Transcript was automatically generated.

0:00:02 – 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.

0:00:16 – Frank Curzio

Let’s get out there. It’s August 21st. I’m Frank Curzio. This is Wall Street Unplugged. I’m going to break the headlines and tell you what’s really moving these markets. Back in town is the greatest analyst in the world sitting next to me, the most handsome guy ever, Daniel Creech, fresh off his 16th vacation of the year. What’s going on, man? How’s everything?

0:00:44 – Daniel Creech

16th vacation of the year Things are good as A How’s everything. 16th vacation of the year Things are good as Aerosmith sings. It’s good to be back in the saddle again. Frank had a great trip. Two quick observations. Airlines were full, I flew Delta packed planes, all over the place.

0:00:56 – Frank Curzio

You had a delay, right, you had a delay too, yeah.

0:00:57 – Daniel Creech

So I was having dinner on Sunday evening. I was scheduled to fly out first thing in the morning on Monday, got a text message Flight was canceled. I had a layover. I feel like Ron White. I had a layover. I was going from Dayton, Ohio, to Jacksonville, Florida. So it would make all the sense in the world to go from Dayton to your home state of New York and then down to Jacksonville. Evidently there was some weather on the East Coast. They canceled that flight, put me on a late flight for evening. Got in around 1am Tuesday morning, not a big deal Other than the hassle and the reschedule. I got to say it was easy. For you know, I didn’t have any other options. So what am I going to do All the other flights? But that was good.

Second observation is I took a quick video. Frank, I was laughing out loud, had a small layover in Atlanta coming home and I thought, hey, I’ll grab a sandwich. You know, don’t want to have a cocktail on the plane on an empty stomach. That’s not responsible. Every food court line was empty except one, guess which one. It was Chick-fil-A, of course. So I’m standing in line. I think I got a half an hour. I can chill out here and I’m waiting and they’re great at service. Don’t get me wrong, but I literally took a video out of the eight restaurants right next to each other. You could have walked up to the counter and ordered right away, and everybody stood in Chick-fil-A. It’s just hilarious. That’s brand awareness and the power of a brand. But a great, great trip up there. Always good to go home and even better to be back, because nothing better than doing podcasts here with you.

0:02:14 – Frank Curzio

Frank, yeah, that’s cool. I got to see the family hang out, said the weather was great, right oh?

0:02:18 – Daniel Creech

75 and beautiful man August. All those global warming guys really are upset now because I’m going to brag about how good the weather was in August and I had sweet corn, I don’t know.

0:02:27 – Frank Curzio

It’s climate change, it’s not global warming. Oh, that’s right, it’s climate change. It doesn’t matter which way it goes. Let me tell you something?

0:02:33 – Daniel Creech

Middle August, 75 and low humidity is absolutely a wonderful change, regardless of what you want to label it. Daniel@curzioresearch.com, I’m having fun everybody.

0:02:41 – Frank Curzio

No, that’s great stuff. That’s great stuff. So glad to have you back Again. I told you this podcast plan to do more interviews going forward. Got a lot going on with our company right now. A lot of good stuff. So people subscribers know what I’m talking about, but I did want to get to some interesting news today. A lot going on.

The first thing is which is 30 minutes late, by the way, but you just had the payrolls, which is the BLS announcement. They come out and actually this is when they go over the final tally of payrolls. Now this is from March 23 to March 24. Why they don’t do this often and why they can’t get this data? Because they use a quarterly census of employment and wages, right. So this is like the factual, because it’s based on state unemployment insurance tax records, right, it’s not based on surveys and shit like that. So it covers nearly all US jobs.

And it came in today and there was rumors of how bad it was going to be in terms of the revisions and the revisions were that bad. Well, you had JP Morgan and Wells said there’s going to probably be a negative revision of this Again. They get the heads up from the Fed all the time and everybody else. So they got. I mean, how do you know it? Right? They just actually reported this recently. It’s going to be around 600,000 of a revision. Goldman Sachs said it could be more like 1 million. It was right in the middle it was a little over 800,000. It was revised lower, much, much lower. Daniel, what’d you take?

0:03:58 – Daniel Creech

I think that this is a perfect display and exclamation point on the Willy Wonka and Wizard of Oz world that we live in. Frank, 819,000 jobs that we thought were created, as you said, between March 2023 and 2024, didn’t happen, never happened. That’s 30% less jobs than what we’ve been reporting and bragging about in the financial media. Me too, and you too. Everybody wants strong John numbers. Everybody wants a better economy. Of course, frank, that’s the worst since 2009. You know what happened in 2009, frank Chaos, markets chaos. I do think there’s a lot of politics here. I haven’t listened to the full soundbite yet on CNBC. I don’t want to take that big of a swing at him, but CNBC. I don’t want to take that big of a swing at him, but CNBC what’s his name?

Senior economic advisor Steve Leishman said well, I don’t know what you should really take away from this. The thing that you should take away from this is that we’ve been lied to for a year and that’s 800,000 jobs. That did not happen. That reportedly happened, and you’ve got to think of what goes along with that.

We talk about this all the time and you do a great job about sentiment. When you know and you think that the economy is doing much better than expected, when the job market is better than expected, that gives you hope. For lack of a better word, we’ll get to the DNC later but it changes people’s attitudes sentiment. It could change spending habits later, but it changes people’s attitude sentiment. It could change spending habits, but the idea that it’s a 30% hit to payroll jobs and the worst since 2009, I think it just makes people buckle down and understand.

Listen, you got to take everything data wise with a grain of salt and, as we’ve said, heading into the political, the political election this year, that is not a coincidence. It’s not a coincidence that you have these huge overstatement in jobs over the last year to kind of fuel this fire of a recovery and or this bull market. I just think that’s crazy. I think two assets are going to do really well, or this is just a tailwind for those two assets gold and Bitcoin? What about you? What are your thoughts there?

0:06:01 – Frank Curzio

You know why the fuck do we have all these numbers for?

if they’re not accurate like what AI is doing right now is it calculates things a million times faster and this is like the perfect use for it when it comes economic data. That’s just old, it’s. It’s through some surveys. I mean, who do you know you’re talking to? It could could be. So this is data that we could get right away now and all of our decisions in investing. I don’t care if you’re a fundamental analyst or technical. Imagine if you’re doing technical charts and you’re like well, last time this happened with a stock, but that really didn’t happen. I mean, what’s your thesis? It gets thrown down the drain. So when this data is not accurate and is off by this amount, this much, it’s a really, really big deal. I mean, we’re looking at 2.9 million jobs are created from March 23rd to March 24th. That’s 242,000 a month. Now you’re minusing 800,000?.

0:07:01 – Daniel Creech

Mm-hmm 819.

0:07:04 – Frank Curzio

So you’re looking at what. Maybe, instead of 242, I’m doing a math in my head 165-ish, 170? I mean it’s massive, massive, right? You talk about 60,000 jobs fewer and you know what you would think this would have to do with government jobs and things like that. But the biggest downwind revision came from professional and business services, which I knew. For Professional Business Services, which I knew you knew, anyone who follows any newspaper could see the massive layoffs that have taken place over that time period by just about every company in the S&P 500. And that’s what we were saying.

