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

How’s it going out there? It’s December 11th. I’m Frank Curzio, host of Wall Street Unplugged Podcast, bringing you the headlines and tell you what’s really moving these markets. So a great interview for you today with the best analyst, best podcast host, money manager and most handsome person in the world. President and founder of Horowitz Company. Great, great friend, Andrew Horowitz. What’s going on, buddy?

0:00:46 – Andrew Horowitz

Hey, Frank Curzio, you know I got to tell you something that was very nice of you. That was nice. I would say the same if you were coming on my show. You know that, oh yeah.

0:00:55 – Frank Curzio

I do. I came on your show a couple weeks ago. A couple weeks ago, yeah, I sent. This is much more important than anything we’re going to talk about today. Okay, okay. What is this about? Oh, oh, if you’re on YouTube watching this this is a Marlin that. Look at you. Look how skinny you are there. What do you have? What do you have Like a Zep pound with one cheek and a Majorno on the other cheek?

0:01:16 – Andrew Horowitz

Yeah, it’s almost like 50 pounds man. You look great there. Seriously, zempic Tuesdays, I got Zep-Bound Wednesdays, I got Maggiorno Thursdays. It’s unbelievable you know.

0:01:25 – Frank Curzio

Look at the size of this. How big is it?

0:01:29 – Andrew Horowitz

So that’s about a 250-pound blue marlin Pacific blue marlin that we caught. That was a good fish. Did you see the tuna? You have the picture of the tuna.

0:01:37 – Frank Curzio

I do, I think I have the picture somewhere. I could probably bring it up.

0:01:39 – Andrew Horowitz

Yeah, but that tuna took six guys, two and a half hours, six rounds each to bring up. It was a beast, it was like pulling a Volkswagen out of the water.

0:01:51 – Frank Curzio

Wow yeah, if you guys watch this on YouTube.

0:01:54 – Andrew Horowitz

Is that your boat? No, no, no, that was down in Guatemala. I go down to Guatemala once a year hopefully maybe more with a bunch of guys and we get a boat at this place called Casa Vieja. If you have your listeners the opportunity to look it up, it’s a wonderful. It really is. I mean, if you could do this. It’s a bucket list trip. It’s a wonderful trip and they make it so easy. You get on the boat, you fish, you get off the boat, you get back to the lodge, you get a massage, you eat dinner, you have drinks, you play poker, you smoke cigars, you go back to sleep, you get up, do it again that’s great, see, I can’t wait to.

0:02:25 – Frank Curzio

I’m part of the one percent, like you, you know ah I see, yeah, just for for a quick. Uh, yeah, for a quick, quick reference. Uh, Andrew, when he goes away he’s always sending me pictures of uh, you know his fishing, fishing and food right. So if you go to his website, it’s fantastic, even when I think it was on your podcast food is my favorites.

Yeah, I was on a podcast a couple weeks ago, on your podcast, and I’ll bring up that website in a little bit, but uh it. The notes were like frank curzio and the next one was like chili cook-off contest and that was the only note. So I was like that’s all I want to see when I listen to that part of it, which is really cool, but man it sounds like you’re having a lot of fun. Man you can tell you just sounds like things are really good, huh?

0:03:02 – Andrew Horowitz

Working hard, playing hard, but balancing, balancing really well. Yeah, new studio. Looks good in the background. Got a picture of Fort Lauderdale in the background there going. It’s supposed to be out my window, wow, but it’s just a nice view of Fort Lauderdale, what it looks like. Actually it’s a little bit old. That’s probably a few years old. There’s a few more buildings in there, but that’s the best one I could find to stretch out behind me.

0:03:24 – Frank Curzio

No, that’s really really cool man. It seems like, yeah, it’s really nice. So let’s get to the markets, and I guess I want to start with the Trump bump, would they call it right. The last month has been incredible. It feels like everything is up higher, From Bitcoin going to 100,000, Bitcoin is up over 40%. Lots of stocks are doing very, very well. I wanted to talk to you and bring on the podcast because, fundamentally, it’s hard to justify, right? People are like this is expensive, expensive. What about from a technical perspective, which you look at because we’re seeing that? I read someplace that if you’re looking at investor sentiment into stocks, it’s at a 40-year high. How do you look at that from a technical perspective? Because it seems to me a lot of stuff’s breaking out. You have a lot of momentum, Earnings have been pretty solid, You’ve got interest rates probably coming down. How do you play it from a technical perspective? Because it sounds like people are worried, but they’re staying in this market.

0:04:13 – Andrew Horowitz

Nobody wants to get out. Let’s just get that straight. Nobody wants to be the fool that didn’t go along with the ride here, and you know, if you look at trends and you look at the ability for markets to maintain the directionality of where they are, I mean you have to side with the fact that markets are in fact trending higher. I mean it’s not a question, it’s just a fact. Even little intraday blips on the downside can’t really derail things. You can’t have issues in China or issues in France, or even what’s going on in South Korea. It seemingly has no effect on our markets right now, and the big reason for that is, again, fomo. Nobody wants to be outside of what they think or perceive what is being told. Because if you look at the media that every day they’re talking about well, deregulation and a friendlier environment and the opportunity, lower taxes all these things are making for a really good story for the markets. A good friend of mine, brian Shannon, always talks about. You know the trend is much, much easier to follow, as long as it’s going for a long term, than turn. If you’re in an uptrend, why bother doing anything and trying to fight it? So right now I think there is a good amount of sentiment that is, I would say, overly enthusiastic, considering also that the Fed is supposedly going to maintain their relatively dovish stance and inflation is going to be calm.

