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: What’s going on out there? It’s September 16th. I’m Frank Curzio host of the Wall Street Unplugged podcast where I break the headlines and tell you what’s really moving these markets. So, I went to a place called Ashley Furniture a couple of days ago. So, Ashley’s a big furniture brand, actually ranked number one home furniture retail in North America which has over 800 showrooms. They have a very big presence in the South, especially in Florida. I’ve never really heard of them in New York, but in Florida, they’re very, very big, and since I’ve been living in Florida, we’ve ordered lots of furniture from these people. So, we’re a really good customer of theirs.

Frank Curzio: Now, we’re getting a new dining room and bedroom set, because they’re about 15 years old each. Need a little bit of an upgrade, and we ordered that, believe it or not, two and a half months ago. And, it still hasn’t been delivered. But, I get it. I mean, it’s COVID. Everything’s on delay. You get supplies different places. I understand that. I get it. Try ordering anything and it’s going to take a long time. If you’re doing your Christmas shopping, guys, start doing it now, because it’s going to take a few months to get it to your house. Seriously. It’s crazy.

Frank Curzio: But, my wife and I went there a few days ago, and we were looking to get a new T.V. stand, two end tables, and a coffee table. We just painted the walls, right? A couple upgrades to the house. Got to look a little nice and sweet. So, go to Ashley, walk into the store, and right away when you walk into these stores, you know how it is. I mean these guys just come up on you like immediately. It’s crazy. Right? “Let me help you. What do you need?” And, it’s just, you’re like here we go. And, the kid kind of looked like a little bit of a shady guy.

Frank Curzio: But, I say, “You know what? Let me play along.” He’s like, “How can I help you? What are you looking for?” And I tell him, “Listen. We need two end tables, a T.V. stand, a coffee table. He’s like, “I know exactly what you need. I’ve got just what you want. I’ll show you a whole bunch.” So, he goes to different parts of the showroom. It’s a pretty big place. And, he starts showing us different things, and my wife and I fell in love with one set. It was all set together, all same color, looked really, really cool.

Frank Curzio: So, he does his thing which sales people do. He figures out the pricing, throws in a little discount. “I’m going to take care of you.” And he goes, “You know what? With everything, delivery, everything that you need, warranties, it’s $2,800.” Which, seemed like a log of money to me. I mean two end tables, T.V. Stand, Coffee table. It was nice, but $2,800 just seemed like a lot.

Frank Curzio: So, I told my wife, I said, “You know what? See if they have anything going online where they might have a special.” And, we do that a lot with stores, because they’ll have 10, 15% special out of nowhere. You just got to log onto their account and whatever. So, wife starts looking into it. And by the way my stuff is great with stuff like that. She’s like an investigative reporter. She’s quick. She can find anything which is incredible. But, this is what she loves to do. She loves this part. So, she looks. She figures all this out. She starts adding up the prices, looks online and figures out how much everything is going to cost to get the same exact furniture that’s on their website.

Frank Curzio: Remember this guy quoted me $2,800. It came to $1,300, the same exact furniture that this asshole just quoted me for $2,800. So, as she’s looking online and showing me and telling me, this guy’s still talking, and I’m letting him talk. Basically, digging his own grave. Talk, talk, talk, talk, talk. How he can get this this fast. “It’s a great deal. We have it in stock.” All this crap. And then I was like, “All right. Enough’s enough.” So I call him out. And, I say, “Listen, buddy, everything you just showed me is retailing on your website, Ashley website, for $1,300, but you’re quoting me for more than double that.”

Frank Curzio: And, he knows he’s caught, but he’s trying to kind of just find a way that he can get away with it. You know when you see someone that’s just caught lying or whatever? He starts looking through his notes. He’s pausing. He keeps digging. And, I’m not letting him off the hook, because I’m pissed off, because we’ve bought a lot of furniture at this place. So, I tell him, I said, “Look. I’m going to be honest with you. I’m really pissed off since I’m a great customer that you quoted me $2,800 for furniture that’s going for $1,300 on your website.”

Frank Curzio: So, you know what he tells me? He goes, “Yeah, but the good thing is we always price match.” I said, and I said this to him, excuse me. I said, “It’s your own fucking site. It’s your own site that you’re price matching. You price match other people’s sites. I get it. Best Buy, Amazon, Walmart, I get. This is on your site, On your site, that you did not tell me about.” So then he starts going into, he tells me that Ashley Furniture Stores are individually owned. Well, the website is corporate.

Frank Curzio: Look. I understand that if you’re charging me 10% more. You’re in store. I get it. Online can be cheaper. These guys have to make money, a little bit of commission. But, more than double, this kid. How fucked up is that? More than double, he quoted me. And, I’m just looking at him. And he’s looking at me. And I’m like, “Really?”

Frank Curzio: But, looking at the bigger picture here, and stay with me, There’s a reason why I’m telling you this story. I started doing some research on Ashley and realized its parent company owns the online operations. It’s actually called HomeStore, and they have 800 stores. Now, most of the HomeStores the Ashley HomeStores that I went into, so they’re called Ashley, but it’s really Ashley HomeStore. The HomeStore owns online, but all these stores are independently owned. So, they have to buy all the furniture from Ashley Home. Think like a franchise. You buy all the furniture from Ashley Home, which they manufacture by themselves. Two brothers own it making a fortune, but then these owners I guess have the right to sell these items for whatever fucking price they want to. And, mark it up, and they’re going to make all that money on the commission.

Frank Curzio: If you don’t know better. That, “Hey, let me go online to check this out to see where it is.” So, it’s not like McDonald’s makes royalties from the owners and the franchises. They’re going to send them all their product, the burgers, the french fries. They send them everything, right, and set them up perfectly, but the franchise owner from McDonald’s, he can’t sell a Happy Meal for 20 bucks when it’s priced at less than five dollars everywhere else it’s been advertised. But, when I look at this model, which I’m sure there’s tons of businesses out there doing this especially in the furniture industry. There’s a reason why Wayfair is where it is. Look at Wayfair. Look at their stock. Everything’s ordering stuff online. I actually went to Wayfair, and I understand why it’s such an amazing site. And, right away 10% off because you’re a new customer. Constantly just the algorithms there and the AI. It’s just they’re sending me stuff that they know I’m going to like which is really cool. There’s a reason why that stock’s so high.

Frank Curzio: When I look at this model, you realize especially with Ashley Stores, they’ll never, ever, ever be able to compete with online again. And it was always that way for the world to see. Online was cheaper than big box. We understand that. And, online was like, “Yeah, we kind of need big box too.” Right? You have Amazon opening up stores. Apple opened up stores. Microsoft opened up stores. Tesla opened up stores, big box. Because they knew that some people want to go there and pick up their items. But, with online operations, I don’t have to go over the specifics with you, but you know why it would be so much cheaper. You don’t have to pay for rents. Fewer employees. Less healthcare. But, online we all knew was cheaper than big box, but not everyone took advantage of it. And, hear me out here, guys.

Frank Curzio: In fact, hardly anyone took advantage of online shopping, which sounds crazy. It sounds crazy to anyone of us who ordered something on Amazon, ordered something online and got it delivered to us. Because, when you look at eCommerce sales. So, eCommerce sales has been a secular growing trend for a long time. What does that mean? When we steadily hire year after year after year after year. It’s not cyclical where during certain times a booming economy it does well and then when it’s a weak economy doesn’t do well. It’s a secular trend that’s been growing. More and more people go online. But, do you know how much actually as a percentage of total retail sales of the U.S., which is a little over five trillion dollars? And as retail sales, I’m using data from the U.S. Census Bureau which includes gasoline which you’re not going to be able to buy online. But, it includes everything.

Frank Curzio: But, do you know how much? I want you to take, and think about it in your head. As a percentage of total retail sales in the U.S. come from eCommerce. They have that number. In 2010, it was just four percent. 2014 it was six percent. In 2016, it went up to eight percent. By 2019 year-end, it grew to 11%. That’s all the shopping that’s being done online.

Frank Curzio: I would think it’d be a lot more than that, considering the discounts that you get. But, it’s just 11%. What does that mean? It means it can grow incredibly. Now, in 2020 this year, as of Q2, so this is the end of June, that quarter was at the height of COVID. eCommerce sales came in at $211 billion. That was 44% higher than last year’s comparable quarter. You know what else? That 44% is the fastest growth rate, this is unbelievable when I looked this up, the fastest growth rate we’ve seen for eCommerce sales since before the dot com crash. So, we’re looking at 1999.

Frank Curzio: You look at it on an annual basis, eCommerce sales have not grown this fast since the pre tech bubble, The dot com bubble. Now, you have to think about that for a minute. The internet was still in its infancy back then. You could argue it was in a very first ante in terms of growth. I mean, Netflix and Google were what? Two years old. Netflix was still sending DVDs to you in the mail. I mean, streaming didn’t exist. Tencent, the largest tech company in China was one year old. Facebook, Twitter didn’t exist then. The iPhone wasn’t even invented yet. That was like 2007. No social media, no streaming no cloud. We weren’t even on 3G yet.

