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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 on September 4th and I’m Frank Curzio, host of Wall Street Unplugged, podcast where I break down the headlines and tell you what’s really moving these markets. So I have Daniel Creech join me today, but unfortunately we had a bad storm that knocked out electricity Like three, four times in a row in a 20-minute span yesterday, which knocked out some of the cameras. And, by the way, for any of you that actually do any taping and Daniel and I were talking about this that do any kind of taping music or whatever when you have sound systems and we kind of control the studio here, so when you have sound systems or a studio and everything, every single time, no matter how it’s set up, absolutely perfectly, it doesn’t matter you’re always going to fucking run into problems. I mean always, always, no matter what I’m telling you. It’s crazy, it’s pain in the ass. Musicians know what I’m talking about. People who do camera work know what I’m talking about, but it’s crazy. Anyway, I’m going to have Daniel sit this one out. He’ll be back back tomorrow. We’ll show you a premium podcast.

Let’s talk about the markets. Markets fell sharply. Everybody worried. Even Tom Lee is bearish for a couple weeks, especially downturn in September. Maybe five weeks, six weeks. It’s going to be a great buying opportunity, but everyone’s super, super bearish and what I learned in my 30-year career is or one of the biggest mistakes I made, I should say is you never want to be on the side that everyone else is on and, man, it’s hard to find someone that’s bullish right now. Because when you look at the data and you look at everything I mean you talk about NVIDIA crashing right, it fell 10%. Amd on semi I mean, all these big semiconductors fell sharply. It wasn’t just AMD or NVIDIA, it was the whole sector. The SOX, which is the ETF that tracks semiconductors, had the biggest one-day drop. And I want you to think about when Some people say since last year, since two years ago or five months ago or whatever In the market, biggest downturn since a month ago, but the stocks had the biggest one-day drop since March 2020. That’s how much it fell down. You could say, hey, listen, it went up tremendously and you’re right. Just like when people say home prices are crashing in Florida, they’re down 7%, 8%, some places 10% from their highs. They’re up 100% in three years.

When you’re looking at the markets and you put your TV on, holy shit, they’re negatives. They’re negatives. I mean, look at the consumer stocks Dollar Tree down 20%. Consumer stocks Dollar Tree down 20%. They warned the full year now expecting earnings of $5.40 compared to $6.56, which is a big warn. That stock was $150. Trading around $66 right now.

I don’t know who owns that stock, especially after the horrible report from dollar stores. I mean, let’s get real. These are the exact same fucking stores. There’s no difference. It’s not like somebody passes a Dollar Tree and said no, no, no, no, it’s a Dollar Tree, we got to go to dollar store. No, they’re all exactly the same. So if one warns, you know they’re all going to warn. And yes, dollar Tree said it’s more than that Tornado, tornadoes and this and that.

But you know again, those are charges or whatever that people kind of analysts ignore. When you have these one-time events and they strip them out or write-downs and stuff like that, you want to compare apples to apples. But it was bad all around. You look at these things and it’s like it’s just crazy. Then you turn on TV Buffett’s selling more, Bank of America is selling more. You have Goldman Sachs cutting its workforce, also cut its copper forecast due to continued weakness in China. That’s what they’re projecting continued weakness. Wow, sounds familiar. Good job. Nearly a year late on that, by the way, more news out of China just abandoned its 26th high-speed rail station project.

I mean, it really really is a disaster over there. Think about the worst possible scenario. And it’s worse than that. I mean, who was it in Armageddon, one of my favorite movies? I love that movie, so entertaining. But people are like you can’t launch a rocket ship onto a meteor and blow it. It’s entertainment. It’s entertainment. It’s entertainment, relax. But I remember when one of the guys asked what are the scariest conditions? What can we expect when we get up there? And he told them he’s like it’s got to be like minus 100 degrees to 200 degrees and razor blade rocks coming at you. And he’s like, okay, scariest place imaginable. Scariest place imaginable. That’s where China is right now. As bad as you think it is, it’s much, much worse.

Two bad manufacturing reports which really pushed down the markets. We’re finally seeing like everyone wants the economy to slow down. We talked about this, daniel. I pounded the table on this. I said it’s the reason why stocks sell off when a Fed starts cutting, because you’re thinking, wow, interest rates. And everybody said that was the bullish indicator for all 2023. This is why stocks were going to surge in 2023. Because the Fed’s going to start cutting and they never cut and stocks surged. If they would have cut, we’d probably see the markets come down, because when the Fed cuts, it’s telling you that they believe the economy is slowing.

And then when you get these two economic reports showing that the data is slowing, now you see the narrative switch. Holy shit, we need things to slow this way. Inflation comes down. Now you see that come down where bad economic reports are turning out to be bad for the stock market. And you’re seeing all these companies, all these companies, even the ones that raised their guidance a little bit. You look at Walmart. Target said look, we’re seeing the consumer slow down. We’re able to manage it because of what we’re doing and we operate good businesses. But everyone is saying it everyone and we still haven’t touched interest rates, even though the market’s kind of foreseeing that we’re seeing rates drop tremendously. Were they two-year, what did I hear? 14, 15-month lows now.

