This transcript was automatically generated.

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.

Daniel Creech: How’s it going out there? It’s Wednesday, September 13th and you are listening to the Wall Street Unplugged podcast.

Don’t adjust your audio or visual.

Frank is out of the office.

I, Daniel Creech, research analyst here at Curzio Research and the transitory host, the fill in host behind the mic here on this Wednesday.

I normally join Frank every Thursday on Wall Street Unplugged Premium, where we break down more in-depth market analysis and give you stock picks.

But Frank and I are putting out fires right now, for CRA members.

He was joking, you’ll get that issue later today.

Uh, the air, the AC in the office was out until just a little bit ago, so it is starting to cool down.

Frank’s dealing with some fires at his own house.

That, horror story seems to never end.

That poor guy, if anybody was on the fence about building a house from scratch and starting with that woo takes a need, but no, everything is going smoothly.

Don’t feel sorry for us just keeping you up to date.

A little inside baseball here, but couldn’t be happier to fill in for the one and only Frank who will be back in the office tomorrow.

Like I said, for our Wall Street Unplugged Premium podcast today, you’re stuck with me.

I’m running the helm and I’m going to talk about the CPI data that came out today, how markets are reacting, and then I will continue to opine on energy and why you should.

I’ll give you the answer first, why you should and must have exposure to, oil and gas and also carbon neutral or, a new fun drinking game, carbon capture that we’ve joked about in the past.

All that.

And then there’s a great, if I have time, I don’t wanna run over my allotted spot, but there’s a great article in the Wall Street Journal today about amateurs piling into 24 hour options and it’s just gambling we’ll through all that and more.

And let’s dive right into the August CPI report.

Data broke out this morning and the Consumer Price Index increased Remember Frank often talks about whether it’s earnings or any kind of data, you wanna know what expectations are going into it.

Uh, gasoline rising gasoline prices amounted for over half of the increase the core CPI, which excludes food and energy that you and I have to live with and pay for.

In reality, rose is stronger than expected.

Point zero 0.3% month over month.

And the briefing consensus, remember there’s different people have different estimates.

So this 1.3 was a little bit higher than the 0.2 that briefing had, some of them had it in line, et cetera, et cetera.

Year over year basis, the total CPI was 3.7% versus 3.2% in July.

So that’s higher month over month energy.

That CPI was up 4.3%.

That was actually down a little bit from 4.7% in July.

What does this all mean? More kind of mixed Goldilocks lukewarm this spit it outta your mouth because it has no taste type data is just fine for markets right now because as you can see here, I’ll switch over to Finfin Viz a free website.

Markets are basically flat right now.

the futures were down about, 50, 60 points on the Dow after the CPI headline print hit.

Markets are digesting this.

I think there’s really much a do about nothing until the Fed meeting, later on this month.

But what I wanna share with you, and I’m gonna share my screen here, I wanna go over a little bit of detail and I apologize if you can’t see this too much.

This is just an easy um, c p I data internet search.

You can pull up from the, government website, the bls.

gov and look at the Consumer Price Index.

I just wanna go over a few details here.

What you need to take away.

The headline is good.

Okay? Markets aren’t tanking.

Everybody’s kind of, I say everybody, these investors are in line with this soft landing narrative.

Hey, the Fed is gonna be able to keep or continue raising interest rates, keep them higher without causing a massive recession.

That’s all well and good, but there’s one big spoke in the wheel here I wanna point out because energy is going to continue to go round for round with j Powell and Powell had better be sitting down or keep his head on a swivel because energy is about to throw a mean right or left cross, whichever dominant hand you are and really take hold of this inflation drama and surroundings CPI index.

Alright, so I went over the 0.6 point sevens.

Let’s here.

if you scroll down, what I like about how on the government website, they do break this down.

And if you go to the far right, it has the unadjusted for 12 months ended.

But if you look at just August, when you go down the columns here, there’s only one, there’s two line items that grew by double digits or more.

Most, most everything is, you know, a percent or lower energy prices as a whole grew went up 10.5% and gasoline of all types was up June and July for energy, commodities and gasoline rose 0.6 and But then in August you get these massive double digit increases.

