., we might know uranium production globally as 125 million pounds per year, sort of falls way short of where demand is. And so, while the Sprott Physical Uranium Trust this an excellent new development that gives us day to day price discovery, and what was otherwise a very opaque, physical market, it’s dropping kind of just as peanuts in the grand scheme of the bigger demand that the power plants are going to have to actually buy uranium to run their fleet, to generate emission free electricity.
Amir Adnani: I, Frank, I covered a lot of stuff there, so feel free to come back and peel it apart if you like on the ATM or on reactors, et cetera.
Frank Curzio: No, it was great explaining that the at-the-market offering. I think that definitely educated a lot of people to understanding it’s not a traditional private placement and they’re buying physical uranium, but what I want to get into is you have been in this industry for most of your career, I think, and you correct me on this 2004, 2005 is when you started uranium energy, I believe? And you, so you’ve lived through balloon bust, right? You lived through the boom going into Fukushima, and then that huge bust going into Fukushima. The biggest thing, the biggest negative, I saw in this industry, and I am heavily invested in this industry. 20 industries I am in gold, I’m spread out, diversified in stocks and everything. A lot of people are all in this industry. But one of the things, and one of the reasons why I haven’t even got more aggressive is the electricity companies, right?
Frank Curzio: That’s where you’re going to see demand come from. When did you see that demand start coming in? Was it this late during the last cycle pre Fukushima? And why are they so late to the party? Because I think what I like, and the reason why I wanted to have you on, this is forcing their hand. As prices going higher, they’re talking to their CFO is going, holy shit, we need to do something right away. So, when did it take place, were they late to the party last time? Is this normal? Because once you see that term, that’s where this industry is just going to boom, because these guys, they have to load up on this. I mean, this is that, is how they power their plants and everything. But you just take us through the last cycle, and why they’re late to the party, if they’re late to the party, and when do you think that they’re going to start coming in now that prices are going higher?
Amir Adnani: There certainly have been late to the party in the last two boom cycles, no doubt about it. And the reason we know that is because for years after those boom cycles became, came off because of Fukushima, et cetera, for years, they were complaining about having signed contracts at higher prices. So, if you recall, for example, the big north American uranium producer Cameco, for the longest time was talking about how they had $50 contracts. So, in 2015, when the uranium, or 2016, when the Sprott uranium price hit $17 per pound, Cameco was selling uranium to utilities at $50 per pound. Why? Because those contracts had been signed in 2010 when uranium price was approaching 50 and went to 60 and eventually 70. So, we know for sure, and that utilities tend to be late to the party.
Amir Adnani: We know in ’06, ’07, they signed contract. We know this because Tokyo Electric Power for example, had a lawsuit with Cameco. Why? Because they signed to buy uranium from them at $90 per pound in the ’06, ’07 run-up. So, we know, we know that the utilities do this. We know that in ’06, for example, when the uranium price was at 25, 30, $40 per pound utilities were nowhere to be seen. And then they show up and that’s what drove the price from $40 per pound to $140 per pound. So now, why? Why did they behave this way? Number one, you got to remember, these are big, utilities are big companies, and they’re not nimble. They don’t, they’re not like you and I, we, we speak yesterday, “Hey, Amir, can you make time tomorrow get on this podcast, make things happen. Let’s go.”
Amir Adnani: Now you’re talking about companies… You’re talking about Duke Power. You’re talking about Exelon. You’re talking about national companies. In China, the business of buying uranium, it’s all state owned, and Russia its all state owned. Come on, man you’re telling me that state owned bureaucrats and government employees are going to move as fast as the private sector? Never. Not in any industry, and so certainly not in buying physical uranium. One other point, though, the costs for a pound of uranium makes it almost a negligible cost to the overall operating costs of an existing nuclear power plant. You know, arguably less than 5% of the overall cost. So, you could argue that the other reason why it, maybe they don’t care for being late at the party is because they’re not price sensitive. So, it’s not a case that they’re just let’s say, are lazy and stupid.
Amir Adnani: No, they’re intelligent people. They know what they’re doing. Maybe they’re slow because it’s a government company, but ultimately, I can tell you when uranium hit $140 per pound, no one was reading articles in the U.S. newspaper about their electricity bill going up from nuclear power plants. It, it would be a very different story if the price of gas doubled, or tripled, because in gas fired power plants or in any, the fuel cost is, is almost half of the overall cost of running the plant, not the case in the nuclear reactor. And that I think, that that low cost feature of the fuel in running a reactor is, is a very bullish part of the story for me. Always was, because I think at the end of the day, a nuclear reactor will buy whatever they need to buy to make sure they don’t run out of uranium.
Amir Adnani: And you can’t run out of uranium because it’s way more costly to shut down an existing nuclear reactor. And there’s no substitute for the fuel. You cannot put zinc or silver in a nuclear reactor. It’s got to be uranium based fuel that goes through the fuel cycle. That, that to me is really an important part of why the bull thesis has a lot of room to run.
Frank Curzio: You know, the 5% is interesting because it’s 5% of costs now, but as prices go higher, especially if they go much higher from here, because we’re looking at this so differently, right? It’s funny how sentiment changes because we, we, we broke through 30. We were like, wow, we broke through 30, right? We’re looking at well over a hundred dollars per prices, but as this goes up, right, I mean, you could easily double from here and you could still, and it’s not going to be an inflated market, right? Because we’ve been there before. I mean, wise guys say, whatever, 50, $55 operating costs, but anyway, the costs are going to go high for electricity companies and that’s going to eat into margins, which I think kind of forces their hand even more. Right?
Amir Adnani: Yeah. And, and I mean, look, in terms of, let’s say that the kind of upside runway that we have in the price, I mean, for example, look at most commodities, right? And you even look at gold, that’s pulled back year-over-year, it’s off maybe 10% from its all-time high, and it doesn’t even get used up for anything, right? Your uranium is at one third of its all-time high. It’s at half of the incentive price globally to actually build new uranium mines. And it makes up a very small percentage of the operating cost of a reactor. So, this things got a long way to go in my opinion, from 35. And even if it goes from 35 to 70, which is exactly where we were when Fukushima happened in March of 2011, you think by a flick of a switch, new uranium mines are going to come on? We’ve had the longest bear market in any commodity, over the last decade, in uranium.
Amir Adnani: I can tell you right now, there isn’t any major uranium mine under construction, which is actually a big difference between this bull, this early innings of this bull market versus ’06. In 06 we had a fantastic bull market in uranium that started in ’06 and went through ’07, but at that time there was a deposit called Cigar Lick that was under construction, looking to come in, it had some delays, but it was being built. Today, there’s not a single game changer of a deposit under construction, anywhere in the world. The closest thing that you get to stand by projects that are permitted, ready to go, are the projects that my company, Uranium Energy, has in the U.S., in Texas, and Wyoming. But our projects are just the perfect size to really cater to the U.S. market, right?