But the manufacturing reports was the ism and the pmi purchasing manager index. All you need to know is the number 50. When the below, it shows contraction. When it’s above it, the health economy is healthy. If it’s 51, it’s a great economy. If it’s 49, it’s terrible winter recession, that’s everybody looks at it kind of like uh, how recession is defined. So gdp grows for three straight quarters at 0.1%, it’s not a recession, we’re fine. But if it declines two straight quarters at 0.1%, it’s a recession, right, it defines recession. But both of these reports came in under 50. Now people worry about the tech slowdown, the global slowdown. You see, Germany is an absolute disaster.

Do you see the car reports? Holy shit, they’re down tremendously. Ford another recall, good for them. Holy cow. Recalling tons and tons of vehicles. And these are the vehicles that they pushed out because of COVID, that they didn’t have the parts for, and they probably said you know what, don’t worry about that chip, let’s just get it out. And now you’ve seen all these recalls from the supply chain disruptions and they’re coming in from 2021, 2022.

Those are the cars. Those are the cars where we had trouble getting because supply chains were down, because the Fed said, hey, let’s spend like $3, $4 trillion after we open up everything, after everything is good and asks all-time highs, let’s continue to just fuel the market with trillions of dollars. That’s not going to be a problem. We’re not going to see inflation right, it’s transitory. We’re not going to see inflation. We’re not going to have supply chain concerns Absolutely not. Everyone’s going back to work and you’re getting trillion dollars stimulus into the market. That’s not going to be a bad sign. Nothing’s going to happen. We’ll be fine.

Zscaler warned companies may cut spending. They’re a little worried for its products Down over 15% today. Dick’s Sporting Goods pretty good quarter. They just warned of a consumer slowdown and said shrink, hurt them, shrink. Why do they call it shrink? I find that so interesting.

I touched on this a couple of times. Why don’t they just say that it’s a bunch of low-life pieces of shit that steal our merchandise? There’s nothing we can do about it. We can’t hire more security guards, because if security guards stop them or hit them, they’re going to get arrested and thrown in jail for life. So we can’t Think about it.

If someone’s robbing your store in Florida. You rob a store, you get shot. You see the videos everywhere. People get shot. They got guns behind the counter. If you come into the store, you’re going to get shot. You better be prepared. You break into someone’s house you’re going to get shot. You’re going to get shot in the head and the cops say listen, aim for the head. This way he doesn’t get up. That’s what the chiefs tell you Aim for the head, shoot him and it’ll be great. That’s what you need. They say it, that’s what you need to do. You, when they steal the shit, they just go in there with a bicycle and put everything in the thing and go out. They don’t even care. How does this happen? It’s not just Dick’s. I mean Walmart, target. You’re seeing stores close all over the major cities because of this. Is anybody paying attention? But Dick’s is down over 10%, although the numbers I thought were pretty good, but expectations were high.

The stock’s lately More negative news US Steel says it’s closing mills and they’re going to move their headquarters out of Pennsylvania if the collapse with Nippon Steel, if the government blocks it. Government loves blocking deals these days, but you’re looking at bad economic data all around starting to show up in stocks. We’re seeing it. We’re seeing this slowdown and, by the way, these risks that I’m telling you about I didn’t even mention Russia, Ukraine, Iran, Israel. Political risks Oil is now below 70, pullback below 70 today. Massive debt that’s out of control. The carry trade in Japan. People worried about that again.

All this stuff, all this, all these negatives, these massive, massive negatives that you have to worry about, that you have to be concerned with and you know what? I’m going to check it right now. And the market’s up. The market’s up. How could it be up with all these risks? And I can tell you something Everything that I mentioned to you people are talking about which means what? If I taught you anything, it means it’s factored in, even when it comes to NVIDIA.

Nvidia got smoked, lost $300 billion in market cap. There’s only 25 companies. One day loss of $300 billion. Let me put this in perspective. It’s pretty cool Just to see how big that is. Yes, we know $3 trillion valuation One day loss of $300 billion. There’s only 25 companies in S&P 500 with a market cap of $300 billion. That’s like Netflix going to zero, chevron going to zero, amd, merck, pepsi those are pretty big names. That’s the market cap. Nvidia lost in a few hours when the market was open.

And now the Justice Department is going after NVIDIA. Surprise, surprise, they sent up a subpoena looking at NVIDIA being a monopoly. Maybe listen to this podcast Because I said last week, Nvidia had 80% market share in GPUs last year. You know what it is. This year, 88%, it’s gone higher Because they have the best product on the market.

I’m not sure what the Justice Department could do and think about it. Companies can choose whoever they want to choose to buy the products from, and this isn’t Microsoft, where they own the software in every computer and you could use other companies where it wouldn’t hurt your performance or anything. It’s not like Google 80% of the search market forced where Apple signed a deal with them as well and they paid. I don’t even know what is it? Five billion a year? Where Apple signed a deal with them as well, they pay. I don’t even know what is it. $5 billion a year? Whatever, they pay them billions and billions a year. Google pays Apple, just so it’s a bet in the phone. That’s your search for Google. I mean this is different.

