Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on main street.

Frank Curzio: How’s it going out there? It’s January 25th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down headlines and tell you what’s really moving these markets. Moving these markets, holy cow. This is as crazy as it gets. I’ve been doing this for close to 30 years. But if you look at Monday when the market sold off incredibly… It’s starting to soft a little bit right now, but it was down 4%. At that bottom, with the Dow down 1,100, S&P down at 4%, pretty much, 3.99%, at the bottom, 90% of all stocks were down. Can you think about that for a minute? 90%, 9 out of every 10 stocks. This is a broad, massive sell-off. This isn’t risk off only. They’re getting nailed more than anything. But you’re just seeing a total sell-off, which means there’s a lot of leverage coming out of this market. But what do we see?

Frank Curzio: The markets came roaring back, erasing that 4% loss completely. Just to put that in perspective, the last time we saw reversal like that of 4% reversal in one day was in 2008 when Lehman failed. It’s not a good thing when you see moves like that. Even though it came back and positive, and maybe this is the bottom. Now, we’re Tuesday and the market’s down another 2%. It’s not down the 5% it was in one day, but when you’re comparing things to one of the worst periods and one of the most uncertain times, it shows you how crazy it is. It shows you how dangerous this market is. But this particular market is one of the worst I’ve seen. You say, “Well, we had COVID. Market crashed 35%. Credit crash, 2008, the tech crash, 2000. I was even around for the ’87 market crash.” Holy shit, am I old.

Frank Curzio: Why would I say this market is worse than those? Because if we look at COVID, to me, it wasn’t difficult to see what was going to happen. We were going through a pandemic, holy cow, first time we’ve ever done something like this and lockdowns. But even before that China closed. China was the growth engine of the world, you got to see profits come down. We just didn’t now at what extent and the uncertainty of something that is a black swan event, that we were like, “Holy cow, we’ve never seen anything like this. Lockdowns, masks.” You see it, though. You understand the reasoning, why there’s so much uncertainty, and why the market come down.

Frank Curzio: You see it. If you look at the credit crisis, same thing. When we were going through it mid-2008, finally, when Lehman failed and the whole market crashed, first went up, everybody was happy, “Yeah. You let Lehman fail. That’s cool.” The whole market crashed and the whole financial system seized, you started realizing the extent of the damage where the Fed had to come out and do different things, or they had to backstop the market. But you understood that. You saw it and you were like, “Holy shit…” You understand why the market’s getting murdered. Even in the tech bubble, NASDAQ crashing 70% over a two year period, holy cow, horrible. The Fed wasn’t there to just throw money at everything and bail everything out. They just let it crash, which is different from what they do these days.

Frank Curzio: You’re not even allowed a recession. But I also got it since a lot of those tech companies, some of them had billion dollar valuations were like four pages working in the early stages of web in three, four years. Everyone was starting new companies, the funding, it was crazy. I mean, most of these guys were barely generating any earnings at all and some of them weren’t even generating sales. But if you look at today’s market, these tech companies, these giants, they generate tens of billions of cash right now in this market and expected to generate that over the next few quarters, even in this environment. Technology today is a lot different than technology then. You can’t look at back then and say, “Well, they traded 40, 50 times earnings, and they’re only trading at, whatever, 25 times earnings today.” But they were trading that high.

Frank Curzio: These guys are generating… They’re growing incredibly fast and not all of them are trading at 40, 35 times earnings. I mean, you’re looking at some good technology companies trading below 19. The average company right now in the S&P 500 is trading around 19 times old earnings. But even when I go back to the NASDAQ and seeing that during the tech bubble of 2000, you understood it. You saw how bad things were and eventually that was going to happen. Now, today, it’s different because we’ve seen this sell-off since November. Outside of November, there hasn’t been any news that is surprising. We’re seeing the risk. We understand the risk. And yet, we’re seeing… It feels like 1% to 2% downturns in the markets every single day. This is based on what the Fed said.