Amir Adnani: We’re looking at producing, or we have a permanent sort of profile, of up to 4 million pounds per year, right now, before any further growth, the U.S. consumes 50 million pounds per year. The world consumes almost 200 million pounds per year. So, we’re as close as it gets to a company in terms of having production ready, fully permitted, projects that can come online the fastest. And that’s not going to solve the world’s structural deficit when it comes to uranium. So, coming back, yes, there’s runway here to get to 70.
Amir Adnani: We get to $70, that’s a double from today’s levels, and again, what happens? We’re, just back to where we were in tech basically a decade ago. And Fukushima happened at that $70 per pound. We’re still are a half of the, of the all-time, high of $140 per pound. I don’t know of any other commodity that has this kind of setup, and is also being consumed on a year in, and year in, basis to generate the one thing that we need more of any other time before, electricity. I guess the case for nuclear power and uranium is a very fundamental one.
Frank Curzio: It’s fundamental. And for me, when I was looking at this industry, and it was electricity companies, which you addressed and why I think they’re going to start purchasing, but the other thing is, is also sentiment. I mean, we’ve seen what the ESG movement can do to Exxon. Where someone owning this much of a stake, was able to convince the trillion dollar companies have trillions of the management to actually vote for them to change the structure of the largest oil company in the world. We see how powerful that group is. This considered green carbon friendly. You have some amazing ties in Washington to the point where Spencer Abraham, chairman of UEC, I mean, just a former Secretary of Energy. What are you seeing in sentiment in terms of there? Because that was a big thing. It’s Fukushima. Everyone’s like, Japan shut everything off, everybody shut everything off, and everyone thinks it’s going to be like this massive event taking place, and everyone’s scared of it.
Frank Curzio: What is sentiment right now? I mean, is, is that ESG movement enough to push us over? Do people feel more comfortable about it? And then you’re seeing electricity demand go through the roof, whatever. If you’re looking at, more data’s being stored than ever guys, holy cow. If you look at the servers, the amount of servers, forget people talking about Bitcoin, which is this much, but the amount of electricity continues to go higher, higher, and higher. And this seems like the most logical choice, but it all comes down to sentiment. To me, I feel the sentiment changing where people are going, okay, you know what? We need more uranium and nuclear. Are you seeing that with your contacts? Who your contacts are very, very big in this industry.
Amir Adnani: Well, first of all, there’s the context. So, you’re talking about, for example, the chairman of our company, Spencer Abraham, who’s a former U.S. Energy Secretary. That is a very unique vantage point and set of experience and relations that Spencer brings to us. And that it allows us to see certain things, both in terms of policy in Washington, DC, which I can tell you today is the best setup for nuclear power and uranium from a policy point of view, because there’s bipartisan support. There’s no bickering between Democrats, Republicans, over the fact that nuclear power needs to be supported. A major amount of component for it in the, in the latest stimulus bill for reactors in the U.S. And for the first time, since the Eisenhower administration, the United States government wants to purchase physical uranium for a national strategic reserve. So, it’s historic. That not only is the bipartisan support unique and advantageous, because you get the full support of government and policy makers. But we haven’t had this type of setup in a long time.
Amir Adnani: We’re talking decades. We certainly didn’t have this setup in the bull market of 06/07. In ’06/’07, the United States government was selling uranium from their stockpiles. Now they’re looking to buy uranium from now and over the next decade. And this support for nuclear power, where everyone basically agrees that it is paramount that if we’re going to meet these net zero pledges and targets by 2035 or 2050, you must have nuclear power in the mix.
Amir Adnani: Now, a couple of other things. Perspective. Look, whether you like Tesla or Elon Musk or not, he’s done something to the idea of electric vehicles. Where now, every car maker on Earth is talking about building more electric vehicles. In ’06, when we had that bull market, Frank, Tesla as a company was a year old. We were still very much focused on the internal combustion engine for getting us around. The movement that we have now in EVs and electric vehicles was nowhere near what it is today. Meaning, again, greater importance being placed by a whole other sector in terms of demand and need for electricity.
Amir Adnani: You talked about Bitcoin and cryptocurrencies. They consume a boatload of electricity. It puts more pressure on it. Bill Gates wrote this huge best-selling book about the environment and his experience with it. That changed people’s attitudes towards nuclear power, because he concluded we needed nuclear power. And he’s putting his own money behind a company called TerraPower that he founded, that’s now building small modular reactors. He’s teamed up with his buddy Warren Buffett to build a small modular reactor in Wyoming.
Amir Adnani: These developments are so much more powerful than me, as a uranium mining executive, coming and telling people, “Nuclear is green. We need more uranium. We’ve got to get on board.” No. You got governments behind it. You got these net zero pledges. But every major government already, and including the European union, which we didn’t have before. You have the EV movement. You put all of that together. And I think we are now being driven in a certain direction of growth when it comes to nuclear power, and then obviously as nuclear power grows, so does demand for uranium. And that pull is more powerful than I have seen in my 16 years in this industry, because it’s coming from so many different places. Policy, government, other sectors, other entrepreneurs, billionaires committing capital, not just talking about it, but taking action.
Frank Curzio: Actually, yeah, I just wrote down that quote too. Pulls more in your 16-year history. And talk about that, because you’ve been positioning yourself, and I’ve always said, your work ethic is second to none. You are incredible. You’re also a good friend. That’s not why I recommended your companies in the past. I went to go visit the Hobson plant. I spent a lot of time with you. I always said, I wish you went into other industries other than going into uranium because it was so depressed for so long. I believe gold’s going to take off, which you are in position for, but these two companies… Talk about, just really quick, you mentioned UEC, how your position here. And then I’d like you to get into Uranium Royalty, which is very exciting and something that I’m an investor in. Uranium energy, UEC, you’re president, CEO; Uranium Royalty, you’re chairman director. So, you are fully engulfed in this. You’re all in. I can see how much you spent your entire life doing this, and now to see these trends really turning.
Frank Curzio: Why don’t you just give us a little bit of a brief description of what UEC is about and then get into Uranium Royalty, because those are the two companies I think people… They’re going to want to know how to play this. And these are two great, great ways to play this boom that I think is inevitable, and it’s here. It’s not something that’s going to take a long time, so-
Amir Adnani: What I’m realizing now, and I was very young when I started Uranium Energy, and I also became a parent around the same time. So, I guess what I’m realizing, Frank, is that being in the uranium business is a lot like being a parent. You’ve got to have a very long-term approach, from birth until these kids grow up and get going. It can take a long time. So, I think that’s the first thing I would highlight, is that really the competitive advantage of any current uranium company including UEC, that has survived the last decade of, again, one of the longest bear markets in any commodity, is that you’ve got a competitive advantage.