If the Justice Department says, hey, you know what? This is a monopoly. I mean it’s not like they could force the biggest hyperscalers to buy GPUs from their competitors, which are AMD, Intel, Samsung, Intel. I can’t believe I said that name. Holy shit. I think they may lose that $8.5 billion in funding I’m hearing that in the rounds because they have to meet certain qualifications and now they look like they’re closing fab plants. What a disaster over there. But if you look at the hyperscalers, think about that. But if you look at the hyperscalers, think about that. They’re going to have to sacrifice performance if they’re forced to use their competitors products. When I look at this, I don’t see abuse here like Nvidia forcing companies to use their GPUs. They just work harder than everyone else. They come with the best chips that are 10 times better than the competition. And However, with that said, when you look at Nvidia and you see the market coming down, stocks coming down, the Justice Department coming after them that was at the close of yesterday it adds fuel to the fire with tech stocks melting down and even the large cap tech stocks.

They were down about 3% yesterday. They weren’t down like the 7, 8, 9, 10% like the semiconductors. But even when I look at NVIDIA and you say all the risks, I highlighted that we’re talking about what’s the biggest risk here? Everybody keeps saying it when it comes to technology, the concerns over CapEx it’s going to slow down, it’s going to slow down, it’s going to slow down.

Jp Morgan came out with a great note today. It was pretty cool, well-researched, comparing this current tech boom to other areas. When it comes to CapEx spending and the percentage dedicated to one company, if it hits a certain percentage it usually calls for the top of the market. We’re still a little bit away from it compared to the dot-com bubble. But I got to tell you something there is zero evidence. There is zero evidence that hyperscalers plan to cut CapEx on AI. There’s zero evidence, zero. That’s Taiwan, semi, all these companies, every one of them. I mean there’s zero. I mean you could say eventually they’re going to have to close it down. They’re not seeing the benefits. Believe me, guys, these people, these companies know every single thing that 7 billion people are doing, at every single second. They don’t make mistakes anymore. They’re not going to overspend on AI because they think they can’t make money off it. They’re already seeing massive benefits. You’re seeing layoffs. You’re seeing what 400 million people use meta AI, by the way, which is a slower system. So what are they going to do? They’re going to force it to go slower. If the Justice Department gets its way, can’t buy NVIDIA chips to catch up to everybody, but you’re telling me that it’s not benefiting them. They’re not seeing that huge return, and you know who’s saying that A lot of economists who know nothing about stocks.

When you listen to these companies and what they’re doing, this is a fear-based sell-off based on something people believe is going to happen, not something that’s happening, we’ll see the slowdown. We talked about slowdown. We cover stocks all the time. We see people warning. They’re warning of the customer. The customer starts spending a little bit less, seeing delinquencies go a little bit higher. Banks are doing fine. I’m not telling you it’s a rosy rosy outlook. I’m just saying that the fears are based on something that people believe will happen or it’s going to happen in the future.

But if you’re selling NVIDIA here, sell NVIDIA because you think the multiple is going to come down. Say you know what? It’s a little too expensive. And when we compare multiples we compare them to other stocks. So we look at NVIDIA trading at 32 times forward earnings. You don’t say well, compared to the S&P, it’s really expensive Because the whole S&P is not growing as fast as NVIDIA. But you would compare it to other technology companies that you might put in your portfolio like an Apple. I mean you can compare it to AMD. Amd is more expensive. A lot of these companies are more expensive than NVIDIA on the chip side.

But even if you look at the hyperscale, if you look at big companies, the big tech, you’re looking at Apple, Microsoft, trading at similar multiples growing much, much slower than NVIDIA. But maybe you say you know what these multiples with this high interest rate, which is what I thought would happen over a year ago, I said we should be trading at over 20 times. 20 times multiple is an expensive multiple. That’s a premium multiple, passed to historic, which is around 17%. But you deserve that multiple. When interest rates are zero, when interest rates are where they are, we should be trading around 17, 18 times, but we’re trading at 21 times now. Okay, the whole multiple of the market should come down. That’s what you can say. Okay, stocks are expensive, that’s fine. That’s your argument. You got a good argument.

But to say, hey, you know what? The whole tech sector is going to collapse because these companies are going to cut CapEx on AI. There’s no evidence of it. It could happen, but there’s zero evidence of that of Apple, of Microsoft, of Tesla. I mean look at Twitter, with Grok, which is the X platform. I mean, look at Google, amazon. None of them are cutting spending. They’re trying to find ways to compete with NVIDIA, but they’re not cutting. They can’t cut because if they cut they fall behind everybody else.

But these tech companies, they don’t make mistakes. They know every piece of data, everything that is going on. They understand it. They understand how much money they’re going to make by spending $1 to $7 billion on AI and how quick that return on spend that they’re going to generate in the next month, in the next three months. Maybe they don’t expect a great return in six months to a year. They know. Are you kidding me? Look what we know how to do with AI right now. You don’t think they know? Spending $7 billion and having the best engineers, thousands of them, the greatest talent in the world that knows everything about AI, they have the monopoly. When you’re looking at five, six, seven different companies, Are you kidding me? Do you really think that they’re going to overspend on AI? Because whoever’s going to win at this race is going to be the biggest company in the world based on market cap. They’re going to take market share from the rest of these guys I don’t care if they’re in kind of different industries where you say, well, Microsoft is software and cloud and Amazon is cloud, but yet I wouldn’t call Apple a cloud company, even though it’s a cloud division. It’s more a hardware company with 55% of sales. But all these companies, it’s this race to win because they all have so much data that they’re going to analyze.