And why is that? Well, because if you go over to CNBC here, this is the crude oil chart and I’m gonna pull up a year to date.

And what you can see from this, basically crude oil, hit a few bottoms, tested this bottom range of around 67 50 a few times this year, the last time in June and July.

And since the end of June, June 27th on this chart, oil has basically gone from straight up from, call it sixty seven fifty to 88 50.

And the reason I bring this up is because as you can see in the inflation data, this is going to have a huge impact going forward.

And these are lagging indicators, meaning oil prices, unless, and I I’ve said this for a few weeks now, were going to be proven right, not as in I know everything I’m right.

Just follow the data.

Oil and energy prices make up 7.5% of the CPI data.

When you have oil prices continuing to go higher, unless they have a dramatic pullback right away, the next two, so next month when we get August and then October, when we get September for CPI if oil on the W T I West Texas intermediate remains at 85 or above, or even heaven forbid it, if it doesn’t go back into the seventies, if it just remains 82, 85 or above for the next several weeks or months, this CPI data is gonna be absolutely trashed with higher, it’s gonna be a lot higher than expectations because of energy.

And what will that do that’s going to force Fed share Jerome Powell’s hand to either get aggressive on inflation and continuing hiking rates and continue this narrative of higher for longer and maintaining these higher restrictive interest rate policies.

Or as we’ve said in the past, both Frank and I and Frank said, on, um, a recent video for subscribers, the Fed may be forced because of energy prices.

The Fed may be forced to just move the goalpost and say, well, you know what? We’ve been talking about this 2% goal for inflation for a long time, but maybe two and a half percent isn’t bad.

Or maybe it’s 3%.

We don’t know.

I’ve been in the camp for a long time that I do think they will move the goalpost because that’s what politicians elected and appointed officials do.

That’s Daniel Creech.

So don’t take that as gospel.

There’s only one gospel.

Remember, I simply think they’re going to move the goalpost because it’s real easy to get inflation from nine down to three-ish percent.

It’s gonna be very hard to get it from three to two without causing things to break, especially when oil is going against you and makes up a huge percentage of the c p i.

Continuing on with this oil theme, I wanna explain why we’re gonna help you out with, um, see we’re gonna help you out.

Apologize there.

We had a had a, technical glitch there.

We’re gonna help you out sift through all this ridiculousness and mixed messaging with the energy sector because I wanna point a couple of things out to you and these are all timely here.

And we, I’ll switch over here to, this is an article from the Financial Times and, and zero hedge link to it.

The takeaway here is the International Agency.

We’ll push a new report next month outlining for the first time the world is beginning of the end of fossil fuel era all.

Now, this is according to the financial Times, times we are witnessing.

This is a quote, we are witnessing the beginning of the end of fossil fuel era and we have to prepare ourselves for the next era.

This research report from the International Energy Agency is going to say that global oil demand, okay, not not peak oil, not peak production.

This is demand, demand for usage.

Peak oil demand will happen before 2030.

Alright, lemme check my calendar.

Yep.

Still 2023.

So before 2030, you’re gonna have peak oil demand.

It’s going to start retracing and you’re gonna have to shift to cleaner energy, to help replace the demand.

Now this is going to be interesting as it unfolds.

And quickly, I’ll just tell you, having exposure to oil and natural gas almost in coal, in in l n g energy is basically the most simplest bet you can make in investing.

And I’m gonna get into betting and investing, a little bit later when I talk about the article in the Wall Street Journal.

The way I view having exposure to the energy sector, whether you own oil and gas, Exxon, Chevron, whether you own refineries like Marathon Petroleum, whether you own, exploration and production companies like e o g pick there, there’s a lot of great and well-run oil and gas companies.

And the reason I’m so excited about having exposure to that sector is because that’s the easiest way to bet against silly politicians and their goofy goals.

And I’m not saying I’m anti clean energy, I’m not anti anything.

I’m pro increasing civilization and, human wealth for everybody.

Alright? Daniel Creech has a huge heart all lemme just tell you that having exposure to these oil and gas stocks give you tremendous leverage against what the politicians and stuff are telling us.