We were saying it pounding it down your throat how this is the first time I’ve seen in my 30-year career with stocks at all-time highs and these companies are laying off like crazy. You don’t see that Usually, when their stocks are all-time high, business is good, margins are great, earnings are great and they’re spending more, they’re hiring more. Now they’re cutting back and we saw that. And for this to be so far off, it’s terrible. Now what’s the takeaway? The takeaway is no reason why you shouldn’t go a 50 basis point Cut in September. It just makes a lot of sense, plus the CPI number that we’re going to get just a couple of days before. The year-over-year comparisons are not good to the point where it’s going to come in less hot than expected. Year-over-year it’s going to be down a lot more. So you’re going to see inflation the green light and this is why you’re seeing gold rally here.

Interesting I saw just before we went on it was Barrick Gold, the CEO of Barrick Gold. I can’t remember the last time they had gold CEOs on CNBC, holy shit. But he was just saying how you know underpriced the market is and you know where in terms of the stocks and equities listen, I am getting super bullish. You know that I haven’t talked about gold a lot in terms of being incredibly bullish. We’ve had, maybe we picked away at Newmont here and there we have, I think, one junior miner in our portfolio. I believe in our small cap portfolio that we still have. It’s come back that we had long term, but I used to have five or six of these in my portfolio. You’re going to see a ton of these names go into the portfolio.

This is an industry I covered for 10, 15 years. I know all the good players. I know all the shitty players in the industry. Who’s getting it done? What projects are great? I mean, the project is still there. There’s CEOs that did a great job, that you know, developed these, that they added to their assets. They didn’t just raise money to pay salaries, they raised money to buy assets that were down 80, 90%. Now you know the next $500 move in gold $3,000, I think we could many of us agree that it’s going to go there, especially with rates coming down this sharply and everything else going off with deficits and stuff like that.

I think it’s ripe for gold stocks right now. I really do. I think gold stocks right now, even silver, they should do well. They haven’t really performed, considering where gold is, and I know a lot has to do with inflation and cost, especially when it comes to actual miners, not junior miners that aren’t mining anything. The next move is going to be much higher for these names and I think that’s the move that everyone buys these junior miners for to get the 2X, 3x, 4x returns when that cycle changes.

The cycle changed a while ago. It changed what two years ago, where we saw breakthrough new highs and now at 25.50 new highs, and after this number, gold was down a little bit off its record high and now it’s flat and Bitcoin is up, approaching 60 grand again and you have the overall markets turning around too, where they were relatively flat and now they’re higher because they’re expecting a bigger rate cut from the Fed. And I said this year it’s very difficult. I could cite, and I did this on Twitter Daniel, I said, if you’re a contrarian investor, you should be buying stocks, hand over fist right now, because if you look at the risks and I named pretty much 10, 15 different risks, whether it’s geopolitical Israel and Iran. If you’re looking at Taiwan invading China, if you’re looking at the economy slowing, overvaluation, ai stocks in a bubble, commercial real estate is slowing, over-evaluation, ai stocks in a bubble Commercial real estate is dead All this stuff, all this stuff. Really, there’s so many negatives in this market and you don’t see too many people that are bullish other than Tom Lee, and he deserves it. He’s been very right in this market for a long time. If you’re a contrarian investor, you’re buying this market.

It’s hard to go against this market with buybacks coming back into play. A lot of people caught off sides that removed a lot of money from the market in the downturn when it went just pull back a couple weeks ago. They’re getting back in it. There’s a $6 trillion in cash and money market accounts have to make their way back into this market that came out of it. So this year, going into the election, it’s difficult to bet against the market.

And here you have positive news right, which is more jobs, more layoffs. But that’s positive because the fed is going to cut aggressively and that’s what everyone wants to see. Because when we look down the line and we look at target, we look at some of these companies reporting uh, we’re seeing people starting to get hurt right now I’m going to talk about a little bit later in in in autos and things like that but you’re seeing the effect of what happens to the consumer when interest rates are high. For longer. It doesn doesn’t happen right away, but now people are getting squeezed, it’s tougher. You’re seeing delinquency rates go higher. It’s getting tougher and tougher. We need interest rates to come down. I think this gives the all clear for the Fed to lower by 50 basis points when they meet in September.

0:12:00 – Daniel Creech

I like the 50 basis point call. Two quick things. You pointed out 358,000 jobs that weren’t created, overstated, in professional business services. The next one is 150 in leisure and hospitality Frank, 115,000 in manufacturing. The whole on reshoring manufacturing, getting back to the kind of the good old industrial days of the United States. Again, it’s not saying that no jobs were created, it was just so much overstated that that’s unbelievable. So those three categories are just-.

0:12:29 – Frank Curzio

But it makes you think, because this is from March to March, right? You say well, it’s not a big deal. Well, what about from March to right now? Right?

0:12:37 – Daniel Creech

Yeah, exactly. Well, you don’t get that until forever ago next year. Forever ago why?

0:12:41 – Frank Curzio

Why, forever ago, do we have to wait? Why is it every March with the BLS? Why is it updated quicker? Why are we not restructuring these indexes?

The CPI is a joke the way it’s calculated, recalculated and it was rebalanced in a way to calculate it, so you show no inflation forever. That’s what every politician wants, that’s what the Fed wants. That’s why it’s. 30% is rental properties and real estate, because, oh, that shit never goes up and it didn’t even go up that much.

If you look back at history, and you look back 30, 40 years and I’m an idiot because I did this research it’s rare for rental properties to go higher than 2% in any given year. Even when we saw 2005, 6, like 4, 5, and 6, leading up to the housing crisis, home prices were going up 20%. Rentals weren’t going up as fast. So like, okay, this keeps inflation in check. We all knew there was inflation, but based on the CPI, there’s no inflation, as all the Fed cares about. And now we saw out of nowhere, in the past couple of years, rental market went through the roof. It’s gone up 8% one year. So now you see it reflected and they’re like, oh, it’s just the way they calculate this and all this data.

It could be so easily solved and make it so accurate, but there’s a reason why they’re not doing it and again, it’s got to be for political purposes. But this is an embarrassment to be this far off. It’s really an embarrassment because you’re basing your research, you’re basing everything your money, your livelihood, everything. The Fed is based on its policy, which affects the world, the entire planet. Right with a reserve currency and this number is this wrong? It’s very, very disappointing. But with that said—.

0:14:09 – Daniel Creech

So last thing, sorry, what does Powell say this Friday at Jackson Hole? Do you think he addresses this?

0:14:16 – Frank Curzio

Is he going to mention this? And they’re saying that—I forgot what. I read the economic analysis on it, where economists are going to say—remember, economists are just—. I’m starting to realize most economists are idiots. I mean, they’re useless human beings. They’re useless I. I mean they’re useless human beings. They’re useless. I mean they’re worse than weather people and they’re even getting better, at least Remember they used to be so poor.

0:14:34 – Daniel Creech

We were only insulting economists. Now we’re bringing in weather meteorologists.

0:14:37 – Frank Curzio

now I mean it’s so bad. Even when you see when a data point changes, what happens. They say Goldman Sachs comes out and says, oh, now there’s a 25% chance of recession. Now there’s a 25% chance of recession. Now there’s a 30% chance of recession. You know what? The chances of interest rates going to where they were right now? When they first started raising them, Goldman Sachs had them peaking at 3%, at 3% in 2023. They’re going to peak at 3%. They’re going to come back down at the end of 2023. And look where they are now and look how much longer it took.