Frank Curzio: Verizon became the first company to launch a 3G network and that was in 2002. So, throughout this whole entire period, right now, this growth has been faster than any other time dating back to pre-dot com crash. So, you’re looking at for the quarter, the total retail sales the Q2, was 1.3 trillion. So, if we times that by four, it’s a little over five trillion annually, a number I mentioned to you earlier. And, if you take the 211 billion of eCommerce sales of that 1.3 trillion, it amounts to 16% of total sales now for eCommerce.

Frank Curzio: Guys from 11% to 16%. That’s in an industry. We’re not talking about a company increasing sales. We’re talking about an industry that’s been growing at, every couple years, a little higher. A little higher, a few percent. Now, it’s 16% of total sales. It’s a tectonic shift, an anomaly, deviation, diversions, whatever words you want to use, but something that nobody could predict or forecast. It seemed like a… I should say it seemed like it because it’s a certainty now, but people say it’s a mathematical certainty.

Frank Curzio: Nobody could predict how fast this would grow. Now, why did it happen? We all know. COVID. Staying at home. They close all these shops. That’s the obvious answer, but it’s much, much more than that. And, once you understand this, you’re going to realize that a lot of these high flying names, they’re going to go a lot higher. And, you’re also going to realize that we’re not even close to being in the bubble, not even close. And, we hear that mentioned. That’s a question they ask almost every guest now on CNBC and Fox Business. “Do you think we’re in a bubble?” “Do you think we’re in a bubble?” “Do you think we’re in a bubble?”

Frank Curzio: You could argue we were in a bubble in 1996. You could argue we were in a bubble in 1999. From 1999 to the peak in 2000 and March the Nasdaq doubled. And people thought we were in a bubble ’96. And a bubble is a rational exuberance. It’s people buying stuff. They don’t even care. These are companies that are seeing unbelievable growth. They’re seeing demand. They’re seeing sales explode. They’re seeing earnings explode. Look at the numbers. And, why is this happening?

Frank Curzio: Because staying at home, and this is the bigger point, it forced people to buy things online for the very first time. I know it’s going to sound crazy to some of you. Especially those of you who shop Amazon a lot, but there’s a lot of people who aren’t on Amazon. But, these people didn’t have a choice. If they wanted things, they had to go online. They were forced. They were forced to change their behavior. Pretty big deal since we’re creatures of habit. We hate change. We all hate change.

Frank Curzio: And, we like to do things the way we like to do things and we hate when people tell us an easier way to do something that we’re used to doing. Right? Oh, you could do this so much easier. “My iPhone is so slow.” “Well, you could pay for storage, keep it on the cloud. Apple makes it pretty easy, charges a few dollars.” “Ah.” People don’t want to hear it. You pay your cable company $150 a month to watch whatever. Chicago Fire. Forget about Chicago P.D. anything P.D. is gone now. We all know that. Those are the rules. P.D. Unbelievable. Taking cops out of cartoons. Insane.

Frank Curzio: Anyway, but now you can stream it online. You can save a ton of money. Back in the day, millennials, you’re not going to remember this. We used to go to travel agents to book trips, and some people still do. But, everything could be done in five minutes using Expedia and Priceline, but some people still have a travel agent, believe it or not, especially traveling internationally. What about using a full service broker? That was the norm. They used to charge you a fortune. You still kind of need one if you want to get to private placements. You like to have one at Goldman Sachs, which you’re going to get into a lot of great deals.

Frank Curzio: But, now you can trade online with no commissions. Where am I going here? Why am I saying this? These examples provide an easier cost efficient way to consumers, but they’re not necessities. All these examples I just mentioned were not necessities. People are still going to use full service brokers. They’ll refuse to put all the pictures downloads on cloud. They’ll continue to pay cable companies a fortune. When you get the same service for a huge discount. And yes, some people will still use a travel agent believe it or not.

Frank Curzio: It’s not a necessity to them. You don’t have to do that. So, you’re not being forced into something. You’re not being forced to change their behavior. This time is different. People who never used Amazon before and there’s a lot of people believe it or not. It seems like everybody, but there’s a lot of people. They just figure it out. They could order paper towels. Milk sanitizers. Order it online and have them delivered at their doorstep in a day or two, and they can reorder them automatically every two weeks. And the best part, it’s cheaper. I don’t have to run out to a grocery store and worry about catching COVID which is a big deal to people in a danger zone, over 65, or have underlying conditions. But, you want proof of this, how many people, and be honest with yourself, how many people do you know that talk about the massive amount of boxes they are getting delivered to their homes now from Amazon? Tons of people, everybody talks about it. Nobody really talked about that before. I have heard that dozens and dozens and dozens of…

Frank Curzio: “Oh my God. You’ve got to see the Amazon boxes piling…” and it’s reflected in Amazon’s numbers. Crazy. Did you see Amazon’s numbers? And, this trend of more online shopping is just the beginning. We’re at 16%. We know COVID is going to end. Things are getting better across the board in the U.S. We see it in COVID in terms of statistics. Hospitalization rates are coming down. Death rates as a percentage are coming down tremendously. The dangerous spots, Florida, Texas, whatever. All okay now. Numbers coming down. But, New York, California stay closed. Someone said USC has to beg their freaking mayor to play football. Leave it up to them. If there’s certain people that don’t want to go there, and they’re worried about COVID it’s fine. But, if you look at a demographic, and you look at their age group that catch COVID, they have a better chance of dying from the flu. Okay? Enough with the politics. Enough with the bullshit. Especially California and New York. You’re always going to be democratic. You don’t have to worry about losing votes. Just do the right thing, because you’re messing with people’s lives.

Frank Curzio: Sorry. Didn’t mean to go on a tangent there. But, you’ve seen COVID numbers get better, which means businesses are going to open back up. In terms of those brick and mortar places. Even New York said, “You know what? After six months, we’ll allow indoor dining at 20%, 25%.” It’s too late Mr. Cuomo. It’s too late. All these companies are out of business already. We’ve been opened up in Florida since May. All the numbers are getting better. We’re fine, things are cool, we’re practicing social distancing, you’re late to the trend. That’s okay. But, brick and mortar. You’re seeing more and more stores open up. You’re even seeing hair salons, gyms, movie theaters. Places that you thought would be closed up, they’re starting to open up. But, do you think older folks are going to run back to shop at big box retailers anytime soon? Especially now they learned about online shopping, and so many people have for the first time. Again, it was only 11%. 11% of retail sales. Now it’s 16%. Unbelievable jump in a number like that. Unbelievable. But, do you think they’re going to run back? If I was over 65…

Frank Curzio: Listen, I talk about why people should be going out. Yes, they should be practicing social distancing. If I’m over 65, it’s a different story. It’s why we shouldn’t have guys like Fauci, what is it, close to 80, making decisions for us. It’s someone that’s in a danger zone. If you look at everybody making these decisions, even Pelosi is 80. Trump’s 74, 73. Biden is 77. These are the people we want making decisions about COVID when they’re in that danger zone? And they’re at significant risk compared to the rest of the population? Absolutely not.

Frank Curzio: Those older folks aren’t going to run out. They just realized, “Wow, I could spend money on Amazon and get everything delivered to my doorstep. If I want to get out, I could walk around the house. I can go to a park. I don’t have to be in front of people where you might have assholes say, ‘I don’t need to wear a mask.'” Doesn’t matter if you believe the statistics or not, just wear it, because you’re going to make that older person feel more comfortable. Isn’t that worth it than fighting about it and telling everybody why they’re wrong and statistics. Who cares?

Frank Curzio: You really don’t know. We really don’t know. There’s a million studies out there. We really don’t know if masks help. Believe me. I looked at all the studies. You really don’t know, but I wear a mask. Why? Because, it makes people comfortable. And, if I was older, I would hope other people would wear a mask, because I’d be worried.

Frank Curzio: So, where am I going with all this? Those of you who believe we’re in a bubble. Those of you who believe the rally in names like Overstock, Amazon, Wayfair, Netflix, Nvidia, Etsy, Square, Datadog, Cloudflare, CrowdStrike, Zoom, I could keep going. If you think the rally is over in these names, you’re absolutely crazy. And even throwing in the big box retails that had the best online operations. The Walmarts, the Targets, the Best Buys, these are names being driven by growth. They’re not being driven by valuation not being driven by fundamentals. We know that. You’re looking at what trends these guys are in. They’re in AI. Right? Artificial intelligence, cloud, big data: These are all trends that were growing, and I covered all these years ago from going to the Consumer Electronics Show for the last nine years.

Frank Curzio: You follow my newsletters you know everything there is about these trends, and you’ve made money off of them, and they’re continue to grow faster and faster now. Because of COVID, these trends, they’re on steroids. They’re on steroids. And, this growth is not going to slow for years and perhaps decades, because it’s forcing people to change their behavior, and when they’re doing that, they’re realizing how easy it is to order stuff online.