And so, alright, we keep hearing we’re gonna, you know, global.

If it’s not peak oil, then it’s peak demand.

And we’re, we have to have this Paris agreement and you have to lower the temperature.

We have to take these drastic measures to lower the temperature because there’s a climate crisis.

Now, I was joking earlier about the mixed messages and I wanna share with you, pull up here.

See, see on the screen here, this is from the World Climate Declaration.

There is no climate emergency and this is signed by 1,609 signers signatories who are scientists and decorated smart individuals all over the globe.

I know it’s hard to see on the screen here, but this is a 53 page document.

And I started tearing through this the other day and I thought, oh man, I’m gonna get a lot of great, this is gonna be fantastic.

I’m gonna have a lot of data and just sink my teeth into be able to have all kinds of great notes and, and, and data points for the future and say, and just to help educate everybody and try to figure out how to find the best oil and gas stocks because there is no climate emergency.

I’m gonna take their word for it and dig into this.

Of this 53 pages, about 50 of them, about 50 of them are just the signatures of all these 1,609 people.

You have a cover, a cover page, an opening page.

And then when we get to this, this is just some bullet points and this is great.

Now, they don’t go, they, they cite some research here, so we’ll have to look into this, but this is enough to get everybody going crazy in the short term.

There is no climate emergency.

These scientists dictate, and I’ll get to some of who they are and all that.

I don’t recognize ’em.

That doesn’t mean that they’re not scientists like everybody else says the scientists, that Sayable warning is real.

Their scientists too.

My point is, we should have a debate on this.

Lemme touch on a couple of these points here.

Uh, it says that, um, you know, natural causes are for warming, not just manmade.

They talk about a little ice age ended as recently as 1850.

Therefore, it’s no surprise we are experiencing a period of warming.

Warming is far slower than predicted.

They talk about the models a little bit, but here, I I don’t think you could be more blunt and as just a common sense guy, I’m very happy to read this because as Frank has talked about during COVID or anything that’s highly politicized, if you’re a decorated individual or a career individual in that field and you go against the overall narrative, there is risk there.

You could lose your job, you could get embarrassed on the internet, et cetera, et cetera.

That is a real fear.

I don’t think anybody’s gonna push back on that.

And so what I’m excited about this is just to see, hey, here’s over 1600 people decorated in their science fields and all that saying, there isn’t a crisis.

My big point and takeaway, what I wanna provide value for you listeners, is forget for a moment what side you’re on.

Whether you think that there is no climate crisis or whether you think there’s a massive climate crisis and we only have a few years to really get our act together and start drastically changing the way we use energy or it’s gonna be too late and we’re gonna have hell to pay in the future for just a moment.

Forget that and ask yourself why is it we only hear from the fringes? We either hear from past presidents and current presidents that the debate is over that climate change, manmade is real and that’s just the way it is.

People when you’re gonna have to get in line and deal with it, or we hear people say, oh, that’s just a bunch of bss and we don’t have to worry about that and everything’s fine.

There’s gotta be room in the middle.

And my thing or my calling and what I wanna point out to all you is why don’t we see major debates about this? Why isn’t there a global debate on stage somewhere online, on Twitter or X or Meta and Google or pick any TikTok, whatever platform.

Why don’t you get some of these members from the 1600 plus signees and some of the most advocate global warming? Why don’t you see that on debate or podcast or anything? And the fact that you don’t on a mainstream level, I’m not saying there’s zero out there.

Don’t email me daniel@curzioresearch.com and say, oh look, here’s a debate going on between two people that has five views that nobody knows about.

The point is that is the answer in of itself.

The fact that nobody wants to have a global conversation.

They want people to just be in the kind of middle, in the gray area in that fearful, oh goodness, we gotta do something because it’s gonna be too late if we don’t.

That’s the oldest trick in the book to get people in line to do what you want.

So learn to think for yourself, think about why you’re not seeing these kind of debates.

And again, I think this is exciting for humans in general because these guys are saying, Hey, let’s talk.

This isn’t that big of a deal.

Look at a couple of other of these points here.

C O two is plant food.

The basis of all life on earth.

Global warming has not increased natural disasters.