So if you’re selling stocks or you’re selling video, like just the narrative, again it doesn’t matter what the narrative is. You can say whatever you want. Just like everyone said, the market’s going to go up tremendously in 2023 because we’re cutting rates. The Fed didn’t cut rates and the market went up tremendously. Pat yourself on the back. You’re right about the markets. You may be right that some of these technology companies could fall from here, but it’s not going to be based on what. Is your slowdown in capex or we’re seeing a slowdown, capex again? There’s just no evidence of that. I don’t know what he’s talking about.

I listen to the commerce calls, probably more in depth than 999% of the people out there. That’s why you probably listen to this podcast. They’re going to break this stuff down, but if the multiple, the overall multiple, comes down, that’s fine. But let’s see, because Nvidia should not be trading at the same multiple as Apple, as Microsoft. It should be trading at a much higher multiple because there’s growing earnings over 100%, which, by the way, they had to delay their main chip. If they didn’t have to delay their chip by three months, they would have had another $3 to $4 billion. $3 to $4 billion in their guidance would have been added to their guidance if they didn’t have to delay their Blackwell chip three months, holy shit. So let’s see how this plays out, because not everything is terrible.

We’re going to get a good look on Friday, which is a jobs report, which is pretty important. All of a sudden, nobody really cared. You can look back. You can look at this so many different ways. The data is the data right. We’re at 4.3% unemployment. You can say that still, historically, we have full employment. That’s a great number. Or you could say that it’s going up a ton. It had a three handle on it for you know how many years, and now the last three months has a four handle, that’s 4.3. And usually when you see unemployment rising three, four, four months in a months in a row, it’s a sign that you know that’s when recessions hit. But could you compare again to date? It’s how you interpret it. Would you say we’re going to be in the recession with unemployment rate of 4.3, 4.4 percent?

I don’t know, but we just had two pretty weak manufacturing reports. Today we had some good data on durable goods, but now economic data people are paying more attention to. So they’re saying if we come out with a good jobs report which, by the way, could you define what a good jobs report is? I have no idea what a good jobs report is. I really don’t. I’m not kidding, I don’t know. I covered a shit for 30 years. I don’t know what a good job report or what’s considered a good job report for Friday, I don’t know. If jobs come in stronger than expected, is that good? Because that could show inflation may start rising again and the Fed’s only going to cut by 25 basis points. If it comes in weaker than expected, is that good? The Fed may cut by 50 basis points? It could show that the economy is really slowing and maybe, hey, we could see a recession pretty soon. I have no idea.

We’ve spun this around where any jobs data or the number that comes out is going to be good. The estimates are for 160. I think they’re expecting 4.3 unemployment. I will say this when we hit 4.4 or 4.5, I could see, sentiment-wise, you’re going to be like holy shit. We’re getting closer to 5. That’s a big deal. I haven’t seen that in a while. I like to look that up.

5% unemployment Remember 4.5% to 5% used to be considered super low. Now, since we’re coming off a base of 3%, 3.1%, 3.2%, now it seems like 4.3% is high, but over 4.5% we hit a 4.5%. I can picture people saying, wow, maybe we get a 5% handle. We got to lower rates a lot quicker. But what is a good jobs report number? What is a good number? I would think if it comes out like bad, really bad, that’s going to push the market lower. I mean, if you’re forcing the Fed’s hand for a 50 basis point cut which I still believe that’s what the Fed should do, because they’re way behind I mean, look the bond market’s telling you that how far behind you are. You can go 25 basis points if you want. I mean, you know, maybe it might be better to go 25. I think Daniel was talking about this.

One of the things we want to talk about today is, you know, 50 basis points seems like the Fed might be nervous. It’s all how you interpret it right. The Fed didn’t have to do anything. The Fed didn’t do anything yet and look how much they lowered rates just by saying the right thing. That’s the power of the Fed. That’s why the communication is so important and what they say we’re going to lower rates. We’re going to lower rates. We’re going to lower rates. We’re going to lower rates. We’re going to lower rates for six, seven months. We’re going to be data dependent, but we’re probably going to lower Marks and pricing in Lower rates for a while. Lower them.

I think 50 basis point does a job, but they might have a good point. That, at this point, does a job, but they might have a good point. That could be seen as a sign of weakness. Maybe the economy is a lot weaker than we believe because the economy is breaking down. It’s breaking down to the point where people are starting to struggle right now.

They just can’t afford prices. Some of these prices are stupid. They’re stupid. You’re going to stores and you’re going like get the hell out of here. I got into a fight with my daughter in the store, my 13-year-old let’s go in. We got bagels. This is Sunday and if you get one bagel one bagel with egg and cheese it’s $7.