Frank Curzio: And they know how easy it is, I don’t have to go to a conference. That’s why I’m going to just go on Zoom. Did you see Zoom’s numbers? They’re comparing this bubble to the tech bubble, right? Where you had an irrational exuberance. These companies weren’t growing sales like the way they are now. These companies weren’t growing sales the way they are now. These companies weren’t growing earnings the way they are. They didn’t have cashflow back then. They had a web page maybe four web pages and a great idea. And, these things are having billion dollar valuations. I’ve never seen a company grow faster than those numbers that Zoom put up in such a short period. It’s incredible. And, look at Peloton. Peloton’s a name I wouldn’t recommend. I don’t think that’s a secular shift. I love the fact that that CEO went on… I love this part. The CEO’s like, when Apple just announced their music service, for 9.99 Fitness Plus. That’s a good thing. That’s a good thing for the industry. It validates our thesis.

Frank Curzio: When a two trillion dollar company comes into your industry. Not to mention their growth model, what is it based on? It’s based on subscriptions that you’re going to be charging more than what Apple is offering especially for the real connected one, which is 39.99 a month. The rest of it, I think, is 12.99 a month. They have like three million subscribers, but the best is they mention on the call the growth model is to provide more content to people and more music choices. I’m pretty sure you’re not going to be able to provide more content and more music choices than Apple’s service. I’m just guessing there. I have a feeling. And, that’s their growth model. 80% comes from hardware, but their growth, the reason why Peloton’s taking off is because their subscription service which just got thrown under the bus by Apple, because everybody owns an iPhone, or an iPad, most people, and it’s going to be very easy for them to get on these new fitness programs. I’d be worried about Peloton. I don’t think that’s a whole ship. But, Zoom, CrowdStrike, Etsy, it’s different with these companies, Nvidia.

Frank Curzio: But, you’re looking at these trends, the AI, the cloud, the big data analytics, they’re on steroids. More people online than ever. And, like I said this growth, it’s not going to slow anytime soon. When you have a behavioral shift, that’s what happens. And, what else have we seen behavioral shifts in? Look at healthcare. Online doctor visits. Online diagnostics. I mean, I’ve seen this with my mom where it’s a pain in the ass for her to go. I had to take her to the doctor yesterday for a check-up. She’s doing great by the way. Thank you for all the comments, concerns, really, really appreciate that. I mean, we were told that she was going to die twice, and she’s driving now, which is incredible. I mean it’s just really, really incredible and really great news. But, I’m there with her when she’s talking to her doctors online sometimes. That’s a behavioral shift. Supply chains. They’re becoming more localized. They have to. Where so many places that close off globally. I mean, you see Europe? You can’t go to Europe right now. You can’t go to a lot of different countries right now.

Frank Curzio: Well, what about your supply chains that are from different countries? You’re forcing them to be localized. That’s a behavioral shift. They’re not going to do it just for now and when everything opens up they’ll be like, “Okay let’s go back to Europe. Let’s go back here.” No. This requires opening up new plants, hiring more people. Again, a behavioral shift. The insurance industry. Hey, look at property casualty. Where these guys are getting murdered right now, and less insurance could result in consumers buying fewer assets like cars or real estate which we’re not seeing right now, but how much will that insurance cost?

Frank Curzio: It’s the greatest industry ever. Start an insurance company. It’s one of the only industries you’ve got to put a ton of money up front for something that you think’s going to happen. It’s the greatest industry ever. But, now they got screwed. You see a lot of insurance companies still down tremendously. It come back a little bit, but they’ll find a way. They’ll find a way. To insure things that don’t need to be insured, and they’ll make money off of you and not even go near the things that are risky anymore.

Frank Curzio: Especially in this day and age where everyone’s nervous. Paranoid about everything. What about working from home? Another major shift. Companies are realizing how much money they could save instead of opening how many offices in major cities. You look at the Fortune 500 companies. They have like 10, 15 offices in all the major cities. You don’t need them no more. You know how much money that is? The leases? The rent? Do you have any idea how much that costs? I lived in New York City all my life. Holy cow. And get whatever you want now. Hell they’ll roll out the red carpet if you’re looking to buy real estate or lease anything in New York or some of these major cities.

Frank Curzio: The entertainment industry. I mean, I don’t know if you saw this. So, they released a couple of movies, and they did absolutely horrible in the theaters even though they just opened up. Horrible. Which is resulting in every studio pushing their pictures out further and further. We’re going to launch this in December now, towards Christmas, in January, in February. You can keep going. March, April, May, June. The traffic is not going to come back like it once did. I don’t care what movie you release, what Avengers movie you release. You better be putting it out on streaming.

Frank Curzio: And by the way, it’s interesting that Disney still hasn’t reported their streaming results from Mulan. I thought that they would throw that out there immediately because that would be a boom for their stock. The fact that they haven’t said anything makes me worry. Well, maybe that didn’t work as good as they thought it would. I thought it would work. Maybe not. Why haven’t we seen those numbers? We see the box office numbers everyplace else all the time. That a daily basis, weekend, how much money these companies generate. Why is Disney not putting out that number? Interesting. Interesting what they choose to put out and not put out. They’re putting out their subscriber numbers every time they’re good in the middle of a quarter because that’s what’s driving the stock. Kind of interesting.

Frank Curzio: What about digital advertising? Social media networks? You’re going to see higher demand for social media networks, because companies are going to do less advertising on billboards, streets, mass transit, because nobody’s really on the streets. There’s not as much traffic in these places. Think about Times Square and having one of those beautiful, beautiful lighted up billboards, 100s of them. I mean, I don’t even know how much that costs. That probably costs a million dollars a five minutes. Who knows? Not that expensive, but you get my point. There’s nobody there. Even for New Year’s, how many people are going to go there? 25% of the audience maybe? All going to be wearing masks. There’s going to be fights. There’s going to be protests. I mean, that’d be crazy to go to Times Square to watch the ball drop. It’s going to be a shit show. There’s no way. It’s going to be dangerous. It’s going to be crazy. Think about that. You can have behavioral shifts.

Frank Curzio: Look at the unrest across every major city. A lot of them are not safe right now, which is causing a lot of wealthy people to move out of these cities into the suburbs. Not good for restaurants. Parking garages, that might sound funny to people maybe in the Midwest. In New York City, they don’t allow you to park any place. They’ll have 10 different signs up, and they only need one sign that says you can’t ever park there, but they’ll have 10 signs to take you 15 minutes to read, and you think you can park there. It doesn’t matter. They’re going to give you a ticket. And, they’re going to tow you.

Frank Curzio: To park in somebody’s garage is like $50 for a couple of hours. Gone. Gyms in major cities. The tax revenue for these cities. But this is how you must look at investing going forward. It’s not a temporary shift. It’s a behavioral shift. We don’t see these often. I think text messaging. Nobody leaves voicemails anymore. My voicemail is just filled up. I had no idea. I don’t listen to voicemails. If I have any investors out there, you’re going to call me, because my Investors in CEO talk which is going to be launched in a couple weeks. Free trading. I talked to a lot of them. Don’t leave a voicemail. Send a text.

Frank Curzio: It’s a behavioral shift. Social media. That’s where everyone communicates now. In their groups, they email, they’re through Facebook. It’s, that’s just the way it’s done now. But, it’s resulting in trillions. Trillions of dollars being shifted from the old way of doing business to new ways. And, that’s going to result in a lot of winners and lot of losers, and the companies that are seeing this shift, if you look at all these high fliers, I wouldn’t throw Tesla in there as much. There’s some of them, you don’t put. You’re looking at those names I mentioned earlier. Earnings are exploding. Sales are exploding, cash flow, subscribers, they’re exploding. That’s what the market wants to see. To say that this is in a bubble is absolutely crazy, because these things aren’t going to crash when you’re putting up that kind of growth, those kind of numbers. Those are the businesses that are going to see the most demand, and it’s going to continue, and continue and continue. Again, that’s how you must look at investing going forward. And, if you figure out some of those new ways that people generate business, you’ll make an absolute fortune.

Frank Curzio: If you’re looking for ideas, you could start by trying to create something for rich people that they all want, because I can tell you every rich person I know has one thing in common. They all want something. Every single one and I’ve talked to a lot of them on this podcast through the years, been doing this 25 years. They all want one thing in common. You know what they want? They want more. They all want more. And that brings me to my interview.

Frank Curzio: The incredible person, first-time guest. His name is Chris Willis. The managing director, the government advisory and program delivery at Latitude Consultancy Limited. So, basically Chris, his specialty, which he’s been doing for over 25 years, is immigration. He helps rich people get dual citizenship. And, business right now, no surprise is booming. It’s going to be a fantastic interview where Chris is going to break down the best countries that give dual citizenship, how much it costs, which varies tremendously from country to country. How bribes are quite common, or should I say donations? We cover that, but it’s a step-by-step guide for anyone looking to get a passport in another country, which is very, very, very attractive in today’s current environment of COVID and a lot of these major cities not being safe.

Frank Curzio: So, really, really great interview coming up. And then in my educational segment, I’m going to bring in Daniel Creech to go over the latest news including the massive M&A deals we saw this week. The strong earnings from some of these companies like Peloton, FedEx, breakdown a whole bunch of stuff. Lot of fun coming up in that segment, but first let’s get to my interview with immigration expert, first-time guest Chris Willis.

Frank Curzio: Chris Willis thanks so much for joining us on Wall Street Unplugged.

Chris Willis: Hi Frank. Thanks for having me.