Frank Curzio: Finally, coming to terms where, “Hey, we have to stop buying treasuries. We have to raise rates. This inflation is insane now, over 7%.” Again, almost anybody knew that outside of the Fed. We’re all seeing it. We pay our bills. But you’re looking at this risk, it’s already on the table. We already know this. Most of it should be priced in. When the Fed made that surprising statement that inflation is not transitory, we’re going to aggressively raise rates, I mean, look, we were adamant about that going in and saying, “Wow, the Fed is going to have to raise rates. It should have raised rates a year ago. It’s not transitory.” We were talking about once this happened, and once the Fed reversed, that this is a fundamental change… I use that term a lot in these podcasts. This is a fundamental change in the marketplace.

Frank Curzio: Things are different now. The Fed can’t go in and just bail you out. They’re taking money out of the system, almost have to force a recession, raise rates, stop buying bonds, all this, right? It’s the only way to control inflation, taking money out of the system. Stop handing that free checks on the side. A lot of this is going away. Also, saying you should be buying puts to protect your portfolio. With that said, I had no idea it would be this bad and this quick, no idea. I was wrong on that. I knew meme stocks, and I was talking about AMC saying it should be trading around $5, and wherever it went to $30, $40, $50, $60, $70. Eventually, numbers matter. That eventually can stretch out, which stretched out for many, many years because we had easy monetary policy, free money. Everything was getting funded, just early stages ideas.

Frank Curzio: Even in crypto, that didn’t even exist yet, we were able to raise $10 million like nothing. That’s what happens when you have low interest rates, easy money policies. Medium stocks, space stocks, ESG names, stocks and sectors with no earnings, sometimes not even generating sales, trading multi-billion evaluations. I mean, I expected to sell off on those names. I also expected a pullback in the overall markets, maybe around 5% to 7%, maybe 10% max off its highs. Looking at, hey, you know what? We’re probably going to see a recession for two reasons. Fed’s taking money out of the system. Also, if we look back at history prior to the pandemic, 5% plus inflation, besides all several recessions over the past 60 years. When we had inflation of 7%, that resulted in a double dip recession. Where inflation is, you have to expect, okay, recession’s coming, which is not the end of the world.

Frank Curzio: It’s not the end of the world. Recessions used to be normal. It’s a normal course of action. It’s just like a business that’s aggressive, maybe too aggressive, it has to slow down and cut costs. It’s normal. There’s times that are great and other times that aren’t so great. It can’t be great all the time. The Fed was there making everything great all the time, making it very easy. Oh, we have problems, keep interest rates low. Everything’s at record highs. One year ago today, earnings hit record highs. One year ago, home prices, record highs, net household wealth, record highs. All this shit’s at record highs. Every asset class is at record highs. What the Fed do? We got to buy more bonds. They injected so far close to $19 trillion into this market, just in the US alone. 10 and a half trillion came during COVID before January, 2021. Another 9 trillion, when asset prices were record highs and everything was going through the roof and everything was…

Frank Curzio: Another $9 trillion was injected into this market, which is insane. They shouldn’t been raising rates a year ago. Now, they’re behind the curve. They’re well behind the curve. But you look at the S&P, the NASDAQ, great companies that reported blockbuster earnings last quarter raised guidance, they’re down 20% from their highs. Most Dow components, 52-week lows. Russell is down over 20% from its November highs. We’re talking two months ago. What does that mean? It means many stocks within that, if you look at the mean, are down 30% plus from their highs. Again, just over the past two months. When you have COVID, when you have the credit crisis, you get it. When you have a Fed that just said we’re changing policy, and they said that two months ago, and to see that’s the same risk everyone’s worried about right now, as this leverage is coming out of the market and everything is selling. It’s crazy because it’s not just these high risk companies that are getting crushed.

Frank Curzio: Yes, they’re getting crushed more than the rest of the market, but there’s a broad base sell-off on everything. Again, we saw that at Monday at the bottom when 90% of stocks are lower. Holy shit. That’s unheard of. That’s a catastrophe. That’s like we’re going to war Russia-type thing. Sell off everything. I mean, it’s insane when you think about it. But something I’ve never seen in terms of just a massive pullback in the market on really no new news. The Fed news of tightening was in November. Inflation is at 7%, no surprise, been there for a couple months now. We knew it was going higher. Some increases to the Fed rate hikes. They said three and now some firms come out four and I’d be surprised, maybe it’s five but most… I think the consensus is for four. It was three two months ago. I understand a little bit there. We really got to control inflation.