But the big thing right now, frank, is this you have I don’t want to call it Goldilocks because that’s kind of a played out term, but almost a really perfect time, right. So what do we have going on? You have the potential for tax reductions, the potential for deregulation, potential for a very business-friendly administration. If you look at the picks that they put in, why is Bitcoin over 100,000? Because the SEC chair that’s being proposed Very friendly to crypto. And then, finally, you have a Fed that’s very friendly as well. Top it all off with a little bit of cherry on top on the whipped cream and that earnings are really good and the economy is strong. There is no landing going on. Package that all up and you have a good stock market.

0:06:17 – Frank Curzio

You bring up all good points. We’ve seen earnings season where even earnings are coming out like dripping out retail earnings. We’ll get to those in a minute. What I noticed if you look at almost every single company and I follow what you follow we love following this stuff. We listen to conference calls and watch their earnings all the time Exporting goods Pepsi, coca-cola, chipotle just announced Disney Everybody’s raising prices.

When the Fed meets, I mean 75% chance that they’re going to cut 25 basis points. I mean that’s favorable or not. But it comes to this point where it’s almost like when people talk about deficits, eventually they’re going to matter. Right now they don’t. You’ll see that in credit spreads, but it seems like inflation is starting to go back up here. And if it does go back up you might not see it on the CPI because maybe rentals which is all garbage and figured Fed. I mean, is that a catalyst lowering rate? Should they keep it the same? Because I mean stocks are just rocking higher, right? You see, you know companies are doing well. You’re saying that the economy, if you look at the statistics they look at, you know not everyone’s doing great in this economy. I get it, but with the statistics that they look at they would, and it seems like it’s going up. What do you think Is the Fed’s shot that?

0:07:29 – Andrew Horowitz

they do nothing. To steal a phrase from my good friend, Daniel DiMartino Booth I am fed up with the Fed. The truth of the matter is that the Fed is I don’t want to go so far as a Jim Cramer moment of you know, they don’t know nothing, they don’t know what’s going on, but they are just flaming and fueling and fanning the fire. What is happening is that somehow the markets got them by the tail. They’re just following along with the markets are doing what the markets are pressing the Fed fund futures at a 75 percent rate hike, a rate cut probability for a couple of weeks from now. I mean, that’s what markets want. Do they need it? No, Does the economy need it? I don’t think so. Are we at above, a neutral point? And if so, should we really be doing something about that? Anyway? I don’t think so.

I think that right now, where we are with regard to the markets is a point where there is excess exuberance stealing a phrase from someone else and when we look at what is going on right now with regard to the economy and adding to the fact of gosh, we have to bring this up again, and I apologize because I feel like this is like part two tariffs. We got to bring up tariffs again, and now tariffs are being scoffed off as oh, it’s the art of the deal. It’s simply a negotiation factor. Okay, but what about the tariffs that we have on already? You can’t tell me everybody forgot about this. I talked about this for years with you too. Tariffs are inflationary. There’s no question about this, Frank. Tariffs are inflationary, and the truth of the matter is, when we look at what’s going on right now with regard to China, okay, yeah, we want to make sure that they don’t do things, but they’re retaliating.

Already. Maledium and a variety of rare materials are starting to slow down exports of right Because those make semiconductors and batteries, and we’re seeing that even though Trudeau came down and kissed the ring down at Miralago last week or so, he’s talking about retaliatory tariffs, mexico succumbing to the pressure, it seems, about border protection, but we’ll see how that goes. I don’t know if there’s going to be fact or just this fictional idea of new tariffs going on, but Trump seems to believe the tariffs are actually paid for by the countries that put them on. They pay in a way, but the truth is we pay and our payment you and me is all about higher costs, and I agree with you.

I was sitting recently with an executive owner of a company We’ll remain nameless, a major company of materials, we’ll call it parts. And what was he doing? He spent the afternoon with me. We’re doing things, but basically raising across the board all his prices on all his products, which there’s a lot of skews by 5%. Why? Why? Because his competition was doing the same thing. Did he need to? Not really, but his competition was raising. Why not? So these price increases by you mentioned Disney, pepsi, whatever, or shrinkflation, which they can’t get away with as easily as much anymore, because people are looking, is something to really be concerned about, and the Fed just to bring it all wrap it back up into a package for you with a nice bow, frank. The Fed is making a very big mistake in my opinion.

0:10:57 – Frank Curzio

I don’t know where I want to go with this, because I want to talk about tariffs. I’ll talk about the Fed first, because I actually said this and I meant it. It’s almost like if you wore a MAGA hat, like two years ago, you’d get rocks thrown at you like it was dangerous. I actually said, I think after the transitory comments, that Powell deserved an A-plus and everybody ripped me apart because it’s just common knowledge. Everybody just say we hate the fed and I get it. But the criticism that that guy received, if you would have told me that he’s raising interest rates from relatively zero to over five percent in short term you told me that again, the transitory thing, it was a nightmare. It’s the worst worst call that I’ve seen from from anyone who ran the fed. Okay, but I’m talking about after that.

Okay, if you had told me he was able to raise rates the way he was and the job market was still very strong, the economy was still very strong and you would see the housing market still remain strong, the stock market, everything I mean. People were ripping him for raising rates and people were ripping him for lowering by 50 basis points. We’re at an all-time high with the markets. We’re seeing earnings strong and everybody keeps criticizing.

I get it, that’s what you need to do, but it’s just do we give them a little slack, because there’s no one that agreed with this guy for the last two and a half years. And if you look at the market conditions right now, there’s not one person that’s unhappy, who’s in the stock market, who owns homes, who owns assets. And again, you know you and he’s raising right and you see the underlying. I’m not saying there’s not money, tons of trillions pouring in from our politicians, right with stimulus, with stimulus, but just, you know, being able to raise rates like that in the face of everyone on CNBC, all these economists just criticizing hell at him, telling him he shouldn’t do, should do it. I just think the end result I’m like all right if it’s not an A plus, I just don’t think it’s an F, you know.