Frank Curzio: Well, you’ve been working in the immigration industry for 25 years, which includes helping people get dual citizenship… Let’s start since you’re a new guest, how did you get into this industry? Because right now, I would think that business is booming for you.

Chris Willis: Yeah. We’ve actually had a big intake of interest and people looking at having a second residence or citizenship. And we’ll talk about some of the reasons why in a bit, but I started off in this industry 25 years ago before it was really an industry like the way it is today. So, we would start you with a question of identifying the programs, identifying the need of why people were looking for such a residence or citizenship. In fact, I started it off in London in the UK where there’s a big concentration of a lot of Australians, Canadians, New Zealanders, et cetera, who were either looking to stay in the UK, or bring a partner back to their home country. So, that’s really where it started.

Chris Willis: And then, it evolved into bringing a lot of Canadian inbound immigration, and then finally getting into all the different residence and citizenship programs that are available around the world.

Frank Curzio: Now, I said I would think business is booming, not just for the coronavirus that we have the most cases in the U.S., so maybe that might worry people, but we’re seeing unrest in major cities where a lot of wealthy people are moving out. They’re very scared right now. And I say with Zoom technology, sometimes it’s better to be lucky than good. Just being in the right industry at the right time, that was the best way to communicate during COVID. But, is it that simple? What are some of the main reasons Americans are applying for a second citizenship?

Chris Willis: Well, I think what’s happened now, Frank, is there’s been a big reality check. People realized, I’m an American citizen. I’ve got my ability to live and work anywhere in the U.S., but what happens if I want to go to other parts of the world? Whether it’s for just for leisure or for business purposes, or even just as an insurance policy because as you say the safety’s struggling a bit with COVID and there’s some other factors. You know, civil unrest. There’s concerns about the economy. There’s a variety of reason why people were saying, well look, maybe I can be better off somewhere else. And you know, they’ll look at other factors such as what’s the healthcare system like? What’s the security like? How does this new country manage COVID? Because, some countries have managed it better than others. And, that’s a factor a lot of people are looking at right now.

Chris Willis: For an American, you’re used to having the ability to travel the world, but what’s happened now with a lot of these travel bans, you know the European Union being one. Canada being another, so two major destinations that Americans are used to traveling to are basically saying the border is closed unless you have status to enter the country. In other words, you’re a Canadian citizen or European citizen. And so, they’re having that second citizenship can open up many more opportunities than being reliant purely on being an American.

Frank Curzio: So, is that right? If I have dual citizenship, so I have a passport in Europe or one of the countries in Europe and the United States, even though they have a travel ban, I would be able to travel back and forth right now?

Chris Willis: Yeah. I mean, it could be subject to quarantine requirements, but you can at least enter the country. And, I’ll give you an example, because a lot of the popular citizenship by investment programs take place in the Caribbean. And you may have been reading that a lot of the Caribbean countries actually shut their borders saying, “We don’t want anybody in. We don’t want anybody out because we want to be able to contain the pandemic, and we can do that if we close their borders.” Many of the countries were saying, “Look, as of this date, we’re shutting the borders. So either you get in, or you get out. You make that choice.”

Chris Willis: So, places like the Cayman islands, their borders have been shut since the beginning of April. So, it’s a very different phenomenon to go through when you’re on say a smaller island, then you’ve got to say, “Well okay, if I’m going to be in that place, can I conduct my business?” For example what are the communication links like and that type of thing. Which, let’s say you wanted to go to Antigua and the Caribbean, unless you’re a citizen of Antigua, then they wouldn’t have let you in.

Chris Willis: So, you couldn’t come in as an American as a visitor. You’d have to actually have a citizenship to qualify to enter the country. In normal times, no problem. Americans, Canadians, Brits, they come and go. But during the pandemic, they’ve restricted it only to citizens. So, if you don’t have that privilege of having that second citizenship, you can’t get in.

Frank Curzio: Wow, that’s very interesting. So, take me through the process. So, Chris I call you, I say, “Look. I want to do the citizenship.” And I know the rules are going to be different for each countries, but let’s talk about the similarities between them. What do I need to do? Because when I’m researching this, it seems like I have to invest in something, either real estate bonds, or make a typical donation to the country. I mean, do I have to do these things? What’s the process if I called you and said, “Hey, I want to do a citizenship. I want to pass Florida in the Caribbean?”

Chris Willis: Well, there’s two things we’d have to distinguish. You have what’s called residency by investments, and you have citizenship by investments. And, the very quick distinction is residency means you have permission to stay indefinitely, but you don’t qualify for a passport unless you meet the citizenship requirements. So, we see that as being a popular option in places like Europe. You know, and the Cayman Islands and the Caribbean. So, that’s one angle. The second angle is the citizenship, which is the direct application for citizenship. So, you don’t have to meet any residency requirements. Once you’re successful, you’re issued with a naturalization certificate, and with that you can apply for a passport. So, the first thing we have to do is understand the client’s needs. You know, saying, okay, doing a residency or are you going to do citizenship, or are you going to be spending time in that country, or are you just looking for the travel document?

Chris Willis: So, once we can whittle that down and decide, okay, this is the best course of action, then we can look at which program is going to be the most suitable. So within the Caribbean, they’re similar but very different. They’re five programs that currently offer a citizenship by investment program. And, we touched on it that you typically have two options. One is you make a donation to the government. So, it’s essentially a transaction. You make this donation, you pass all of the due diligence. So it’s a wealth source of funds check, et cetera. And, then you’ll be granted your economic citizenship.

Chris Willis: But, for some people, and more so for Americans, there is an option to buy real estate. So, you can actually incorporate a lifestyle component as well. So, you know let’s say you’re in New York, you’re in Boston, you’re in Seattle, it’s winter. It’s cold, and you say, “Look, I want to have my two weeks in the Caribbean every February to break up the winter.” You could say, “Well, why don’t we buy a villa in the Caribbean, and the benefit of purchasing that villa, we can also qualify for economic citizenship.” So, some people are okay cutting a check and walking away. Others would rather invest in something and have an asset. So, you have the two different options there.

Chris Willis: Certainly if you do go down the real estate route, you’re getting into a second negotiation with a developer. Because you have to go through the whole real estate purchase process for them, but then you can use that purchase to qualify. So again, it depends on what the client’s after. And in some cases it could be a larger family or a group of friends who all pitch in, invest in the minimum amount in the real estate that needs four or five of them to buy a larger villa which they use amongst themselves.

Frank Curzio: Now. I don’t know how much you can talk about this. I’m just curious, because a lot of politics are involved here, and the donation part, is there certain nations, where is there a limit to that donation? Because I could see someone who’s extremely rich, a hedge fund manager saying, “Hey, I’ll donate 10 million to build a library wherever and get approval.” I’m not too sure if you could talk about that, but seems to me that if it’s based on a donation, the more money you give, the more likely it is for that country to accept you. Is there any kind of truth to that or is that, again, I don’t want to speculate or conspiracy theories, but I just is this a level playing field for anybody, or is it definitely skewed towards the extremely wealthy?

Chris Willis: Yeah. Some of them will have minimum net worth requirements, which could be as low as two million. So, it’s not excluding a big chunk of the population. It’s certainly, or of your listeners. But, it’s very clear in terms of what the minimum is. And, it’s not at the 10 million level. I mean, you can. There are other programs where that can come into play. In Europe, for example, but in the Caribbean the least expensive is 100,000 U.S. So, once you add on your due diligence costs, your professional fees, your passport fees, et cetera. A single person is still going to be under 150,000 U.S. to get a Caribbean citizenship in less than about three months.

Chris Willis: So, it’s very affordable for many people. And, the fact that the processing is quite quick, it does give you a very quick solution. It does give you that sort of plan B. That insurance policy whatever you want to call it, because everyone sort of talks about the what ifs. That what if is right now. And, that’s what I was talking about the reality check a bit earlier where people are realizing, “Hey I didn’t plan for this. This isn’t part of my portfolio or my strategy. So, let’s check this box. Let’s get this second citizenship so we have another option for myself and my family if things ever get worse.” And, that’s where I think there’s a little bit of an uneasiness about the ability for everything to recover quickly in the United States, and that’s what people are getting nervous about and make sure to have this contingency.

Frank Curzio: Yeah. No. That definitely makes a lot of sense. Now talk about the countries, and I could be wrong on this. I always research everyone before I interviewed them across the research industry. What are the most popular countries? Is it 25 in total that you can do this, or is it more than that? I thought I saw number 25 someplace, and what are some of the most popular countries that you’re getting right now in terms of people asking for a passport dual citizenship?

Chris Willis: Well, in the Caribbean, you’ve got five. And, this is just for the citizenship program. So, you have St. Kitts and Nevis. You have Antigua Barbuda, Dominica, St. Lucia, and Grenada. And, as I mentioned earlier, they’re similar but different, but they all have a donation option and they all have a real estate option. So, then we start looking at which countries can you visit as a citizen of your new country? So, for example, in Grenada, they have a visa-free treaty with China. So, if it’s important for you to travel frequently to China and not worry about visas et cetera, then you would have visa-free privileges if you were citizen of Grenada.