Frank Curzio: Yes, interest rates under 10-year are higher. But still, we were at these levels less than nine months ago and before nine months ago, we were above 1.7% pretty much since 2013, pretty much since then. I mean, we’re not like 2.25 out on 10-year. We’re not 2.5 rising at 3%, holy shit. We’re at 1.7, 1.8. I mean, we should be seeing a 30% selloff in stocks. This isn’t expected. It should be expected. Rates are going higher. We should be expecting this. The Fed told us this months ago. But yet, you’re just seeing this massive sell off regardless of any sector of stock, regardless of news or earnings. Again, I get it for the AMCs, Virgin Galactics, GameStops, marijuana stocks, EV names with billion dollar valuations yet to manufacture a single vehicle right now. I get it. I get the selloff in those, but quality names, even banks are selling off in an environment that should be very, very good for them, higher interest rates increase their margins.

Frank Curzio: Gold stocks should be on fire right now. Some of them were, but they sold off tremendously. Uranium, holy cow, uranium stocks got cut in half out of nowhere. Uranium, the profile has been more bullish than it’s ever been in terms of supply and demand economics, but a 50%… Should that sector get destroyed? No, I don’t think so. Even gold stocks, Bitcoin and banks, these should be solid hedges in an inflationary environment and even these names are getting destroyed because you’re seeing leverage come out of the market and everybody sell. That’s what happens. It’s just weird considering we don’t have this massive problem. Yes, we could go into recession. Yes, we should be down maybe 10% off our highs, but 20% stocks down 30% from their highs?

Frank Curzio: Now I know, this is dreary. It’s a terrible and ugly market. Why do you have stocks in your portfolio down 30% plus? And I bet, even based on your emails, a lot of you are close to saying, “You know what? F- it, I’m going into cash. I’m done. I can’t take it anymore.” Before you do this, I’m going to say something. When it comes to small-cap stocks, this may be one of the greatest buying opportunities I’ve seen over the past 10 years. I know that sounds insane. You’re watching stocks get crushed, but buying on extreme selloffs always sounds crazy even though everyone says you’re supposed to do that. That’s what the best investors do. Best investors buy stocks when they’re cheap, they buy distressed assets that they know they could turn around.

Frank Curzio: Look at this sell-off as an opportunity because every name is getting nailed. You know as well as I do, not every name deserves to get nailed. Some of them got good balance sheets. Some of them got good management teams. Some of them have great growth profiles in the right secular growth markets. They’re seeing earnings strong. They raise guidance. They’re getting nailed because leverage is coming out and people are selling no matter what. That’s an opportunity, but keep sticking with me here before you think I’m crazy. You look at small-caps which have been annihilated since November, down over 20% from their highs. That’s the entire index, not just a couple of stocks. The means probably 30% on average, the stock is down. But you’re looking at the Russell down 11% just this year with three weeks in.

Frank Curzio: Think about that, 11%. To put this in perspective, the Russell is trading now at a 30% discount to large caps. That’s a big discount than the credit crisis, COVID and the largest discount since the 2000 tech crash. Again, which is absolutely insane. I’m not saying all small-caps are a buy but there’s lots of names or dozens of them, solid balance sheets, great management teams and growing earnings in the middle of those secular trends, AI, 5G, data analytics, digital sales, digital marketing, crypto, metaverse, autos. I’m not just talk about EVs, but those that supply and chip suppliers. I mean, those companies got nailed as well. Some of them are down 25$, 30%. I mean, auto companies have a lot of cash, especially if you’re looking at Ford and GM. Every one of these guys is going all in, spending tens of billions of dollars…

Frank Curzio: Ford literally said, “We’re going to spend $30 billion on new technologies.” But just building these cars, that’s going to result in a massive profit stream coming in for many, many years as everyone goes EV. That’s not going to change. Should these stocks be down as much? I mean, some of them, again, who just have crazy valuations, yes. But the chip companies, these guys got good fundamentals. Some of them even a small-cap land paid dividend. They raised their dividend last quarter and they’re showing massive free cashflow. Should these be down 25%, 30% in this market? Is this a COVID credit crisis type of sell-off? No, it’s a change that we all see coming. We all knew coming, and maybe we think it’s going to be a little worse than expected. But this sell-off is crazy, especially for many of these small-cap names. One day, I’m recommending in CVO tomorrow, the biotech that has 10X to 20X plus potential. You listen to my podcast.