So I decided to say all right, you know what? Let me just get a half dozen bagels for everyone in my family and it’s like $8. I said you know we’ll make the eggs or whatever. Seriously, because I’m like this, it just doesn’t make sense. The prices, it’s not like, oh well, if you can afford or not, it’s it’s come on. It doesn’t make sense. I’m like, well, let’s just do that. And, by the way, in florida they don’t put tin foil around the bagel with the eggs after they cook it. So five minutes, by the time you get home it’s cold and I you, I feel like telling them listen, there’s not a lot of common sense in Florida. It’s okay, I won’t go there with a rant. Not a lot of common sense in Florida. To me that makes sense.

Charge an extra 10 cents, charge $20 for your bagel if you want. That’s what everyone’s doing now anyway. But anyway, my daughter’s like can I have a muffin? And I said from from $8 to $15. They charged me $7 for a small muffin and like a medium sized coffee and I was like, are you fucking kidding me? You know, I kind of got pissed at my daughter’s. Like could I get an apple juice? I said no, we’ll get it someplace. She’s like what do you mean? I can’t get apple juice, I said no. I said we’ll get it someplace else. I’m going to hand him $3 for something I can get a dollar at a store down the block. I mean it’s getting to the point where people are like F you. I mean, how much are you going to charge? This is ridiculous. For some of these prices they still try to get away with them and I are going to go out. Their costs are higher and they’re not seeing as many customers come into these stores now. There was no one in this bagel store on a Saturday.

Yes, football started for college football in Florida. It’s very big down here. Football SEC, holy shit, it’s massive. They show every game on every channel. It’s amazing. It’s amazing. I mean just people felt the bars it’s. You know, coming from New York, where you know college football is like meaningless, it’s unbelievable. When you get down to the South, holy cow, it’s like a religion down here. It’s awesome. Everyone has flags out in the houses. They’re wearing shirts, flags on their cars and stuff. It’s crazy. It’s crazy. We’re in like Florida County, which is bad because Florida is atrocious. Not as bad as Florida State, though I don’t know how Florida State did it. They managed to make Georgia Tech and USC look like great teams. But USC I don’t know. We’ll see USC’s in Penn State Division. We’ll see about football.

Anyway, you guys get my point about prices. Let’s see what they come out with. It’s going to be interesting when it comes out with the job report. What is a good number? I would think if it’s a strong number, that would be better, because today we got strong durable goods numbers on the economic front and it definitely helped the market. I think people are like okay, it created a little bit of a base after yesterday’s sell-off.

When, if we see another 2% sell-off now now you’re reading into the papers Tech’s going to crash. All the headlines all over the place Remember, fear sells. Now you have people saying okay, I’m just going to pull my money out of the market. And, by the way, what’s different about this market than past markets is you have an alternative to stocks. You didn’t have an alternative. When interest rates are zero, where were you going to put your money? If you take them out of stocks, where are you going to put your money? Now you can take out your money and earn 3%, risk-free, 4%, 5% in some areas of the market, still earning well over 4% on money markets in time for brokers, where you have to have a certain amount there. I think it’s 100 grand.

But you could find these rates if you look hard enough. But there’s an alternative. That’s not a bad return. It’s not a bad return. You could say well, what about inflation? Well, the real interest rate is what? Then? At least it’s not negative. We look at the real interest rate, which accounts for inflation. Inflation is what? Two point, whatever. But there’s an alternative. If you’re scared of the market, hey, let me take it out, I’ll take 3% and let me see if things settle down. You didn’t have that when interest rates were at zero. So it’s a lot easier for people to say, okay, I’m pulling out of the market, I’m going to put my money here for now. That’s okay. That’s an alternative. Now we’re seeing the market bounce back today Again.

A lot of these risks that I’m talking about are coming back into the market. Let’s see what the jobs report I mean the jobs report is so ske. Have it right, you know. Let’s let millions of illegal aliens in the country give them jobs and we’ll have a good, strong job market, which would be great for this. Maybe, maybe he’s smarter than I think. I don’t know maybe, but that’s going to be a big influence of in terms of the data and the hundred, like they didn’t say an economist like trying to predict this stuff, and the fact that it gets revised every freaking year. Two million jobs got revised. That Are you kidding me? I mean, do you even believe this number? I mean that’s a whole other conversation. When we get there, when you’re looking at the overall markets, you know you want to be careful here.

But this is an opportunity where not everything is terrible. I mean you can say consumer names. Look at the dollar stores I brought up, you know Dave Buster’s. I brought up Five Below A lot of these companies getting annihilated. You know who’s not getting annihilated. What about Ross Stores? What about TJ Maxx? What about Burlington? Who take the inventory off of the shelves of everyone and resell it?

If you haven’t been to Burlington, man, Burlington’s awesome. I think it’s so much better than TJ Maxx, which is the comparison to Burlington. I, which is the comparison to Burlington. I mean every time I go in there I’m buying stuff they got good brands at really like crazy low prices. And my wife’s like can we go to Burlington? I’m like shit, I don’t want to go to Burlington, come on, you know it’s a Saturday. I want to go home, I want to relax a little bit or whatever. And then I go there and then I buy more shit than she does, and she shirts and everything. This stuff’s good, it’s really good stuff. It’s reflected in their stock price. They’re doing great. Those companies are doing great.