Chris Willis: So, when people start looking at the number of countries you can go to, versus the quality of the countries you can go to, that can be a determining factor. Because, some people may say, “It’s really important I can get access to South Africa.” Then when we do a study, we see which of these countries will give you visa-free privileges to South Africa. And, there’s only one, which is Antigua. So, then that could be a reason why they would look at one program over another.

Chris Willis: But, I lived in St. Kitts and Nevis for two years and Grenada for a year, so I know that region very well. And part of my role is I also represent an industry body in the Caribbean as well. So, the Caribbean, I’m extremely familiar with, and it’s a well-established industry now. Some of the programs have been around since 1984. Others are only a few years old. So, I think what happened is once other countries in the Eastern Caribbean saw that St. Kitts and Nevis were doing so well to the point I mean at its peak, it was maybe 40% of its GDP was coming in through this program. So, there’s a heavy reliance on some of these programs.

Chris Willis: Just keep in mind tourism is the main revenue generator, and with COVID, their season was wiped out. So, they’re having, lucky, they have resources in reserves from this program to help deal with a loss of revenue from COVID. So, there’s so many different effects and benefits that come from this especially when you’re talking about smaller states. You have limited resources that come as it relates to tourism investment.

Frank Curzio: No. And, I can see just with the coronavirus, it’s amazing how something like this puts more things into action. Even when a company like Amazon where you think everybody was shopping online, and now you realize how many people weren’t with how many boxes go into the house and how much things are easier, but when you’re forced to do something, something like this, to rethink different things, I can see why business is booming for you right now. Now, we talked about the benefits, what are some of the drawbacks? Because when I look at this, I mean if we have to worry about double taxation, laws by two different nations, you know. What are some of the different negatives of doing this?

Chris Willis: Well, I mean, within Caribbean countries, you’re only taxed on income you would generate in that country. So, and obviously as an American citizenship subject to FATCA and you’re taxed on your citizenship. So, it doesn’t really change things from a tax perspective, unless people are renouncing and going through that process, but actually it’s a very small, small percentage of people. However, there’s also some tax revenue programs in Anguilla and in Cayman Islands, where they have a very attractive tax structure, in fact, for non-Americans could be a solution for some people.

Chris Willis: And generally the drawbacks, one is that people are buying real estate. They have to hold it for five years before they can sell it on. So, for some people, they’re saying, “Well, what’s the value going to be in five years? There’s going to be more products on the markets. And am I going to lose on this investment?” And, also, it’s the management of it after that five years. Because, most of them tend to be in hotel development. So, if you had a share of ownership, or you bought title B real estate in a development, what’s my insurance going to be if I put it in a hotel rental pool?

Chris Willis: Now, with COVID, for example, and hotels have had to close. People are getting no returns. So, there’s a risk there like you would have with any investment. But, keep in mind, from a purely investment point of view, this certainly isn’t the best out there. But, the benefit is you’re getting a second citizenship. Right? So, in places for those who don’t want to just cut a check and walk away, whether they did the donation, if they did want to invest in something that’s going to be some misassociated invest because of some of the unknowns. And then, apart from that, it’s a relatively straight forward, it’s an established industry. So, there’s not a lot of down sides.

Chris Willis: Clients will have to go through strict due diligence from the point as I mentioned earlier demonstrating source of wealth, source of funds, going through any criminality, et cetera to make sure that they’re not going to be a reputational risk to the country or a threat to the security of the country. So, that’s part of the process, and again as long as they can document all their background, then there’s no reason for them not to be approved.

Frank Curzio: Great stuff. So, I would think that you’ve been in the Caribbean, you’ve worked with the Caribbean, you work with Canada, of course, I would think it’s easier if you live in America to get dual citizenship. What about people outside trying to get dual citizenship for America? Is that just like an impossible task? I can picture that being much more stringent, right?

Chris Willis: Yeah. Well, I mean, the immigration policy, so many of the different categories have been suspended. There are a few that are still open. It’s not easy. I mean, I’m looking right into getting into the U.S. In fact a lot of the consular offices opened a few weeks ago. So, it’s not an easy process, and the current administration is very much about attracting the right type of immigrants. Well, a lot of the business programs, I’m sure you’ve heard of BB5s, which had a lot of popularity, but that’s now changed a little bit so it’s less attractive. And then, you’ve got the E2, which is also quite attractive for entrepreneurs or people looking to enter on a temporary visa, or a what we call a non-immigrant visa because the attraction there is that they’re not being subject to FATCA because they’re only a temporary resident as opposed to a green card holder or a permanent resident. So, then they’re only taxed on the income they generate in the U.S. So, for some people that’s a better solution for their overall structure.

Chris Willis: Then, you know what? The U.S. is always going to have an attraction for people irrespective of COVID or whatever else is going on in the country. It’s still very much an attractive destination just like the UK is, just like other countries are as well. But, as it relates to the United States, again it’s a residency program to get in, but what we’re also seeing from some American’s is interest in some of the European programs. Ireland is one. They’re the biggest synergy between the United States and Ireland. And, they’ll say, “Look, if I want to get status somewhere else, I like Ireland because it’s English speaking. I like Ireland because they have good beer, and I can play golf.”

Chris Willis: Or there’s a lot of reasons why a lot of people, and they may have some heritage in the country as well. Others are looking at citizenship programs in Cypress and Malta, which costs a lot more. I mean, Cypress you’re looking two and a half million Euro. And, for Malta, they’re just rebranding at the moment, but you’re going to be looking at about 1.2 million Euro really for an application to go through. And, that will take about 18 months where Cypress is about six to eight months. So, it comes down a little bit to you get what you pay for. So, if you want the cheap and cheerful quick one, it’s the Caribbean.

Chris Willis: If you want the more involved longer process, which let’s call it a higher value, European passport, then it’s going to cost you more and take a little bit longer. So, like a lot of things in life as I mentioned, you get what you pay for, but there’s different options on the table for people who want to have a second citizenship or a residency. And, this is why it’s key that when we speak to people we get a sense of their motivations, their time scales, their budget, and then we can guide them to see what the best program would be.

Frank Curzio: Yeah. No. I was just going to ask you about the cost and everything. So, for Caribbean, how much did you say the Caribbean was? Because I know you said a million and a half or more for some European nations, but the Caribbean, how much lower is it?

Chris Willis: Yeah. No. It starts at 100,000 U.S. so, it’s very affordable.

Frank Curzio: Yeah. No. Definitely.

Chris Willis: Yeah. Some of these will have due diligence fees, professional fees, passport fees, et cetera, but certainly south of 150,000 U.S. for a single person. The larger the family unit, the higher the price. It will go up proportionally. Again, some countries, they are priced more appropriately for families than single people and vice versa. But the other thing that’s interesting here, Frank is that some of the countries have a greater expansion in their definition of a dependent. So, as opposed to the standard husband, wife, two kids, some of the programs will include the parents if the parents are over 55, they can be included on the application, or in some cases even siblings. If you have a brother or sister and they’re unmarried and have no kids, then they could also be included, so if someone says to me, “This is my family structure. I want to include as many people as possible.” Then, that will dictate which program might be more suitable over another. So, as I mentioned before, they’re similar but different. And, it’s all about these different tweaks that we can assess against the client’s needs.

Frank Curzio: That’s great. I guess the last question here. So, say if I wanted to go through this process and I called you, and I just filled out all the paperwork, how long does it take and I would think it’s much longer now compared to pre-COVID, right? But, what’s the process, and how long does it take to actually get this finished? Is it like a year or two years? A few months?

Chris Willis: Yeah. It’s actually relatively quick. Caribbean it’s around about three months. And in fact, they were very good in terms of dealing with COVID because typically, everything has to go in hard copy. So, you collect everything, you get the hard copy forms signed, all these supporting documents and get a courier to the process in unit. However, they were then accepting soft copies due to COVID and able to at least open a file and start process. And if there was a couple of documents that were maybe outstanding that the applicant couldn’t get due to COVID. For example a police certificate because government departments were closed because of COVID. So, they’ve been very, very responsive and prepared to deal with it. So, we didn’t really miss a beat when it came to processing. So, from that side of it, we were very encouraged.

Chris Willis: When you look at the European programs, they do take a bit longer. Ireland, you’re looking at least six months for it to go through. As I mentioned before, Cypress is about six to eight months. And Malta’s going to be about 18 months. So, if someone’s for whatever reason has the time sensitive matter, then the Caribbean would be the logical one. I mean, you’ve even got a program in the South Pacific in a small island nation called Vanuatu which is also been attractive for some people.

Chris Willis: So, this concept of economic citizenship is continually growing, and I think for a lot of smaller countries, they see their sovereignty as being an asset that people would be willing to purchase. And so, they’re structurally different programs. We saw Montenegro, Eastern Europe launched a program last year which is sort of stopped and started to come out of the gates. They’re pitch if you like is you know we’re going to ascend to the European Union by 2025, so why don’t you invest in us now while the prices are lower and hedge your bets that we’ll be a European country in the next four or five years. And, we’re going to see more of these programs evolve. I mean a big thing on what I do is I work on the government advisory team here at Latitude, and so we’re speaking, during COVID, we’ve spoken to over a dozen countries who are looking to either tweak their existing program, or start one from scratch so they can benefit from this ever growing market.