Amir Adnani: What have we been doing for the last decade, when this sector was hated and out of favor? We were buying assets for 10 cents on the dollar, maybe five cents on the dollar. We were permitted. It takes seven to 10 years to get the permits to mine uranium in the U.S. We’ve gotten permits for four of our projects, three in Texas, one in Wyoming, to actually be able to produce uranium. We have a processing plant, and there hasn’t been a new processing plant built in the U.S. in the last decade. We have the people. Not just the chairman of our company who’s a former energy secretary, but Scott Melbye, who’s the president of the Uranium Producers of America, a technical team that’s built and operated uranium mines for decades. So, Uranium Energy is, today, the premier U.S. uranium mining company. We have more projects permitted for production than any other company in the U.S. We have the largest pre-construction permitted uranium mine, Reno Creek in Wyoming. Our portfolio has over a hundred million pounds of 43-101 compliant resources in the ground.
Amir Adnani: But our balance sheet is also a very uranium-centric balance sheet. What do I mean by that? We have over $115 million in cash, and physical uranium, and uranium equity holdings that we have in Uranium Royalty. Which allows me segue to that in a second, but before I go there, we’ve really put our money where our mouth is, both as a company and as an individual. I’m a top five largest shareholder of the company. Spencer and I are both large shareholders of the company. When you pull up Bloomberg and you look at our top holders, you see names like BlackRock, Fidelity, the Sprott Organization, our mutual good friend, Marin Katusa. We’ve really attracted some of the best investors you can ask for in terms of brand recognition and large holders, but also commodity-focused investors. People like Rick Rule, people like Warren Gilman. But you also see management amongst these well-known investors, amongst the top holders of the company.
Amir Adnani: So, we’re totally aligned in that sense. Our physical uranium initiative, we started it when uranium was at $27 per pound earlier this year. And we said, you know what? I think the price of uranium as a commodity is going to go up way more than cash itself. Considering all the debasement of fiat currencies we’re seeing out there, we can buy physical uranium and store it for less than the prevailing mining cost in the world. And so, we institute the physical uranium program. We started buying and storing physical uranium on U.S. soil. And that is part of our $115 million of holdings on our balance sheet. And you were talking about a company that’s, over the next 12 months, going to spend about $12 million. So, what I mean is, our balance sheet is very strong compared to what our expenditures are, given that currently we’re not producing uranium yet. But the moment we get to $50 uranium, we have the ability to turn on an existing mine. We were a uranium miner before we shut that mining operation down.
Amir Adnani: But what we’ve really done over the last decade is again, go out there, build our portfolio, build our platform. Frank, the past decade wasn’t about mining uranium at prices well below marginal cost of production; it was about buying assets. So, UEC has bought the assets, we’ve bought the physical uranium, and heck, we’ve even launched a uranium royalty company, which is the first and only company applying the royalty and streaming model exclusively to the uranium sector. And uranium energy is the largest shareholder in Uranium Royalty. We own 18% of that. I’m also the chairman of that company. Obviously as the largest shareholder there in Uranium Energy, we’re involved; I want to make sure that that company does well.
Amir Adnani: That company, earlier this year, listed on the NASDAQ. I think we’re also the only NASDAQ-listed uranium company. And we have royalties on a portfolio of assets, including two of the biggest uranium mines in the world, called Cigar Lake and MacArthur River in Canada, owned and operated jointly by Cameco and Orano. We have physical uranium. We have a 10-year supply agreement with Kazatomprom, the world’s largest radio producer out of Kazakhstan. We have a very small team, very small GNA. I think the company’s spending less than a million dollars a year to operate, has over $70 million of cash and marketable securities, very strong balance sheet.
Amir Adnani: And what you love about a royalty company, and what we love about a royalty company, is exactly that, Frank. Very small GNA. Royalty companies, we don’t go out there and spend money on exploration and development. That’s not our business. We don’t own these assets. We simply have a royalty, which is an agreement whereby a predefined percentage of future revenues are paid out to us. So direct exposure to the commodity price, direct exposure to top line, almost a hedge against inflation. To your point, if there’s inflationary pressures that drives costs higher, we’re not exposed to that. We’re exposed to top line and with revenue.
Amir Adnani: And I really love the royalty model. As you know, I’m involved with two royalty companies that I’ve founded. One Uranium Royalty, one Gold Royalty in the precious metal space. And I think investors, when you look at where these royalty companies trade, they typically trade at much better multiples of net asset value than the miners do and the exploration companies do. And it’s really, I think, the simplicity of the business. It’s a diversified business, and you don’t have all the headache that goes with actually building and operating the mines themselves.
Frank Curzio: Well, I could tell you one thing. This interview, I tried to keep to 30 minutes. I think we’re going a little long here, because it is so interesting. And just to see where everything is coming together right now for you. Being your friend, I’m proud. I see how hard you work. I think that shows great character, because being in a tough industry for such a long time, you’re not someone that complains about it ever. You’re positioning yourself as best possible for when this thing comes back. Now, you’ve seen it come back, you’re well-positioned, and I’m really happy for you, man. I’m really happy for you. But I’m very bullish on this, to the point where I’m going to be adding to my positions, because I think there’s definitely a change in the environment. And this thing’s really going to go now.
Amir Adnani: Thank you, Frank. I really appreciate that. And I know you’ve been on this journey with me as well. We’ve been to Hobson’s together, you’ve seen what we have down there. And yeah, I think ultimately… This feels different this time, for sure.
Frank Curzio: It definitely does. Okay. Now, before you go, could you give me a “How’s it going out there?” Could you give me one of those? The way you do it when I call you though. Every time I call, he makes fun of me. Every time.
Amir Adnani: No, listen. When I go for a run or any kind of exercise, I like to multitask. And as you know, my favorite thing to listen to are your podcasts, because my head is so focused on uranium and gold and commodities. And I love that on your podcast, you cover a variety of sectors and industries. I actually don’t know how you do that in terms of just knowing so much about so many different things. But I love the intro, where it’s all about, “Hey, how’s it going out there?”
Frank Curzio: And you know how it’s easy? It makes it easy to cover all those industries because we have great contacts like you across all industries that really help us out, that come here to educate our investors. And I know how busy you are. You travel the world, you’re always busy and you always find time for the podcast. And I know my listeners really appreciate it. So, thanks so much for coming on such short notice, and I’ll talk to you soon, bud.
Amir Adnani: Thank you, Frank.
Frank Curzio: That’s some great stuff from Amir, a lot of information packed in that podcast. I like to bring you trends when I think things are at the right time. And when I look at timing of this industry, and I’m adding to my positions here, does it mean that this industry or pricing go low? Absolutely. I have no idea what’s going to happen in the future.
Frank Curzio: I do know that what’s kept me on the sidelines… And I have a pretty big position in uranium and doing well, but what’s kind of the sidelines, wiring and electricity companies buying, but now it’s Sprott and a new entity. You’re purchasing physical uranium, taking it off the market, and you’re seeing that resulting in prices going higher. It’s going to force electricity companies to go out there and say, “Hey, you know what? Maybe it’s time to lock in prices.” Which is very, very important, lock in and start buying physical uranium. And sentiment is clearly changing in the industry.
Frank Curzio: So, when you put all that together, why do I like it so much? And now, we’re actually breaking out on a technical level in terms of prices. Look at what happened… And this is the biggest bear market… Real quick, guys, before I get to Daniel here… This is one of the biggest bear markets I’ve seen of something that’s going to be obsolete, like coal or something like that. I said that earlier.