Frank Curzio: You listen to me for decades maybe, I don’t throw around numbers like that. But this is a stock that has fallen 35% along with the rest of the market, especially biotechs got annihilated. They’re about to release phase two data, which I’m expecting to be positive, not because I have inside information. It’s because it’s primary endpoint is going to be super easy to achieve based on their last study, which is extremely positive. Now, I don’t throw around the 10X, 20X potential gains, but this technology, this company is competing with the number one selling drug in the world. If they get it right, sales are going to explode over the next few years. If they don’t get it right, yes, you’re going to lose money on the name. But now that it’s down 35% from its highs and you still have that upside potential, the risk-reward profiles is much, much greater. These are the names I’m talking about.

Frank Curzio: If they don’t get it right, yes, the stock will fall. But with the stock down, it lowers your risk profile while maintaining that incredible upside. If you look at all the great investors, that’s the goal. Maximize your upside while taking as little risk as possible or lowering that risk. This is the opportunity. I know you’re seeing a lot of stocks on your portfolio that are down tremendously and you’re like, “Holy shit, should I just sell everything?” But for me, most of the risks seem priced in here. I mean, small-caps, so many great opportunities. I understand we’re going to see slower growth. I understand the Fed is tightening while economy earnings will slow. I get it. But here’s what, I don’t want to say a lot of people don’t get because I think some people get it, but here’s a few things that you need to be aware of.

Frank Curzio: Being down 20% of the Russell about two months, similar to the NASDAQ which is getting crushed off its highs, at these levels where we’re trading right now, it’s not just pricing in your normal typical recession, which again, we’re not used to seeing because the Fed doesn’t allow it anymore. They balance out of everything. But where we are, this is pricing a very severe recession. That’s what any downside, well further downside, implies from here. It’s simply not the case. Now, you look at Omicron, it’s about to disappear. We’re talking about a month or two from now. This isn’t going to be a story anymore. We’ve seen it. We have the profile. You look at the UK. You look at South Africa. Look at these numbers skyrocket immediately and disappear completely. There’s a lot of positives here, where I think mass mandates are going to go away in three to six months.

Frank Curzio: It opens the door to traveling, less fear. I just went to The Bahamas. Guys, if you’re traveling internationally, holy shit, you really have to be tech savvy. I mean, yes, you have to get tested before you go, a couple days before, tested before you go back. Omicron’s very easy to get. Sometimes, you don’t even know you have it. If you have it, you’re going to be at another country for at least 10 days, maybe seven days now, whatever it is. That’s a real pain in the ass. But having to download this and take 40 minutes to go to fill out a Bahamas visa and then go to a specific app, depending on who you’re flying, where you have to verify all this information and put it on there, and then you have the test results that they email you. And on the app on your phone, they’re like, “Well, you have to take a picture of the barcode.”

Frank Curzio: If you can’t take picture of it, so you really have to go on a computer because you can’t bring it up. Then, you have to save it to your phone, which a lot of people don’t know how to do. It’s not that easy to save something to your phone, a file to your phone. It is for some people, but think about older people. These are the people that travel the most. But you look at The Bahamas, when I went there, they said they have a 50% unemployment rate, 50%. The hotel that I stayed at, which is beautiful, was completely empty. 80% of it, 85% empty. I have no idea how they’re not bankrupt. But what I do know is in America, things are getting better. We like to travel and things are going to open up a lot more over the next three, six months.

Frank Curzio: That’s going to open the door for a lot of these countries who generate a lot of money from tourism, but that’s easing. That’s going to ease going forward. That’s a positive. Inflation is also going to ease up. No, it’s not transitory when it comes to energy. But it will be transitory when it comes to wages. Wages is what’s really scaring the hell out of the Fed. I mean, they’d like to see the client wages, seeing wages go higher. It’s a clear sign of inflation. Maybe not energy as well, given the current landscape, where a bunch of nut jobs out there believe that we have to go alternative energy even though we don’t have alternative energy to fill up that supply. Oil prices are starting to surge, and chances are, they’re going to go well over $100 until we start drilling again and become energy independent, since we have basically an unlimited amount of oil based on the price.

