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 22nd. I’m Frank Curzio, host of the Wall Street Unplugged podcast where I break down the headlines and tell you what’s really moving these markets. I just got home. I feel like I’m saying that on every Wall Street Unplugged now. I just got home from a business trip. I drove to Miami on Tuesday night, which is six hours. Kind of peaceful though.

Frank Curzio: I drove back last night, getting home around 1:00 AM, but I had some amazing meetings. One of them was with Carlos Domingo, who is the founder and CEO of Securitize. So if you’re not familiar with that company, they’re like the standard in the space. That’s the company we use to launch our security token offering. It’s called Curzio Equity Owners. We’re the 10th token to launch on their platform.

Frank Curzio: They do all the online checks and make sure everyone, and every investor’s KYC, AML compliant, know your customer, anti-laundering, make sure that they verify. You have to verify that you’re a credit investor. They do this through their amazing platform. Make it easy for basically anyone to launch an STO.

Frank Curzio: Everybody that comes to me, even Securitize, especially in the finance industry that are looking to launch these, they’ll talk to Securitize and then they’ll give me the name and say, “Hey Frank. Why don’t you talk a little bit,” because having experience in both of these industries, there’s not a lot of people that do. So many people and companies have been coming to me saying, “Listen, we really want to launch STOs. How do we do it?”

Frank Curzio: We’re thinking of starting a consultancy business and hiring more people for that, because that’s how big demand has been. That platform, you get all the information you need. When I say you, it’s anyone who’s investing, and our investors and stuff like that. I have our SAFE agreements on there. SAFE stands for Simple Agreement for Future Equity. It’s standard. Ours is about 64 pages, goes over the company, the cap structure, everything so you see all that stuff.

Frank Curzio: Securitize now raised over $30 million, I want to say over the last 18 months. Might be over the last 24 months. $30 million, and the list of investors, high profile. Coinbase, Blockchain Capital, Nomura, which has over 400 billion assets under management. Mitsui, same thing, over 400 billion assets under management. Santanla, over a trillion in assets under management. Japan, Europe, global. Getting bigger, and bigger, and bigger. Just so many amazing things going on in this industry.

Frank Curzio: Talking to Carlos about STOs, and this market, it’s like talking to Jamie Dimond if you want to learn about how the consumer is, or the banking trends. He’s the standard in the industry. That’s why it’s worth it. He has his pulse on this market. The biggest players in the industry are all investing in him, but just so much positive news and excitement. It was the first time I met with face-to-face. I’ve talked to him plenty of times on the phone, and it was just a great conversation. He’s just telling me the insider trends, and what’s going in development. It was fantastic.

Frank Curzio: Although that meeting was really, really great, my second meeting, I get to an admit, it was in Fort Lauderdale. I’m driving. I don’t know if you guys noticed, I live Amelia Island. I’m not going to give you my exact address, in case one of my stocks go lower. I don’t want you to knocking on my door. As North as you can go on the East Coast in Florida, that’s where I am. Going to Fort Lauderdale is about a four-and-a-half hour drive. Not too bad.

Frank Curzio: When I talked to Carlos I said, “Hey, you know what? I’m going to be in the Fort Lauderdale area, have some meetings set up, do you want to meet?” He said, “Yeah, definitely,” because we had a meeting planned with somebody else and that person canceled, unfortunately. It was good cancellation, like a detached retina or something, whatever it was. I said, “Carlos, let’s still meet.” He said, “Yeah.” I said, ” I’m going to be a Fort Lauderdale. What works for you?” He’s like, “Well, how about if we have the meeting in Miami?” I’m like, it’s like another 90-minute drive, right? I was like, “Okay.” 90 minutes doesn’t seem that far, but when you drive four-and-a-half already, it’s kind of far. Basically, I drove from as North as you could possibly go in Florida to almost as South as you could possibly go before hitting the Keys.

Frank Curzio: My second meeting was with the STO Market Team. If you’re looking to find out security tokens that are free trading, very hard to find, go to STOmarket.com. These guys aren’t paying me or anything. I love these guys. Actually, I kind of hate them now that I met them face-to-face. Their names are Herwig Konings, he’s a founding partner at security token group.

Frank Curzio: You may be familiar with that name because he was my first guest on my new STO Unplugged podcasts. Don’t worry, it’s not taking more time away from me, because I talk to all leaders in this industry. Now, I just want to press the tape button. This way you got a good idea of what’s going on. You’re not just hearing it from me, but he was my first guest.

Frank Curzio: Our STO Unplugged podcast, monthly podcast, we’re going to be interviewing the biggest names in the industry. Yes, it’s already on iTunes. His partner Kyle Sonlin, who is the co-founder and CEO of Security Token Market. I say I hate them because they’re two young guys, great shape, good looking, motivated as hell. Very, very smart. I’m like, “Man, I miss when I was at young.” In that they’re really young, but just the excitement being around that.

Frank Curzio: They always say, as you get older, if you want to feel younger, you hang around with younger people. It makes a lot of sense, because I know there’s basketball. I play basketball with people who are 60 years old, and they play like they’re 40. There’s people I know that’s 60 that hang out with 80-year-olds, and they can barely walk. It’s just true, and you see that excitement it gets you motivated. Just seeing these guys, and what they’re doing, it was really, really cool.

Frank Curzio: The meetings went fantastic. The reason why I’m having these meetings is because ours token, Curzio Research, is going to go free trading in July. For me, I want to find out as much information, the exchanges, where we’re going to go. Just finding ways to collaborate to bring more attention to this incredible industry. Yeah, that’s what we’re looking to do. It’s an industry that’s going to take off. It’s taking off now. When the institutions start coming into this space, which they will, my goal is to have an established brand, where they’re going to want to partner with us, because we’re going to be doing all that leg work already.

Frank Curzio: It’s not often where you see a huge growth industry that you can get in early, before the institutions. The institution will ask a lot of questions, and a reason why they’re not in it is because they want more regulation. They have their fiduciary responsibility for the assets under management to make sure of everything; they cross every T, dot every I. Right now, they’re like, “We want to, but we really can’t. We’re creating different arms to really get in, and around it.” Once the SEC gets on this, hopefully soon, to really crack down on all the bullshit in crypto, this is a market, security tokens, there are securities, that it’s really, really going to take off. You’re starting to see that now.

Frank Curzio: So, awesome meetings just to let you know, and driving down to Miami… I got to say it, I’m not a big fan of Miami. That’s not because 90% of the people there don’t speak English, or even the crazy traffic, which is on par with New York City. It’s just a materialistic place. It’s at least five Lamborghinis. Every woman is all dolled up. They’re beautiful there. It’s like, you have to get dolled up. You can’t just roll out of bed and go to the store. No, never.

Frank Curzio: They’ve got tons of makeup on, glasses, nice dresses. You’re looking at the guys where I was in the business district, I would say 60% of the people wearing the suits. The guys wearing these suits, they’re all the same color; light blue, and bright pink shirt. Everywhere, and these fancy shoes, dark sunglasses. Don Johnson was so ahead of the curve, I think. Usually, styles change over time. Not really in Miami, but it’s just not my cup of tea.

Frank Curzio: I’ll have a soup bowl there. It’s going to be crazy. Average ticket is what? $9,500. It’s probably even going to go higher. It’s just a booming economy in Miami. Lots, and lots of rich people. I’s just really not my cup of tea though. I just like hanging out with people who are cool, and just… I don’t know. Maybe it’s just me. Driving down there, I think I got to 12, maybe 13 people who gave me the finger while I was driving. When it comes to driving there and driving back, I got to be honest, I don’t know what everyone’s problem is. I’m a nice guy. I think I’m a nice guy. A lot of you listen to my podcast. I try to help people make money.

Frank Curzio: If you’re on I-95 where the speed limit is 70, and you’re in a left lane with little traffic, and you’re doing 50 with your brights on, I’m going to come up right on your ass. If you don’t move, we’re going to swing around you and cut you off. That’s how we drive in New York. That’s how you’re supposed to drive. It’s pretty simple. It’s a simple rule. I know in Florida it’s tough, because they don’t teach you things like that. They don’t teach you things in whatever, your driver’s ed class, like to use your blinker. They don’t teach you to use a blinker.