Frank Curzio: When you look at a good example of what’s going on right now, why it’s so important what Amir has done and positioned himself perfectly to take advantage of this, is when you look at COVID, what happened? We saw companies pull back tremendously. Nobody modeled for 90% decline in revenue. Nobody does. Usually, five, 10, 20%, whatever. If thing goes bad, this is who we’re going to fire, these are plants we’re going to close, whatever. To survive that part and be as lean as they are, and the balance sheet that they have from raising money at the right times, positions himself perfectly.
Frank Curzio: Now, what happens? Why do I love to buy stocks when the industries are really shitty and start to come back? Because they’re leaner than ever. They’re leaner than ever. And now when demand comes back, and that’s what you saw with COVID, now you see stocks explode. Now, you see a hundred, 200, 300, 500% gains, because now they’re leaner than ever, that’s why earnings are surging. And yes, those costs are going to go higher as they increase marketing, as they increase and start hiring more people. But when you’re in that perfect environment where things are shitty, you’re cutting costs, you don’t really want to buy the stocks. “Ah, okay, it’s really, really cheap,” and that’s fine.
Frank Curzio: But now when you see this industry start to break out and demand come back, now you’re going to see these stocks… A lot of you should be in them for a while, where the past couple of years you’ve seen nice gains. You know, maybe you did it a little bit earlier and it took a while, but the next phase of this, we are in the very early innings. And I know you’re seeing some of these stocks break out. You’re seeing this at a six-year high.
Frank Curzio: To me, when you have a company that’s changing landscape like Sprott, and I know those guys as well. Amazing, amazing guys. Rick Rule has been a mentor in so many ways to me. Eric Sprott’s amazing, and meeting those guys in their office and hanging out with them and going on their little events in Vancouver. And just with top executives and introducing me to everybody, just really, really great people. But that’s a game changer to me. So, definitely two ways to play it there. There’s other uranium plays as well. Just be careful out there. I’ve been following Amir, I know Amir well; he’s a guy that talks to his shareholders the most, he’s a guy that’s very transparent. And for me, knowing him for longer than a decade, this is the most excited that I’ve seen him in this industry, which makes me excited.
Frank Curzio: And it’s not like he said, because he’s running two uranium companies, but there are fundamental changes taking place. And there is a big shift. The fundamentals look great, and it’s pretty exciting times. I know a lot of you in these stocks and doing well. I hope they quadruple for you. I’d love to see everybody make money, even myself. And hopefully, that happens.
Frank Curzio: Now. I always say, this podcast is about you, not about me. Let me know what you thought about that interview. I like to keep them 30 minutes; it went about five minutes later because I thought it was fantastic. I thought it was interesting. I wanted to know more. I wanted to give you the plays and stuff like that. But let me know what you thought, email@example.com. That’s firstname.lastname@example.org.
Frank Curzio: Now, Daniel… So, I just did that interview now, before Daniel came in. So Dan, you didn’t get a chance to hear it, but definitely listen up because that was pretty incredible. That was exciting for me, and I like Amir a lot, but definitely… I know you’re going to give it a listen in a little while, but really good stuff.
Daniel Creech: Yeah. Yeah, I definitely will. It’s always great hearing him on there, and it’d be great. We’ve seen some ups and downs, but yeah, at this time, if there’s fundamental changes, that’s exciting and we need to prepare subscribers for it. That’s good.
Frank Curzio: Well, I want to start out by saying I was busting Daniel’s balls this morning. Because the past three weeks, now that my daughters are going to school… I know a lot of people out there, your kids are going to start going to school if you’re in east coast. Mine have been in school for three weeks. So, now I’m driving one of them, because it’s a major commute. So, the youngest, I have to drop off very, very early now. So, I have to drop her off at, I think 7:20, 7:25. So, I come in the office and I’m here before Daniel, and I’m like, “Ah, now I see, pal. I see that… What time you getting in now?” He said, “I get in a little bit later, I work late,” but it was funny. He’s like, “Damn, man, I got to get here… ” It’s funny.
Daniel Creech: Yeah, I went from the hardest working employee in the office to the last person in now. So, it’s easy when there’s only two of us, but…
Frank Curzio: Yeah. Last person in, first person out. And the way we work here too, in a way, a lot of my staff, I encourage them to work because I work long hours daily on Wall Street, wearing a suit, jumping on… I had to be there at six in the morning, jump on the train, like 5:15. I used to read the whole Wall Street Journal by the time I’m there. Podcast every day. And I get home six, seven o’clock, especially when daylight savings, just the time change. I used to leave when it was dark and get home when it’s dark, which is terrible. I didn’t have kids then.
Frank Curzio: But what I realized now is being able to walk away, when you’re doing something and you just walk away. If I jump in the pool with my kids for like 45 minutes because I’m a mile away, and then come back here and work, it clears your head. And that’s even like… Sometimes, we’ll hit a bucket of golf balls. Which takes like half an hour, golf course is right here. It frees you. You come in, and you’re just so much more productive. And we’re usually here, and I just came with Dan, Dan’s usually here. It’s very, very late hours, but…
Daniel Creech: Yeah, I’m early and late. Like you just mentioned, daylight savings time. I basically get up as the sun comes up and then normally, feel sorry for me, I usually roll out of bed and grab coffee and go to the beach. And now Frank’s cutting into my beach time. So now, I’m getting here second. It’s like, “Hey, what’s going on?” It’s like, “Well, hell, I haven’t even looked at anything yet. What are you doing?”
Frank Curzio: What time do you go to bed? You go to bed kind of early, right?
Daniel Creech: Yeah. 11-ish.
Frank Curzio: Yeah, yeah.
Daniel Creech: Not super early.
Frank Curzio: Me, maybe like one-ish and waking up at six.
Daniel Creech: Oh yeah. Hell, I don’t care about that.
Frank Curzio: Yeah. So, I don’t know.
Daniel Creech: But anyway, it’s a good time, yeah. But I did go to the beach this morning and then stumbled in about… Hell, I didn’t get here until eight o’clock. Frank’s raring to go, “Hey, what’s going on? Did you see this? Did you see that?” I’m like, “No, I really didn’t.”
Daniel Creech: I’m ready to tape the podcast, so let’s rock and roll.
Frank Curzio: That’s awesome. All right, so let’s talk about some of the things that going on. One of the big stories is China. Kids, under 18-year-old, they’re forbidden… they actually used that word, “forbidden”… for playing video games for more than three hours a week. And considering that 62% of Chinese minors often play video games online, it allows people to also play mobile. That’s a pretty big deal. And you know what? I’ve been listening to reports, and some experts say, “Hey, you know what? This was on the table,” and, “People should have known this.” The market didn’t freaking know it. 3 trillion in market cap was wiped off this industry. And they’re coming back today, which is the Activisions, EA, Baidu, JD, Tencent, Alibaba, Ubisoft, which is UA base. But yeah, it definitely hit the market by surprise. And that’s not a long time, three hours, is it? To play for a week? I thought it was a day, because I know some people play a lot, but that’s not a lot. That’s pretty crazy.