It’s useless, right? I mean, the way it’s not useless is people are basing the consensus of what these idiots say on how they’re trading the markets and what the fed and trying to dictate fed policy. But there is. They are so wrong with their analysis and I don’t know if they just lock themselves in a room. They don’t understand people because the economy is people. It’s exciting.

I wish I taught economics. I I make it so exciting because it’s about everything you buy, everything you sell. It’s about your neighbors, what they’re buying. I mean you can have so much fun with it instead of doing bell curves and all this stuff, and they’re so used to looking back at history when we’re in a moment that’s unprecedented, where we never spent $11 trillion and threw that into the market and handed it not to the banks, directly to people in businesses, and they don’t understand the effects of that. They didn’t understand that that was going to cause inflation.

The number one smartest economist on the planet is Powell, supposedly, and he said it was going to be transitory. You couldn’t have been more wrong with that. So it’s frustrating because I love economics, it’s something that I take passion in, and looking at numbers, I feel like we do a good job predicting it. But man, you can’t be this wrong on a freaking number. You just can’t. It makes you think like we’re China all of a sudden. It’s sad, it really is sad. But anyway, powell will be addressing this. He definitely will be addressing it, and this should increase the odds of a 50 basis point cut, seeing that the job market is not that good. But they should know that it’s probably even worse right now. Right, because we’ve seen a ton of layoffs over the past three, four months, exactly Right, since March.

0:16:30 – Daniel Creech

Yep, absolutely, it’s not as rosy, but unfortunately, or fortunately, like you said, that’s good for asset prices, that’s good for stocks. So bad news is good news, bad news.

0:16:38 – Frank Curzio

And yeah, if inflation goes higher, it’s good for stocks, if inflation goes lower, it you can’t really short the markets. You’ve got to be crazy short the markets Because even when we see shorts, what happened? We just saw it right a couple weeks ago. I can’t overstate this that when we have these pullbacks and as someone who’s been doing this for a long time the pullbacks are so quick and so big and I think the bears just jump on it. When you see a 20% correction, a 25% correction what was it? Nvidia? A 25% correction. What was it NVIDIA? Nvidia 25% correction All right, it corrected. Usually, you could see that type of correction in six months, nine months a year maybe, if you date back before the credit crisis. Now it happens like in a week and a half and everyone becomes more bullish. I’m like your thesis just came to fruition A 25% you’re talking a trillion dollars of market cap wiped off of NVIDIA.

0:17:25 – Daniel Creech

You’re of NVIDIA you’re right.

0:17:26 – Frank Curzio

In a week and a half and everyone’s like keep selling it, keep selling it. Now it comes back. You know these downturns happen so quickly that once you start recovering then you have. What do we have now? What is it the S&P 500? What is it up for?

like I don’t know how many days in a row seven, eight, nine whatever it is, it’s like every day it goes up, every day it goes up, but when it goes down it goes down so much quicker and that’s why it’s this buy-to-dip mentality. It’s a buy-to-dip mentality. If it goes down even more than 20%, it goes down 30%. What happens? You get Jeremy Siegel going emergency 75 bases cut right now and the next Fed September, another September, oh my God. And you got everyone in CBC panic mode. Fed’s hand to be like the Fed’s got to do something right away. It’s almost like these safeguards are in if the market goes down, because we’re not allowed to have a recession either.

0:18:18 – Daniel Creech

Anyway, I didn’t want to go that far into it, Going into a retail right Target posted.

0:18:22 – Frank Curzio

Good job, Daniel, on that. Oh, I hear you.

0:18:23 – Daniel Creech

Welcome back, we’ve had this in a portfolio for a while. I did sell that out of CRA. Yeah, we did. Yeah, it was profitable, but that that just got to be more aggravating. Listen, you can buy Walmart, you can buy Target anytime and hold those guys, but we did at. You timed it right at the beginning because it was a great COVID trade when everybody was supposed to lock down and stay at home in handcuffs other than the biggest and most profitable big box retailers.

So two things I thought. Well, one thing that I thought was hilarious, just kind of to piggyback on our worthless economist conversation. We just had the CEO of Target said the consumer is resilient and we were joking just a few minutes ago because they cut prices from peanut butter to diapers, to all kinds of things across 5000 items and said you’ve been talking about that for the last couple months, since we’ve been following these on their conference calls Frank, when you go to Target, yes, there’s a lot of things that you don’t have to have, that you can discretionary purchase or whatever, but essentially you’re going there for food and or items that you have to have. So of course you’re going to be resilient in that, like I can’t stop buying food and gas. So to classify, I don’t want to take a shot at the CEO, because they did put up a decent quarter and again, with all the BS and wokeness they’ve been doing, there was a lot of bad news baked into this.

So getting away from that or at least putting decent comps, same store, comparable sales, back in, like that’s huge and I don’t know if it’s still at its highs today. It was up 15, 16%. Last time I saw it was up 10% and that’s still a good move. I would still stay with Walmart over this because that’s just. I mean, they’re clearly the leader and if you believe that things are going to continue to stay tight, when I say they things, I mean higher inflation, higher cost of goods. But the resilient thing just bugged the hell out of me, I got to admit, because of course you’re going to be resilient for food and stuff that you absolutely have to have. I don’t know about your thoughts on Target, but I just saw the headlines and I just kind of giggled out loud.

0:20:20 – Frank Curzio

Yeah, I’m just actually looking to see the price differential. So this stock’s up 12% today, right, I think it was up like 16% at its peak and I have a chart up here showing that. Without that, it was basically flat year to date, while Walmart was up 42%.

0:20:34 – Daniel Creech

Yeah, right, so, which is amazing, and even if I do, yeah, I got it at 13% year to date and it’s up almost 13 today.

0:20:41 – Frank Curzio

Yeah. So that’s all the move. And even Costco is up 33%. So you know you have 30.

The takeaway is this one is the report was good about time because these guys have lagged everybody else and should have right. I mean we’ve done okay with this position. Walmart has done better. I mean we’ve owned it for a while and they’ve had inventory concerns and things like that. But you know you’re right to say the consumer is resilient when they’re purchasing. A lot of this is groceries and they’re not getting it because when you go, even by me in Florida in public, they destroy you. Unless you buy like the two for ones and stuff like that, they destroy you. Every single thing is at least 20 to 30% higher, minimum than if you’d buy it at a Walmart or even a Target. So there’s people like I’m done with this and I’m gonna go to Target and Walmart and you’re seeing that. But they said, while resilient, they lowered their estimates like the low end of their guidance and they said you know they’re expecting the consumer to cut back a little bit. So you know the guidance wasn’t as great, but again, low expectations into this stock and it’s like a catch-up trade.

And when I look at Target and Walmart. This is the perfect environment for these big guys and you see a slowdown in the economy. They, you say they have pricing power, but it’s almost like they have like the reverse pricing. So pricing power is ability to raise prices and pass them on to the consumer. These guys are also able to cut prices and maintain their margins because of the control they have over their suppliers. And what that does is, when you have a weaker environment like this, a lot of the mid-tier and smaller companies struggle like hell. They struggle like hell. Think about your banks. If you have a mid-tier bank, your fees are always higher than they are, even though JP Morgan and Wells Fargo bang you out, and they’re not even giving you any interest, even though interest rates are high. Right, they’re going to fuck you and everybody knows that. But when you go to the mid-tier banks, their fees are much, much higher, right. So that’s how they make ends meet.