Frank Curzio: So, the last thing here too. And, I really appreciate that. I mean it’s amazing how brilliant you are. You’ve been doing this for 25 years and answered every question seamlessly. This is subject I’m sure a lot of people, average folks, probably don’t talk about. But, it’s a direct indication. And, that’s the point of this podcast where you want to see what’s going on with the economy. It seems like this is more of a precursor to how there are a lot of wealthy people that may look to move out of the U.S. or at least get that dual citizenship. So, I guess the last question to you is, I saw on industry site that demand was up 40% year-over-year. I don’t know if they were talking about that site. Is it up even more than that? I mean, are we seeing like incredible demand? Put it into perspective. I asked you earlier, but is this the greatest demand since you’ve been doing this, or is it just, “Hey, business is pretty good right now”?

Chris Willis: Yeah. If you’re referring to people renouncing the U.S. citizenship, I mean that number is maybe five or 6,000 maybe, certainly not north of 10 per year that would do this, because it’s a pretty involved process that you have go through. And you know, many people once for whatever reason they would say, “Okay. I’m done with the U.S. I’m going to renounce.” They’ll say that to get some publicity and then don’t actually follow through and do it. We see that usually around an election or around other events that might happen. So, that’s growing, but it’s still not significant in terms of volume or scale. There are people who specialize in that, and that’s all they do. But no, in terms of the industry itself, as I mentioned before, we’re seeing definitely a big spike, and that’s for a variety of reasons, not just in the U.S., but also globally.

Chris Willis: Because this pandemic has really opened people’s eyes and realized that maybe they’re not as prepared as they thought they were. And, we’ve been having the all mighty American passports… In this current climate, it’s not as strong as it used to be. I mean, Americans I think can get into about 86 countries now without restriction. Whereas in normal times it would be 184. So, even the fact that Canada gets Canada, or to the European Union, would be a significant impact on people’s ability to travel freely and enjoy the freedoms that are usually associated with being an American citizen. And as I mentioned before if they did say, “Hey. I want to get out because of this, or I have a place in this country. I’m going to hunker down there during the next spike in the pandemic or whatever it is.”

Chris Willis: If they don’t have status, they’re not going to be let in. And, unfortunately, because of the way things are going in the U.S. with the pandemic, a lot of countries are not ready to open up their border to Americans right now until it’s really under control. As you know, there’d be a lot of different thresholds that have to be met for people to be granted access, and I don’t see that changing any time soon, because it doesn’t seem to be getting any better quicker. So, in terms of not just in the U.S., but globally.

Frank Curzio: Makes sense. So, Chris if someone wants to get in touch with you to learn more about this, how could they do that?

Chris Willis: Well the best way is my email is, Christopher.willis@latitudeworld.com. You can also go to our website, which is latitudeworld.com, and all my contact details are there. But that also gives you a full breakdown of all the programs. We have a lot of videos, we have a lot of collateral on there, so you can do some research and see which program might be best for you. And then what we’ll do is we’ll just arrange a consultation, understand the needs and then we can start seeing which programs could be best suited to somebody.

Frank Curzio: Well, Chris, thank you so much for coming on. I mean, give us some knowledge about this industry that few people talk about. I really, really appreciate it taking its time and hopefully, you’ll join us again soon.

Chris Willis: Yeah, Frank, my pleasure and like I said, as you touched on a lot of people don’t know about these programs or if the option even exists. So, it’s wonderful to be able to share a bit of what I do every day with you and your listeners and hopefully it will generate some options for people who hadn’t considered it.

Frank Curzio: Yeah. But, I’m pretty sure it will. And, thanks so much for being on, Chris. And, we’ll definitely chat soon.

Chris Willis: Thanks, Frank. Meet you again soon.

Frank Curzio: All right guys, great stuff. Hopefully you liked that interview. I understand when it comes to Chris, he’s great at what he does. I understand it’s mostly for the rich elite. I do have fund managers, doctors, credit investors that tune into this. But, this interview wasn’t just for them, or to generate business. Again, I don’t get paid by anybody. It’s for you to get a better understanding of the behavioral shifts taking place because if you understand that you’re going to realize that you’re not in a bubble. It’s going to influence numerous industries, just something like this what you’re seeing, more rich people leaving cities. There’s so many different ideas so many companies that are getting impacted by this. Sectors, individual stocks, and that’s what you need to pay attention to. That’s how you make money in this market. So, let me know what you thought at frank@curzioresearch.com, that’s frank@curzioresearch.com.

Frank Curzio: Now, let’s get to our educational segment where I’m bringing in Daniel Creech. Daniel what’s going on man?

Daniel Creech: Hey, man, a lots going on. Lots going on this week. It’s Wednesday, and it feels like a Saturday already for crying out loud.

Frank Curzio: I know. I know, and you know it was amazing the news flow that we saw walking in Monday, just the M&A especially, but I was told by so many technical analysts a week ago to sell, and this is for real, and the market’s going to come down and now these same guys are on T.V. saying, “You need to buy. You need to buy,” as the market goes up, which is kind of funny. But, I think the big topic here, even though I was going over it, is how we’re not even close to being in a bubble if we compare this to other times even from a valuation standpoint, trading at 25 times forward earnings compared to 44, 45 times during the dot com peak.

Frank Curzio: But, there’s a lot of positive things going out there, and it’s not just the MNA deals, which we’ll cover in a minute. Nvidia buying ARM holdings, Oracle, TikTok, Gilead Sciences, Immunomedics. I mean, some monster deals out there, all announced this week. But what are you hearing out there in terms of sentiment because my argument has been that we’re not even close to being in a bubble, and as long as we’re continuing to see this growth within these names within these industries, it’s going to continue.

Daniel Creech: Yeah. With regards to the bubble, I think we really have to separate the crowd from the individuals. You know, much like what we do in our newsletters and stuff, but you can pull out top headlines about hey, the FANG stocks make up a certain percentage of the S&P 500 and the Russell 1,000. I think it’s what is it? Is it 24% of the S&P 500, give or take, is the FANG’s?

Frank Curzio: The FANGs plus Microsoft. Yeah. It’s like 22 to 25% at the minute, I think.

Daniel Creech: Which is a lot and so we basically not to ask for a pat on the back, but we basically do the same thing every day here in research and figuring stuff out and trailing the markets. So, it’s funny because we’re talking through the office walls here and Frank brings up that Nvidia 40 billion dollar deal which we’ll talk about in a minute. But, I lean in and I said “Hey,” I said, “Who would have thought somebody’d do a six billion dollar deal?” Of course six billion dollars is nothing today. I say that laughing because we just throw money around like crazy, not only in stocks valuations, governments, whatever. But, I just yelled to Frank, “Hey man, who would have thought a six billion dollar deal wouldn’t even have got any news?” And, Frank’s like, “What are you talking about?”

Frank Curzio: I didn’t even see that deal.

Daniel Creech: Yeah. Yeah. Verizon bought Tracfone for six billion dollars, no big deal. Nvidia’s got the headlines with 40 billion. Frank comes back and says, “Yeah, but the best news of the day for me is Pfizer.” I’m like, “What the hell did Pfizer say today?” So, basically we got everything going on. But, to come back to the bubble just to play devil’s advocate thing. So, Mr. Curzio, biggest semi-conductor deal ever right? 40 billion?

Frank Curzio: 40 billion. At least one of the biggest, but I do know that there’s no way this is going to get approved. There’s no way this is going to get approved. It can’t get approved. It’s going to create a new monopoly in processing data center. People don’t understand that. I mean, even the semi-conductor people, they’re starting to complain about it, now, but this is going to be created in year one. There’s a reason why Nvidia’s stock, they added 17 billion dollars of market cap after they announced this deal where you usually see when a company announce they’re going to acquire someone, they’re stock gets hit. You don’t go up five, six, seven percent. But, if this deal goes through, Nvidia could double from here. I mean, they are going to own, they’re going to be the biggest AI computing platform in the semi-conductor industry. They’re going to own it. They’re going to be able to command their own prices. I would be surprised if this deal goes through and it could.

Frank Curzio: I didn’t understand why SoftBank. I mean, maybe, people are saying they’re desperate out there, they’re in trouble. But, tech did bounce back a little bit, because they were bullish on tech when it fell 10% in a week or two ago. But, they should be doing this for 50, 60 billion dollars. They’re doing it for 40 billion. So, I don’t know what they’re getting. Maybe they’re getting money under the table. Maybe they’re getting their executives have going to be there for 10 years as a consulting agreement. Whatever it is, but selling this for 40 billion dollars is a joke. That’s why Nvidia surged. But, to see this deal. I mean, and you mentioned the Verizon deal was under the radar, but you didn’t even talk about what the Pfizer news was because, to me, the Pfizer news is a big deal because all of these vaccine companies, they all came together to say, “Hey, we’re not pushing this. If we get a vaccine, we get it, but it’s going to be based on safety.”