Daniel Creech: Yeah, it just fits the bigger narrative that everybody’s experiencing right now between, basically, choice and control. So, this is eliminating choice a lot. It’s not up to the parents or individuals. It’s going to be from the government over there, overseas in China. What really stuck out to me is, we’ve seen this pattern, and we’ve talked about this, Frank. So, they’ve cut down on everything from online education to healthcare, to video games, they basically kidnapped Jack Ma from Alibaba, the huge Amazon. They’re just cracking down. And again, it’s a controlled environment and it’s a controlled state. Several guests and Frank has talked about this in the past.
Daniel Creech: What was interesting to me is that in the Financial Times, just a couple of days ago on August 30th, George Soros, Frank, billionaire, wonderful investor, like everybody else, crazy in some situations. But he wrote an op-ed, or an op-ed, however you want to say that, for all you out there. And he’s basically warning everybody about the risk in China, investors. And he had some pretty stern comments in this. And I encourage everybody to go to ft.com, you can Google it, it’s pretty easy. But he mentions how China’s birth rate isn’t near as high as what they claim it to be.
Daniel Creech: Now, that’s a whole other rabbit trail. I’m not even… I’m just giving you kind of an overview, I don’t even want to talk about that. But when you’re in a controlled environment, Frank, it’s very hard. And we’re finding that out as the Federal Reserve, it’s very hard to control an economy. In fact, it’s impossible. You can cause crazy variations in between that, but ultimately what’s the economy, as you always point out? It’s millions and millions and billions of people making individual choices at a rapid pace to better their lives. That’s not predictable. Unless you want to take the selfish route. That’s pretty easy there, Frank.
Daniel Creech: So, he talks about, “Hey, you know what President Xi is doing over there in China is unlike anything anybody has ever seen from the investing world in the power that they have.” He pointed out that… And Frank, I didn’t know this. This is great, because a lot of this… Listen, it’s important to understand these macro events and what’s going on, because as you just said, it’s $3 trillion. You’ve seen all kinds of trades or opportunities get hammered hard. The Uber of China, when they pulled the app off right after they went public over here, Frank, a lot of investors got burned on that.
Daniel Creech: Soros points out that, unnoticed by financial markets, the Chinese government quietly took a stake and a board seat in TikTok owner ByteDance in this past April. Now, I know there was crackdowns. I remember during the Trump administration, there was talks about selling that, forcing ByteDance to disinvest TikTok for quote unquote “security reasons,” as they all point out. But Frank, I didn’t know that. For all the headlines you’ve seen, did you know that they have a board seat and a stake in ByteDance? I didn’t know that. The Chinese government.
Frank Curzio: Yeah, I actually knew that, so…
Daniel Creech: So, that’s impressive. I didn’t see that along the several headlines.
Frank Curzio: Well, it’s smart, because that’s going to be the biggest social media company, bigger than Facebook.
Daniel Creech: Right, absolutely. Well, smart or corrupt or however you want to point that. I’m just saying, that’s a big influence on that. And Soros is actually talking about how pension fund managers are allocating, and they don’t meet any requirements based on their quote, “ESG,” environmental, social, government standards and investment decisions. So, he points out that one of the most widely worldly index is the MSCI, all-country world index, has about 5 trillion in passively managed assets and exposure to China. Now, what do all powerful people do, Frank, when you want to change something? You call on your powerful friends. So, he is urging the U.S. Congress to pass a bipartisan… There’s a key word there, Frank, cause everybody gets along… Bipartisan bill explicitly requiring the asset managers invest only in companies where actual government structures and both transparent and aligned with stakeholders. How the hell do you expect that to be enforced from overseas?
Frank Curzio: Oh, especially from China.
Daniel Creech: Exactly. But think about what’s going on here. You have a situation where you have a ton of volatility around all kinds of names, from technology to the Didi, which is up over 10% today, the Uber of China. The Alibabas, the Tencent that you talked about earlier. You have all this gray area in craziness, overhanging the controls they can implement quickly and overnight over there. And now, you have a very powerful, connected person calling on it… Let’s just play the “what if” game. What if they did pass something like this? 3 trillion would be nothing compared to what the market valuation would get wiped out on this. If managers actually had to be able to prove what they could prove over in China, before they could invest, you’d have a rush for the exits, would you not? Am I missing something here? That’s crazy.
Frank Curzio: No, no, it is crazy. The ByteDance and TikTok… Anything that goes on, I’ll tell you it’s addicting as hell, but it’s entertaining, it’s fun, you laugh all the time, it’s cool. It’s not like Twitter where everybody hates each other, or Facebook where you get stupid comments even from friends and stuff. I feel like TikTok got it right where it’s what social media is supposed to be about. It’s just that you’re connecting, it’s fun, it’s happy, it’s laughter, it’s cool. And again, from me being on other social media platforms, I really like it because it’s entertaining as hell.
Frank Curzio: So, I saw that and even the much bigger story… I think the much, much bigger story here, Daniel, is… Yeah. In terms of the three hours of videos, I think that’s great for the U.S. kids. Because I got to be honest with you. I don’t know if you play video games. Have you played video games growing up or no? Have you?
Daniel Creech: Growing up? Yeah, I did. Not lately.
Frank Curzio: Okay. Well, I play them pretty much as a grown-up as well. And when you play Call of Duty, especially Fortnite, my daughters… I got to tell you, man, those kids from China? You start the game, you’re like, “Yeah, let’s go!” Boom! You’re dead. And like they sniper shot, boom! You can’t even play against them, because… I don’t know if it’s that they’re on all day, but I got to tell you, I think it’s going to be a boom. They might make it up, because a lot of people don’t play because of that. They got to play like different levels and lower levels, because these kids are just so amazing. They pick you off, they’re great, they play everything, they know every trick in the book, they have everything. So, I think it’s a positive if you’re a gamer-
Daniel Creech: So, this is a good thing to level the playing field of video games.
Frank Curzio: It’s definitely going to level the playing field.
Daniel Creech: Okay, I like it.
Frank Curzio: I don’t care who you are out there; you’re going to agree with that. It’s kind of amazing. I played against people in China, people in Japan, people everywhere. And I’m telling you, man, they’re really good. Now, I don’t know if they put more hours in and that’s it, so it will level the playing field. But all kidding aside here… And actually, I wasn’t really kidding about that… But you want to look at different names. And I can tell you the name that I love the most is Take-Two. I think they have the most limited exposure to China, where everybody wants to create these metaverses, universes, these virtual reality, whatever, where you go inside the platform, the Roblox and the Fortnites.
Frank Curzio: I always saw that a little bit as a negative, because you see how much money Fortnite makes. Last time I looked, it was a year ago, it was $300 million plus a month off that platform. Think about that, how much money they make. Incredible. Roblox is making a fortune as these kids play it, but with Take-Two they don’t have too much exposure to that, and I think they’re going to benefit, or this isn’t going to hurt them.