0:12:30 – Andrew Horowitz

I love the fact that he reduced rates and he’s really soft on the markets. I love the fact that he’s you know he’s continuing being a big cheerleader. It’s good for my business, it’s good for my portfolio, it’s good for everybody. Let’s be honest about this, Frank. That’s what we do. We’re investment guys. We should be like yo Powell cut another 50-person base points. Go, go, go, Go buddy. But the truth of the matter is I’m looking at a bigger picture. I’m trying to look at the bigger picture of what exactly is going to be happening moving forward a year and a year and a half from now. I do not want to see a portfolio get spoiled and ruined. I don’t want to see the markets get smoked because all of a sudden, pal’s like oh, we made a mistake. You know. The reality is, we should have been watching and looking at the things that were happening and the potential for what’s happening Not really what was happening right then and there, but in the longer term. And I think that they get very short-sighted.

0:13:27 – Frank Curzio

They used to be really long-term and they are to a point, but they become short-sighted and market dependent, not data dependent market dependent, definitely market dependent, yeah, and let’s talk about tariffs really quick, because we have a playbook for tariffs in Trump 2018. And I was really against this because I did a really deep dive in it and everyone went crazy in the trade war with China. It’s going to be a nightmare. The market got hit and I told everybody. I said, please ignore this, just ignore this. It’s nothing. No-transcript. Massive inflation for 2018. We didn’t see that. So what happens if he does use this as a tool where I feel like we should be leveraging the United States being the strongest country and the biggest buyer of goods in the world, we’re letting everyone else get away with so much stuff for so many years. Okay, regardless of what conspiracy theory you think about, but look how quick Canada I mean Trudeau came to the table. He was like you know, like the scared little puppy, you know.

He came and he kissed the ring he came down and he kissed the ring, but it opens up opportunities. But let me say, if this happens, okay, there is big opportunities here. There’s companies right, you’re looking at some large caps with 34, sometimes 70, 80% of their revenue comes from overseas. It’s going to be tough. The guy changed their business and some of them are doing it.

But I would think, if this tariff, if he really goes through with this, this has to be fantastic for small caps, right? I mean, these guys do their business in the United States. It’s going to be more money for the United States. It’s also, I mean, does it result because we’re looking at immigration, where he’s going to deport? That’s what he’s going to do, that’s what he ran on. If he does that, that should result in maybe slow economic growth, which means we’re starting to see the dollar pull back. I mean, what I’m trying to look at is say, if he does implement these things, it seems like a dollar going lower is going to be very good for the market, very good for stocks, very good for American, very good for small caps. Are you looking at that way of how to play it if he really does follow through on some of these things?

0:15:22 – Andrew Horowitz

It’s also good for emerging markets. By the way, dollar lowers is very good for emerging markets in particular. Look, here’s the deal, here’s the deal. We can sit here and criticize and second guess, and all that. Two things I want to mention.

Number one I’ve learned this over the last number of years, particularly over the last 10 years. The first thing is let’s not invest on what we think is going to happen. Let the markets do that, but let’s actually see the reality of the results of what happens before I really put my both feet in. That’s number one, because I think if we were to invest right now, yeah, you’d think deregulation, that’s small caps, it’s great, well, we’ve had small caps anyway. But okay, you know small caps. If you think tariffs, okay, that could be good for small caps too, but it could be inflationary. That may be problematic for bonds.

So what I would do is short bonds to go short duration, and I think rates, by the way, for the record, are going to be higher moving forward than lower. The only reason they go lower is is a lack of I like that. I, I would. I would think that, yes, I’m gonna. There’s not lower. I don’t see lower. Lower would be a really big problem with the setup because, in fact, if it’s lower, that means he failed at everything or that the markets and economy failed, that none of this actually came true.

The reality of all the things we’re talking about right now the benefits of deregulation, the benefits of a lower dollar, the benefits of um that’s not happening. That’s the only reason. What rates would come down more If everything is hunky-dory, rates have to go higher Because that would mean we continue on a growth trajectory of GDP. We continue on a growth trajectory of retail sales. Earnings are doing fine, all that’s doing fine. The Fed is going to stand pat and bonds rates will come down and, truthfully, I think that, depending on how I would say adversarial the US becomes with other countries, will depend on how our bonds are structured as well. At the end of the day, all that putting aside, we have a massive mountain of debt that somehow has to be resolved eventually. That somehow has to be resolved eventually, and there may be a little bit of a bloom off the rose with the idea that we could just carry this debt forever without some kind of reactionary response from, maybe, the bond vigilantes.

0:17:30 – Frank Curzio

Yeah, and it’s interesting. I love that take because I think a little different than you. I think rates would be lower. I love always and I don’t want to bore people because I love talking, I love having you on because we can talk economics, and it’s great we take different. You know we try to make it as exciting as possible.

0:17:41 – Andrew Horowitz

Did you just say you don’t want to bore people? Wait, did you just say I don’t want to bore people, but I love having you on? Is that what you?

0:17:46 – Frank Curzio

just said no, no, no, bore people economics, because I love this stuff, me, and you could. That means the economy is doing good. Higher interest rates is eventually going to crush the housing market because people are not. I mean there’s a supply problem right now and that’s changing, you’re seeing it with now there’s more homes available on the market than a very, very long time, several years and higher interest rates. I mean you’re looking at people. They can’t move sideways because they want to move, even if they want to go from New York to Florida and get a discount. I mean you’re looking at 3% rate that they’re locked in 4%, most people 80%. Are you going to go to 7%? Right, and that’s a huge jump. And taxes, and taxes, and taxes. So you’re making up the difference.

0:18:27 – Andrew Horowitz

Right, you have a $300,000 house you’re selling. Right, you sell a $300,000 tax with a $300,000 or $200,000 tax base and you sell the $300,000 house for 700. You got to start paying taxes on 700 yeah well, if your primary residence.