And if you’re looking even at retailers those mid-tier retailers that compete with them they could stay afloat, but in this we have a slowing economy, consumer cutting back. These guys are able to capture and take lots of market share and become even bigger, and that’s why, through these times, when you see the downturns, the bigger usually get much, much bigger. Right, they have better balance sheets. Then they could buy some of these struggling competitors that were actually doing well at one time.

But this environment fits these companies absolutely perfect because, yes, it’s a slow economy and, yes, you’re seeing prices. They’re lowering prices on certain things and that’s working. Did you notice that they’re lowering prices? Who’s lowering prices? Costco, keeping their price at $1.50 on a hot dog. Good for them. But you have Target said they’re lowering their grocery prices over the past two quarters. We saw Walmart say the same thing and look at their results. So they’re able to get people into the store and maybe get them to buy other things that they’re not used to buying, because once you get in that store there’s a million things to buy.

But these guys accelerate so much in these types of environments and it’s no surprise. They’re going to do well and they’re probably going to continue to do well as the economy slows. Yes, I know rates are coming down, but let’s see, we got a couple head fakes in the past with Target. Let’s see if this is a head fake or not. But this is a catch-up trade. It was flat compared to Costco, which was up 33% year-to-date. Walmart was up 42% year-to-date and this is a catch-up trade. It’s up 13%. It should get momentum and go a little bit higher here. But the outlook wasn’t this. You know, they didn’t really raise outlook and they were more cautious and conservative in outlook, like most people are, because it’s tough to gauge the economy. But overall, very, very good quarter for them and good for them right.

0:24:06 – Daniel Creech

Yeah, absolutely. And just to piggyback with them cutting prices, them, target and Walmart. You’re also seeing McDonald’s do the value meal again, going after that consumer because of headwinds like inflation and such. And, frank, I’m sure you’re a fan of this On September 6th, do you know, a new Beetlejuice movie comes out. Yep, okay, so Denny’s, you like Denny’s?

0:24:25 – Frank Curzio

I love Denny’s. Yeah, I’m a big Denny’s fan. Waffle House, all that. They just closed. Denny’s in San Francisco 25 years ago.

0:24:29 – Daniel Creech

I like the dive bars of restaurants I’m a big fan of, but they’re doing two, four, six and eight value meals for Beetlejuice, Beetlejuice, Beetlejuice type stuff, wow. So maybe we’ll go eat at Denny’s and try that out, maybe buy the stuff. But the consumer that is struggling I mean they’re, they’re honest about it and you know value meals and all that kind of stuff at Walmart. So or excuse me, mcdonald’s and now Denny’s with Beetlejuice, Beetlejuice. So I just wanted to say Beetlejuice.

0:24:54 – Frank Curzio

You know I was excited because I love that movie, but I saw the long preview that they had when I went to go see, you know, the Wolverine and Deadpool, also really quick with Target. Which is interesting is the CEO was on CNBC and they asked him about price gouging, which we’re hearing, which I think everyone in the Democratic Party. You have a Democratic convention going on right now. They all got the memo to mention that, you know, mention at the convention price gouging and stuff and how they’re going to go after big companies. And he came out and said listen, you know, we’re in the retail industry. You can’t do this in our industry. It’s just too much competition, which he’s right. But it’s just like every company now, every single company that sells anything they’re pretty much going after. But yeah, at least it’s a democratic convention which is going on right now and you know we saw a couple of things out of Kamala where she hasn’t done too many interviews. Okay, they’re getting a lot of momentum. They raised 500 million, they have 500 million dollars 500 million dollars.

They, they raise, I think, since they announced it, which is insane, uh. But now she’s got to go over her policies and we see the flip-flopping back from fracking. I’m not for fracking them this, that right but one thing that they did mention is they want price controls and everybody went crazy on that because that’s never worked in history and we know that, which means it’s not based on supply and demand, and we see this happen in a lot of countries where that doesn’t work and just the economic policy coming out of them is insane that even Democrats are going holy shit, what’s going on here? Because they also said they want to tax unrealized gains. You kind of say this going to an election, but when you highlight that at your convention and you really can’t understand the economy, how things work, remember, these are all politicians on both sides, so many of them have gotten paid by the government and it’s you know. They think there’s a limited amount of money. These are tax dollars, right, they’re supposed to represent us. What they’re doing is they’re doing things that represent themselves. They’re gonna get them elected. We all know that on both sides. I don’t know if people understand. I’m sure listen to this podcast.

You might understand what unrealized gains you taxing those unrealized gains are, but I’m going to put this as an example for you. So if they decide to do something like this which is outrageous, I can’t see it being done I would predict at least 30% of small businesses are going to go under and the stock market is going to crash at least 40 to 50%. And here’s why If you have, say, if you have $10,000 and you bought Nvidia three years ago at $25. And today it’s at a hundred, right, so you have 300% gains. Okay, and say, for example, just for this example, that those three years it worked out exactly a hundred percent gains. A hundred percent gains, a hundred percent gains, right, over three years. Under the current policy, you’re not going to pay taxes at all until you sell it, and when you do, you’re going to be taxed 20%, maybe 15% based on your tax bracket, on a 30% gains, which is $6,000. Okay, fine, that’s the way the system is. If you use unrealized gains, you’re selling something that you haven’t sold yet, right? I mean, you’re getting taxed on something you haven’t sold yet, and when I see how it’s talked about, they’re dead serious about it. They’re not like oh well, we said that it’s not like fracking. You said it a while ago. They reiterated this is what’s going on Now.

If you’re taxing the unrealized gain, you would get taxed 25% on the $30,000 unrealized gain a year. So year one 7,500 in taxes. Year two 7,500 in taxes. Year three 7,500 in taxes. As you own this, that’s $22,500 that you would be taxed. And more importantly is how are you going to pay for that tax?

Many investors are going to be forced to sell their stock. You’re going to see money coming out of the market tremendously, but the best part is, let’s say you don’t sell it and NVIDIA goes all the way back down to 25, you just paid $22,500 in taxes on that and yet you don’t have a capital gain on it. It’s when you put it into perspective and again, if you’re in the stock market, you understand and I just gave you one on one on that and you’re probably like, ok, I get it, but if you don’t understand what that would do to assets and what that would do to businesses, the stock market, I mean, you’re talking about an unbelievable collapse. If they were really serious about this, I don’t think it’ll get passed. Anyway, I will collapse. If they were really serious about this. I don’t think it’ll get passed anyway. I think it’s insane. But to mention that out loud, holy shit, I mean that’s pretty insane.

And that’s what we’re hearing from the Democratic Convention right now and again huge popularity, just like with Trump. It helped that he almost got killed. Well, you said a popularity of the Republicans. Just it was insane. And then they were like listen, biden, you know they pushed him out. Kamala, who is surprisingly how everyone hated her on both sides and say she was the worst vice president. Now she’s the greatest thing ever. Uh, it is interesting to see how this is unfolding, but I think the Democrats have a very good shot at winning here.