That in and of itself is gonna get a lot of people upset because there was just a hurricane that hit Florida.

Yeah, didn’t hit us prayers to everybody over on the west coast of Florida.

Uh, they say that clo okay, climate policy must be scientific and you know, blah, blah blah.

But there was one other I wanted to show here.

okay, so climate policy relies on inadequate Metals, or excuse me, inadequate models.

C o two plant.

Here it is.

Here’s what I wanted to highlight.

Additional c o two in the air has promoted growth in global plant biomass.

It’s also profitable for agricultural increasing yields of crops worldwide.

Now why is that important? Well, because there’s this thing called food that everybody needs in the world to survive.

And so according to ExxonMobil, between now and 2050, we’re gonna have 2 billion more people on the earth.

That’s about what they say, And so how funny is it that the majority of people here, the global warming extremists say we have X amount of number of years to change, or it’s over.

And then you have these scientists say that this isn’t a big deal and actually what the other side is advocating of more.

C o two’s gonna ruin and kill everything and kill everybody.

They’re actually saying it’s great and it’s better Now think about that.

Think about how far apart this is.

And yet the individual investors are in here just being told by people that fly around private jets to keep our ac turned up high so that we do not ruin the world people.

That is a pretty crazy scenario.

And I want, again, my big thing here is just think for yourself.

Read both sides.

Read through why the world is coming to an end and why it’s not, and then make investing decisions accordingly.

But I’m gonna dig through some more of this.

They do have some footnotes at the bottom.

So I’ll look through this, world Climate Declaration from the Global Climate Intelligence Group and talk about, and update you guys further as that.

But hey, there’s no emergency needed right now according to these guys.

So let’s take that and run with it since we are optimist here.

And the last thing I want to end with is to continue.

Let’s check on the market here real quick.

Uh, Goldilocks is still okay, everything is basically flat and boring, neutral as Frank was joking about in the past.

Alright, switching gears here.

Final few minutes of the podcast this morning.

I was reading the paper here and Frank and I have talked about in the past about the vix, the volatility index.

V I X is the ticker, and I’ll pull this up using Finvizz here.

Actually I’ll just do it at CNBC and vix.

The VIX is basically the fear index and we can do a five year chart.

So typically when the VIX is moving up, markets are moving down.

this is used as a bellwether or a gauge for professionals and investors to say, and this is a five-year chart we’re looking at here and say, listen, when the VIX is low, that means option premiums are cheap, therefore you can buy protection against a market pullback.

I know I’m being very general here, just stick with me because Frank and I have talked about in the past how you have all this uncertainty, all this worriness and craziness in the, in the markets right now.

Yet if you look here basically from October of last year, the VIX has gone nowhere but lower and it’s drifted lower and lower, lower and it’s a basically five year lows or very close to them.

And the big takeaway here is should you use this as saying, Hey, the VIX is low, therefore markets are gonna pull back any time.

That’s what it’s done in history.

So therefore buy puts, um, buy inverse ETFs or sell stocks and get out of this.

Well, not so fast because you don’t wanna put too much weight into something when data changes.

And from the Wall Street Journal this morning, there’s a article here, amateurs pile into 24 hour options.

It’s just gambling.

Now, options enable traders to, this is a decent, description.

O options enable traders to leverage their betts on individual stocks.

They get the right though not the obligation to buy or sell shares at a set price on a set date.

The Big 10.

And Frank’s talked about long dated put options, which, Genia Turanova does through Moneyflow Trader, which is an excellent service.

This is completely different.

This is just gambling.

So they quote and they talk to a few people.

So the Wall Street Journal says Lucas Soer woke up around the time the stock market opened, opened up his Robinhood app.

He had a hunch it was gonna be a great day for stocks.

So he bought some call options in the tech heavy NASDAQ composite indexes that day.

By the time he was drying off from the shower, I’m paraphrasing here, his $3,000 bet had turned into $80.

So he lost quite a bit of money.

Now the deal is here and Frank’s talked about you can buy options on all different links.

What these guys, what these amateurs are doing is they’re buying zero dated options or zero day till expiration, which means you buy something and it’s going to be worth zero later that day unless you get lucky.