Frank Curzio: It sounds crazy, but if we’re at 200, they’ll drill 25,000 feet instead of 12,000 feet to frack. I’d been to these areas, we have ton of energy, so much so that when natural gas, which is a byproduct of oil, they’re burning it for free, which they’re not going to do anymore because natural gas prices are higher. They could sell it. But the fact we’re restricting that… And I understand the whole climate change shit. I don’t want to get political here, but it would be nice to have renewables to replace this before we start cutting back on oil. Because now, every single problem, where it’s the UK, the Ukraine, Russia, China, something that could disrupt oil supplies is going to be amplified now. The fact we’re sitting on this much oil and not being able to drill is crazy.

Frank Curzio: That’s going to result in higher prices. But if you look at everything else in terms of inflation, home prices are starting to fall. You’re going to see food prices start to fall because people are going to change their habits. They’re not going to pay… They used to pay $60, $70 going to maybe their local restaurant for burgers and fries with a family of four. Now, they’re paying $80, $90. Eventually, they’re going to say, “Hey, you know what? That’s not worth it to me.” I do see food prices coming down. You’re going to see the supply chain bottlenecks, which has caused inflation ease. Omicron’s got to die down. I mean, a lot more workers working on to get things out a lot quicker at the ports, but also, you’re going to see slightly slower demand. Now, with the Fed taking leverage out of the market but supply chain, something I follow religiously is getting better week after week, especially in the auto sector.

Frank Curzio: You see it get better. That’s a positive. Earning season is going to be pretty solid, 8% expecting on earnings. That’s pretty cool. Yet, you’re going to have names like GE that just won today, and DocuSign, others that don’t get it done. Just like you have every earning season, they’re going to get nailed. But even on the large cap front, when I look at a company like Roblox, I mean, Roblox is not the same as Rivian. They’re both trading around whatever, $75 or so, wherever they are. Roblox has a $40 billion valuation, but generating close to $2 billion in sales and those sales are growing. Their users are growing. The amount of time spent on that platform is growing. Plus, you’re seeing companies like Nike and others because they have the whole metaverse set up already are asking Roblox to build this Nike World, which is a great growth model.

Frank Curzio: It’s where the world’s going. You don’t see a trillion dollar company like Meta or Facebook change its name to Meta without really knowing for a fact of how big this trend is going to be. They have a pretty good track record of getting into things early. But then, you have Rivian with a $60 billion valuation generating 1 million in sales the past 12 months. Two totally different companies, should they both be down over 40% from their highs? No. I think Roblox is a screaming by here. Could it go lower? Absolutely. But if you’re looking 12 months, 24 months, this is a great name at this price. It’s just $120. Now is what? 70, 75. Should it be in the same boat as Rivian who really has high expectations, and I believe they do have the best technology in battery space in the EV space but there’s huge expectations for Rivian and everyone else is coming out with EV vehicles at the same time.

Frank Curzio: Roblox is almost on an island by itself. Yes, you have Meta. But how many companies… They’re doing in their own thing? This is a people saying, “Hey, you know what? I believe in the metaverse. Where do I go? Roblox?” Maybe it’s Decentraland. Maybe it’s Sandbox. There’s not a lot of options out there where this stuff is ready. You could build it right away. Looking at Best Buy, had a 52-week low. Best Buy’s at a 52-week low, trading 11 times forward earnings and market’s trading at 19 times forward earnings. They’re growing earnings at 20% year-over-year. That’s what you’re expecting over the next year, 20%. Even if that slows to 10%, 11 times forward earnings, should be trading at a 52-week low? More people buying homes, yes, it’s slowing, but they sell a lot of smart home technology. TVs flying off the shelves. You have AR, VR massive trend, new phones being sold through. They have a nice growth model there, but really should that stock be trading at a 52-week low and down 30%?