0:29:47 – Daniel Creech

That’s crazy to say, well, I mean it’s crazy to say from two, three weeks ago yeah, they have a lot of momentum, they’re getting a lot of money, money, money trumps everything in politics. I I’ll talk about this more as podcasts unfold and things. But I there’s a lot of reasons that the polls that we’re seeing are very, very slanted or whatever. I’m not trying to cry or say I have a tinfoil hat on, I just it’s very difficult for me to believe that the race is as close as it is. When you understand the average person is dealing with the circumstances everybody’s dealing with, with prices and all that kind of stuff. But I could be wrong on that.

The takeaway from the unrealized gains and, to your point, it would cause such a doom loop because, for instance me, galaxy Digital Holdings is my largest position in stock. I have been up several thousand dollars and I’ve been down 80% in that stock. So if you tax me when I’m up several thousand dollars and then the year later I was down 80%, what that causes is you’re either going to have to sell that stock or you’re going to have to sell other holdings or other assets. And what happens when you do that? Now you are creating a taxable gain that goes through for the next year. It would just be an absolute terrible idea. But you’re pandering. It’s that more social division, and that’s done on purpose and everybody does it. What drives me insane is that you can always. The only thing that you don’t touch is capitalism, and that is what is under attack right now. That just shows you where we’re at in this kind of graph or up and down of society. Nothing new under the sun. This happens all the time. If you look at history, it’s just unfortunate that we have to defend capitalism when you have the easiest result to point to and be like hey, how did the United States become the largest, greatest superpower in the shortest time in the history of the world? Well, capitalism, yeah, let’s do away with that. The history of the world. Well, capitalism, yeah, let’s do away with that.

The crazy thing on price controls very quickly. If they implement price controls, go, buy everything you can, because you’re going to see empty shelves and even higher prices. That’s the only thing you need to take away there. As you said, it’s been tried countless times. It’s never, ever worked. It won’t work. It’s not going to work. But the idea.

The bigger problem here is and both parties do this, and this is what’s aggravating, and you just have to deal with it through this political season. But wouldn’t it be great to be able to cause a problem, blame others and then take more responsibility and take over more control of that sector. So, whether it be healthcare, whether it be energy, whether it be public education, whatever you want, you can take it over. You’re the biggest influential player. This results and statistics suck. You can look at how much for education. You look at how much we spend per individual, per child, and balance that or compare that to the rest of the world.

You can look at health care costs here and compare that to the rest of the world, and then you can say things like if you like your doctor, you can keep your doctor. Prices skyrocket, people are still uninsured. And what do you do? Well, you blame the healthcare system. Now, there is a lot of blame to go around the healthcare system.

Do not get me wrong. I’m not defending them. The only people more crooked than our business, frank and Wall Street, are the healthcare people, and I say that as a compliment. I know several doctors and one is a great friend of mine. But wouldn’t it be great to be able to infiltrate them, affect them, impact them, blame them and then take over more control of that company. That’s a scary thing. What you’re going to see, too, is about these price fixing, is that you’re just basically going to want all government employees to be farmers and take over all the farming, because, even though wheat prices and different things are crashing, bread is still expensive, so of course that’s the farmer’s fault as well. We’ll see how that unfolds, but unfortunately we have to defend capitalism, but it is worth defending.

0:33:17 – Frank Curzio

It is interesting when I see and I’m going to give Trump a little shit here too, because when George Floyd happened, it was May 2020, and then you saw riots in the street and as he’s running, you know well, this is 2019, right, so 2020, 2024. So, as you’re running, you’re like I’m going to clean all this up and I’m going to get the National Guard, you’re in office, yeah Right. So when you have Kamala Harris going, hey, you know, this is what we’re going to do to control inflation. You would have fucking VP for three and a half years. Why don’t you do that? Oh, I’m going to control the border. I mean, you can’t make this up with these politicians. It really is unbelievable. It really is when I see something like that. But I can tell you why. Because I’m going to elaborate a little bit more, because I think people might have been surprised when I said I think that, even though they’re leading the polls, whether you believe them or not, the Democrats have a good shot. One is, when I look at this election, or even look at the last election when Biden beat Trump, it was separated by just 44,000 votes in three states. It was Georgia, Arizona, Wisconsin. That was it. It was 44,000 votes. So both of these sides are going okay. What do we need to do to get those states? What do we need to do to get votes? And both sides should be kissing everyone’s ass. Yet think about what the Democrats are doing, which is crazy. So they’re kind of losing a Jewish vote by not showing full support of Israel. They’re kind of losing a woman vote, as every single House Democrat voted to support men playing women’s sports. They lost the entire crypto crowd since administration. You look at Gensler and Warren attacking this industry, even the good players. They shut every bank down illegally that does everything with crypto and said we’re going to go out to any bank that does crypto right Illegally. They did this. They’re going to get that fixed, probably in a couple of years.

Operation Chokepoint 2.0. So how do you make up the difference? There’s only one way. You got to open up the borders and you let 7 million illegal immigrants come in and when you have, harris and Wallace both said said this publicly that they want to give them licenses and when they have licenses, they’re going to be able to vote and win.

He didn’t run on liberal, he kind of partnered with them and said okay, I’m, you know, you felt like, okay, I’m gonna, I need these guys on our side and here’s what I’m gonna do. But you didn’t think they were gonna go that far left. And now this party I mean even the vice president you selected you had the chance, like Pennsylvania Pennsylvania is a huge freaking state, right swing state, and that guy would have you know again, Jewish would have been better and you chose, like the liberal, where they’re coming out and saying and pounding their chest, saying this is who we are Right, they’re not faking it and people are actually supporting that. And to have that agenda and not even care about some of these groups that you kind of need. It makes me think that they have a very good shot of winning. And I know some people don’t want to hear it. I don’t want to hear it because I think you know capitalism. It’s not that I love Donald Trump, I just like a lot of the policies that are currently in place. I feel like, being a 50-year-old white businessman, I am a racist, I’m a white supremacist, I am the enemy. Anybody that works hard and works their balls off and tries to support their family, I feel like, is like an enemy of this administration.

And if this happens and the economic policies look, you’re going to have to adjust your portfolios. This is serious stuff that’s going on right now and if this happens, I don’t really think a lot of those policies on the economic side will pass. I’m hoping not, but the fact they’re saying them out loud at the convention is a little scary and I just hope that that doesn’t happen. We’ve seen this really left agenda in Canada. Holy shit, it’s been a disaster. But that’s something that you have to pay attention to. You’re going to adjust your portfolios if that happens, depending on you know, senate, the House, everything.

This is a pretty big election. You’re going to see major, major changes and you can look back and say what is it for the past 12 years. So what do you got? You have eight with Obama, four with Biden, right 12, 13, 14. So the last 16 years, democrats had control of the White House for 12 of those years, and it can’t all be Donald Trump’s fault, all right. So you could blame that guy as much as you want, but you guys had control pretty much the majority of that time frame.

So we’ll tell you how to adjust your portfolio and what you need to do, but you need to pay attention to this and vote whatever you want. I know there’s Democrats that listen to this. I know there’s Republicans. We want to get into the weeds a little bit here, and I don’t care about offending any place. Everyone has their own thoughts or whatever, but when it comes to your portfolios, you’re going to have to adjust depending on who wins. It really is going to make a significant difference, more this election than I’ve seen in any other election.