Frank Curzio: And, I do a lot of research in this sector, and Pfizer I believe is going to be first to the market. They’re going to be first to the market with their vaccine. And, the CEO came out and said, “We’re basically going to have a vaccine by the end of the year.” Not that anyone under 40 should take it, but sentiment wise, even for older people, that’s going to be a pretty big deal. That along with all these deals, I mean, look at TikTok. We looked at Gilead Sciences to acquire Immunomedics. And that’s a 21 billion dollar deal, and that was like the third largest of the day that was announced on Monday. I mean, how crazy is that right?

Daniel Creech: Yeah. And that was Monday, because guess what today has already taken place with the newest IPO? Have you been following Snowflake at all?

Frank Curzio: I know. I keep following it, how they keep raising it and raising it and raising it.

Daniel Creech: I don’t think it’s trading yet, but it went from 70s and 80s that it was supposed to be priced at to over 100. And now, I think it’s set to open at over 200.

Frank Curzio: Is that really?

Daniel Creech: Yeah. I just saw the headline for it before I came in the studio.

Frank Curzio: I didn’t even see that yet. Oh man. Holy, that’s amazing. Over 200? That’s bad for the investment bank. That means they really messed up.

Daniel Creech: Yeah. It was priced in over 100, but I was trying to take notes and everything was just changing, but it was hilarious because so cloud data computing, data analytics, obviously that’s where everybody wants to be with work from home everything being pulled forward. But, the crazy thing there is Berkshire Hathaway and Salesforce.com are backing this. They each bought 250 million in the private placement. So, you get a headline like that and think Buffet and his managers buying more growth set companies. That transition of allocating capital is going to be, but man you throw those guys behind something, and I can’t wait to watch that thing trace.

Frank Curzio: I’m looking at it, right, and in 2018, it raised 450 million bring their valuation to three and a half billion in 2018. I mean, we’re talking about October 2018, so less than two years, less than two years. Now, at $120 a share, which they’re coming out at. But you said 200, which I didn’t even see that yet. That’s incredible.

Daniel Creech: It’s going to open.

Frank Curzio: Yeah. It’s going to open there. I mean, you’re looking at 120, to $33 billion valuation. If I knew it was opening at 200 and I owned like 30% of this company, I’d sell like 25% right here. If it’s going to open at 200. It can go to 250, 275, but that’s insane. I mean that’s insane. We all know the fundamental, we all looked at it, even the investment bankers looked at that, and for them to be this wrong, on pricing something this big, that it could have come out at $200. Holy cow.

Frank Curzio: But, yeah. It’s interesting. We’re doing this around 12 o’clock. And, we did this in the middle of the day as close as we can to being in real time, but let’s see how it opens. Who knows how it’s going to open over the next couple of hours, but I had no idea. And, then you looked at today also home builder sentiment. I mean, for those of you that own a house in your neighborhoods. The value of my house, someone across the street sold their house just a week ago, and the value of my house is up probably about 20% over the past nine months. 20%.

Frank Curzio: We have more square footage. We have a nicer, I’ve seen their house. I think ours is nicer in terms of the spacing, the outside, the back yard and stuff. We have a pool, and it went out. It’s fetching 20% more. So, home builder sentiment. You saw it right, Dan? I mean, we looked at Toll Brothers. We looked at Lennar. We looked at them, but now the sentiment comes out, it’s pretty crazy.

Daniel Creech: Yeah. And that throws CNBC under the bus here a little bit, but everything has to be clickable on the headlines. So, I understand that, but everything turns into, “Oh, well is this a red flag? Or, these all-time high sentiments and stuff.” But, when you look at what’s driving the sentiment behind it, it shouldn’t surprise anybody. We’ve talked about it, I think you talked about in your opening on home builder sentiment, dollar stock club last week, we threw a pick out there for playing the home builders. You know. When you have basically zero interest rates and a demand for people that make a lot of money, they can now live anywhere they want in the country… That’s going to be a huge, huge path going forward, and I don’t understand why… I don’t look at that as a sign at the top. I look at that as a trend and more of a confirmation than anything else.

Frank Curzio: And, it’s a good segue into what we saw on T.V., which was Chad Smith is one of the greatest technology investors. He’s amazing, incredible. I told the story that he was at an investment conference. I don’t know if it was Seeking out something. I forgot what it was. Very famous investment… It might have been IRIS own conference. And, he went up there and said Amazon’s going to have a three billion dollar valuation when it had less than I want to say about a $350 million, a billion dollar valuation. So, he said it’s going to be three trillion. And, David Einhorn went up there after him, and basically made fun of him. And, said, “Yeah. I’ll take that bet. You have no idea what you’re talking about.” And this was about seven, eight years ago.

Frank Curzio: And, I know his performance has been a bit better lately. But anyway, but now he came out and he’s backing a company called Opendoor through a SPAC. Pretty interesting, guys, because I’ve been talking about security tokens for how long saying this is a better way to bypass the system where it’s better for investors. It’s better for issuers where it costs a lot less. Now, we’re going to go free trading in a couple weeks on a global exchange. Going to be the first token in the world to go free trading on a global exchange. It’s going to be available to retail investors, mom and pop investors. Very proud of that. Almost done, very, very close, but SPACs is something similar. Chamath was going over that, I love the fact that Andrew Sorkin put his feet to the fire when he was asking him about fees, because he said, “I put $100 billion into it.”

Frank Curzio: And he was like, “Well, what are the fees?” “Well, it’s 10s of millions.” “Well what is 10s of millions?” And, Andrew kept pounding it which I was surprised because they’re sponsoring their Delivering Alpha Conference and Chamath is going to be one of the biggest speakers. And he was just kind of going after him and he wouldn’t let him off the hook, but the amount of fees that they’re generating, still, that’s why security tokens I think it’s just a matter of time before it goes crazy.

Frank Curzio: But, I wanted to get your opinion about that. I know you’re familiar with that deal, and SPACs in general, but that was pretty crazy. I just fixing to get on T.V. and they get ripped a little bit. It was interesting.

Daniel Creech: Yeah. I think I’m going to come to the defense of a multi-billionaire who needs it.

Frank Curzio: Yeah. Yeah.

Daniel Creech: The only thing bad about Chamath, and I’m probably butchering that because I’m in the middle of researching this guy a lot more just because I know his track record and stuff. I mean the guy’s a partial owner of the Golden State Warriors NBA basketball team. But, I do say, he didn’t answer the question. He didn’t answer the question on fees which to come to his defense, he probably doesn’t know, because there’s probably incentives.

Frank Curzio: He was saying he wasn’t sure.

Daniel Creech: Yeah. And, I’m halfway joking with that everybody. Of course, I don’t mind the guy getting paid. If he’s doing something where like I hate the idea if they’re selling it as a cheaper better way to help everybody, and then they’re back-dooring all these ridiculous fees. We’ll have to dig through a bunch of filings and such nature. So, I don’t have any problem with anybody making money. I know Frank doesn’t either, but it was interesting how he did dodge that question.

Daniel Creech: The other thing to me about it with the Opendoor thing, is it’s a billion dollar deal. I don’t know how many group of investors he has, but the cool thing is that Wall Street is changing. So, to Frank’s point about the security token industry, I think it’s great to see Wall Street go away from the typical Wall Street IPO. Obviously COVID cuts down on traveling, but these SPACs special purpose acquisition companies, reverse direct listings we’ve seen kind of pick up some steam. So, I think that change from a macro level is great. And, I think it’s only going to lead to the security token… we need to get Chamath on the security token path is what we need to do.

Frank Curzio: Yeah. I know. That would be nice. I think it’s just a blip on the radar for him where he could probably take money out of his pocket and buy the whole industry, but that will change just like it changes in a lot of industries. But, he is an incredible investor, and I’m a big fan of his too. I mean, just he never really tears people apart and I’ve seen him get tear apart so many times and he’s been right so many times. And, this guy has a knack when it comes to technology knowing what’s going to work time and time again. And, you don’t see him have a lot of losers.

Frank Curzio: We all have losers. I could name a lot of losers for a bunch of great smart people out there, and they have many more winners than losers. I don’t see this guy having too many losers. I haven’t seen it, but he’s just into the right companies at the right time. Remember SPACs are different from IPOs, where if you’re looking at this IPO, when you’re talking about Snowflake, it’s coming out if it comes out at 200 it’s going to be what 160, 170 billion dollar plus valuation.

Frank Curzio: These companies are pooling their money together with SPACs and saying we’re going to buy a company over the next 12 months. And if we don’t you get your money back. Over the next 12 months, we’re pulling our money together. We’re basically, we’ll take over a company, and it will just be a holding company on the exchange, the New York Stock Exchange or whatever it is. And, they’ll find a growth company and take it over. If it happen to be Opendoor, and then boom, they just take over the whole entire company incorporate everything and it happens much, much faster. But this is a way where you can get into these companies at a much earlier stage than buying the Snowflakes where it is. So, there’s a reason why Goldman Sachs… All the investment banks are doing SPACs now. And pretty soon, all the investment banks, they’re going to be doing security tokens, as soon… Because, all the infrastructures there.