Frank Curzio: Watch out for cars around. No, it’s only about you. They’ll stop in the middle of street. They don’t even know who’s behind them. How the left lane is the passing lane. The left lane is the passing lane. If you’re going 120 and someone’s behind you, move over. It’s the passing lane. It’s simple. Or, how yellow light does not mean stop immediately. In New York, yellow means speed up before the light turns red. in Florida, it’s scary.

Frank Curzio: That’s where the most accidents happen. That light hits yellow, and I’m talking about a guy that can easily go through that yellow without it turning red. They will hit their brakes as hard as they can. That light is yellow so long, I know I can make it, and I’m behind them. Very easily. We’re not blowing a light. Then, when they hit their brake and it’s unexpected, that’s where you see the most accidents in Florida, because they think yellow is stop. Just the way it is.

Frank Curzio: Anyway, I had people give me the finger. Whatever, I don’t care. It’s just, drive right. Drive rights not hard, not asking too much. It’s hard to get used to. Anyway…. Sort of really crazy the past few weeks. Always is in January, because I attend lots of conferences. I always have lots of meetings, a ton of traveling. I did want to go to the Vancouver Resource Investment Congress, but I couldn’t this year. My mom is coming home from being in the ICU rehab for close to four months, which I’m excited about. She was supposed to come a couple days ago.

Frank Curzio: I’m here with her in Florida, where the rest of my family’s in New York who come back and forth. I just want to say thanks so much for all the prayers and support. She’s doing much better now, and that really meant a lot. More than you’ll ever know. I really appreciate all those prayers, and all those notes. I read them all. I really appreciate it. I’m trying to get back to everybody, but we get lots of emails now. We’re getting bigger. It’s hard to answer, everyone personally, but I really, really appreciate all the feedback and all the support. It meant a lot.

Frank Curzio: I have to tell you… Just in this month alone, I’m going to CES for a full week, going back and forth to see my mom so much. I just came back from South Florida, which was basically a day trip. I’ve been out of the loop a bit. Always getting emails, checking out everybody. You guys know Daniel. Dan’s doing fantastic, yeah, Daniel Creech. He’ll call or email. He was talking about Wrap Technologies, also talk to the management scene, but rap technologies popped to a new high. It’s a stock. I don’t mind giving away for free since my subscribers, most of you own it already at much cheaper prices.

Frank Curzio: This is the company that created the Bola Wrap, which shoots a rope at you just as fast as a gun. It wraps you up. It’s the first non-lethal gun. Not really a gun. Device, I should say. It’s starting to be deployed by police departments, not just in America but all over the world. It’s been an up and down ride for the stock, which I told everyone when they bought it. I said, “Listen, I’ve been through Taser.” I was one of the few guys out there that recommended Taser very early on, low single digits. Again, it went from five, to seven, to 11, back down to seven.

Frank Curzio: That’s the way these companies operate. It is an adoption, it is a manufacturing curve. Everything was in place when we recommended this. I don’t have a crystal ball. Management drops the ball here, you’re going to lose money. Here’s a product that I was one of the first, if not the first… They say the first, that actually, I flew to New York City, I sampled it. I had him shoot me with it. We advertised it. I got it from interviewing some of the top police officials where this saves lives.

Frank Curzio: This isn’t bipartisan bullshit that you’re seeing in Washington, right? You have Al Sharpton. I don’t care what you think of him, loves the device. You have Republicans, love this device, because it saves lives. I don’t care what color you are, what race you are. Whatever it is, you don’t want people to die. You don’t want to pull your gun out and be in that kind of situation. Nobody wins. Even if it’s a clean shoot, nobody wins.

Frank Curzio: Avoiding all of that with this product just makes sense. Now, they’re seeing the orders. Just really cool to see that stock pop. It popped 17% yesterday. It’s just going higher and higher, and higher. We advertise this. I did a huge promo around it, so we got a lot of subscribers in for the first time. This is the first stock they bought. For me, that’s the first impression so I’m really happy to see the stock soaring. I love when you guys make money. That’s what this business is supposed to be about.

Frank Curzio: It’s not supposed to be about the editor makes money no matter what the hell his performance is, which unfortunately is the standard in our freaking industry these days. It really is. You know that, I know that, I’m going to say it. That’s a fact. I know great editors in this industry, and I know horrible ones that don’t write anything. Any of their newsletters, nothing, they’re getting promoted. They don’t even know what’s in their newsletter and it’s sad, because their performance is absolutely horrible when the market’s near all-time highs. It shouldn’t be about that when it comes to newsletters.

Frank Curzio: You’re not subscribing to my service. A lot of these guys, most of them, if not all of them, do not even invest in their own ideas. They’re telling you this stock’s going to go up 3000% in six months. If you had a stock that was going to go up 3000% in six months, would you give it to people that you really don’t know that well, or would you buy it for yourself, this way you can improve your family life? You’re not allowed to buy a lot of these stocks through other firms. They don’t let you. For us, we invested. I’m an investor in a Wrap. I’m not selling any of my shares. I held it. I told people, “Hey, hold it long term. It’s a great company. Doesn’t mean it’s going to go higher. It’s doing very, very well now.”

Frank Curzio: For me, I’m happy. I love to see this. I love to see a good company, one that we brought a lot of investors in, where a lot of you listening to this have followed me some five years, 10 years, 20 years, 25 years. I’ve got people telling me, FXC days with your dad. I used to read your dad’s newsletter. I’m not talking about you guys, because you guys know the credibility there. Like, everything. You can track everything that I’ve done, every podcast online, all of my newsletters, or archives. Everything I said. I cover my losers, everything. Winners as well, everything.

Frank Curzio: For new people, for the first time, to actually get into this stock, and this is another promote, it’s really cool to see. It’s really cool. For me, I’m haven’t sold a share in the stock. I still think it’s going a lot higher. You’re going to see ups and downs, just like with Taser. More demand comes in, they’re going to have to probably raise money, and they’re going to have to increase that manufacturing, but they have everything in place. They even hired the guy, the co-founder of Taser for their CEO. Actually, their president.

Frank Curzio: It’s amazing to see the pieces that were put in this place. Just from early on, when I first recommended this thing, where it wasn’t even on NASDAQ. It wasn’t in a rush of 2000. It was trading over the counter. To see where they are now in the Russell 2000, this stock really warring, it’s just really nice. One thing I have to tell you… Since I got shot with this device, which I’m sure a lot of you saw that. We advertised this everywhere. A lot of my friends got into this name. They’re like, “Holy shit. I just saw that.” They don’t subscribe to my newsletters. Like, “Oh, you like the stock?” I’m like, “Yeah, of course I like the stock. I wouldn’t be promoting if I don’t like the stock.”

Frank Curzio: They got it at a good price, like you guys. Then, it was at three, and it went to six dollars. Then, it fell back to around three-thirty, for no reason at all. It just pulled back. Everything was in place. We even had to stop them in Curzio Research Advisory, and I rarely do this. I did it twice in the past four years, I think. Once with Citigroup. When Citigroup came down, I said, “Don’t sell it,” and that stock’s up tremendously for us. Especially if you bought it again when I told you to. Also, this one. When I said, “Ignore your stock.” Three-thirty, and this is just in November. Now, the stock is trading at seven-fifty.

Frank Curzio: When it was at three-thirty I had my friends calling me. They’re emailing me, “Is everything okay with the stock? Should I sell it,” which is common. When a stock goes down, you want to sell it. When it goes higher, you want to buy it. That’s the way of the program. Especially people who are not familiar with the market. I told them, the same thing they first asked me, “Look, it’s a risky name but they have all the pieces in place. Your stock’s going to return five X over the next five years, so hold it long term,” but none of them listen. Yeah, none of them. They’re going to call me every time it goes down. Now that it’s trading close to seven-fifty they’re like, “Frank, should I buy more?” I have to say, it pisses me off.