Oil prices are coming down because you’re looking globally, I mean, man, people worry about the US slowing down the rest of the world. Holy cow, is it bad out there? Europe is a disaster. China’s a disaster. Japan, you know, it’s really really bad out there. We have high interest rates. We raise rates. You’re in a reserved currency. We hurt a lot of countries. We really do. You debate, well, a good dollar, a strong dollar, a weak dollar, is good for exports, good for imports or whatever. When we have higher interest rates, other countries do not do good. And China, holy cow. China has done everything that they possibly can to stimulate the economy and still people are not buying stuff and they’re investing here, they’re investing in other places. I mean it’s crazy and you better be careful, because if you look at some of the stories that are coming out too, and they’re sending troops to fight for Russia. Holy cow, this stuff is real Again, stuff that you got to have good contacts, which we do to see a lot of this stuff that’s not reported a lot.

But we have weakness around other countries. When you see China doing what it’s doing, it almost provokes them to try to take over Taiwan or to join with Russia. They really don’t like. But then you throw in the BRIC nations and stuff like that. The next thing you know, geopolitical risks get extremely heightened. We have a Goldman to lower their copper prices with China and stuff like that. It’s supposed to be a positive market.

If you’re looking all around, you want to be careful. There’s ways to protect yourself. You can buy inverse ETFs if you want. We talk about that all the time. Buying puts is really tough. We try to have a newsletter doing that, if you want. We talk about that all the time. Buying puts is really tough. We try to have a newsletter doing that. Even when you’re right, sometimes you don’t make money on those things. It’s hard because of the way the market is.

Jp Morgan put out a good report, a really good report, today, not just about the semiconductor. I like the report. I don’t agree with it as much. The comparisons to 2000 are not apples to apples. The valuations are insane. Back then we saw the amount of money and amount of CapEx spending. It’s just. You can say it’s a percentage, but you’re looking at the biggest companies in the world. They had shitty balance sheets back then. I mean you’re looking at big companies that almost went under. They almost went under. Now you’re looking at these guys. They’re generating like 25, 30 billion in free cash flow. I mean they’re much better positioned.

And when we see downturns these days, what happens? They happen so quickly, like in August. We fell sharply, we fell tremendously and we bounced back. Even now, 3% loss in one day. I mean it’s much better than 1% one day, 1% the next day, 1% the next day. It is gradual, even if it’s down like 1% a week and you fall 10%. That’s 10 straight weeks. And that’s where the sentiment changes With us. It changes like in a second. You get the headlines market’s crashing, ai trade is done, it’s over.

I just think the AI trade is over for companies that have been bullshitting you all along, like the Intels, like the AMDs, who do not have, like the Salesforcecom, like the Snowflakes. They tell you whoa, we got a great AI. He’s a corporate Bullshit. You’re not. Nvidia is, the hyperscalers are Not. Everybody is.

But we see these big downturns and the report. I was talking about JP Morgan big downturns and the report I was talking about JP Morgan. They said look, this could be more of a prolonged downturn with tech, which would not be good for the markets Pretty obvious, since they account for such a high percentage of the whole S&P 500. But will it be prolonged? Will we see a quick pullback like we do? 10%, 12% pullback, even in COVID? It was what? 30 days, 30 days of a massive market crash and a month and a half later, everything was fine and we closed down the world. We shut the world, we locked people in their homes, we chased people who were surfing on the beach because they were going to die if they didn’t wear a mask and we turned out okay, just a quick downturn, and we came back. So why am I telling you this? Because you want to be careful here.

There’s a lot of stocks that shouldn’t be trading at the valuation they’re trading at. I love small caps here. Yeah, if the economy’s so small, small caps usually do poorly. However, they’ve done poorly already. They’ve done horrible in the past three years, especially if you relate to large caps. So many of these names are down so much and the risk-reward. You could see these things where, oh, if they bounce back, you could see a 30%. You’re looking at two 3X gains. I mean, some really great small caps that I’m looking at are down tremendously.

Stop picking away at oil companies. These guys could produce at $50 a barrel, $4 a barrel. They generate tons of free cash flow. These guys are fine. If you used to see oil come down below $60, $50, these guys were just like they had so much debt they were done. Now they’re buying back their stock. I mean, you know oil, there’s just so much tensions out there. You know oil’s probably going to go higher from here. We’ve been saying that for a little while and lost a little money on it, but still I like the position in oil. I love gold here.

Bitcoin pulled back with the market yesterday. I still think the dynamics. I had my newsletter the newsletter goes out yesterday, which is a crypto newsletter. I did just the tailwinds behind Bitcoin. It’s going to be choppy through September. But I mean after the election, almost every time after the election. We’ve seen the last two elections and, by the way, one was Trump Republican, the other was Biden Democrat Just those last two. The average gain over the next six months is about 250% in Bitcoin. I won’t use 2012 because I think Bitcoin went up like 2000%. I won’t even throw that at you. I think it matters if Trump gets in. He’s definitely very, very pro-crypto. I know the Democrats are saying they want to be pro-crypto, but we’ve seen what they did.