I’m not just talking about buying climate change or maybe oil stocks or not oil stocks based on fracking and stuff like that. There’s a lot more at stake here in terms of where the allocation is going to come. Higher taxes that they’re going. I mean, I’ve never seen this right. You’ve never seen an election where the people that are running on any side are saying we’re raising your taxes. You know, holy shit, like who wants? You really want to raise my taxes. You’re taking my taxes and giving them to places like Ukraine and without any checks or balances, and giving our money away where we have no say in it.

That’s not what a democracy is, right? You’re supposed to represent us. You’re not representing us and now you want to take more money from us, right? It’s just usually you lie about it and say, well, no more new taxes. And you lie about it and you raise taxes. That’s usually what every politician does, but to say, hey, we’re raising your taxes, it’s definitely a different world. It’s pretty crazy. I didn’t want to go that deep into that, but we do. I mean, this is going on right now. They’re probably going to get a good day today and tomorrow for the convention. I think it’s Thursday, right, is the final day.

0:38:50 – Daniel Creech

I believe so the waltz speaks tonight and then, I would guess, Kamala speaks tomorrow, and they’re going to get a lot more momentum there and then let’s see.

0:38:57 – Frank Curzio

Let’s see, there’s going to be debates, there’s going to be interesting of what’s going on, especially it’s just going to be up to a few states, that’s it. Everything else doesn’t matter. It’s just basically a handful of states, four or five of them and those three I mentioned earlier. So it should be interesting. But, uh, I don’t know if I told you, Daniel, but my daughter just got her license today today.

0:39:21 – Daniel Creech

Nice, I knew it was coming up a couple of hours ago, a couple of hours ago, a couple of hours ago. So she passed Well, congratulations.

0:39:26 – Frank Curzio

Yeah. So I said, okay, it was nice knowing you, I’m not going to see her anymore. My wife’s not going to know what to do because she’s. She think about when we were an hour away and they made a really good school because we took them out of public school. We didn’t like the public school that they were in and then that’s why we actually built a new house in Jacksonville but my wife was commuting an hour there, hour back, hour there, hour back, four hours a day in the car.

Holy shit, and as tough it was on her because she’s doing the driving. I had to listen to it every single day when she got home. So it wasn’t as good for me as well. And I get it. Now I don’t know what she’s going to do with herself because I, okay, and I drive her and I come here and I get here, you know, around whatever 8-ish or whatever 815. But now she doesn’t have to drive. So I’m like, wow, you got a lot of time so you don’t have to cook and stuff like that. But anyway, the point of this is I went looking for a car with her and I bought her a car. I bought her a Mercedes.

And before you say Frank, I can’t believe you bought a six-year-old a Mercedes Hear me out, hear me out, and this is going to be a very good segment, guys, because I’m going to talk about cars, okay, and I haven’t talked about this in a while, but, holy shit, this industry in a lot, a lot, a lot of trouble. Okay, we went to about seven dealerships, we got a CarMax and we went with an EV. So it’s a Mercedes EQB 250. It has 7,000 miles on it and it was $37,000. That car, brand new, is probably I don’t know. I want to say twice that when it first came out, I mean we were looking at comparable cars, traverse and stuff like that. That was much higher. And when you get into this in an electric vehicle, she loved it because you see everything light up. We charged it for the first time yesterday, holy shit.

0:41:08 – Daniel Creech

Complete EV or is it a hybrid EV? Ev okay, Not a hybrid.

0:41:11 – Frank Curzio

Okay, and holy shit I mean it was the first time so I said, okay, let’s go, because I didn’t know you couldn’t go to Tesla. I didn’t know there’s certain chargers that are good or not. We went to three different places. Two of them were closed, where they only had like one or two pumps. We used a car and you could press a button, anyway, but it was a whole process. Now we know how to do it, but I could see like the learning curve behind it. But once we get the charger in our house, it’s going to be different.

But the point is pricing matters when it comes to EVs. You know I’ve been negative on this market for such a long time, saying it’s too optimistic, telling you that Ford and GM have no idea what they’re doing and never be able to scale, and not Tesla. You know, Rivian, I thought, did a great job being able to scale even though the timing was bad. And you’re seeing, you know people pull back and prices coming down. The used car market is crashing, absolutely crashing right now. I mean to get an EV. If you’re ever thinking about trying an EV, do it now, because you can get Teslas for half the price that have like 5,000 miles on them. It’s the only reason why I did that. I didn’t want to get her a Mercedes, but when it’s cheaper than a lot of the GMs, the Fords and everything else that we were looking at, I was like, wow, and it’s used and, plus, we’ll get a tax credit for it. But the point is, when we went to seven different dealerships, the amount of inventory, Daniel, that I saw on the books not on the books, but just at the lots holy, I’ve never seen so many cars in my life. I mean, there was one where there was hundreds, if not a thousand, cars. That’s how big this lot was and they had a big garage with four different floors that we drove in and it was all full of cars.

My wife is in the market for a car. I was two and a half years old, so she wants to trade it in, get something more updated, and she is going through the midlife crisis, like we all do, and she wanted a Dodge Charger. So we tested something I didn’t know. They stopped making them in 2023. They’re coming out with the electric one, which is probably not gonna be available for another three years. They must’ve had like 70, 80 of these cars, all different colors. They wanted to give it to us. They wanted to give it to us and then when she test drove, she’s like I’m not ready for it, I don’t want it. You know, maybe without any kids or whatever, but you know it was just funny. It’s like your dream car when you were younger. But I got to. Holy shit, these guys have so many cars. They weren’t busy.

I asked every single dealership how was business and everyone said the last two months had been really, really bad. So I just started doing research and man, it’s pretty scary. I think Ford and GM are both going to crash from here crash. I think they have that 30% plus downside from here. That’s how much I think. I mean it’s that bad with the industry. So I don’t know going to see massive incentives, but ford came out today.

0:43:44 – Daniel Creech

I was gonna say they’re already in the news just today about lowering what’s the news that you saw? They’re uh scaling back even further on evs that’s switching to hybrids, for I believe it was ford yeah, they’re going to focus more on hybrids, which actually I mean that makes a lot of sense, but yeah, anyway, they’re cutting back even more. So this is probably their fifth or sixth announcement to cut back on evs.

0:44:03 – Frank Curzio

Everyone’s going to see that article and that’s what read the whole article. Because first they dropped plans for the EV truck, their plant in Tennessee, so they said they’re going to further delay it, which means they’re probably not going to do it. And they also took a $400 million charge. This should be the headline story. The $400 million charge should be the headline story on basically manufacturing and their plant. And if you look at Ford, ford I think is second in the US, maybe at 7.4%. Third in the US, Hyundai is 10%, Tesla’s 50%. But I started digging in and GM might not get smoked as much because we know they have a $6 billion buyback in place amounts to 10% of the float, which should help a little bit. But GM just announced layoffs. They announced layoffs in December. They just announced layoffs a couple days ago. If you look at Ford’s last quarter, it was atrocious. And again they said they canceled their electric three-row seat for the SUV, delaying the plan again the whole write-down for the SUV, delaying the plan again the whole write-down.