And I don’t mean to use that as a derogatory term, lucky and just the timing has to be perfect.

So one of the many amateur investors who have moved, so this gentleman Soer, this is the transition and what has the meme stocks, so you remember the game stocks, Tesla, a M C theaters, those stocks went absolutely gangbusters through the lockdowns COVID lockdowns of 2020 and then through 2021 as well, not necessarily lockdowns, but people taking up day trading and all kinds of stuff.

So trading is booming in options that expire in as little as a day or sometimes just hours.

And so for a fraught small upfront fee, you know, and they talk about some of these, um, gambles have paid off and he’s turned, you know, you make thousands and thousands of dollars.

Lemme point, lemme get back to that.

All right.

Short-lived and short dated options expiring in five days or fewer accounted for half of all the option activity in August.

Now that is tremendous because, and what I hope you guys take away from this, I’ll give you a couple of stock ideas, but what I wanna take away from this is when there’s not a lot of news around the company specific, if it’s not earning season, if we don’t have a big Fed speech to pay attention to or a Fed meeting or inflation data like we have today, markets have to bounce around from nine 30 to four o’clock eastern every single day.

Stocks are gonna bounce around.

And what I hope you take away from this is that if we can figure out what’s a little bit behind some of these massive movements, then you understand what’s going on.

And you can either choose to, you know, ignore it if it deserves being ignored or looking into and acting accordingly.

The ultimate takeaway here is this is what you wanna make sure you own and why you own it.

So I don’t care what your thesis is, if you just look at a chart and say, Hey, I like this technical setup.

If it falls below here, I’ll sell it.

If not, it’s off to the races.

And I like that risk reward.

That’s fine.

That’s your plan.

Stick to it When you know what you own and why you own it.

If you see a stock on no news drop, six, seven, 8%, that’s tough.

But what if it’s just tied to a bunch of crazy options or something that’s totally unrelated to the individual stock? It’s just market noise.

That’s what I wanna try to help you guys understand.

That way you, you can take advantage if a big pullback happens in a stock unrelated to that because a market, shery buy some more stock or add to it from your watch list.

If not, if it rips higher and you know, it’s kind of silly and it’s gotten oversold, or excuse me, overbought sell it.

That’s how you, you use it to your advantage.

But the fact that options that had a lifespan of five days or fewer, meaning they’re going to be word zero unless these guys, these option traders are correct, accounted for half of the volume in August.

That’s up from one third.

Okay? So you went from about 33% to 50, that’s a magnificent increase and that’s going to cause volatility.

And that’s not done.

That’s going to continue to happen in the future.

So pay attention from here and onward.

The individual investors made up 27% of all activity in the options as of June, and that’s up 23% since the start of 2020.

Again, that’s when the influx of these amateurish investors came into the markets.

During the COVID Lockdowns, one gentleman just says it’s just gambling and they talk about some of the highest option traded stocks are GameStop, Tesla, A M C, um, lemme see here, there’s a couple other highlights.

Uh, then they, they talked to Kyle Klut, who’s 31 and turned 300 contracts.

They don’t give, the amount that he paid for, but he turned that into $71,000 in one day.

So I don’t know if he put 10 grand into 70 or 5,000.

Anyway, he, he’s lost a bunch of money.

He just says, Hey, I’m just exceptionally great at it.

He said, um, he’s made more than a hundred thousand dollars on his one day options and that’s great.

I’m not taking shots now.

I’m just, I’m just kind of going through this, um, the take one of the takeaways here for how you profit from this or something to put on your watch list.

So they highlight Citadel Securities and they make the difference between the spread.

But listen to this, brokerages made more than $2 billion from selling option orders last year, more than double what they made in stock orders.

Now, a lot of stocks for amateurs or individuals through apps and different things.

A lot of stock orders are free.

That’s more of your institutional or fee-based, accounts there.

Two stocks here.

One, I was dead wrong on Schwab, Schwab brokerage account.

I recommended that for Dollar Stock Club after the, and we’ll pull up Schwab, see what it’s doing here after the fiasco in the small or the regional banking crisis.