Frank Curzio: We’re seeing tZERO light years ahead of everything, but there’s one more subject before I let you go, Dan, I want to talk about because we’re looking at the banking sector, not everything is great, guys. So, we’re seeing this shift. Right? The behavioral shift I talked about in some industries to other industries. And banking is getting smoked, traditional banking. The Citigroups, the JP Morgans, Wells Fargos, not the Morgan Stanleys and not the Goldman Sachs, investment banks that make a fortune off of trading and liquidity and volatility. These companies are linked to interest rates, and when interest rates are really, really, really low, that hurts them in their interest margin, and they’re going to stay low for a long time. And now Citigroup is a company that used to be in our portfolio…

Frank Curzio: We sold at a great time before all of this nonsense. We sold a lot of our stocks in February before the market crashed due to COVID. I love Citigroup, because they were buying back their stock and raising their dividend to the point where they were going to buy 60% of their float, meaning they didn’t really have to do anything. Just have earnings stay the same, relative, and you’re looking at a company where you would see this grow tremendously. I mean, this is share prices will grow tremendously, because you’re just taking all those shares off the market. Now that you no longer have to do this, the Wall Street Journal also reported the company could get reprimanded for failing to improve its risk management systems. And, we’ve seen a major sell off in Citigroup and the financials in general. They just refuse to participate in any kind of rally we have, right?

Daniel Creech: Yeah. What kind of move is that? You let the next CEO take over and then the headline comes out about how you might get fined and the government’s even more pissed at you than they were moments ago.

Frank Curzio: So, she took over and then she…

Daniel Creech: And I apologize. I don’t have her name.

Frank Curzio: Yeah. No. But she…

Daniel Creech: But, it was a big deal. I mean, they named a new CEO and then bam, you get all this, and then the stock drops 10% in two trading sessions give or take.

Frank Curzio: I mean, so basically, she takes the reins and then she’s forced to let people go, and then you’re seeing the stock really, really get hammered. So, it’s just really, really crazy. I mean, Jane Fraser’s the name, and then you have Michael Corbat, who’s been there for a while. A very, very smart man, who’s now doing personal things and stuff like that. But still when I look at Citigroup and I see this thing come down so much… I mean, to me it looks like Wells Fargo, Bank of America?

Frank Curzio: I mean, what about their risk management systems? But, it is interesting guys. That’s what this podcast is about today is about this behavioral shift we’re seeing and it’s going to result in some sectors doing great and other sectors doing terrible. The ones that are doing great, they’re seeing tremendous, tremendous amount of growth. And, for people to say that’s in a bubble like that’s not going to continue, they’re crazy. We only have 16% accounts for eCommerce sales when we’re looking at the total retail sales over five trillion in the U.S. annually. It’s only 16%. And, it went from 11 to 16%, and that’s going to stay very, very high now I would think.

Frank Curzio: And you know there is these major shifts, right Daniel? I mean, you’re looking at a lot of things we talked about here, there’s going to be clear winners, Gilead Science, Immunomedics, biotech, healthcare, but then you do have the banking sector and even commercial real estate in some of these REITS that don’t look too good.

Daniel Creech: Yeah. Two quick things on that. For us, selfishly, it’s going to be great to see separation. I mean, we have newsletters, we’re stock pickers, so we want to try to do the homework and figure out “Hey, this is going to help this group of companies, such and such businesses, and we want to ride those trends.” The interesting thing on the finance for the banking industry is from your major shift from your traditional banks like Citigroup, you talked about to the trading banks like Goldman Sachs.

Daniel Creech: This volatility, this environment, should be great for them going forward. So, if you have a solid company especially as an investment and you believe in the management team, you want them to have the stage of opportunity. And, if you’re Goldman Sachs, you’re investment bankers. You’re trading. This is your opportunity to perform. I mean, you want this. You want volatility. You want a lot of things moving. So that should be good for them. The other thing real quick is through stock screens and just insider buying, you can look at insider buying on FINVIZ. I know Frank uses that a lot. It’s a free site for everybody out there.

Daniel Creech: But, there’s been a lot of insider buying on regional banks. And, I don’t mean a lot of insider buying as in money amounts. Some of these are 50,000, $150,000 purchases, not that that’s nothing. But, what I think interesting is the amount as far as the frequency. There’s a lot of insider buying as far as transactions go. And what’s going to be interesting to dig into that is that regional banking’s in certain sectors. If you’re in the Midwest, if you’re on the coast, you want to look at exposure to flooding, fires, all of that kind of stuff. Where are their loans out? Are they agriculture? Are they oil and gas? But, that will be something. I mean obviously banking is a huge part of the economy. It will transition. It’s not going away. But, those are couple of things that are really going to be good on the path going forward.

Frank Curzio: No. I love that. I love that idea too, and it’s good that you saw that. I didn’t see that. But, I would look when it comes to the regional banks. Look at the ones that have a lot of exposure of real estate which is completely booming right now. And, I bet you that’s where you’re going to see a lot of insider buys, because I’ve covered regional banks before and some have leverage to very, very high profile areas, whether it’s New York or New Jersey, California, just different places in California. But, just where you’re seeing huge demand, especially in states I would look at regional banks in states that have no income tax. What is it six or something I think what we saw? Right? I’m not going to try to name them I don’t think. We could try to name them and mess it up completely. I think it’s Florida, Texas, Wyoming…

Daniel Creech: Nevada.

Frank Curzio: Nevada. I think there’s two more, but I don’t…

Daniel Creech: Utah? Utah’s…

Frank Curzio: No. Not Utah. I don’t think it was Utah. I think it was something on the East Coast though. It might have been Virginia or something. I don’t know, and then there was another one.

Daniel Creech: Oh. Tennessee. Not on the East Coast, but I think it was…

Frank Curzio: Was it Tennessee? I don’t know.

Daniel Creech: Subscribers will listen and…

Frank Curzio: Yeah. So we mess up sometimes.

Daniel Creech: Yeah, you know, email and tell us how terrible we are.

Frank Curzio: So, guys, let me know what you think about this format. I want to really break down the news. There’s so much going on this week was incredible in terms of how many deals and SPAC announcements. There’s just so much news flow. And, I love giving you the opinion that we talk about every day. When I walk into the office and Daniel and I just shoot the shit, talk about all of the stories and everything. And, I just thought that would be pretty cool to really have this, be taping it, you guys listening to what we’re thinking almost like on a daily basis because all this stuff happened in the last two days three days. So, let me know what you thought of this segment, frank@curzioresearch.com. And Daniel, thank you so much for joining us, bro.

Daniel Creech: Hey. Great to be back. See you soon.

Frank Curzio: All right guys, so look, that’s it for me. You want to see more of me, unfortunately if you want to see my face which I know a lot of you probably don’t want to do, and you like the voice instead, but if you do Curzio Research YouTube page, we’re going to start videotaping all of our segments, our whole podcast. We’re almost there. Really excited. Getting some backdrops in, but it’s going to be really, really cool, and even guests, we’re going to try to get guests in-house and everything. And, you’re going to see more and more guests, like Chris, new time… New guests that just can provide different perspectives of different things. This way we all learn so it’s going to be really, really cool going forward.

Frank Curzio: Also, feel free to follow me on Twitter. Trying to be a little edgy, but you can tweet me @FrankCurzio. And last thing here, I’m getting lots of requests for our Curzio Venture Opportunity promo. And, there’s a reason why, because you see how bullish I am on stocks, how it’s great, I’m telling you guys to buy on pullbacks. But what I’m seeing small caps in the industries that I’m talking about, they’re seeing the behavioral shifts.

Frank Curzio: There’s a lot of names that haven’t participated, and you’re starting to see a lot of money pour into these names. Their transferring their businesses, transforming their businesses. They’re lowering their costs tremendously, so they’re more efficient now. And, they’re going to more online operations. You’re seeing demand from the last quarters because of COVID they’re still down 30, 40% off of their highs. We just recommended three of them. We’re up on all three. However, they’re still below their buy-up-to prices.

Frank Curzio: So, you’re going to see a lot more recommendations. I’m seeing a lot of great, not the whole Russell 2000 index is going go up, but there’s a lot of companies that are growing much faster. Twice as fast as the overall market that are not that expensive, trading below the average in multiple for the Russell or the S&P 500. So, I’m really excited about this, seeing lots of names out there.

Frank Curzio: But, if you want to take advantage, we’re not going to have that promo up. We don’t sell this often. It’s a six percent discount. You got to our website, curzioresearch.com. Again, we try to offer the best deals for you guys. Love you guys, and we only sell our products when I think it’s a really, really great time to buy them. And, there’s a lot of names that are under a buy up to price that I really like and you’re going to see a lot more names come in, because I’m screening and you’re seeing dozens. Dozens and dozens of names come on my list over the past month actually, I’ve had more ideas than I’ve had normally for this newsletter, where, sometimes it’s difficult to find them.

Frank Curzio: But now, even if you’re a subscriber to it, you know I’m talking about when I do the videos and you’re seeing just insiders buying these stocks off their highs. This is really a lot of really good stocks out there, small names that you’ve never heard of that have tremendous upside potential still well off their highs. So, if you want to take advantage of that, again, it’s 60% off. We’re not going to do that for too much longer. So, if you want to take advantage, get a lot of questions on it, again, you can go to our website at curzioresearch.com. So, guys that’s it for me. Thanks so much for listening. Really, really appreciate all your support. And, I’ll see you guys 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.