Frank Curzio: If you’re into the market, or if you know a lot about stocks. A lot of you do who are listening to this podcast. You’re going to have people always ask you, “Hey, what do you like? What do you like?” They love that. It’s your friends, your family members. Don’t ever tell them. Don’t ever give them a stock. Do you know why? For me, when they asked me, I’m like, “Buy S&P 500, man. Market’s going higher.” That’s been my advice.

Frank Curzio: I’ll tell you why. Because, if you give them a stock and it goes down, they’re going to call you every single day. Then, if it goes up, they’re not going to give you anything. They won’t even buy you a beer, so what’s the value to me? People subscribe to news. These are a couple of friends who aren’t subscribers, but it’s just funny how there’s no upside. They’re making money. They’re like, “Okay.” They don’t say anything. If they lose money, they’re going to call you every single day.

Frank Curzio: Just be careful if you follow stocks, if you follow the market. If family members are asking, don’t give them that tip. Everybody has a tip these days with the market going higher, higher and higher, but don’t even share it. It doesn’t pay. It’s a no-win situation for you. It’s a guaranteed and no-win situation. They’re not going to share anything with you. They might say, “Hey, man. Thanks for that pick. That was really cool. What’s your next one?” When it goes down, they’re all over you.

Frank Curzio: It’s crazy, because a lot of my friends don’t even subscribe to any of my newsletters. I mean, at least subscribe to Dollar Stock Club. It’s a fricking dollar a week for a stock pick. A track record that’s been real good over the last six months. Really, really good, and these pics come from the professionals, the experts I interview on this podcast, Wall Street Unplugged.

Frank Curzio: You know what? Speaking of experts, today’s guest has the top pick in our Dollar Stock Club portfolio. It’s up 125% in six months. The stock is Luckin Coffee. The analyst is Andrew Horowitz. He’s a great guy. I’ve known him for a long time. Hosted Disciplined Investor podcast, which is the second best financial podcast in the world behind this one. He also manages money through Horowitz and Company, one of your favorite analysts. One of mine as well. Again, we go back a long way, and just a great, great friend.

Frank Curzio: Today, he’s going to break down the markets that keep going higher, and higher and higher, and how to play them. Going to talk about the Coronavirus, which has affected hundreds of people in China. Now, there’s one case in the US, so what are the implications? Not in a bad way, right? We’re just got to say, if you have some of these stocks in your portfolio, which he outlines, and I love this segment we’re going to talk about. It’s like, just be careful. These are big names that are in China that trade in the US, that could get impacted.

Frank Curzio: He’s also going to break down earning season thus far, which has been pretty strong even though we’re still early in the season. Last, but not least, Andrew is going to give his favorite stocks to buy right now. Guys, pay attention because Andrew has been red hot at least over the past 18 months, now that I’m tracking these portfolios and these stock picks for my guests, and the ones that I put in Dollar Stock Club. He’s been red hot, so definitely, definitely pay attention.

Frank Curzio: Now, in my educational segment I’m going to break down one of the most hated sectors. Hated sector, no doubt about it. I’m not talking about gold, I’m not talking about uranium, I’m not talking about mining. No, it’s not that. There’s another hated sector where it’s just, people don’t want to buy stocks in it for some reason. Can’t blame them, because this sector has come down tremendously over the past couple of years, and why it’s about to see a massive turnaround starting right now.

Frank Curzio: Of course, I’m going to share my favorite ways to play the trend, as there’s a lot of depressed names. Some of them are hanging in there, doing okay, maybe 15% off their highs. 10% off their highs, but more 20%-30% off their highs. These are names that could easily pop 30%-40% less in six months because they’re super depressed. Especially with this data on this sector. It is going to turn positive. It’s going to start. It’s actually starting a bit now. Not too many people talking about it, and it’s going to go on for 2020, 2021, 2022, and a lot of these names are going to rebound sharply. I’m going to share a lot of those names with you in a few. First let’s to my interview with the one and only Andrew Horowitz.

Frank Curzio: Andrew Horowitz, thanks so much for coming back on the podcast.

Andrew Horowitz: Hey, Frank Curzio, you made it back from Vegas.

Frank Curzio: Yeah, it was a lot of fun, man.

Andrew Horowitz: That’s awesome.

Frank Curzio: You mentioned that you might come this year, and I thought you might.

Andrew Horowitz: I know.

Frank Curzio: A couple of other friends met us there. It was really cool. Great technologies, a lot of fun. We took videos of a lot of that stuff. Some of them, yeah, jumping water in a wetsuit. The visuals were bad of me in the wetsuit, but it was really cool. It was a lot of fun, man.

Andrew Horowitz: It provided me hours of laughter. That one point. No, he was great. Your tracking of that information, the live feeds on Twitter stream, and all that you’re doing. That was some really cool stuff there, and that was really great. I want to seriously, thank you for doing that, because I felt, in a way, that I was there., Obviously not for the parties, but for the education of the technology that was coming up.

Frank Curzio: Yeah, I appreciate that, and that’s the goal. It’s really cool. I’ve been going for eight years and it’s been awesome. Next year, that’s it. You’re coming.

Andrew Horowitz: Okay. I’m there.

Frank Curzio: All right.

Andrew Horowitz: Cool, cool.

Frank Curzio: You’re going to be jumping in that wet suit.

Andrew Horowitz: Oh, that’s bad.

Frank Curzio: All right, let’s get to the markets here. The markets continue to hit pretty close to new highs. We have a lot of positive things in the favor. I won’t even go over all of them, because everybody gets told them every single day if you’re watching CNBC, because most of those guys on there, they’re traders. When the market goes higher, they love the market. When the market goes lower, they don’t like the market. What are your thoughts right now? Everybody that I talk to is very, very bullish. It’s hard not to be bullish, but what concerns you? We should be concerned when everybody’s leaning to one side, which is the case right now. Almost everybody’s bullish.

Andrew Horowitz: It’s interesting, because I always look at the idea, the concept, the visual of, when everybody’s on one side of a boat, everybody’s like, “Oh, look at that,” what happens? The boat starts leaning. Then, all of a sudden it leans to a point it gets a bit too much. Everybody starts racing. That’s not the problem, because it’s controlled, as slowly and surely as everybody gets to that one side of the boat. It’s when everybody races to the other side. That happens when you have things like a concern about MOMO getting into FOMO, which we’ve had recently. Everybody says, “Hey, you know what? I need to be in this.” Why? “Well, because it’s going up.” Everybody’s racing to that side.

Andrew Horowitz: Now, we’re starting to get that boat tipping a bit towards that, as you mentioned. We have incredible amounts of bullish sentiment out there. If you ask people, “Why are you buying?” Fundamentals look good. No, it’s all about, well, the Fed is priming the pump, or the markets are just going up so I need to be in there. I don’t want to miss out. The sentiment is really toward the bullish side, which is fine. It could last a long period of time.

Andrew Horowitz: As you said, there are a lot of good things, and particularly, because many of the headwinds, the roadblocks that were there, that were building up throughout 2019, even the market was going up were just evaporated towards the end of the year. We got a trade deal, which was crap. Let’s be honest, and I could talk about that if you want, but there was a resolution so everybody’s like, “Okay, that’s done.” There is no change of tariffs, no change of really anything except for a promise to really buy, and a few other items in terms of access to Chinese markets, with the Brexit supposedly happening at the end of January.

Andrew Horowitz: We have the impeachment, which is a case done now. Well, pretty much, it’s going to vote along party lines. That’s a done deal. A lot of the issues that were really out there disappeared. That wall of worry no longer was there. There was no longer any roadblock. Everybody’s like, “If that’s the case, let’s get going.” The thing that is, I think, most troubling, if there is something… If you were to like say, “Andrew, what is that?” The markets are discounting all bad news. You look at Boeing stock. Boeing is looking for a $10-billion loan. They are needing that to make up for shortfalls, potentially, on costs related to the delay and all the things that are going on with the 737 Max, on top of liability exposure they have.