0:18:41 – Frank Curzio

I think you have a 500 000 tax credit for that. At least I did no forget that I’m not talking about that.

0:18:44 – Andrew Horowitz

I’m talking about state, local. Oh okay, I’m talking about your two taxes are gonna be.

0:18:49 – Frank Curzio

Oh man, they gotta be through. Yeah, 700 000 house, of course. Yep, I know right 700 000 house.

0:18:52 – Andrew Horowitz

You’re still paying two percent, depending on where you live. So instead of paying the taxes on a three hundred thousand dollar they may be in some states you have a reduction. Maybe it’s 250, 2%, which is $5,000 a year. You’re going to pay it on 700, which is $14,000 a year.

0:19:07 – Frank Curzio

You talk about home insurance. You talk about auto insurance. These things are through the freaking roof.

0:19:11 – Andrew Horowitz

Very difficult to move.

0:19:15 – Frank Curzio

Let’s talk about stocks. Now let’s get into some retailers. Black Friday, you saw some of the winners. It was Amazon, I mean, you’ve got the China and overseas companies, timu, you got Sheen. You have, of course, reporters. Walmart, amazon reported good sales and I was looking at them like okay, if these guys are reporting good sales, someone has to report bad sales. Not everybody’s going to be good. And then we saw Target come out, which is not good with the American Eagle, and then Foot Locker right, because it was like someone’s probably not everybody could do good. What were your thoughts? I thought you know, there’s some companies somewhere, some losers, anything you like in that space, because some of them are getting it done and some of them are clearly, you know, falling behind and I don’t think that’s providing any opportunities for you.

0:19:53 – Andrew Horowitz

So when you look at, for example, retail sales, you know doing a thing which is against the grain of what people thought was going to happen, as rates came up as a concern about the economy, jobs, you know again another point that brings me towards the fact that things are fine from an economic standpoint right now, at this moment Timestamping right now, you and I since we’ve been doing podcasts for 15 years and you’ve been doing a little bit longer everybody has a podcast.

0:20:18 – Frank Curzio

Now I think we’re 0 and 15 betting against the US consumer Cause. We always like and every time they beat it Right. I’m just. It’s so funny, Every time, yeah no, absolutely Never.

0:20:27 – Andrew Horowitz

That’s the truth. The old phrase, the old adage do not bet against the US consumer. They will find a way to grab the extra money. Inside the scenes of their couch, they will spend money. So what’s happening now is, with regard to the retail earnings Costco, I mean, it’s about to be what $1,000 a share Home Depot. There was a theme to all these, though. These are all good right Costco, walmart, amazon, home Depot, target depot, target, miserable footlocker. You mentioned there, uh, lows, but they had a theme and it was really interesting. The theme was you know, we did better than we expected, but you know what? The consumer is really slowing down. They’re really coming to uh places to uh buying at lower price. They’re being more discriminatory. That was the theme of all of it, wasn’t it? So I don’t know if that’s a sandbag or if that’s reality.

0:21:26 – Frank Curzio

Well, I want you to talk about this because you’re really good at this. So, when it comes to earnings and I said Best Buy, so Best Buy last quarter they beat estimates and the stock was at an all-time high and that’s all you hear as an investor, not was at an all-time high and that’s all you hear as an investor, not you and I, because we cover this industry, everyone’s professional on something. They’re doing their own thing. That’s why they listen to our podcast out and out. What they didn’t realize is, year over year, they beat the estimate, which is the consensus analyst estimates of the 30 guys that are covering and they take the mean estimate and they declining year over year. Both for Best Buy, they bombed this quarter. It’s not surprising. It’s not surprising.

0:22:01 – Andrew Horowitz

But the latest quarter before that.

0:22:02 – Frank Curzio

I’m like if you’re seeing sales and earnings decline year over year, your stock should not be trading at an all-time high. You should not. I don’t care if you’re trading at 300 times forward earnings. If you’re growing earnings and growing sales, you deserve the premium. When you’re not and this company deserved a premium this quarter they came out and got hit. Talk about that a little bit because we’re hearing okay, you beat the estimates, but when you look at Salesforce, okay, salesforce, a little bit lower, but they’re still growing earnings by double digits where some other companies are like hey, we beat estimates, where we had negative same-star sales of 2% instead of 5%, which is still not good, but you’ll see the stock go higher. How do you play that?

0:22:37 – Andrew Horowitz

So the hype machine is out there doing their job of doing the estimate versus reality, and what happens, as we know? What happens is that the company is giving analysts their best estimates along the process and they come in and beat it by a few cents, usually right, maybe their outlook may be soft, but if their revenue right now, if revenues beat, everybody’s happy. It’s not so much about earnings right now it’s about it’s about revenues, which I don’t know where. The tide goes back and forth, but you can see it all the time Like oh, companies are beating earnings but they’re not beating revenue. Oh, that’s okay, we’ll give them a buy.

I think the big issue, though, is that most people and I’m not blaming people, I’ll blame analysts have become extraordinarily lazy. They’re just looking at what’s the estimate. It’s easy you beat the estimate, the stock goes up, and that’s what the analyst gets paid for. Right, if they can have an estimate company comes a little ahead and the stock goes up because most of them are sell-side analysts. Sell-side analysts get paid by their companies to pretty much make sure that the stocks stay elevated, and I think when we look at this and we see that kind of scenario that you mentioned, where we have declining sales Now, by the way, that would not be allowed to be.