So lemme pull up Schwab here and it has bounced back.

We did lose on this one.

I was dead wrong on this.

My timing was awful on this.

So as you can see, this is the big sell off on the regional banking crisis.

Uh, we bought in somewhere around here and it sold off and closed us out.

still getting beat up pretty bad.

I still like Schwab because of the insider buying.

You have to be okay with being a longer term hold in this, in my opinion, my absolute best pick and the one I should have picked first for you subscribers is Interactive Brokers Group.

The CEO is an absolute wonderful person to listen to.

Anytime you get a chance to, well run company, they don’t get ahead of themselves.

A lot of professionals and very seasonal investors, um, use this platform and it, I think it’s near an all time high.

If not, I know it’s at a 52 week high, but Interactive Brokers is a stock that needs to be on your watch list.

These guys have excellent returns on investment.

Again, it’s a sticky product once you use that platform.

Uh, not a lot of bouncing around there, they’re taking in more assets.

It’s just a very well run company as you can see from the charts.

return on equity is great.

It, it’s just a boring stock, but it’s going to continue.

I I’m just trying to tie something into, hey, how do you get value outta reading a great article like that? There’s a lot of craziness going on with options right now.

Follow GI Turnover’s advice.

If you’re gonna get an options, I’m an amateur.

It is just gambling.

And that’s one final thought I wanted to say.

I, I hear this a lot about people and people.

It’s usually either all in or have nothing to do with it type of person.

Yes, the stock market can be like Vegas.

Yes, you can take anything and turn it into a gambling, you know, fiasco.

So with options, if you wanna bet on single day options, that’s gambling, absolutely.

But stocks investing isn’t gambling Vegas.

You can go and the odds are always against you in investing.

You can wait, you can be patient, you can buy great companies like Exxon’s, like Interactive Brokers like Marathon Petroleum, Eaton Corp, Chubb Insurance, um, you know, there’s, there’s a ton of big winners that we’ve had in the past, Transocean with the offshore drawing rig.

R i g is the temp, ticker.

And you can wait until those odds are in your favor.

Yes, there is still risk there.

I’m not saying that investing is riskless.

I’m simply saying the people that just think that stocks are like Vegas aren’t paying attention.

They are using the venue that they can as gambling in Vegas and that’s exciting.

It’s euphoria, it’s adrenaline.

That’s all great stuff.

What we wanna help you do is find great businesses.

Yes, it’s not exciting all the time.

We gotta market to be exciting, to try to get your attention.

But you can find great businesses and you can wait.

You can be patient, you can look at their books, you can figure out when the odds are in your favor and that’s something you can’t do in Vegas.

And right now, one of the best risk reward, um, probabilities or opportunities in the, in the stock market, in my opinion right now is in energy.

Oil prices have had a good run up, but we have a lot of good winners.

I’ve had some losers in energy.

Yes, I understand that, but we’ve had a lot of good winners in energy and I still think, I don’t think it’s gonna be off to the races, it’s not gonna go straight up from here.

But if you don’t have energy exposure right now, start getting some and then add to it on any pullbacks because the fundamentals are in place for it to be higher for longer.

And this is just one of the best setups and the, or excuse me, in investing in markets for individuals.

And it’s a clear contrast between how you can gamble and how you can put the odds in your favor and almost essentially be the house.

And when you have a trade like energy unfolding, it’s going to be fantastic.

And I hope you guys make as much money as possible.

Remember, it’s not good enough to be right in our business, in my business in Frank’s business, we gotta be right and make money.

That’s the kicker there.

That’s why it’s like golf and it’s fun.

We’ll never conquer it.

But we’ll continue to try to get better each and every day.

Alright, everybody, thank you so much.

Thanks for putting up with me tuning in.

You’ve made a great decision.

Don’t miss Wall Street Unplugged Premium tomorrow where Frank and I break more in-depth analysis and we’ll give us give you our latest stock idea feedback.

Love me, hate me, don’t ignore me, daniel@Curzioresearch.com.

That’s daniel@Curzioresearch.com.

Frank will be back tomorrow.

Cheers everybody.

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. Remember, it’s your money, and your responsibility.