Andrew Horowitz: Yeah, they have money in the bank, but they’re going to borrow it. It was initially in $5 billion, now it’s $10 billion. Stock’s hovering around 300, and we’ll call it, I don’t know, $10 a share, give or take. This stock was up last year. Could you imagine if this was any other name out there? There’s some reason why it really didn’t get hurt, but this is a company that put $43 billion into share buybacks over the last… I think seven years. Now, I think Boeing should be ashamed of that, and should have actually put a bit more of their money into safety, and to innovation, rather than just worrying about share price. That’s another story.

Andrew Horowitz: I think that the markets are discounting all the bad news, really. There’s clearly these buy programs that are at work. If you look at the markets, 9:30 in the morning, it’s the Pavlovian response. The bell goes off, and markets move higher regardless of where futures were. We know the Fed is pumping in liquidity. I think the biggest issue right now is, what happens if all of a sudden sentiment changes and says, “This is like the Coronavirus. Maybe this is something.” If the Fed stops priming the market. They put another $25 billion into the overnight lending markets again last week, I don’t even understand why. Do you understand why?

Frank Curzio: I don’t, but you know what? This is a good topic. I didn’t want to cover it so much because we’ve got so much to talk about, including the Coronavirus. What I want investors understand is you have to put your feelings aside. Like, the Fed’s printing money, gold’s going to go higher, buy a little bit of gold. That’s okay. You’ve been doing that for, for a while. A lot of people have been shouting at the top saying, “You’ve got to buy gold.”

Frank Curzio: You have to realize, we don’t really agree with this. You’re right. Why is it another 15? Why do they keep pumping more and more money into it? You have to realize that they’re pumping more money into the market, period.

Andrew Horowitz: Right.

Frank Curzio: If they’re doing that and they’re keeping interest rates low, every asset’s going to go higher. You could argue it. Write yourself a sign, go in front of the Fed, do whatever you want. Money-wise, don’t fight it. I understand the emotions out there, but when I see people out there going, “You got to buy gold. The feds are destroying the country,” whatever. Maybe that happens 50 years from now. I don’t know.

Frank Curzio: The trend is, lower interest rates and the Fed keeps pumping money into the market, and that’s why you seeing not just stocks, every asset price…

Andrew Horowitz: Every asset.

Frank Curzio: –is going higher. You have to realize that. So don’t get your personal feelings, because we talk about it all the time. Like, why would you do this? Why are you buying back stock? The bottom line is, when you buy back stock, it’s good. Stocks go higher because of that. You could say, “They should spend on R&D.” You’re right, they should have spent it on safety with Boeing. I agree, but you just can’t fight it. You don’t want to get your emotions involved too much. I think that’s why so many people have trouble buying in this market, especially if they’re goldbugs where they’re like, “Oh, it’s going to…” It’s just the environment is so–

Andrew Horowitz: Hyperinflation, hyperinflation.

Frank Curzio: Yeah. That’s another thing too, right, Andrew? Everyone says, “Well, inflation.” Listen, every single bill I pay, everyone who listens to this pays, every single bill. Everything has gone high over the last five years, three years, two years, last year, right? We see inflation. It doesn’t matter. The fed looks at the CPI, and the CPI is hovering around two. Now, they even say, “If it goes even above 2% a little bit higher, we’re going to be fine. We can keep interest rates low.” That’s the only thing you need to be concerned about, but it–

Andrew Horowitz: Well, on that, you know what they did. They recently went to a new process of looking at their CPI target.

Frank Curzio: Yeah.

Andrew Horowitz: They look at a couple of different inflation gauges; CPE, CPI. Basically, if you look at this as CPI, for example, one of the things they had as a target of 2%. why they had this 2% target, and why the rest of the world adopted, who knows, but that’s what it is. What they said recently… As a matter of fact, I was at a lunch with Bernanke about, I don’t know… eight months ago. He talked about, “Hey, you know what? I think the Fed’s going to start doing this averaging process where they’re going to look at a historic, maybe over the last year.” If it was at, let’s say, 1.5, and now we’re at 2.25, we’re over the target. Yet, they’re going to average out and look at this saying, “We can overshoot because it’s been short of this for some time.”

Andrew Horowitz: Remember something Frank. You don’t have to remember something. The fed is in the business of pumping markets in the economy. That’s their job. Do they have any other job?

Frank Curzio: No.

Andrew Horowitz: No, they have nothing else. They’ll slow down the economy, but they’d much rather speed it up. Point, though, is that you asked me where are the issues. If the Fed stops and starts pulling out money, or stops their process of funding the repo market in the short term treasury and the overnight lending market, that’s an issue for liquidity. There’s other reasons too, but a big part of what’s going on right now is liquidity that has been flushed into the markets. It finds its way down into equities and risk assets. On top of that, the share buyback’s estimated to be about $420 billion this year by Goldman recently. Those are the things you really need to look out for that we know of. Then, the is what we don’t know, we don’t know, like the Coronavirus.

Frank Curzio: Talk about that, because are people going to look at this? We hear about SARS, hear about Zika, we hear about Ebola, that the world’s going to end. Don’t go off…. I mean, it’s so extreme, and so much fear behind it. It reminds me of, and this might be a definitely… not an apples-to-apples comparison, but it’s like the government shutdown. When it first happened, the market crashed, everyone’s worried. Then, you had another one. Now, it’s a blip on the radar if it closes even for a week or two. It’s like, “Oh no, don’t worry about it. We’ve been through that.”

Frank Curzio: Are people going to start looking at this where, there’s one case in the US, there’s hundreds of cases in China. Is this that much of a scare? It’s scary because if this thing spreads, it’s insane and holy cow, but is it going to influence stocks in the markets? Actually, you give me a list of topics all the time, or things that we want to hit on. This is one of them, but I love what you were going with it because, from an investment point of view, if you own stocks within certain sectors, why don’t you go over that where this could impact those?

Andrew Horowitz: Yeah. First of all, the Coronavirus is not a disease that is somehow contracted from drinking too much beer. Let’s just get that straight, okay?

Frank Curzio: Yes.

Andrew Horowitz: It is a pneumonia-like a virus, and it’s right during flu season. It’s bad timing right now, because China’s new year period is now. Now, remember something. When China gets a flu or a cold, it’s potentially really bad. The concentration of people in that country and how close they live to each other, and some other issues related to the country itself, it could spread very quickly. That’s why they’re always on alert.

Andrew Horowitz: The big issue is you’re really going to have are, if you add this timing of this to the Chinese new year. Also add to the mix here, Hong Kong protest. The direct hit on tourism, for example, and confidence in the region. You may be having some problems with areas like the casinos in Macau, other travel-related stocks; hotels, and airlines. There is going to be the potential for a very significant hit, because if people don’t travel, particularly in Japan during this year… They’re not really moving, and moving out of China because of some kind of limitations. If this does spread, if this does get a little out of control, that could be a problem in the Asian region during this period, because it’s a very big time for China.

Andrew Horowitz: The answer to the other question you had is, will this just be a blip? It’s always a blip, and it’s always controlled until it isn’t. Already, Kuroda from Japan’s like, “Ah, don’t worry about it.” The central banker of Japan is somehow now a scientist, and a health minister. This is how ridiculous it is. Making sure all the markets don’t react, because they kind of cut down a bit recently in Asia. I don’t know where this goes, and how this progressive, and if it metastasizes into something much greater. I don’t know.

Andrew Horowitz: The thing you need to be aware of is that you need to be alert to this. You need to be aware of where it’s going and what may happen, and just realize that in the past, yes, these kinds of situations have been transitory, have been temporary in nature. Even the Ebola scare that happened, it was temporary in nature. There will be, with modern day medicine, some kind of a cure or something that will happen there.

Andrew Horowitz: Maybe look at some of the companies that produce masks, and clothing related to containment. There’s a couple of companies that are wild names like Lakeland Industries. EPT is another one, but that’s totally speculation. The only thing you have that for is if things get out of hand, those stocks will probably rally pretty good on that. If it all falls down and nothing happens, maybe a biotech here or there will come up with some kind of a cure for this.