A stock that we buy, a stock that is declining sales on a quarter of a quarter or a year of a year basis and it doesn’t have consistency in revenue, revenue sales or doesn’t have consistency in earnings raw earnings is going to be excluded from screens that we utilize for our clients. It’s not happening. Is going to be excluded from screens that we utilize for our, for our clients? It’s not happening. So, yeah, um, the, the reality will hit eventually and they’ll be the first ones, by the way, to get smacked when the market turns, because, remember, about 80 of the of the stocks movement is based on the, the, the market’s general trend 80, 80%. Is it really Something like that?

0:24:21 – Frank Curzio

yeah, yeah, because I know you have a Attribution of stocks.

0:24:23 – Andrew Horowitz

That’s the whole point of what’s called a mean various optimization with efficient frontiers and understanding true asset allocation based on modern portfolio theory talks about how you know, essentially, the attribution of returns are based on market things and what is outside of those, and most of our stocks is all. But that’s why you want to look at the overall market what is the trend and think about that before you know. You can have stocks that don’t do well, as you talked about, like small caps that don’t have earnings breaking out in a really good market, but they’re the first ones that will turn lower when all of a sudden, people are dumping a really good market, but they’re the first ones that will turn lower when, all of a sudden, people are dumping.

0:25:02 – Frank Curzio

Yeah, and I love you brought that, I love bringing that out of you because I know you’re analytic and have all systems in place and stuff like that through your money management style, which is great.

So, and you said something interesting about the analysts there, Andrew, because the analysts there’s a big bias there, right, because these guys get investment banking revenue and if you’re a company and you have, like Disney, and you have 32, 35 analysts covering it, whatever it is, and you’re going to raise money whatever way, right, which they had to do before, not so much now. Yeah, you’re not going to go to the guy that has a sell rating on you, right, I wouldn’t, you wouldn’t, right, you’re not going to. You’re going to go to the guy that has a buy rating on you. They’re like, hey, we’re going to really cheer you your stock on, and they say a conflict of interest in everything, right, so you know, you look at 2021 when you know Disney, still, I mean it was 180. I think it almost went to 200, you down in the 90s and it’s like 110, whatever it is now. But that whole bias in it it’s so hard, because I’m explaining this, as you know, because these are the analysts and these are the estimates that they’re beating, and they’re biased estimates.

So when you really look under the hood, that’s where you find the disconnect, where, yeah, this might have beat the estimates and maybe the stock goes up a little bit. But when you and I guys like us, look under the hood and say, okay, listen, the, the earnings were okay, they’re still not really growing that fast and they’re trading at 35 times forward earnings and they’re barely growing. You know they’re growing 60% slower than the overall S&P 500.

You know so you’re going to see that bump because it’s exciting and you beat the estimates and oh, you know, and they really, really guidance. But a lot of times, you know, you see these, you could predict a lot of times looking at that and take a closer look under the hood, which is crazy, yep.

0:26:36 – Andrew Horowitz

I agree, but generally speaking, retail sales are good. The only thing that I saw that was a big problem, it was an issue was this idea that many of these companies are fetching, as I would say, concerned, worried about the consumer, and that commentary seems to be getting a little bit louder in the background recently.

0:26:58 – Frank Curzio

Yeah, yeah.

0:26:59 – Andrew Horowitz

I definitely heard that, so what?

0:27:00 – Frank Curzio

are the sectors are you looking at? Because you’re looking at, most of the sectors are higher. Especially, stocks are at pretty close to all-time highs. I think Trump got elected and now that Trump bump. But are you looking at underperforming? Because you see, oil biotech hasn’t really performed well outside of, if you get healthcare and some of the largest ones, especially weight loss drugs and stuff. Any thoughts on some of those sectors that have been underperforming? Do they look attractive like oil, where you had OPEC say, okay, we’re going to just extend those cuts a little bit longer. It seems like it’s a lot. I had opec say, okay, we’re not, we’re gonna just extend those cuts a little bit longer, and seems like it’s it’s a lot. I’ve never really seen a market this kind of booming market where oil’s not participating. Usually all those hiders like that’s bad for everybody and bad for stuff, but you usually see that because the economy’s doing good, oil goes higher.

It’s like you’re more building more everything, and yet you know, you see the problems in china. I’m just surprised that oil hasn’t.

0:27:50 – Andrew Horowitz

That’s the relationship that’s you know.

0:27:52 – Frank Curzio

I mean these companies are in best shape that they’ve ever been. They’re paying dividends and great. Remember that when you see downturn oil, a lot of these things would disappear and go on their coin bankruptcy. Now they, they have the fundamentals, they know the price. They turn it on, shut it off, you know, but it financially they’re very good. If you see oil go up to 70, 75, uh, it’s a little bit below 70 now, but if it goes to 80, you’re going to see a huge jump, I think, in some of these names.

0:28:17 – Andrew Horowitz

I think the big issue is China. It’s not a sector I love. I think that if you look at the history and if we do any kind of outlook, when Trump came in last time, it was one of the worst sectors out there for a variety of reasons. You have the drill, baby drill, you have the fracking, and all that. All of a sudden it cuts down, pricing or production is up, but yet maybe the spreads aren’t as good for the refiners and it just hurts everybody. So let’s go to utilities. Love utilities. You know what I love about utilities. We’re in a great market. We have a reasonably high interest rate environment and utilities utilities are at an all-time high. There’s no way you and I could have guessed that in a million years.

0:28:54 – Frank Curzio

Well, you might have been able to guess it about a year and a half ago, and I’ll tell you why. Because utility companies. We’ve always looked at this defensive sector.

These are the new growth companies and you got to look at them I know it’s not like I’m buying this in a dividend and I like it. It’s not the whole con edison stuff. These guys are on fire and I’ve done a lot of of research in this industry over the past two, three years. I have great contacts. I mean you look at Constellation Energy when you see some of these contracts, they’re signing contracts that prices are increasing over three years by 75% and the companies that are signing these are signing it in like two seconds because they’re afraid it’s going to go higher. They have total control.