Frank Curzio: I would look at how much exposure you have to China. Not only that, it’s how much money, how much revenue. It’s easy to see segmented revenue from these companies of how much is made through, not easy, but through our platforms and capital IQ, Bloomberg. Who use Bloomberg, you could find that, but you want to see who’s most leveraged. China it’s definitely going to impact, but I don’t think it’s going to impact the whole industry the same.
Frank Curzio: When you see news like this, this is where it pays to be an analyst and do your homework, because some companies get hit on news and they don’t deserve to get hit, because it’s industry news, and others are going to do well and go higher and they’ll bring up even the garbage ones sometimes. But I think there’s separation here, and I really like Take-Two. That’s one of the things that are in a portfolio that was still up a lot on, I thought that it would be a lot, lot higher, but I think it is going through 200 very easily in the next couple of months. So, about 20% upside. But I really liked this name compared to a lot of other ones, but I would dig in and see who has the most exposure to China and maybe find a couple of articles.
Frank Curzio: I’ll be doing some of that research as well, but that’s how you find the best ideas in a space when something like this happens and it’s a macro event, it usually takes down the whole entire space. And then you want to do your research and say, okay, which name do I want to buy on this pullback? What do I want to buy? Which doesn’t have exposure to this business is getting hurt because maybe they’re going to ETF or maybe they’re whatever, but there’s a sell off among the whole industry. And that’s how you can capture lots of games because you got to be able to buy the discount.
Frank Curzio: Also look for insiders buying these names. If insiders are buying, then they think they know that this isn’t really a big deal to them. And you might see some insider buying in the coming weeks, which again, you could find almost any place, a lot of free sites. We use Briefing.com and different sites for that. But that’s how I look at this industry, and that’s how I look at this news, because I do think there’s opportunities. You’re seeing a lot of these things bounce back today, but they did take a pretty big hit on this news and the previous day.
Daniel Creech: Yeah, that’s a great point on industry news versus specific news. I point this out just because I’m going to continue digging into this because this isn’t going to go away. So, the risks that are associated with China and China. It’s massive population, huge growth engine, very critical to the world economy and different sectors. And obviously you can’t say enough about the growth story and the potential there. However, don’t blindly invest in anything in general, but know these risks you can look at. This is a trading opportunity around certain names, but there’s plenty out there to buy blindly if you will, and you want to be really lazy. So, just take that into consideration, know what’s out there, but yeah, to your point, industry news that knocks down specific well-run companies like Take-Two would be buying opportunities. Absolutely.
Frank Curzio: So yesterday, what happened is a pretty big news. We saw a Zoom, something that a lot of us use now. Zoom beat by 20 cents, they reported a full year of fiscal 2022 earnings above consensus revenues above consensus, but it wasn’t as high as people want it. And yeah, they’re looking at 2022 earnings for the earnings at the consensus around 480. And they provided between 475, 479, and which was expected to 466 plus around 480. When you look at Capital IQ, the revenue is okay, but the stock got hit because they said they’re not seeing enough growth in this name. And there’s a lot of lessons to be learned here because one, I want to say that Zoom, Daniel, is one of the most amazing companies I’ve ever seen in terms of growth. And it took a catastrophic event for that to happen.
Frank Curzio: And you wanted to show this and I know you follow the Zoom as well. I want to get your thoughts on this, but here is, and I have this on Capital IQ again, what we do, videos of everything on a cursory research, YouTube page, I’m just showing you my Capital IQ page, which we do pay a lot of money for. But just, if you look at the total revenue annual basis in 2018, they were generating $151 million. They’re going to generate $4 billion in 2022. And in 2021, it went to 2.6. I mean, it’s got the full years, 3.6, but you’re talking about this little small company that went to massive, massive growth. I mean one and a half billion dollars in net income, right? So, you’re looking at net income was 7.6 million in 2018.
Frank Curzio: You know what I mean? So, you’re looking at in 2022, 1.4 billion in net income. So, you’re looking at a company like this is pretty incredible to me, but it didn’t meet estimates. And the stock fell. I know we were talking about it with Zoom and I said, listen, man, we got to look at these numbers see the incredible, a lot of lessons to learn here and I’ll go over those. But I want to get your thoughts on Zoom. Again, a stay-at-home stock, a property that was in the right industry at the right time. They took full advantage and it has pulled back. Cathie Wood as used to pull back to add some shares. I forgot how many she added, but that was a big story. And I think the stocks up a little bit today, but it felt like 16% after they reported earnings, which they beat earnings. But everyone was expecting a little bit more than that.
Daniel Creech: Yeah, this is a perfect story. What we were talking about last week with it’s difficult to buy as things continue to go up. Frank, if you have a chart, I think that in 2019, did the stock go up four fold? I believe it went up four times. Now, again, we were just talking. It’s very difficult to buy what we were talking about Dick’s Sporting Goods last week and saying, “Hey, it’s probably a better buy now,” even after the chart, looking at it continually rise. It’s hard to buy things that just keep going up in a straight line.
Daniel Creech: But your point, that company and their management team took advantage of a terrible situation on the COVID and the pull forward that they were getting as travel came to a cease and everybody was going online. But, man, you talk about execution because I remember seeing headlines about their Zoom calls getting hacked, Frank, and people were playing music or pornography or whatever they were doing to ruin these meetings. So, what does Zoom do? They went out and they bought cybersecurity companies and they beefed up their security and they were using their stock as currency. I believe that I’m going off of a little bit of memory there, but you talk about just taking advantage of an excellent, excellent environment and rewarding. So, if you’re a naysayer, you can say, “Oh, well the stock, I believe it hit 600 at one point or near. So, it’s down over 50%.” So what if you bought back then?
Frank Curzio: Just before COVID hit, you’re looking at the end of basically 2020. $66, and it went to the highs were close 600, 559. And then it got cut in half. And then you’re looking into this quarter saying, okay, it’s already been cut in half. You know, the numbers, they met the numbers, they raised guidance and it’s still got hit. Here’s some of the lessons guys that I could teach about this. One is you have to be aware when growth slows and it’s slower growth, even though they met expectations, you’re going to see the stock get hit. Usually when the stock runs up higher, you’re going to get hit more. But this stock has come down. I’m surprise about the hit and maybe that’s why Cathie Wood’s adding, but you’re looking at a company that saw absolutely tremendous growth. I can’t think of another company that saw a growth like this in terms of those numbers.
Frank Curzio: And then a percentage, if you could do $10 in revenue, do 25 million and I’m talking about billions, right? You’ll look at this company, go to generate four dollars and 80 cents in earnings, just trading around 300. And when I look at that, I see a company that was super expensive. And if you’re going to buy super expensive companies, you got to make sure that they continue to grow. Netflix, continue to grow. Microsoft, continue to grow. A lot of these companies continue to grow. You’re seeing that with CrowdStrike who pulled back a little bit after earnings, just Workday, whatever, some of these, these companies continue to grow. They’re fine. That’s great. But when the growth slows, or you see that growth slowing, and maybe the service isn’t going to be used as much.