But when I started doing the research on the inventory, it just scared the crap out of you. So when you look at the inventory of new vehicles, okay, they’ve been below $3 million for the past four years. Total inventory of US cars and trucks. Right, they’ve been under $3 million for the past four years, so between 2.5 and 2.9. They’re at 3.3.16 now and they’re likely going a lot higher. That’s very, very high. Remember, these are 2024s in the lot and 2025s are just beginning to come out, so they haven’t gotten rid of 2024s yet. 2025s are just starting to get out. You get 2025 some places. They usually come out now through October.

If you look at supply in terms of days, pay attention to this, please, because this is like the same store sales metric for retailers. That’s how important it is. So, when you look at supply inventory in terms of days, the average supply inventory in terms of days historically is 60 days. Ram, jeep, dodge all over 150 days. Lincoln 145 days. How are they going to get rid of this stuff? Nissan, Chrysler, Volvo, Infiniti, Mazda all over 100. Some of them up to 120. Ford is at 100, but its signature, what’s their signature product? Ford is F-150. It’s at 135 days. That’s how much inventory they have of that car 135 days. So if you’re gonna go to Ford, whatever price they give, you say I wanna pay $10,000, less than $5,000 here, so I’m walking out and they will let you walk out, but they’ll probably call you back. They’re gonna call you back cause it’s gonna be that bad.

The Escape if you’re looking at Escape, the Bronco Sport, over 180 days, wow, okay, the average is 60. That’s how much inventory and you have. The 2025 is about to come in a lot. You know what Toyota’s at? The average is 60. This is cool. Toyota’s at 31. Why do you think?

0:46:57 – Daniel Creech

Because they didn’t go down the EV rabbit hole.

0:46:58 – Frank Curzio

They didn’t go down the EV trail and I remember I think it was 2017- or 18.

0:47:02 – Daniel Creech

Didn’t they run their CEO off too?

0:47:04 – Frank Curzio

I don’t know.

0:47:04 – Daniel Creech

I don’t know, but he was spot on.

0:47:06 – Frank Curzio

Isn’t his name? Toyota? Toyota with D-A, I think? Whatever. But I’m not even going to go into it. I don’t know. Maybe he started the company, his family started the company, I have no idea. But I remember going to CES.

As everybody believes he’s like, we’re not going all in on them, and everybody ripped them apart, especially the climate change crazies. They went after Toyota and said you guys are assholes. They said it’s never going to get to 30% market share, no matter the technology or the cost reduction. I don’t know about that, but still think about that for a minute. If you can capture 25% of it’s game-changing right. So it’s not like we’re shitting on EVs here. We just knew what people like. It’s going to be 40%. We’re going to mandate every car.

So, in other words, when you had 40 GM who did everything they can to put Tesla out of the business, lobbying politicians to make sure they can’t get any dealerships or anything then late, they decided to go all in on EVs and spend tens of billions, if almost hundreds of billions of dollars. And this is over the past five years. Toyota stuck to what they’re great at they manage inventory to perfection, and now they’re selling tons of gas vehicles, they’re selling hybrids, and also while Ford and GM were trying to make EVs and scale them, which never happened. What happened? They forgot about their core business, the gas vehicles, and this resulted in them producing a lot of shitty cars. What happened? They forgot about their core business, the gas vehicles, and this resulted in them producing a lot of shitty cars. They didn’t have whatever analogy. You want to use pulse finger on the whatever. I don’t know what happened. But if you look at the massive recalls that you’re seeing and GM, I think, just came out now and they got fined or something and BMW just came out with a massive, massive recall today, a ton of older cars. But the warranty charges have crushed these companies, especially when you look at Ford, which resulted in a billion dollar hit to profits. That’s a 10% hit in their profits, big, I mean. You look at gross margins of 15% billion dollars, right, I think, ford and gm in a really, really big trouble. I think this is a story nobody’s telling. Uh, we saw it happen with travel out of nowhere. People like the airlines all of them got no and said hey, you know, we’re not seeing the demand as crazy now. The hotels all of them came out and warned said the rev part is down lower than expected.

We’re seeing prices come down in a lot of different industries. Used car prices come. I don’t think this is pricing the Ford GM. I think they’re going to be in a lot, a lot of trouble. They have a lot of moving parts and different things in finance divisions and they’re great at manipulating earnings, which a lot of companies do legally. I think these guys have 30% downside here. I think they’re in a lot of trouble. They’re setting up massive inventory. You’re going to see demand freeze up. The car prices are way, way, way, way too high, so the margins are going to get absolutely crushed. Not only that, they produce these cars already right, so they paid higher prices just to produce them. You’re going to have to sell them at steep discounts to get this inventory off. This is a story I feel like it’s not being told. Before GM, a lot of these automakers were in trouble. I think Toyota was really going to kick ass here, but when you look at the inventory, I didn’t that bad until I started going to these places.

Let me know what you guys see at. You know frank@curzioresearch.com, but you know used cars down 11% prices year over year. Ev prices down 16%. If you’re thinking about an EV, get a used Tesla. They’re giving them away. If you want to try EV it made me try an EV. I’ll let you know how it is. So far, so good. My daughter she charged pretty quick. It was like 20 minutes to get to 80%, but it was to learn how to do it and we never did it before. It was. You know. We’re there for like a half an hour and people are like are you using that thing or not?

And they were like yelling at us. We’re like I wasventful, you know.

0:50:47 – Daniel Creech

Can’t do anything. I’m sitting there, I’m trying to do. It Can’t take you anywhere. Man Can’t even charge.

0:50:49 – Frank Curzio

Nobody accounts for anything like the learning curve, right? My daughter just got a license. Yeah, we’re just, we’re charging it. They’re like and two guys came by Fuck off, come on, just wait. There’s 20 spaces here. You can get it done someplace else. Somebody’s going to finish in 20 minutes, right, Just charging a car.

But anyway, I’m probably going to get lots of comments about that. But seriously, in the stock, this is the way you listen to it. In stocks and stuff like that, I usually say this at a premium. But be careful with foreign GM. If you own those stocks, I’d sell them right away. No one’s going to come by and acquire them. Gm might be a little bit safer. Again, that’s a big, big, big buyback. That’s a big buyback 10% of the flow, which should help them. But let’s see how much they bought back already because they are laying off employees and you’re seeing a slowdown. Write downs Again, that headline should have been $400 million write down and it wasn’t even in the headline. It was like they’re delaying it. No, it should have been. That should have been the headline and it wasn’t.

On another note, there’s a company that you know very well, Carmax, and that’s where we got this car from, and I think they’re going to kill it. I mean, Carmax was jam-packed. The prices were there, depending on where they’re buying, the prices they’re going to be. You know they’re not manufacturing. They don’t have to deal with all the manufacturing costs. They probably have all the algorithms in place, using AI to get the perfect prices on these cars and then they’re going to make their fees, no matter what. But the used car, like CarMax, even Carvanhas on fire. Holy shit, the Carvana come back. That almost went out of business. But you know these are really good names in that space. I know you like CarMax. Talk about it for a while.

0:52:16 – Daniel Creech

Yeah, I’ve. I’ve seen some hedge funds going in and out of it. It’s come on some few screens that I’ve run. That’s what got my attention quickly. I’ll go over tomorrow in more detail on Wall Street Unplugged Premium. See what I did there, frank.