There’s a dire need for electricity through the AI boom right the data centers. People don’t understand how much electricity we’re going to need and we’re going to need it. Now they’re signing deals for nuclear, for projects, small nuclear hackers that aren’t going to be available seven years. I mean there’s like three of those in the world People think they’re going to be. They’re not going to be five years the approval you have to go through the safety local, state, federal, all that three mile island locking in 20 year agreements after it’s going to take five years to get the plant. That’s how dire need they are of electricity. These are the new companies.

0:30:00 – Andrew Horowitz

They really that’s what I would like, uh, next era, southern, uh. Exelon, you mentioned constellation which is more of a pure play on um I, I would say on nuclear, which I like to call new clear energy yeah, I never thought that would be the tops.

0:30:16 – Frank Curzio

Never thought that would be the top story like in the market amazing uranium.

0:30:20 – Andrew Horowitz

You were on uranium for a while. Yeah, you’re on uranium, we want it for a while, so yeah, they’ve done very, very well, so yeah, yeah.

so I think that that when we look at um, you know the totality of all this and we look at um, that I think it’s a great play. We own all three of the companies that is mentioned in our client portfolios and I think that you know, I think that we have to be very careful with some things, but financials, I don’t see any reason why that can’t continue to do very well into a two part. Part. Number one, a deregulatory environment. That may or may not happen, but two, a bit of a reversion trade. You know where they have done very well. Look at the JP Morgan’s, the Bank of America’s, you know. Look at even a Wells Fargo that has a serial problem child in the industry. Citigroup just got a deal with American Airlines as a what they’ve had it before, but with the sole credit card company.

But all the you know name the list right, and the regionals to a degree. The fact is that there could be a reversionary trade there, a catch-up trade. That’s very, very powerful. It has been great, I mean, you know, owning some of these names. They’re not the ones that really hit growth portfolios a lot of times, but still they’re not as exciting and sexy by any means. But I got to tell you, look at the charts, they’re looking pretty good, but I think that could be a very beneficial place too.

So the value side for a minute here, as we look at some of the pull forward effects that we’ve seen in technology, maybe in retail, remember, a lot of people may be very concerned about the tariffs and going out and buying things right away. Like you said, with the utilities, they go in and they grab stuff right away. They kind of pull it forward and that leaves a vacuum in the back Once things change, if in fact we don’t get the high tariffs that were expected or they’ve gorged themselves on enough equipment that they don’t need to buy anymore. So I think that’s kind of important to look at Some of the things that we looked at. Actually, I’ll just throw a couple of stocks your way for a second.

0:32:16 – Frank Curzio

Yeah, you always have interesting names and we track them and you’ve done very, very well on this podcast.

0:32:20 – Andrew Horowitz

So two of the names I talked about last time. Toast talked about Toast, I think. The last two times I was on I talked about Toast. Get a little bit hot on the top end Toast right now. But this is the company that does. It helps restaurants be more efficient through front end, back end billing, payouts, gratuities, gratuity management, ordering, so point of sales. So the whole process is pretty cool. Not cheap for the restaurant, but it creates an efficiency that’s pretty dynamic. The other one that we talked about a hundred times has been Palantir. We talked about that when you were on the show last time. Yep, palantir broke out the uh, undiscovered ai name for defense. Uh, which was kind of like sitting there doing nothing, when I was like what is going on? What is the problem here? Maybe they don’t like his hair, you know corpse hair, I don’t know something. Yeah, it’s just uh, but, but, but. Yeah, but, but it’s been on fire. Broke out since we talked about it.

0:33:16 – Frank Curzio

That’s toast right there, guys. I mean I pull up CMDC so everybody can follow along, and stuff like that.

0:33:20 – Andrew Horowitz

Look at that move since the last earnings.

0:33:22 – Frank Curzio

I mean that’s incredible. Yeah, just in the last earnings. Look at that Boom. I mean look at 2538.

0:33:35 – Andrew Horowitz

Yesterday there was, I think a couple days ago, with that downstroke right there and they talked about how um their numbers will pretty much be in line.

0:33:40 – Frank Curzio

What is this one, palantir? Yeah, yeah, we’re in this at 24 people. Just, they look at the valuation of this and I said I made this mistake before and you went with netflix and I was comparing that very early on with cable companies and saying it, you know, it says it’s astronomical valuation, that could never fill, and I made a big mistake on that because I didn’t realize that, yeah, netflix is the industry, right, all the cable companies together were competing with netflix, kind of like with EVs, when it comes to tesla owning the whole market, this company and I highlighted this, I think, on my podcast last week. Listen to the interview, if you get a chance, guys, if you listen to this, of the Chevron CEO going on stage and I get paid and with the Palantir CEO and listen to what he said about Palantir and what it’s done for that company, which is the second largest oil company in the world.

Palantir has figured out how to use AI and increase profits dramatically, lower cost dramatically, efficiencies dramatically. That’s a service every single company in the world wants. So when you look at valuations here, we’ve been saying we’ve had it since 24 and saying this is a $100 stock. We still think it. I know the valuation is crazy, but when you look at the total addressable market it’s much, much bigger than what people are saying out there, and that’s why you see this thing really run Incredible.

0:34:45 – Andrew Horowitz

It’s a good stock Now two of the best stocks that we App Lovin’. You know that stock? Yep, Go pull that baby up. Yeah, that’s ridiculous Up 750% this year, up 480% since we’ve owned it. Actually, A company that basically is talking about valuation stretch, but a company that is up another God knows how much the last few days. But what’s happening is they take, they help to this is a three-month chart. Is that right? Is this a three-month chart?

0:35:11 – Frank Curzio

This was 100. They helped to. This is a three month chart. Is that right? Is this a three month chart? This was a hundred, probably three, four hundred. Holy shit could be yep, wow, it’s up.