Frank Curzio: Again, we have the Delta Variant, but more people are going to go to work. For me, when I look at this, it’s why is it coming down so much? I mean, the thing has run up tremendously. So, if you’re running up close to tenfold, ninefold. That growth happened right away. It didn’t happen over five years. It happened in two. So now, you see the company come down. So then, if you want to buy it on this pullback, which Cathie Wood did, I will look at where earnings are. So, you’re looking at earnings, and if you’re looking at $300 stock price and its price divided by earnings and those expected earnings for next year off 480, I believe. So, you look at that company trading at, at what, 62 times forward earnings. Now, you could say the S&P 500, Daniel, the S&P 500 trades at 21, 22 times folders.
Frank Curzio: This stock is super expensive. I’ve got to avoid it. However, you really want to look at how fast it’s growing because at 62 times showed earnings. That could be very cheap if you expect the grow earnings at 40% plus a year. And that’s why I think people get lost in is. And I love what you’ll BMR a big monitor report that we hired Luke Downey, covers this stuff, right? Because these are stocks that you would avoid. And yet you might say, “Well, there’s still going to see tremendous growth in how much they’re growing.” I don’t know how much you’re growing, right? So, I’m going to go into Capital IQ right now really quick guys. So, I’m not going to go crazy here. They have Capital IQ estimates, and it’ll show you based on the year of what they’re expecting. So, you’re looking for earnings to pretty much slow.
Frank Curzio: 2021 and 2022, you have very, very strong earnings. But if you look at 480 in 2022 analysts are expecting 484 in 2023 and 519 and 2024. That’s well below growth. So, in a 62 PE growing earnings in a single digits from 22 to 2024, that’s a company that I would personally avoid because I don’t see that growth. If they blocked those numbers, then hey, you know what, you’re wrong. You got to be able to get it. And it’s a good price, but just because a company is trading at 50, 60, 70 times earnings for what earnings doesn’t necessarily mean you could avoid it. You would have bought Apple. You’d probably be up 5000% on Apple in the past 10 years, if you bought it. And when you bought it, you would have had to buy that at 60 times plus forward earnings.
Frank Curzio: So, just to explain to you at that growth, is there you’ll see these companies continue to take. Apple didn’t go up tremendously right away like this and show 9X, 10X returns and in two years. But I think you guys could see the point where Zoom got hit. I wouldn’t be buying it right here on this pullback, Cathie Wood thinks otherwise. I think a lot of that growth, it just, in a two year span we had a Black Swan event. But when I look at Zoom, I think it’s a relative story because you want to invest in growth. It is a growth market, Daniel. And in order invest in growth, you have to understand, you’ve got to be buying expensive companies, but you have to continue to see that growth in order to maintain those gains and get those huge gains. And yeah, in Zoom, I don’t know if those gains are there anymore. I think it’s trading at a level where it could come down more. That could be wrong, but that’s what I think.
Daniel Creech: Yeah, I mean, nobody knows the future here. However, it’ll be interesting to see where this kind of hammers out on the chart. Where it kind of finds a base or support. This is going to be a good segue here, Frank, because I totally missed the move up. We just explained that about how it’s hard to buy. If I had to, which you don’t, that’s the great thing about investing, you don’t ever have to do anything. You can sit there as Warren, Charlie Munger said of Warren Buffet. He sits on his ass and reads a lot. Frank, that’s good advice. You can sit here and just watch this. I would trade it around the Delta Variant if you think that that’s going to have an impact, if you think that travel is going to not come back in a hard way or a big way, and then Zoom was going to have some more pull forward or be able to. They don’t have to grow as fast if you can increase your earnings, once you capture that growth.
Daniel Creech: So obviously, competition comes into play. We’ll continue to monitor that. Switching to the Delta Variant, Frank, cause you can’t ignore headlines about that. I came across a survey from American Hotel and Lodging Association, the AHLA. Big group there, Frank, I’d never heard of that, but that doesn’t matter. I was like oh, I wonder who these people are. Anyway, cause we’ve been talking about travel, travel booking companies. So, you’ve got booking holdings, Expedia, Airbnb, all these kinds of companies. Plus then you have the rental cars and the airlines and, Frank, this shocked me because, now I don’t have the exact date. This was published just yesterday or the day before, or no, this is today. So, this is very recent. But according to the American Hotel and Lodging Association, 67% of business travelers are planning to take fewer trips going forward.
Daniel Creech: Now, this deadline, I don’t know exactly what these timelines are. We know that is it CDC or WHO put out the mandate that you’re going to have to wear a mask through airports, at least through I think, January of next year. So, that’s already on there. 52% of travelers are likely to cancel existing travel plans without rescheduling and 60% are expected to postpone existing travel plans. Meanwhile, another 66% of respondents are likely to travel to only places they can drive. Why is that important? Because if you see a pullback or a drawdown in airlines, but that might benefit Avis car budget or Hertz is now publicly traded. Again, they came out of the ashes of bankruptcy. So, you might want to look at that stock. But that was really interesting to me and this other stat. I know I don’t want to bore you with figures.
Daniel Creech: I know they’re kind of difficult to follow when you’re listening. Frank, TSA travel, the security checkpoints and stuff that scan for screeners is about 80% back to above pre-COVID levels. Why am I breaking down this? I’ll tell you. Because the majority of airlines get their profits from business class and first class, Frank. So, it’s not your coach classes that the schmucks of the world like me fly. So, for all those higher class people. But they don’t expect business travel. So, the more expensive seats to get back to pre-pandemic levels until 2024. Now, I might’ve missed this, Frank, but I was surprised by that. 2024 is a long way away to get back to business travel, in my opinion, based on where we were going with the vaccine, being out there, the number of vaccine shots getting out into distribution and all that. I just saw this today, so this is kind of out of left field, but.
Frank Curzio: I mean, we’re long in this segment, but I would tell you from that I think we all know that the vaccine doesn’t work. Because people, a lot of people, get a Delta Variant.
Daniel Creech: Oh here we go, we’re going to get in trouble now.
Frank Curzio: No, but you, you know that you’re not getting it. I know I’m waiting to get kicked off, right? Everyone says “You’re going to get kicked off these platforms, you keep saying that!” Even though it’s the truth. But seriously, people who got it realize you’re seeing people who got it all wearing masks like crazy, even in Florida. So, when it comes to traveling even though the airplane is probably the safest, the safest, and this isn’t, you know, you talk to any pilot, you talk to anyone on the inside. I mean, it gets filtered. And one of the probably the least places that you would get on the airplane, maybe in the terminal is different, and interaction with people it’s different.