Frank Curzio: Yeah, it’s interesting. I just like when you’re saying the China-related stocks, which are… Big names that trade in the US are, Wynn, MGM, Sands, right?

Andrew Horowitz: Yeah.

Frank Curzio: Those are the ones that have licenses to go in Macau. That sounds like an impact to them. Just something to look at. Again, there’s much more important things, but if those are in your portfolio as well, we just want to highlight that.

Frank Curzio: Let’s move on to earning season, because thus far it’s been pretty solid, right?

Andrew Horowitz: Yup.

Frank Curzio: It’s almost like we see this every earning season.

Andrew Horowitz: It’s the same.

Frank Curzio: Why the analysts don’t get it, it’s just like, “Hey, we’re not going to see growth…” Then, almost 70% of the companies wind up beating every single time, 70-75. It’s always the same statistics. You’d think that they’d raise estimates. Earning season’s been pretty good. There’s a lot more earning–

Andrew Horowitz: Wait, wait, hold on. Earning season is good compared it to analysts estimates, right? I mean, that’s what we’re talking about.

Frank Curzio: That’s all that matters, right?

Andrew Horowitz: It’s all that matters…

Frank Curzio: Unfortunately-

Andrew Horowitz: … but nobody looks at growth. Growth is relatively flat on EPS, and revenue has been okay. It’s coming in. It’s not been terrible. Well, for the most part, overall. Banks have been doing well. It’s amazing. There’s been a little bit of a split in the banking area.

Frank Curzio: Yeah–

Andrew Horowitz: Some companies like a Morgan Stanley, like, wow. Morgan Stanley was really on their announcement of their profit estimates moving forwards and their profitability, so that was that. A couple of banks, Bank of America, okay. Goldman Sachs, Wells Fargo not so good, which probably is par for the course there. They didn’t get hit very bad, but they still have a lot of buybacks coming out. Their balance sheets are looking great. JP Morgan, what can you say bad about that name? The banks are looking pretty good.

Andrew Horowitz: We saw IBM come out actually beating estimates a little bit. Actually, first quarter in, what is it? 10 quarters, or 15 quarters that they actually had a revenue increase on a year-over-year basis? I think some of that has to do with the red hat acquisition, potentially. That’s interesting to note. Netflix does what it does it. It goes below, it goes above. They’re all over the place. We don’t know exactly what’s what. They’re changing their statistics on watching. I don’t know if you know this. It used to be, if you watch 70% of a show it was considered watched. Now, it’s if you looked at it for two minutes, it was an intentional and they’ll count that as a watch.

Frank Curzio: That’s interesting. When it comes to our podcast statistics, what Apple did, it’s kind of the reverse. All the numbers went down 30%-40%. I think the way they started tracking it, it was four or five years ago. I don’t know if they have to listen to a certain amount of time or how long it is, but it’s weird in the podcast industry. It’s kind of opposite, where everything else is just, if you DVR it, it’s automatically that you’re watching it, I guess. Even though you might not watch it, even though it’s taped, maybe you don’t ever watch it.

Andrew Horowitz: How about when you fall asleep watching a Netflix series and it just keeps on going until the end?. You wake up in the morning, you’re on season five. You’re like, “Wait, I went to sleep on season two. How did that work?”

Frank Curzio: That’s so great. That is so great. Yup, everybody’s been there. You binge and you’re watching four or five shows, and boom. Me and my wife pass out. Next thing you know, it’s the third, fourth, fifth season. Damn.

Andrew Horowitz: Got to go back. Buybacks are good. The US economy is still on reasonable footing. Two, two-and-a-quarter percent GDP growth. Maybe the question mark, again, is Boeing. With all the things that are going on, they may shave off about 50 basis points, sort of off of GDP in 2020. Will that be temporary? Potentially. Who knows what’s going to happen with the 737? Already, we’re seeing some consolidation of their suppliers. Some companies are coming together because they’re having some problems there.

Andrew Horowitz: We have this bifurcated economy. I think mainly due to the tariff drag. The tariff drag with regard to manufacturing, which is clearly in a recession. All else, services, which is about 70% of the US economy is doing well. Consumers kind of holding up pretty well. One of the big things with consumers, we’ve had this generational shift in how spending occurs. It used to be, I don’t know, take whatever generation you want.

Andrew Horowitz: There was the Cadillac generation. Like, what you wear, what you have is all important. Then, we got into the next generation, which more of experiential. Then, there’s another generation just all about savings. There’s another one all about just eating. It’s rotated around of what is the industry, but right now what we have is a generation that is not so much consumed with what they have, as opposed to what they have done. That’s where we are now.

Andrew Horowitz: It reminds me of almost my grandparents and all that. They always would have money stuffed in all sorts of places around. They would live very much for the next generation. Well they would save and all that. Why? I want to give it to my kids. Like, whoa, okay. That’s interesting. Kind of progressed now, it’s like the younger people these days are spending everything they have, figuring that one day they’re going to get money from their parents, I guess. Or, somehow things will just work out when they get into their forties and 50s.

Andrew Horowitz: There’s a change in the spending habits and what’s important in the economy right now. I think that is really reflective in how there is this major bifurcation between manufacturing and services. I think that’s what’s going on right now.

Frank Curzio: Yeah. We have seen a decline in the manufacturing. It’s been a drag since 2018. Obviously, that was from China. With China it’s more that, at least every time Trump talks, and even in China they talk, they’re saying how good the relationships are. I think sentiment-wise it’s very, very good. Even though there wasn’t really that much done. It’s better than saying, “Hey, if they don’t do this, we’re going to do this.”

Frank Curzio: I think that changes in terms of sentiment, but the manufacturing sector has been under-performing. You can see that in statistics. I know you cover it, but it’s interesting in how services everything’s going to services. It’s why Microsoft, all of these services, recurring revenue. Office, you’ve got to buy it every year. Just, everything’s a cloud now. It’s Adobe, all these companies like that. Services–

Andrew Horowitz: Your car. You’re going to be able to have a car on subscription.

Frank Curzio: Everything’s subscription. Yeah, it’s crazy.

Andrew Horowitz: Cars, cars. You buy a car, and you buy a subscription. You can turn it in like your iPhone when the next model year comes out.

Frank Curzio: Yup. That’s great.

Andrew Horowitz: By the way, what that is going to create is a world of us being tied to our subscriptions. No longer do we have ownership of anything. It’s going to be interesting.

Frank Curzio: Yeah. Yeah, it is interesting. It’s definitely happening. Definitely happening. Let’s get to some of the stocks. The last two stock picks that you picked, and you’ve been red hot, one of them was Facebook. You said that you didn’t like it as short, and that came down a bit, I think around 15%. You also gave us Luckin Coffee.

Andrew Horowitz: Yeah. Then it went up a bit, and kind of hovering about 8% underwater from where that was, but we got some nice trading on that. But yes, Luckin Coffee.

Frank Curzio: Luckin Coffee, it’s up 125%. we track some of these things in our Dollar Stock Club newsletter now, some of the picks. That’s been the number one pick on our portfolio.

Andrew Horowitz: Wow.

Frank Curzio: It has your name right next to it.

Andrew Horowitz: Wow.

Frank Curzio: It was really cool, which is awesome.

Andrew Horowitz: Very nice.

Frank Curzio: Listen, I got to give you a credit. Credit’s due, and you’ve been red hot almost every single time you’ve come on this podcast, so everyone’s interested. Even me–

Andrew Horowitz: Yeah, I’m so jinxed. I’m’ jinxed.

Frank Curzio: I know, I know. I’m going to share whatever you say right now. Everybody, just short this–

Andrew Horowitz: Oh, man. The pressure, Frank. The pressure. So, a couple of names. I’m a bit late on this one, because it had a major run-up. I invest in this personally because it’s a name that, it’s not really appropriate for our portfolios. Even our aggressive portfolios. It’s interesting because, why I want to talk to you about it was that it’s something that’s like, “Okay, what’s going on there?” It’s a company called Virgin Galactic. Virgin Galactic, its symbol is SPCE. It’s gone from… If you look at the charges, the bizarre charge has been $10 forever. Forever. It’s like it didn’t really actually trade.