I mean, they’re actually going after NFTs now, which is just so vague on that definition. Guys, when it comes to security, anything you expect to make money on that gets promoted by a third party. Which who’s a third party? Is it a person on social media? Is it a brokerage firm? I mean, everybody promotes pretty much what they own and they expect to make money on. There’s not one person that buys a crypto that’s not buying it to make money on it. So that technically means every single crypto is a security Everyone but yet you’re not providing the guidelines for it. And now you’re going after NFTs, which means if you go after NFTs, you’d have to go after collectibles, gold coins, art.

I mean, again, when you’re vague, when a government has a definition that’s vague, it’s trouble because they can go after anyone they want, which means they can go after anyone they want, which means they can go after anyone they don’t like who doesn’t support their agenda. There’s a reason why you’re seeing go crazy after Elon Musk. Is Elon Musk really really a threat to national security, is he? I don’t care if you hate the guy, I don’t care how far left you are. Do you really think he’s a threat to national security, really? But what he’s done Rockets I mean who shoots off rockets and lands the same rocket he’s done stuff that NASA couldn’t do for hundreds of years Well, I should say like 50 years Electric vehicles where would we be without him when it comes to the electric vehicle market? Is he a threat? Is he really a threat to national security? You can say I hate his guts, I hate him because he likes Trump and he’s supporting Trump.

The platform. People are going to say what they want, or whatever. You can say what you want. Is he a threat to national security? Come on, come on with the bullshit. When you have vague definitions when it comes to the government, it allows you to go after anyone you want, which is crazy.

But getting back to the markets here, be careful. You do have an alternative. You can throw it into treasuries. You can throw it into money market funds. Make sure, wherever you’re at that, that money market fund, no matter how broke that you have, pays a high yield. They should pay a high yield in the money market fund, no matter how broke that you have, pays a high yield. They should pay a high yield on the money market fund. If not, put it someplace else, because there’s no difference what platform you use Other than preference. Well, this is nicer. I like this. This is easier. Robinhood’s easier. They’re all the same. They’re all the same, it doesn’t matter. But right now, start doing your homework.

We just saw earnings come out. There’s a lot of companies report and even companies that reported good numbers saw their stock come down. Buying low expectation stocks seems to be good. I would not. Dollar stores or Dollar Tree or anything like that. I do like some of these names. Now, after I didn’t like Dollar Tree, but dollar stores yes, I mean.

It pulled back tremendously and they $1.4 billion on that buyback. They didn’t buy back any shares last quarter. Good for you for a management team where Snowflake bought back $1.5 billion of their shares all at much, much, much higher prices. You’re doing your shareholders a great deal there. That’s a good job. These guys are like, no, we see the shit storm coming, we’re going to see things get worse. Let’s wait. Let’s buy our stock back when it’s 30% lower. Good job by management.

Yes, it’s a tough market. Yes, your stock went down. Yes, you’re a shareholder. You’re pissed. But man, that $1.4 billion what do you think they’re going to do? Right now, that’s like 6%, 7% of the float. So they’re going to start buying. You see, just, if they slow down, you see, just not even good results. You don’t need good results, forget great results. You just need less than bad results for dollar stores and that stock’s going to pop 15%, 20%. And you have that nice floor, that big buyback that they have, which I don’t know if Dollar Tree has that.

I didn’t look too much into detail, just those tornadoes and shrinkage. I love that term so much. But start doing your homework on names that you want to buy 10-15% low. We say this every time the market pulls back. Please, if I could reach out and just strangle you and say listen, this is what I tell you to do for the last 10 years of every single market pullback. Start looking at names that you would buy in a 10-15% pullback from here, and if you’ve done that over the past 10 years, holy shit, have you done great, and I hope that’s why I do this podcast. I want you to do great. I don’t want to pat myself. I don’t give a shit. I’d rather be wrong and see you make money than be right and see you lose money. I’m being dead honest. But when times like this especially when we’ve seen what past markets when they pull back, they pull back right away. When they pull back, see what you want to buy. There’s some names. I mean, look, you’re looking at.

Smith. Micro with the accounting concerns is not the same as you know. Nvidia pulling back, it’s not the same as you know. Maybe AMD pulls back a lot further from here and it becomes a buy. I just think it’s very expensive and I said that when it was well over 200 and it fell tremendously from there.

Could they get it right? Absolutely. Are they busting their asses to try to get it right? Absolutely, but they haven’t yet. They haven’t. I mean Dell and Supermicro. Their AI solutions are let’s give it away cheaper than everyone else, even though we’re slower than everybody else and our margins are going to sacrifice margins and you know they got hit because of that and that was up tremendously before they got hit.

But there’s different companies, like people, like all the retailers are dead. Are they dead? Because I know walmart’s not dead, target’s not dead after that quarter, ross, tj maxx, burlington’s not dead, but I can name a bunch of retailers, which I already named, that are having trouble. There’s good oil companies that have great balance sheets that are going to be buying back their stock like crazy right now. Look at that. See which ones are hedged at much higher prices. The low price isn’t going to hurt them as much. How long are they hedged for? Look at the pioneers, the UOG Resources companies like that. They have a history of hedging a lot of their production. They probably hedge it at $75, $80. If they did it well, you know, probably around $75.