Frank Curzio: Looking at those Monday lows, and again, nine out of 10 stocks on a Monday low, nine out of 10 were down. But that market where we were at the low, that marked the worst start to the markets in 90 years. This wasn’t due to COVID. This wasn’t due to some crazy credit crisis, over leverage. Yes, we’re leveraged here but it’s all based on something that we see coming, that risk we see coming. Yes, inflation’s going to be a little bit worse and maybe it stays higher than expected but the Fed, look, they may raise rates right away. They’re looking to raise rates right away. But they might halt it and say, “Look, we’ll see inflation go a little higher because we can’t afford the stock market to go down 30, 40%.” You know the Fed’s not going to allow that somehow. They really can’t do much but maybe they’re like, “Okay. We raise, we stop the bond buying but we don’t get too crazy and maybe push it out a little bit.”

Frank Curzio: Who knows? But there’s a lot of positives to this market where not everything should be down this much. The opportunities I’m seeing are incredible. I like being an optimist here because everyone I’m seeing, BC who was totally freaking optimistic in November and even when the market’s slowed down, “Oh, it’s great. We know the risk. Everything’s great. You got to buy Snowflake at 350, which is wherever 250 today.” Now, everyone’s more nervous than they’ve ever been, which is typical for TV. They’re going to tell you how they feel after something happens, “The market’s crashing, you should sell.” Well, you should have told us to sell the two months ago but now You’re watching all the headlines, the leverage coming out of the market, a lot of stocks getting nailed, bad news. That’s all you see.

Frank Curzio: Everyone’s reading worried about their portfolios. Times like this is when you want to be a buyer. You don’t see it often where a total sell-off results in great names falling 30% plus. It’s happening because leverage coming out of the market result in every asset or stock being sold. I mean, I could see that during COVID, where the markets got wrecked from mid-February through March 8th, and they got wrecked and I understood it. But then stocks fell another 17% over the next week. The S&P fell from 2,700 2,200 from March 8th to March 15th. Did we deserve that big of a sell-off? No, that was a capitulation, the puking stage. Holy shit, we got to get the markets. We saw the same thing during the credit crisis where stocks looked like a screaming buy in December, 2008. If you look back, it was. The S&P 500 was at 900. What is it at? At 4,300 today? It was a screaming buy. So many people said, “That’s it. We’re good.”

Frank Curzio: But people forget, from December to January, the S&P 500 went from 900 to 666 at the lows. Okay, about two and a half month stretch. The markets fell another 25%. A lot of that was just leverage coming to the market, we have to sell. That provided an unbelievable opportunity. Not only was it an opportunity at 900, but yes, you dealt with that huge market collapse, 25% plus from January to March. But man, look what the market… You had to wait pretty much six months to really see this market take off from there, and it just kept going and going and going. My point is take advantage of the sell-off. Don’t go crazy. Don’t go reading crazy headlines. Don’t go nuts. We know the risks ahead of us. We could see them.

Frank Curzio: I’ve been warning you about them, higher rates, slower growth, but this is a positive for companies with what? With strong balance sheets, those that continue growing earnings more than 8% annually, you just have to find those names. I say this, and maybe I was early saying this the last couple years saying it’s a stock picker market. That means you can’t just throw a dart and everything’s going to go up and numbers don’t matter and fundamentals don’t matter. You need someone that knows what they’re doing that could find these hidden gems because there’s a lot of great names out there that are down 30% plus just because leverage coming out of the market is for selling and that provides a massive, massive opportunity.

Frank Curzio: I wish that was the conversation they were having on CNBC instead of saying it could get a lot worse, it looks terrible. The Fed’s got a rate… We know what the Fed’s doing. What the fuck? We knew since November. Then what? We increased it from three rate hikes to another one. They pushed up the tapering timetable. We get it, it’s all there. That’s what’s crushing the markets on something that we see. Maybe it’s a little bit worse but should stocks be down 30% plus a lot of great names? Not on this. Definitely not on this, especially we’re going to see the market open up, supply chain issues ease, inflation slowly come down from here, which will result hopefully in the Fed not raising rates four times or just slowing down that pace, which is going to be great for the markets because that’s not factored in.

Frank Curzio: That’s definitely not factored in. There’s dozens of names I’m seeing, which I’m really excited about. These are names that you’re going to see make their way into my newsletters. It’s going to be volatile. I’m not going to lie. It’s going to be a little crazy. But over the next 12, 24 months, the gains in some of these names that I’m seeing that collapsed could easily be up 100% plus at 12 to 24 months. That’s how much they sold off even though nothing has changed within the company other than the Fed taking leverage out of the market and raising rates, which is a positive for some companies. If you have a strong balance sheet, you’re paying a dividend.