Andrew Horowitz: Then, it dropped down to about seven or so. I don’t know. It’s up to 75% in the last month-and-a-half. This is a company that is owned partially in an adjunct from Richard Branson, who I love. It is his venture into commercial space travel. It’s an interesting thing, because you have Elon Musk, for example, with SpaceX. A few of the companies working on the whole space area, and the potential for Space Force that we see. By the way, one of the Space Force uniforms that came out, why are they in camouflage? What do you need camouflage in space for? Just a point.

Andrew Horowitz: You have an interesting opportunity here where maybe we’re going to have space travel for fun? Going up, maybe visiting the upper atmospheres? I don’t know what we’re doing. We’re cruising around, we’re doing something. Anyway, they’re building this, and I think there’s a lot of interest. Is this the next level of travel of sorts? SPCE has been interesting. The stock has been on fire. That’s why I’m saying, we may be a bit late on this. This is pretty much the only pure play on retail space travel that’s out there that I can see.

Frank Curzio: I like Rich. Everybody that I know that has been in contact with him… I’ve talked to people who work for him. He’s one of the billionaires that are really, really cool. You know what I’m saying?

Andrew Horowitz: Oh, I’d hang out with him.

Frank Curzio: Working for that guy, they just say, every time you’re around him he’s just energetic, he’s fun. You don’t have guys like Patrick Byrne, leaving the country, selling his stuff. You know, all these crazy… You know, McAfee. Even Elon Musk. These guys, I like the fact that they’re out there. They have to be out there. That’s why they’re successful. They’re doing things against the grain. This is the one guy that it seems like everybody that comes in contact with him, they just want to do business with him. They like them, and he’s like a young kid at heart, entrepreneurs still. Yeah, and he’s always done good for his shareholders.

Andrew Horowitz: How much would you give to be a fly on the wall at a weekend away with Byrne and McAfee?

Frank Curzio: Yeah.

Andrew Horowitz: That would be something.

Frank Curzio: That would be crazy. Unlimited money, and unlimited crazy.

Andrew Horowitz: Totally unlimited crazy.

Frank Curzio: Oh man, that’s–

Andrew Horowitz: That’s an interesting one. The other one is Crocs. This is something I didn’t like for years. This is a company that, way back when they came out, they were one of the high flyers. We were talking about them. As a matter of fact, you can go back to 2000… I don’t know what year it was, but I was all over Crocs as being the biggest POS, piece of crap, out there. Stock came down dramatically, and as a matter of fact, looked like for a little while there a couple of years back that, this is done. This is done.

Frank Curzio: 70 to a dollar in 2008, so 70 was pretty much the high in October 2007. I’m looking at it now. Then, it went down to a dollar-and-change in ’08.

Andrew Horowitz: Yup. Then, it really a stabilized, came up to normal levels from the oversold levels, and it’s been firing on all cylinders. Great turnaround story. New product line, a lot of interest back in the brand. Really good products. Moving to multi-year highs not seen since 2007, by the way, recently. It’s not a great amount of short interest. Sometimes, you want to have that as potentially an additional way for this to catch a little upside opportunity. It’s hitting our fundamental screens as a solid growth story on consistency of earnings, for example, consisting of revenues, growth of revenues, and margin expansion. That’s hitting my core screen.

Andrew Horowitz: This is not like a spec play. This is a core position in our portfolios for the TDI managed growth strategy. It’s been doing great, and it’s really surprising to me, to be honest with you. I think maybe the whole shoe world, when you look at what’s going on with many of these shoe companies. Particularly those that are unique and have a unique brand line. I don’t know if you have Crocs, but anybody that has Crocs that I know loves them.

Frank Curzio: I was just going to say that. Guys, Andrew just throw out tons of stats. I could tell you that it’s trading at 21 times forward earnings, which is not a big deal because the company is growing. I wouldn’t say that it’s expensive. It’s growing very fast now. Generating tons of cash, over $100 million in operating cashflow. We could throw out a million statistics, but as an investor sometimes it’s that easy. Everybody I talked to that has Crocs, they love them. Unfortunately, I’ve been in the hospital with my mom. She’s finally better for the last three-four months. I probably saw literally hundreds of nurses…

Andrew Horowitz: In the hospital? Yeah.

Frank Curzio: … All of them were Crocs.

Andrew Horowitz: Right.

Frank Curzio: All of them love them. They’re all comfortable.

Andrew Horowitz: Plus, they have antibacterial properties also. That’s important for the hospitals.

Frank Curzio: Yeah. People get so caught up. It’s like the Tesla cars, right everybody? Every time someone sees a Tesla, they turn. Even I turn my head. When you have a good product and you’re thinking about shorting something, be very, very careful shorting a company whose product everybody loves, because it winds up killing you. I’m not saying this is a short, whatever. I agree with you, but everybody that I talk to loves this brand. They’re now signing celebrities. It’s a different company from back then…

Andrew Horowitz: Right.

Frank Curzio: Like 2008, ’09, ’10, but look, they are firing on all cylinders right now, and I think there is more upside. I definitely agree with you with Crocs, yup.

Andrew Horowitz: Then, as a matter of fact, you think about cars that turn your head. The one that turns my head all the time is Aston Martin. I had the opportunity just last week at a grand opening of a dealership down here that I was invited to. It was a Rolls Royce Bentley, Aston Martin. They’re like, “You want to go to the grand opening?” I’m like, “Yeah.” It was a big party.

Andrew Horowitz: I had the opportunity to spend some time with the CEO of Aston Martin, United States. I was talking to her a little and I said, “I look at your stock, and I look at the stocks of Ferrari, and all that.” She had some explanation of it, because the stock is not doing so well, but that’s a head-turner, the Aston. Like the Tesla.

Andrew Horowitz: The other stock I want to mention, and there’s one thing I want to… Just remind me to mention one thing about peg ratio before we finish here, because I think that’s something real important.

Frank Curzio: Again, because I know we have to finish. It’s funny–

Andrew Horowitz: Yeah, I’ve got a couple of minutes on this. The PDD, and I cannot pronounce this so I’m going to butcher this. It’s Pinduoduo. It looks like Pindodo. It is a shopping and social company in China. Some people say it’s the Amazon of China. I don’t really think it’s exactly like the Amazon of China, because you have other companies like that. Although, Alibaba is not really the Amazon of China either, but there’s a few other similar to this. They’re a shopping and social-oriented retail site.

Andrew Horowitz: If China’s markets recover and there’s a bit of a relief from this overhang with consumer confidence, and tariffs and all this, I think this could be a winner. It’s another name that has a pretty wide trading range, but interesting name overall to take a look at. I’ll finish up with–

Frank Curzio: All that is PDD, guys.

Andrew Horowitz: Yup.

Frank Curzio: PDD. Okay.

Andrew Horowitz: I’ll finish that with peg ratio. I did a report recently on the peg ratio, which is a better way to look at things on a stock-by-stock basis and a market basis than just PE ratio, because PE ratio is pretty much a one-number, very simple calculations, two-dimensional. The peg ratio is a bit three-dimensional, so it takes the PE ratio and compares to the five-year analysts’ estimates of growth moving forward so you get more of a ratio that is comparable to its own self.

Andrew Horowitz: You’re looking at a PE of 15, well what does that mean? I don’t know what it is… 15. I can say, historically it’s been that, but what about the other names in the sector, et cetera? A peg ratio of one is considered fairly valued. The PE ratio lines up with its forward five-year earnings estimates moving forward in growth rate. A one is a one-to-one ratio. These days, when you look at the market overall, the S&P 500, it’s at 1.82. Now, that means that, historically the peg ratio of the S&P trade is about 1.2-ish… up and down from there. It goes–

Frank Curzio: That is high. That is very high. I’m surprised at that number.

Andrew Horowitz: It’s very high. It was 0.8 back in December of 2018, so you can see that got pretty low. Then, it leveled off a bit. Now, it’s gone ballistic. One of a few things are going to happen here. The first thing is, people got to realize that they’re paying about 30% or 40% over the future earnings estimates for companies right now on an index basis. That’s not one company, it’s the whole index. Some companies are going to be even higher than that. You get over two, you start scratching your head a, bit because that’s really getting outside of the range.