Frank Curzio: But when I look at the airlines and people traveling less, one thing that changed us is international travel. If you go someplace international and you have to get tested for COVID to come back in, even in the U.S. And a lot of these hotels are set up to do that for you. But if you get COVID, you’re going to be quarantined two weeks. Now you’ve got to stay in that country for another two weeks. I mean, you know how expensive, that is? You know how troubling that is? And you’ve got to be in quarantine. It’s scary to be quarantined in another country. I could see another country. In the U.S., there’s different states that are taking it much more seriously than others. I don’t want to travel in New York, but I’m going to be traveling to Baltimore. I’m going to be traveling Dallas and places like that soon.
Frank Curzio: I see it. I mean, I see it when it comes to business travel, however, I think people are going to realize that if they’re healthy, if they’re in good shape and they got vaccinated already there is less much, much less of a chance of you of getting deathly ill from this. Which, I think we have to get used to COVID. I think it’s going to be a forever, maybe not forever, maybe a very long time. I think it’s just like a version of the flu. It’s a little bit worse. So, it’s going to be a seasonal thing and that’s just the way it’s going to be. And right now we’ll talk about booster shots. And then there’s leading doctors saying, well, you’re going to need at least two booster shots. So, you’re going to see more variants, but the fact that a lot of people to the vaccine and saying we’re going to be okay, and now they’re getting COVID again. And again, they’re getting it mildly, which the vaccine protects against, but that’s going to result in a little bit less traveling and it makes sense with cars, right?
Frank Curzio: Because you’re driving and rent-a-car plays are great on this. I still think eventually this is going to open up. People are going to get used to it. They are kind of used to it now. You’re not seeing like massive fear, like there was nine months ago. I think airlines on these pullbacks are fantastic. It’s one of the sectors that hasn’t gone above their pre-COVID levels. It’s still 20, 25% off. I like airlines, have a three-year timeframe. Maybe they go down 10% for me, 15%. I know, three years from now, they’re going to be a lot, lot higher, probably easy double. And I can’t say that for a lot of sectors, even big tech, that you’re going to get an easy double in three years from these levels, but things are getting a little out of control, a little expensive here, but I see that. I see that.
Frank Curzio: And also we saw less hiring too. Really quick, we’ll cover that, right? I mean Jackson Hole was last week, and the Fed basically said, “Hey, we’re not doing anything.”
Daniel Creech: The Nothing Burger.
Frank Curzio: We’re doing nothing. We’re fine. Everything’s good. Everything’s cool here, which we kind of said. Not since Greenspan was an office that anything major has come out of Jackson Hole in terms of policy. Like, they really don’t use Jackson Hole. They’re meeting in later this month. And we might see a couple of things there, but I don’t even think he talked about taper that much, which is interesting. But I did see the reports from today, and I want to talk about this before we go. And that’s around too late. Here it is, the jobs report. I mean, the jobs report was really, really, the private payrolls at 374,000 in August compared to 600,000 estimate.
Frank Curzio: I see this as a problem. I don’t see a lot of people going back to work at the same rate. There’s a lot of these people are still getting benefits. And why is that important, Daniel, to everybody out there? This is extremely important if you’re an investor. Because they have moved the goalposts every fucking time, right? So they say, we don’t want to see 2% inflation and we have 5% inflation on the CPI, right? The gauge meant had never, ever show inflation. Wait, because that’s going to be a lot higher because that tracks rental incomes. And that’s going to come in later on cause rental income, not rental incomes. Just renting in general.
Daniel Creech: What it costs, yeah.
Frank Curzio: Rent’s going to surge. So, we’re going to see that even go crazier. So then, they’re like, well, we want to see the unemployment rate, go back down.
Frank Curzio: Now, they moved it again. Oh, I see the unemployment rate go down to pre-COVID levels, which is 3.9, 3.8. And what are we at 5.2? You’re not going to get down to those levels. They’re not going to see those levels. So, when we see reports like this, let’s see what it translates into the job report, which is the first week every Friday. So we’re going to see that number come out on Friday. I expect that number to actually go up from five point. I think it’s five points, but it’s probably going to go a little bit higher based on these numbers. And when I see this, it tells us that the Fed, if that’s your goal and say, before, we really start raising rates and stop buying $120 billion in bonds every single freaking month and inflating this economy like crazy.
Frank Curzio: We want to unemployment go down. Unemployment’s not going to hit those levels for a very long time. It’s a different market now. A lot of people are not going to work. It’s like they got a taste of being at home, what they could do. They don’t want to go back in the workplace. A lot of these people are getting paid. Still, you’re seeing signs everywhere, not just where I live, guys, you’re seeing them. People are still incredibly short-staffed. You can get a job at any place and they’re not able to do it. And it’s resulting a lot of poor customer service in restaurants and bars and stuff like that, they just can’t get employees. If that’s really the Fed’s goal, expect rates to stay low, which is going to continue to provide a floor. Or, instead of a floor, it’s just buy the dip mentality going forward, at least until we see some kind of tapering, which I don’t. So, that’s how that whole entire thing translates. I think it’s very important that we talked about that.
Daniel Creech: Yeah, you got to look at that and then, hey, everybody have a wonderful Labor Day, but remember this is the last report before, unless something changes, Frank, unemployment benefits run out I believe September 6th. That’s a big change. We’ll see how that affects, if at all, the job rates going forward or job employment. But yeah, you definitely have to that’s a big piece of the pie, big piece of the ingredients to form a thesis around. So, make sure you pay attention. The miss wasn’t that bad because of the competition in wages from the government and employers. You don’t have to make a decision on that right now, but pay attention to it and it’ll help build a thesis going forward.
Frank Curzio: Yeah. All right, Dan. Well, thanks for joining us. You went golfing this weekend. Did you say, did you say you shot an 80 and you got an eight on one of the holes?
Daniel Creech: Yeah. Yep. I did. But it was all right. Yeah. It’s golf, but I went out. Frank and I snuck in nine over the weekend and I shot 44. So, it all averages out. That’s why you brought this up. You want me to admit that on air.
Frank Curzio: I’m definitely going to give you more work to do if you keep shooting under 80. So, yeah, definitely.
Daniel Creech: Well 80’s not under 80, boss.
Frank Curzio: You can’t get that much better than me. Consistently, anyway. But thanks so much for coming in. We talked about a lot of great stuff today. And as always, everybody appreciates it. And thanks, Dan. I really appreciate man.
Daniel Creech: Wonderful. Cheers.
Frank Curzio: All right guys. So, that’s it for me. Thanks so much for listening. Again, looking forward to new format next week. If any of you guys want to send in video testimonials of a minute or so your phone or whatever, feel free to do so email@example.com, no obligation. It’s just everything we’re doing now is going to video. We’re really excited. It’s going to be great for marketing. And like I said, yeah, I want people to come into our business. I want people to learn about us. From a fresh start, the way they’d never heard of us before and coming in and seeing the research that we’re doing, the videos that we’re doing, the education that we’re doing is really, really exciting. We’re all growing. That all comes because of you and listening to this podcast and helping us build this brand. And that’s something that’s pretty amazing guy. So, I appreciate it. Love you guys. Enjoy the Labor Day weekend, your family, friends. And as always, I’ll see you guys on Sunday. 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.
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