But the one thing that stuck out to me from its previous earnings on CarMax was that they highlighted A the management is a fantastic, has a fantastic mindset because they focus on their core business and they want to do that zero to four year old kind of car, that age group. They want to maintain margins. They did take a hit to margins because of, like you said, prices and things, but they’re not just going to discount prices to move inventory like some of their competitors. The thing that stuck out to me was the CEO talked about how the number of cars that were 10 years or older have really taken off lately and obviously that’s a trend with a struggling consumer with higher prices, higher interest rates, higher borrowing costs, etc. What that means is outside of CarMax, like you’d like to say. Hey, if you read the Wall Street Journal, think through the Wall Street Journal and what other stocks are impacted. I know I’ve said this a lot and if you’re tired of me saying this email me, Daniel@curzioresearch.com. But when you have headlines or at least bullet points talking about 10 years and older cars, when people are holding onto their cars longer, that is great for AutoZone and O’Reilly Auto Parts and those guys are some of the most fantastic businesses Shouldn’t surprise anybody and I sold it too early in our Dollar Stock Club with AutoZone.

But those stocks are both right at 52-week highs, maybe even all-time highs, but definitely 52-week highs, and the longer you hold onto your car, the better for those guys. But CarMax is a fantastic business for what Frank was just talking about. Plus, they have the CarMax financing, the financing division. Obviously and this is what’s cool you would rather trade growth in your core business versus having higher interest rates and just taking some more money off the top because at some point high interest rates are going to cause a slowdown in overall consumption, which is happening. But you have the car dealership and then you have the financing side to really where you can take advantage of higher interest rates. Those guys are just solid. So, yeah, the stock not doing a whole lot. It’s kind of been going sideways, but definitely I’ve been watching that for a while but it’s hard for me not to think the real takeaway is AutoZone and O’Reilly right here, with the longer, with the higher those are just amazing companies.

0:54:32 – Frank Curzio

I mean I’m looking at CarMax Speaking of buybacks.

0:54:33 – Daniel Creech

I mean AutoZone, basically wrote the book on that.

0:54:35 – Frank Curzio

CarMax is flat for the year, for 12 months it’s flat. You’re looking at Carvana it’s up 300%, but Carvana I want to look at.

Carvana was great, they were so close to going under that stock was, I mean, even a year ago. Let’s go further back. I mean this is like we’re going at 2023. I mean, I remember coming down to like $3. It’s like seven or eight. Here it’s 158.

All right, so you know, a CarMax again. You’re seeing car sales. What maybe you might say well, people don’t spend. People are going to need cars. They’re going to need cars constantly, but you know, I don’t think they’re going to go new because it’s so expensive right now and now car max is. It’s like no haggle, you go there, that’s the price, that’s it. Uh, it’s pretty simple. The process was very, very easy for us, um, but uh, let’s see I think you’re right with it the auto parts that probably benefit even more. But be careful with the auto industry, because the new companies everybody that we saw, like everybody, it’s just they were all empty. Carmax was pretty packed. People were definitely getting cars there.

It’s going to be interesting to see how they get rid of this inventory. How do you get rid of inventory? Look at Target, look at all these companies who have massive inventory. And, by the way, T.J.Maxx also reported great numbers. That’s up six percent. Another good company. But you know it’s. How do you get rid of inventory? Is you have to lower prices and sometimes you have to take right down or whatever. You have to lower prices. They’re not there yet. They’re not there. You know gm and ford aren’t there? A lot of these car makers. They’re sitting with massive amounts of inventory. I don’t know how they’re going to get it off the books. They’re going to have to lower prices tremendously. And the fact that you can get man electric vehicles or, you know, used cars again, price is down tremendously 11%. You know you’re going to see more people. I mean, if you can get a car at 3,000, 5,000, 10,000 miles, I mean you’re saving it right. I mean, how much does it go down when you drive it out? What do they say?

0:56:16 – Daniel Creech

You drive it like anywhere from 10% of something 10 to 30, really, I mean. They can be astronomical depending on the vehicle, as soon as you drive it out there.

0:56:24 – Frank Curzio

And yeah, if it’s a new car, if it’s 2023, you have the warranty still on it for a couple of years, usually three years. So that’s an industry again. I just went through it like craziness over the past month, which has been a nightmare for me. It’s nice when I’m buying a car for myself, but I got to buy a car for everybody else now. But, yeah, covered a lot, all right, a lot today, and welcome back, Daniel. Good to be back.

We’ll be on the podcast tomorrow, the premium podcast, where that’s where we, you know, really dig into a lot of stocks today. I just wanted to show you some analysis, because I just did a lot on it in the past couple of days, because I Let me know what you’re seeing, let me know if you I know there’s so many people this is podcast now. Thank you so much and I’m humbled, but we have people at dealerships and you might be a dealership where you know you might be doing great right now Toyota, there’s other companies that are doing well, but there’s some that that are in a lot of trouble right now. Business is definitely, uh, in a downturn from those, but I like to hear that’s that’s the benefit of this podcast.

Guys, this is a community, this is massive, this is a network. You know there’s no ego here. You know, if 50 people in a row email me and say, no, no, we’re seeing demand and we all work at dealerships, I’m gonna come out and say, hey, this is what I heard, right, we want to get it right and this way we could, you know, get ahead of the curve, because all data that’s reported just like you saw today with the jobs number it’s all lagging. It’s data, that’s changed a lot. And when you get real time from people on the ground boots on the ground that’s where you get the information first. That’s how you make the most money in stocks. How I made a living doing this is because having a great, great network and getting into ideas and stuff like that before anyone else, no one’s talking about this downturn in the car industry right now Nobody. I think these stocks are going to get absolutely hammered coming up. Let’s see if I’m right and let’s see if we can make money from that. But other than that, daniel, final parting thoughts.

0:58:10 – Daniel Creech

Good to be back. Avoid, be careful on GM and Ford.

0:58:13 – Frank Curzio

Yeah, All right guys, See you tomorrow. Yeah, Questions comments. Frank@curzioresearch.com. Daniel, real quick.

0:58:18 – Daniel Creech

Daniel@curzioresearch.com.

0:58:19 – Frank Curzio

All you guys will see you tomorrow on Wall Street Unplugged Premium. Take care, love this episode of Wall Street Unplugged. I think you’ll really love Wall Street Unplugged Premium. The Wall Street Unplugged Premium is my members-only podcast where I dive even deeper into this week’s events, where I’ll do even more than tell you what’s moving these markets. I’ll tell you specifically what moves you can make today. So this is going to be about trading. Put big money in your pocket right away due to the inconsistencies I see daily in the market.

I’m talking about specific investment ideas. I’m recommending and tracking each week that I believe will be impacted directly by everything I just talked about today. Plus, you’re going to get the chance to go even further down the rabbit hole with me and my co-host, Daniel Creech, as we discuss which of these week’s trends could turn into massive windfalls. Could the big trends that we see lurk in Horizon? Also, the news we’re picking up from our network of insiders, which has gotten bigger and bigger thanks to you and so many people listening to this podcast in over 100 countries, and you’ll get a chance to talk to me directly in my special Ask Me Anything Q&A session. All that and a lot more like premium interviews with world leaders in finance, technology, industry and politics. This is all part of Wall Street. Unplugged Premium and becoming a member is super simple and super cheap. So head on over to WSUoffer.com to check it all out. Sign up today and you won’t miss a thing. That’s WSUoffer.com to check it all out. Sign up today and you won’t miss a thing. That’s WSUoffer.com.

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