Andrew Horowitz: You’re really outside the range right now. Again, you could say, “That’s because interest rates are low, and the Fed is priming,” and this and that, and analyst this. All I’m saying is, that is the other part of that top part of the discussion we had about what issues could be out there. I think people are generally overpaying for equities right now, even with lower rates, even with everything. Even if we have these five-year growth rates that are expected to be decent for companies, we’re still paying, again, 20%, 30%, depending on it, 40% over what the average S&P levels are. That’s something that concerns me.

Frank Curzio: I didn’t know it was that high. I’m actually doing research on that right now just to see where’s that in the line.

Andrew Horowitz: Pull up Yardeni’s research. He does a weekly piece on that.

Frank Curzio: Yeah, because that’s very, very interesting just to see. Yeah, but I’m just surprised. It’s just coming off of the year tax reforms, but next year there’s a lot of expectations of huge growth, right?

Andrew Horowitz: Yeah.

Frank Curzio: There’s expectations for next year, very high growth, so let’s see if the company could do that, if they’re not going to do that. There’s fighting with trade, especially in China and Europe, that’s for sure, but it is interesting. That’s a great number.

Frank Curzio: So, covered a lot. I know you’re busy. Thank you so much for coming on, because I know we had a tight window to do this interview and I love it. If someone wants to find out anything about you, your podcast, anything at all, how great Andrew Horowitz is, how could they do that?

Andrew Horowitz: Let me give them your cell phone number. Hang on a second. You could go over to thedisciplinedinvestor.com. We do a podcast each and every week where we has some great guests on. We had a great guest on last week talking about fundamental analysis. We, of course, have Frank Curzio quite often. You could do that. Find it on iTunes, just look up my name. Those are the ways you can check out all the different strategies that we have from a $10,000 minimum with Envestology, up to $500,000 minimum with our manager, with our Global Allocations, and a long-short strategy, $50,000 minimum with a TDI Managed Growth Strategy.

Andrew Horowitz: thedisciplinedinvestor.com will give you everything, and everywhere you need to look for what that is. Finally, my Twitter handle is @AndrewHorowitz, one word, so follow me there. That’s where I post everything up of what’s going on.

Frank Curzio: All right, sounds great, bud. Listen, get to your meetings. Thank you so much for coming on. Of course, I’ll talk to you soon.

Andrew Horowitz: All right, Frank, thanks.

Frank Curzio: All right, buddy.

Frank Curzio: Hey guys, great stuff from Andrew. Love him. We have this unwritten rule that we always go on each other’s podcasts if we’re busy, if he needs me last-minute. Not that I need him last-minute, but I was traveling, and it’s been a little over three months since he’s been on, so on Monday I’m like, “Hey bud. Could you come on? I’m going to get home on Wednesday.” Tuesday night, I explained earlier, from my trip to South Florida. He’s like, “Sure, I could do it. I can do between 10:30 and 11:00.” That was the only time for him. All right, I guess we’re doing it 10:30 to 11:00.

Frank Curzio: It’s really cool, and we always do that for each other. I know he’s one of your favorite guests because we go everywhere. He talks about the economy, he talks about so many different parts of the market. It’s really, really cool, and his picks have been red hot. Again, I always say this podcast about you, not about me, so let me know what you thought about that interview at frank@curzioresearch.com. That’s frank@curzioresearch.com.

Frank Curzio: Now, let’s get to my educational segment. Going to talk politics a bit, really quick, so I’m going to piss off probably some of the audience. The reason why is because it has to do with the stock market. What are we seeing right now, is this impeachment nonsense, right? I say it’s nonsense because there’s no way that’s going to pass through the Senate. Even if they had strong evidence, and they don’t. I won’t go over it. You guys know. We showed the transcripts, we have the presidents of all the countries saying, no, there’s no… whatever it is, but they just have to bring this out. Anything that they could do to bring this, I think it’s backfiring tremendously. The Davos speech by Donald Trump. I don’t care if a Donald Trump fan, I don’t care if you’re not.

Frank Curzio: For me, when it comes to politics I like to be fair. When we look at the economy, even New York Times has said positive things. Even Andrew Sorkin said positive things. He said, “Hey, three years ago, no one know if this is going to happen, or they doubted it and they were wrong.” The economy’s doing good on almost every single measure. That’s fine. Then, I’m coming home and I’m listening to Hannity, because it just happened to be the radio station. I don’t listen to him often. Sometimes, I listen to CNN. It’s just, you can’t really get anything unbiased anymore.

Frank Curzio: He was talking about all the accomplishments of Donald Trump, and then he was going, “We’re energy independent.” I’m like, all right, take it easy. We’re not independent because of Donald Trump. That was… I wouldn’t say the Obama administration, but 2006, ’07, ’08. That’s when we really started. Shell Oil drilling really started hitting in 2009, ’10. I covered this trend, but just don’t go too far.

Frank Curzio: That’s what’s wrong with politics today. It’s okay to admit some things are good about different candidates. Obama did a couple of great things. I didn’t agree with all his policies, but same with Trump. If you hate him, you hate him, that’s fine, but what he’s done for the economy is incredible, and you’ve got to give him credit for it. That’s fine. I don’t know what’s going to happen over the next few months. Something drastic has to happen, because I really think this impeachment’s really blown up in their face.

Frank Curzio: I think people are just sick of it, it’s nonsense. It just showcases, even on both sides, how much these people are just power hungry. They have to be in power. It has nothing to do with the American people. They don’t give a shit about us. It’s power, we need the power. It’s so great that this is highlighted even through social media. Anyway, the point I’m making here… Again, I’ve probably pissed off people. No matter what you say, you’re going to piss off people in politics these days. The impeachment, which most people would think is a joke, it’s a complete waste of time, and you’re looking at the economy. It’s a strong case for Trump to win, probably in a landslide later this year. Unless something dramatic happens.

Frank Curzio: When I look at him winning the presidency, what does that mean? I’m not talking about what happens in the House, or the Senate. I’m just talking about Trump being the president, what’s going to happen? One of the biggest trends that I’ve seen take place is the massive, massive, massive, massive decline in manufacturing. If you look at the manufacturing survey trackers from Goldman Sachs, it shows a great job. Just talking to the biggest players in your manufacturing infrastructure, stuff like that.

Frank Curzio: You’re looking at the actual numbers, it’s been horrible since when? Pretty much since March 2018, which is not a coincidence. That’s when the tariff, and the trade garbage and all this news trade Wars, that’s when it started with China. It’s been a free fall. Even until today. Maybe not until today, but up to two months ago. Almost through 2019, manufacturing has been a big drag. I tell you, Andrew touched on it earlier with the trade deal, and phase one. I know people are trashing it and saying it’s a lot of nonsense. It’s horse shit when it comes to your portfolio.

Frank Curzio: It’s a big deal because we now have positive sentiment. That’s the most important thing. You don’t have Trump saying, “I’m going to do this if…” You don’t have China saying, “I’m going to do this if…” You’re not seeing that. Now, the Presidents speaking at Davos saying, “I have a great relationship with China.” China’s saying, “Wow, things are good with the US.” That’s a big deal, because now business is going to get done.

Frank Curzio: Now, what does that mean for manufacturing companies? What does it mean for a lot of these companies have global exposure? Now, you’re going to see a lot of companies get a bit more aggressive and say, “If this is not a risk and we’re getting along, now I don’t have to worry as much. I don’t have to be so conservative.” That’s very, very important. As someone who follows earnings, very few companies were raising guidance. Unless you have US exposure, or you’re a technology company with a certain niche, whatever it is, it’s doing well and its subscribers. When they do most of their business globally, and everything going on with China, and also with Europe… There’s trade tensions, plus Europe hasn’t really been great. Any region. Almost every region.