Frank Curzio: This isn’t the worst thing for some companies. It’s bad for companies that aren’t generating earnings and have these crazy growth profiles that are going to grow… Discounted cash flow models going out 15 freaking years with them generating… Like Rivian, $50 billion in 2033, now, you got to be careful. I mean, having access to the debt markets is not going to be as cheap. Wages rising of course is not a good thing because that’s going to increase course for company, but you’ll see wages come down as we see companies cut their R&D and cut back because it’s an uncertain market. But a lot of this is going to be positive. It’s going to bring inflation down. Not down to 2%, but off of 7%.

Frank Curzio: We shouldn’t see every name down 30% plus because of this. Should some of them be down? Some of them should be down 50% plus. A lot of those names are not in our portfolio. But 30% plus with a lot of these names, great, great opportunities. I wanted to get to two quick questions. I usually keep this to 30 minutes, but this is special because I’ve been away for two weeks trying to find new ideas, going away on business. It sucks going away that week considering… Not even that week, but the last two, three weeks. Unfortunately, the market happened to crash during those weeks, and I’m getting emails, which sucks. It would’ve been better if it was in February so I could be here and write more alerts and everything. But just finding new ideas, I found lots of really cool ideas and had great meetings even at the CES and stuff.

Frank Curzio: I wanted to just spend a little bit of extra time in answering two questions really quick. The first one is from Joel. He goes, “Frank, nice call in November, warning us the market’s going to be extremely volatile this year after the Fed tightening announcement. With higher rates and inflation here for a while, is now the time to buy gold and silver?” Joe, I’m not going to take credit for that because I was wrong. I mean, I was right on my call. I really truly didn’t think it would be this bad. I didn’t think we’d see a lot of names selling off 30% plus. I knew that we’d see a lot of risky names get crushed, leverage coming to the market. I was surprised it happened too fast. I’m not going to take credit for that because I would take credit if I told you guys to sell some of the positions in the portfolios, which I didn’t. A lot of them are very, very good names and haven’t gone down 30%, maybe 15%, 20% from their highs, which is following the market.

Frank Curzio: But we were up on a lot of those names. But for me, I’m not taking credit for that. I mean, you guys pay me again to really give you guys the heads up on the real story, what’s going on, you pay for my newsletters and stuff, but for me I could have done a better job. I had no idea. This is a big surprise to everybody how much the markets are down on a risk that we knew since November. Again, we knew inflation was 7%, over 5% I mean, even before November. It’s going to result in slower growth leverage coming out of the market. But to see every single day us go down 1%, 2% outside of Bondi, which went down 4% and came all the way back. But just seeing that is a real surprise off of the same exact risk.

Frank Curzio: It just goes to show you how leverage is coming into the market, which eventually is going to be a good thing. You’re going to get rid of a lot of the garbage out there, and the quality of names you’re going to be able to buy at dirt cheap prices. Is that gold and silver? Absolutely. Gold has gotten crushed too but everything… You look at Bitcoin, everything across the board has gotten crushed. You can’t hide anywhere. That tells me, it’s just a broad sell-off. People having to sell, margin calls, got to sell everything. But gold stocks right now, gold price going higher, it’s never been a more perfect market for gold. I would make sure you have exposure to the large producers. Newmont’s a great name. It’s been on our portfolio. We’re up a lot on already, but I still think it’s a screaming buy here, a really good name. There’s others that are just going to a… Their cost to produce are under a $1,000, like $900.

Frank Curzio: $1,800, $1,900 are probably going to go over $2,000 in gold. That’s a great place to be. Also, silver’s a great place to be. I’d start picking away. Again, an opportunity to buy a lot of these names that are down. Same in the uranium sector, uranium royalty, UEC, other names. Just seeing a massive decline in these names when I don’t think in the past three weeks, I’m pretty sure the price of uranium per pound is flat in three weeks. Should these stocks be down 50%? Has the fundamentals changed in this sector? Absolutely not. That’s where I’m seeing out opportunities, but gold and silver, definitely you’ll see a lot of names make their way into a portfolio. Again, these are companies that based on fundamentals are very, very strong goal, a lot higher based on the fundamentals. Not even just based on being an inflation hedge, and they’re going to have the pick of the litter because a lot of these junior minors have come down and some of them, maybe 5% of them have really good strong projects that these majors are going to be able to buy dirt cheap.