0:35:20 – Andrew Horowitz

What? Another five percent today? So this company, what it does essentially? In a nutshell, it allows for developers of mobile apps to monetize, manage and help create and then market their apps more efficiently $138 billion.

0:35:37 – Frank Curzio

$132 billion market cap. Holy cow, I had no idea it was that big. I didn’t even know that it’s humongous. Holy cow.

0:35:43 – Andrew Horowitz

Yeah, wow, but what’s its P?

0:35:46 – Frank Curzio

Forward P. You know it’s not too bad. I mean, what would you guess if you had to guess? I mean it’s 73. I thought it was. I mean it’s 118.

0:35:53 – Announcer

Yeah, it’s 73.

0:35:55 – Frank Curzio

That’s if you believe the estimates. I mean it could be cheaper if they blow out the estimates, right, right, so it’s all, but that’s next 12 months.

0:36:00 – Andrew Horowitz

The other stock has been really good to us, which is another like hmm, this is a bit of a of a mind bl. Is it that chart?

0:36:11 – Frank Curzio

Yeah, it’s shocking. I had Delta for a while and it got good 123% in the last three months.

0:36:16 – Andrew Horowitz

Wow, three months.

0:36:18 – Frank Curzio

Yeah, look at that Yep On fire, I mean these things are packed, it won’t stop.

0:36:24 – Announcer

It’s up to the fourth, it’s incredible.

0:36:26 – Frank Curzio

I mean I fly Delta and I don’t even, because if you fly Delta and I have miles, right, I, I have miles, right, I have miles with a lot of these airlines and stuff but if you really fly Delta, you go first class. It literally is like it’s almost at least 50% more expensive for Delta than to fly American Airlines or United. If it’s first class I’m using like miles and stuff like that it’s just you know the prices. But it’s incredible. I mean these guys have pricing power. They have no competition, no competition. They forced someone into bankruptcy and they bragged about it. Ftc, they forced what is it? Spirit? Yeah, with Spirit and Frontier, right, so they were going to merge and even with JetBlue, and they came in and said nope, you can’t merge. Why would you not allow those two to merge? They’re like well, we want to have discount prices available for everyone. They’re going to raise prices, so of course they put one of those out of bankruptcy, which means these guys have even more pricing power now.

It’s so amazing how our government was working and they were bragging about it. Hey, we did this justice and we made sure JetBlue couldn’t. No, you didn’t, you actually didn’t. So I mean, there’s no such thing as a discount airline. You guys should know that. Even is it Frontier that’s creating first-class seats now.

0:37:29 – Andrew Horowitz

You know it’s so well. I just flew spirit, Matter of fact. I know the CEO is spirit and they just cut 27 routes. I asked him. I said hey, are you going to cut a route? I was going to Guatemala from Fort Lauderdale. It’s a really easy flight, really easy flight. And I tell you, we sit up front and it’s next to 80 bucks for the front seats, which is stupid. A little bit wider, but you get free booze and free food.

0:37:51 – Frank Curzio

So let me get this right. When you’re part of the 1%, you get to talk to CEO and he created his own flight for you. Is that it?

0:37:57 – Andrew Horowitz

I don’t know. I’m not the one that was talking about first class flying first class the whole time. Buddy, You’re the one that was talking about flying first class the whole time.

0:38:04 – Frank Curzio

Oh, that’s great, that’s great. No it’s good to see, yeah, and I love when you give out names. What are some of the names right now? Because you talk about past winners. You still like these things. Obviously they’re up a lot. Maybe they can go up a lot higher, but is there anything like off the radar that you’re saying, hey, some of these things might just got into it? You don’t have to disclose that right, because you have your clients.

0:38:20 – Andrew Horowitz

So not right into, but I’d say Crocs. Crocs is interesting, pull that chart up. Crocs. Leveling off, it went down to 95 and 93, popped back up after earnings. I think what’s happening now is a direct response to the Foot Lockers. The Nikes People are saying you know what, maybe we don’t want to wear sneakers, maybe that’s out of vogue, for example, I’ll give you an Abercrombie Fitch and a Gap All of a sudden. Who would have thought those stocks, gps and ANF, are going to be doing so well, we all know it’s true, but look at this. We saw this dip starting to rock back up, starting to create a chart pattern. That looks really interesting. And the fact is that Crocs, if you look at some of the things they have, I own no, not the big things with gibbets, but your kids have gibbets.

0:39:10 – Frank Curzio

Yes, and they’re like $5 each at these places. You could buy them on cheap, like 50 of them for that amount, I mean. But yeah, and they put them in their crocs. It’s just amazing. I mean, they have a very good brand, very smart. I have the crocs sneakers crocs sneakers are awesome they’re awesome crocs if you look up, crocs sneakers.

0:39:27 – Andrew Horowitz

I think it’s the light rider or something like that. They make them and a few others. They look like uh, you wouldn’t even know they’re Crocs. You would not know they’re Crocs, but they have the same Crocs material. I use them for when I’m boating, for example, to get wet. Who cares? This drains out, dries up real quick, antibacterial and whatever it is. But if you think about maybe the Uggs and things like that that maybe are doing well, deckers etc. That all flush down. But the real problem seems to be in the sneaker market, you know, maybe what happened is that that whole I think it’s called stock x company. Are you, are you a collector sneakers Frank?

0:40:05 – Frank Curzio

I’m not a collector. Well, I mean not a collector, um, I’m very aware of the market, though it’s just um, but I am very aware that the sneaker market’s on fire, it’s just. This is the first time I mentioned this, last week on my podcast. I’ve covered Nike, you know, and they’re great at manipulating their earnings legally, you know, just buybacks and stuff like that. I’ve covered them so long, over that year, over those years, Nike always wins, no matter who goes against them. Right, they always win. They figure it out. This is the first time there’s an actual threat to their business where they’re in a lot of trouble and you’re seeing it because they’re talking about from like on.