Frank Curzio: There’s no way these management teams, these CEOs could actually issue a positive forecast. There’s just too much in a certainty. I always explain that to you guys. The biggest risk on a stock on the market is uncertainty. Investors hate it. They run to the exits when you have uncertainty. That’s why when a company’s getting sued for many, many years, the stock gradually goes down. Once they settle, no matter what they settle for, as long as they don’t completely go bankrupt and ruin the business, as soon as they settle stocks will go up 15%-20%, because there’s not a risk anymore. You just took a major risk, and that uncertainty was lifted. It’s huge.

Frank Curzio: Right now, the uncertainty is lifted off of China. Maybe we have problems later on. Maybe phase two to deal it, but right now that’s really good. That’s going to result in manufacturing turning around.

Frank Curzio: What does that mean? If you are a Curzio Venture Opportunities subscriber, I just recommended a manufacturing company, which is a technology company. I explained these statistics to you, why it’s important, because this company got nailed. They saw a huge decrease in business from Asia and Europe, especially over the past few quarters.

Frank Curzio: Now, this stock got hit pretty hard. If you’re looking at China and Europe, if they just stabilize, which I don’t think they’re going to stabilize, you’re going to see the manufacturing do better, and better and better, and these trends go higher. Once this happens, you’re going to see so much money flowing into so many infrastructure and manufacturing companies. A lot of these names in this sector are trading off their highs. Well off their highs floor is one, FLR. Jacob’s engineering, not as much. Quanta Services and Common have been holding up pretty well. They trade in close to the high end of their range, but not really blow outs. These are companies that are going to see massive inflows of money.

Frank Curzio: Building supply companies, Martin Marietta Materials. MLM is the symbol. Vulcan Materials, VMC. Eagle Materials. These companies have been doing okay. They’ve been doing okay. The high ends they trade in range, they’re going to see a booming business. They’re going to start seeing that growth component come back, and you can get an early. Listen, we’re getting into early. We’re ahead of The Street on everything.

Frank Curzio: It’s nice to recommend IBM, and people now talk, “Wow, IBM, good quarter. It’s great.” It’s great. When we were buying it, everybody thought I was a complete idiot. Same with Ford. Ford’s going to do incredible, because it’s a technology company. People look at Ford and say, “It’s a shitty company.” It was. It was a five-year. It was terrible. I get it. They’re not even going to be a car company two, three years from now. Everything’s going to SUVs, electronic vehicles. That’s what they’re selling. They’re selling very few cars, because everybody’s buying SUVs and crossovers. They’ve positioned themselves. They have some of the best technology in the space, but people just look in the past and think, “That’s why the stock’s been trading crappy, and it’s down. We’re able to get it cheap.”

Frank Curzio: Wrap Technologies, I mentioned earlier. I want you to get in before the world knows about these things, because that’s when you make the greatest gains. It’s an amazing feeling. Amazing feeling to see that you’re in a stock that people gave you shit on. Then, six months later, a year later, everyone on CNBC loves it. You’re sitting there, it’s up 60%-70% and they’re like, “You should buy.” It’s the greatest feeling in the world. It is. We’re seeing that with a lot of our stocks. Not that I recommend stocks that are completely out of favor. Just sometimes.

Frank Curzio: How do you know which stocks to buy without trying to catch a falling knife? Insider buying is a big tip, and that’s huge. It’s a big tell. Insiders know everything about the company. They’re buying their shares. That’s a very, very good sign. Doesn’t mean it can’t go lower. It may go lower, but they see earnings come. Especially with stocks down 40%, 30%. it’s nice to see that.

Frank Curzio: You’re looking at earnings, you’re looking at the press levels. You see the short ratio really high. Like Tesla, everyone who hated it was already short. You couldn’t get any more. To see that stock take off and blow up in so many people’s faces, it’s not a surprise. Maybe it comes down later, but when everyone’s leaning to one side usually the opposite happens. All the time. Not even usually, all the time.

Frank Curzio: Start looking at these companies. Even 3M. There’s a reason why GE is going high even with their Boeing exposure. Look, Boeing’s a stock we recommend, it with down about 10% on, and they’re coming out with bad news all the time, the emails and stuff like… Look. Boeing’s going to be up at $500 in three years from now. It’s around three-ten now. It’s going to be over $500 three years from now, easily. It can go lower in a short term. It could. Yeah, but they’re going to get the Max jet back in the air.

Frank Curzio: Might take a bit longer than expected, but those orders for the Max jet, they’re not going anywhere. There’s no competition. Only Airbus, who is at full capacity, and these planes are going to save billions for these companies, for these airlines that they ordered, over the life of their fleet. They’re lightweight, 25% more efficient. It’s not like, “Oh wow., This company really messed up,” and now the competition comes and just eats them up.

Frank Curzio: There’s no competition. There’s nobody who’s going to start making airplanes anytime soon. Sorry. Unless you have $25 billion for the facility, which most people don’t. Most people. These days it might be a bit easier to get… considering Jeff Bezos, and how much he’s worth, and Bill Gates these days. But, you get my point. Those headlines are going to be negative. That’s fine. Maybe it comes down a bit more, but I know that this stock is going to go up tremendously once they figure this out. Just like Chipotle did.

Frank Curzio: Getting back to the materials stocks. A lot of them are out of favor. Even the ones that are trading close to the higher range, they’re going to see business take off. Europe is getting better as well. We’ve seen strength on the Euro for the first time in a long time. Our relationship with Europe, much better than it six months ago. Still a little bit work to do. China is much better. You’re looking at manufacturing, you’re looking at the data. It fell off a cliff since early 2018, and the last two months you’re finally seeing the uptick. Even in the Goldman Sachs survey. Pay attention t-t-to that survey. Also, pay attention to Bank America inflows/outflows.

Frank Curzio: When I see firms covering things, and talk to the biggest companies and they’ve be doing this with for 15-20 years, that’s who you want to pay attention to. Even through the ups and downs. They really know these markets better than everybody. They know the top people in these markets. They know who’s full of shit and who’s is not full of shit. Who’s aggressive, who’s not aggressive. It’s all factored in. Even looking at Goldman Sachs surveys seeing that, “Hey, you know what? We’re starting to see an uptick.”

Frank Curzio: It’s very, very early. Nobody’s talking about it, and a lot of these names are going to go higher, which is cool because we’re in a market that a lot of stocks are trading at all-time highs, it’s not easy to find that diamond in the rough. Especially at mid cap, large cap, they couldn’t get it at a big discount right now. It’s not easy. This is an area where you could find lots of great stocks that have tons of upside potential as this trend turns.

Frank Curzio: Be sure to sign up to my Curzio Research YouTube page. It’s absolutely for free, but I have some amazing videos, which Andrew talked about earlier. That’s for the CES, just sampling tons of new technology, products, gadgets. Also, I’m breaking down each trend from the floor of the CES. I have lots of live feeds that I had when I was there, where it just felt like you were there. It was really, really cool.

Frank Curzio: Also, we’re going to start doing lot more videos that we’re going to be posting to that site. Just a lot of people subscribing. It’s getting bigger, and bigger. YouTube is a great platform, but for us, it’s been very, very good. If Facebook wasn’t so good, Twitter’s really good, and now we’re seeing YouTube. People like videos. I like doing the videos. I don’t mind. I like doing them with no scripting. I hate scripted things. I like when it’s unscripted. If you know your shit, it’s very easy to do, and I don’t care if I make a mistake. It’s fun, it’s directly to you guys.

Frank Curzio: You’re going to see all that stuff on YouTube. Short videos, some of them are a little bit longer. Trust me, the ones that are even a little bit longer, which are not many, they’re filled with great data. It’s going to be entertaining, it’s going to be cool. You’re going to hear a different perspective than what you’re hearing out there. You can get all that for free just by signing up to the Curzio research YouTube page.

Frank Curzio: Guy, that’s it for me. Thanks so much for listening. Really appreciate all the support, guys. I’ll see you in seven days. Take care.

Announcer: The information presented on Wall Street Unplugged is the opinion of its hosts, and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility. Wall Street Unplugged, produced by the Choose Yourself podcast network, the leader in podcasts produced to help you choose yourself.