Frank Curzio: They’re in a very, very good position definitely have exposure to gold and silver. Let’s get to one last question here from Matt. He goes, “Frank, with the Fed injecting this volatility into the market, it’s clear the market is trying to price in these rate hikes. Is there any chance the Fed can announce a rate hike after this two day meeting, which starts today, well before the first scheduled hike in March.” Absolutely. The Fed could do intra-meeting hikes if they want. I don’t think they’re going to do that. The Fed could do a lot just by talking here, Matt. They could do a lot just by talking and just saying what they’re going to do. This way the market’s anticipated. Right now, the market where it is, where stocks are, we’re anticipating at least four rate hikes, at least. When they happen, I don’t know.

Frank Curzio: Will they start in May, which a lot of people believe and then go for the rest of the year? Yes. That’s a good timetable. Could they go a little bit earlier? I’m not going to say they can’t. I’m doing this before the meeting, the first day of the meeting. Maybe they do it today, tomorrow. I have no idea. They could do that. That would really surprise the markets, I think. I think that would be a negative but everyone’s expecting it at their next meeting. But that’s what’s priced in right now. Yes, they could. Like you said, it’s clear the market’s trying to price this in. It’s overpricing it. I think for us to be down this much on even when great stocks are down 30% plus is very surprising to me on a risk that we know.

Frank Curzio: I mean, are they going to raise six times, eight times or just go half percent, seven and a quarter percent hike, maybe. I don’t know, but we’re pricing in at 2%, I think, by the end of the year. That’s fine. That’s still very, very low by historical standards if you look at back in history. But for me, I’m surprised that the market is selling off again, not the crazy names that deserve to be sold off 70, 80%, the Pelotons and everything like that. I get, I understand that. I get it, but there’s quality, great names that are down 25%, 30% plus that are just down along with the rest of the market, and that’s where the opportunity lies.

Frank Curzio: To answer your question, Matt, yes, they could come out before that depending on where the market is if inflation really takes off because you’re seeing energy prices take another leg up. If you know what you’re paying gasoline prices, it’s trying to go back to record highs. Maybe they raise sooner rather than later, but if you’re looking at by the end of the year, that’s what they’re pricing in, four rate hikes by the end of the year, and maybe into the first quarter, that’s what’s priced in and let’s see. I don’t really see more than that. We could get more than four. I don’t know. I was betting more than three but I think four’s about right, but we’ll see. Inflation eases up, the Fed’s not going to have to raise rates as quickly and that can result in a massive, massive, massive boom.

Frank Curzio: We can see stocks absolutely take off if that happens and that’s on the table. That’s what’s good about buying when everything’s terrible. All you need is one little positive and you can see any stock, any sector or the entire markets take off tremendously. That positive could be from the Fed just saying, “You know what? Inflation has eased. We don’t have supply chain worries. Omicron has eased as well. You see more traveling, more open to open trade, open stocks, the reopened trade. A lot of those names have been coming down. That’s going to be a great buying opportunity. That will result in a lot of these names going higher.” Again, I’m here to tell you the positives and the negatives. Right now, I’m seeing tremendous opportunity, not in all stocks, but there’s a lot of names that should not be down this much and they will be making their way into our newsletter going forward.

Frank Curzio: Guys, that’s it for me. I know you’d have tons of questions. Feel free to email me, frank@curzioresearch.com. That’s frank@curzioresearch.com. I’m here for you especially during these times. My apologies, every January, I go away for two to three weeks. That’s where the best conferences are for me to do my networking, find the best ideas. No idea the market would come down the way it did, which I like to be here and be writing alerts and talking to you a little bit more. Now, I’m here. I’m going to be here for a while. Any questions, comment, feel free to email, frank@curzioresearch.com. Again, I’m here for you guys. Really appreciate all the support, and I’ll see you guys tomorrow. Take care.

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