But start doing your homework. That’s how you you want to embrace these types of markets, especially when all the fear is out there. Again, everything I’m telling you we already know. So a lot of this is factored into stocks. It’s very easy to promote, especially if you’re a newsletter guy. You’re going to see holy shit. You’re going to see the fear. It’s done. Ai is done. We’re going to get crushed the markets, the debt levels, everything. Holy shit, you’re going to die. Move your money, move your money out of the country right, fucking now, right now. In the meantime, the guy’s telling you that gets paid by a company that goes his check goes right into the bank. He probably went to the bank the day before. Move your money from the banks.

Right now. They’re going to skate the shit out of you, use it to your advantage. Know what’s coming. It’s not difficult to see all the fear packages and the fear shit that’s coming. Everybody mentioned on CNBC. It’s only a 3% downturn. Everybody thinks the world’s over, it’s going to crash. You could say, well, frank, if it did pull back 10%, but it’s 10% off of a market cap. That was what? 500 billion a couple of years ago. That’s 3 trillion and it pulls back. That’s fine. But there’s going to be pockets of growth. There are going to be pockets that make sense here, I think.

Gold, junior miners I’m going to start recommending a ton of those. Holy cow, they’re left for dead, left for dead. These people so many good managers, not money managers so many good managers, I should say CEOs, especially in the junior mining industry, which is a shitty industry and 90% is garbage. But a lot of those guys busted their ass to buy assets at dirt cheap prices over the past 10 years. That are now sitting and they said listen, if we had gold, go to 2000,. Our stock’s going to freaking quadruple. It’s at 2500 and their stocks are lower than they were three, four years ago. For some of these names I’m like holy shit, because no one’s just interested in them. They are going to get interested, especially since you’re going to see this redirection of allocations. I mean, you don’t really see money flow completely out of the market. It’s got to flow someplace, or money managers can’t generate fees, so they’re going to look at other sectors. You’re seeing, you know, defensive companies, utilities picking up Again. It’s just a little bit of a shift into other sectors. Okay, we were way loaded in tech for too long. We’re coming out of tech. Where’s the money going? I think it goes to oil. I think it’s going to go to gold. Some of it’s going to crypto, small allocations, especially now you have institutions and 401ks allowed to own this stuff. That’s where you want to be looking.

And if you listen to our podcast, world Shrunk Home Premium, Dan and I cover stocks, tons of stocks. We give away so many stocks and reports just telling you, hey, this looks good, Look at this company. Just little things that you’re not going to get just by reading a story, because some media channel needs content and they need to put out oh, nvidia’s down, it’s because you’re going to see a slowdown in AI spending. We dig into that and say, hey, we’re not seeing it. Maybe there’s a slowdown in spending to other names. We’re not going to see it to NVIDIA anytime soon. But there’s a slowdown in spending to other names. We’re not going to see it to NVIDIA anytime soon.

But there’s certain names that are going to benefit and others that don’t, and that makes the stock picker’s market. It’s nice to see. Not every stock within one sector goes higher. I mean, retail is a great example of that. Oil is a good example of that. Not every oil company is getting smoke right now, but there’s a lot of good names in that industry Probably show up in our newsletters as well.

But this is the time that you bust your ass and do work, because if you’re a smart investor, if you’re a good investor, the greatest investors embrace markets like this. They love it Because when the market comes down and you’re sitting on cash, you’re able to buy stuff much cheaper. Warren Buffett, greatest investor ever lived. Yes, he’s selling Bank of America, but when did he buy Goldman Sachs? During a credit crisis? When does he buy a lot of these assets? He buys assets where people come to him and he’s able to offer deals that he’s almost guaranteed to make money during a credit crisis. That’s what the Black Rocks do. A lot of private equity firms do, so you want to focus on the names.

Easy to find data on this stuff, we use briefing.com. I don’t get paid by them. It’s really cool to see all the reports. You just fly on the wall whatever. Or you just, you know, dig into some of these companies, see what’s going on, or well, show, unplug premium ten dollars a month only, I mean and you get access to our trading newsletter, which, again, it’s a $5,000 newsletter. At any place else in the industry that you’re getting for $10 a month, but there you’re getting ideas where we’re able to take advantage of disconnects, as it happens, daily, not monthly, which is really cool.

I really like that portfolio. I like that newsletter a lot, actually, because they like to talk about so many ideas and I’m like well, you know this company shouldn’t be down as much. Or you know you should be buying this even though it’s up 10%, 15% because it’s cheaper now than it was before the reported earnings, because they blew out the earnings expectations. But start doing your homework. Don’t just fall away and say I’m getting out of the market If you have cash on the sidelines. Really, really like I want to see a pullback, because when you see an overall market pullback, a lot of stocks, even the good names, pull back. That gives you an opportunity to buy them.

So hopefully you guys enjoyed the podcast. Dan will be back tomorrow on Wall Street Unplugged Premium and I’ll see you guys then. 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. Well, 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.

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