You’re looking at hoka, you look, I mean those. If you look at those sales, hoka’s own, hoka’s owned by deckers just to be clear, it’s only 30, 30, 35 growth year over year. There’s good article and economists, they’re taking market share and Nike has not had that innovative edge. Those commercials and, and you know, the clothing isn’t doing that good, it’s just, you see, in the stock price. And now look what Foot Locker just said when they reported. So these guys are reporting, I think a couple of days at a 19th. You know Foot Locker’s, like you know it, crushed us. They basically said sales of the Nikes are terrible and this is just a sneaker brand. I played basketball all my life, they were it, and now I’m wearing things. Sneakers are very nice and cool, look better and I just I don’t know, I think they’re in a lot of trouble so it’s funny because I went the opposite way.

0:41:15 – Andrew Horowitz

I went the opposite way for years. I had kind of a wide foot, so I always wear like new balance. Um, I’d wear a bunch of you know like like all sorts of different brands, right, yeah. But all of a sudden, I don’t know, maybe I got older, maybe maybe I lost some weight and somehow I lost weight in my feet. I don’t get that, but nonetheless, I’m all of a sudden could fit into Nikes and I love them. I have a whole slew I have as a matter of fact. As a matter of fact, frank, I encourage you and your listeners and your viewers to go look at customizing your Nikes. There’s a really cool app online that you go in and it’s like I don’t know 25 or 30 different points of customization.

0:41:50 – Frank Curzio

One of my shoes says Horo and one of my shoes says Wix on the other side and you use one of my shoes says horo, and one of my shoes says on the other side and you’re using a plane. What?

0:41:58 – Andrew Horowitz

what are you playing, now that you’re an expert in that? You like that?

0:41:59 – Frank Curzio

a pickleball, pickleball pickleball I’m gonna begin into it actually I, I do.

0:42:02 – Andrew Horowitz

I have my nike pickleball. Nike is my pickleball shoe too.

0:42:05 – Frank Curzio

Yeah, I mean, look, I’ve had a couple back surgeries and hip replacements, stuff like that. And I still love basketball. I’m still shooting around, but n Nike’s my go-to. But when it comes to walking I don’t run, but just my normal sneakers used to also be like dark Nikes or maybe New Balance, and I switched to Hoka and on. So but yeah, the sneaker. So no kids, no kids anymore. No, no kids. My youngest daughter likes those kids, though.

0:42:28 – Andrew Horowitz

They came back a little.

0:42:29 – Frank Curzio

That was the biggest worst fashion Sneakers I always like very passionate about, Like I’m very particular about.

0:42:35 – Andrew Horowitz

Watches. You know what the kids are wearing now what Casio LEDs and LCDs.

0:42:40 – Frank Curzio

Really.

0:42:40 – Andrew Horowitz

Big big thing. Go look, start watching. They’re just wearing these things. They don’t care. It’s like $17. You remember those, the old LCDs? Yeah, yeah, you bang them up. Who cares? You get another one for 17 bucks yeah, that’s good.

0:42:52 – Frank Curzio

It’s good to see. It’s really good to see, wow, lots of stocks there. Okay, so before I let you go, tell me if people want to learn more about you and talk about your management portion of the business, which we talked about a month ago, because I was very, very yeah, I love you, man. I hope. I hope you have billions and billions of management, but it seems like things are going very well. I know that because your performance and stuff like that. But also talk about that in your business, cause I know you do something that we don’t do is you manage money, and clients that have come from you and gone to you have done very, very well. You always got good stock picks.

0:43:19 – Andrew Horowitz

So talk a little bit more about that. Yep, so yeah. So thank you. You know anybody that would like to come on board and check out what we’re doing. The bottom line is it’s with someone else. If you’re concerned about it, we make it really easy. You go over to the disciplined investor, frank.

0:43:36 – Frank Curzio

Curzio is on the screen right there. He’s a really good looking guy Right. Look at that Frank looking good. I actually did not plan that. Actually Did that come right? Oh, it’s part of your slide. Slow and everything.

0:43:50 – Andrew Horowitz

But yeah, go ahead. Yeah, you go over to contact us. You just drop me a line and what we’ll do is we’ll set up a meeting, talk about it. We’ll do a secure upload for what’s going on with your portfolio. Take a look, you know, sometimes you’re doing great. We’ll just say, hey, you know what Nothing we could do for you. Sometimes we have one of our strategies that may work out like a TDI managed growth strategy, which is a lot of diversified long-term US equity fixed income strategy. That will give you a really good in-depth view. We rebalance it. We use all the different tools of modern portfolio theory. I make it easy to work with me personally and I think that’s something that you’d really enjoy. So go over to thedisciplinedinvestorcom.

0:44:34 – Frank Curzio

Andrew, as always, love having you on Love the picture. We’ve been friends for a long time and my audience loves you, so you’re more than welcome to come on whenever you want. And thank you so much. I know they thank you for the pics because you always have really good stuff to say and everything, so I really appreciate that, frank you’re the best. All right guys. Thanks so much for coming on. I appreciate it. I love you, buddy.

0:44:53 – Andrew Horowitz

Have a great holiday. Hey, have a great holiday and a great new year.

0:44:55 – Frank Curzio

You too, you and your family. Man, I’ll talk to you soon. Thanks, all right. All right, guys. Great stuff from Andrew. Awesome, love him. Been a friend a long time. He always sends me pictures. Everything, man. See you tomorrow on Wall Street Unplugged Premium with the one and only Daniel Creech. 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 inconsistencies I see daily in the market.

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0:46:45 – Announcer

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