This transcript was automatically generated.

00:02 – Announcer

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

00:16 – Frank (Host)

Let’s get out there. It’s May 22nd. I’m Frank Curzio. This is the Wall Street Unplugged podcast, where I break down headlines and tell you what’s really moving these markets. So, on today’s show, target falls 10% on earnings. Should you be buying the dip? Why crypto is no longer just a Bitcoin story as a sector rockets near new highs and can NVIDIA possibly shit the bed when they report earnings? Today after the bell, let’s bring in my buddy, Daniel Creech, senior research analyst and Curzio Research co-host of the Wall Street Unplugged Premium podcast. Daniel, what is going on, buddy?

00:56 – Daniel (Host)

I’ll tell you what’s going on for happy birthday, happy late birthday, Frank, total disclosure. You think, after working with this guy for several years, I would remember his birthday, but I didn’t. I thought it was today, not two days ago, when it was actually your birthday. So, happy late birthday.

01:12 – Frank (Host)

I did bring a peace offering though, hey, to make you feel even better. It was four days ago, the 18th. The 18th is the birthday, yeah.

01:19 – Daniel (Host)

See, I thought it was the 20th.

01:25 – Frank (Host)

Boy, that’s good to take a live. So all subscribers, yeah, if I gave you a good pick, just remember that’s my birthday. Give you my Curzio address.

01:27 – Daniel (Host)

Are you sure it’s not the 20th Frank, Because I had it written down you forget at my age, right, when you hit 35, yeah, right, so you start forgetting. But I never thought I’d lie about my age and be younger, but 52 is not bad.

01:40 – Frank (Host)

But yeah, no, I really appreciate it, thanks. And I was in bed because I’m still under the weather a little bit. So I was in bed. I was pretty sick. I don’t know what it is, it’s just like it’s cold, but I have phlegm all in here that you cough. So I feel much, much better. I mean, I was really weak. I don’t know what it was. But everyone, I want to talk about something that’s very serious. The most serious topic ever, daniel ready for this, is the Preakness was won by Seize the Gray. For someone that doesn’t really talk about horses that much, you have an interesting story about this. What was it? 15 to 1. It went off at.

02:17 – Daniel (Host)

I think it was 15 to 1s, and I have a friend of mine at a cigar lounge that I frequent often. He is a fractional owner. He bought some, bought a share or shares in the horse and it won one of the how do you say it, Frank?

02:28

Not the Kentucky Derby, but one of those races one of the three legs at the door to get into this race this last weekend and he won wire to wire. He was leading the whole race. I don’t think that matters on the odds or anything in horse racing, but it was cool because I know a few people that bet on his horse, sees the gray and, uh yeah, kudos out to my buddy mike who getting mailbox money off that now right, yeah, I mean, look, it’s triple crown.

02:49 – Frank (Host)

This is the second leg of it. The third leg is always at the belmont. But the belmont, which is in new york, which I’ve been going to since I was probably like seven with my dad, uh, they’re redoing the whole stadium to make it kind of like the kentucky derby, the whole inner circle and everything. So the next next two years probably going to take three years. So instead of having it there this year, they’re having it Saratoga and actually going to shorten the race which actually you brought up. I was surprised. It’s usually a mile and a half. It’s going to be a mile and a quarter, which changes dynamics. Not a big deal this year, but if there was a winner of the first two and this the triple crown winner, would have won the third legisk there, because that’s a really big deal. Yeah, because you know it’s so hard to win these three races one horse because of the distance. Usually you have speed or distance and if you shorten in that distance it’s kind of like you know it’s not as fair and that’s a big deal. A quarter to a half. But just to bring this up, when you said he has a stake in it. I look to see how many people. This doesn’t happen often when usually you have a couple of owners or whatever. Not like this.

03:43

So when they brought this up and I looked it up, there was 2,570 investors and they paid $127 each for 5,000 shares. So they made about $700 each on the win, based on, like it’s, a $2 million purse. I did the job. I could gets even 10% to 15%, but it’s around $700, but not, you know. Again, $700, whatever you paid 127,. The percentage rate of return is great.

04:12

You know you might be saying no big deal. However, now that he won one of these races when he put this thing out for stud, you’re talking millions and millions. I mean this thing could be, you know, 20, 30, 40 millions in value, right? So over the life of however long, you know again, they paid $635,000 for this horse. One horse was $2 million, right. So sometimes they go a little bit lower and try to breed in the house and stuff like that. So it was pretty cool to see this. I wonder if this is going to start a trend. My best friend just bought into one of these things as well and I think it’s like 25 people and he’s racing his first race next week, so this is like a new trend in horse racing where everyone could really participate, which is pretty cool.

04:47 – Daniel (Host)

And it’s fun because it just shows the fractional ownership in any type of asset which you’ve been on for a long time and we think the future is bright around that? Yeah, absolutely so everything from stocks to horse racing here. How about that?

04:57 – Frank (Host)

And speaking of assets, most important stock in the history of the world. Important stock in the history of the world. Remember, it used to be Apple, it used to be Microsoft, it used to be Netflix. Now it’s Nvidia by far. They report after the bell. They’re expecting earnings per share of $5.60 and $24.5 billion in sales, which probably means nothing to everyone out there. That’s just for the quarter.

05:14

But there’s a couple of things I want to mention here because it’s pretty freaking crazy. One is option pricing. Right, based on options, it’s pricing in a 9% move in either direction. Okay, so NVIDIA is such a big company $2 trillion I always say billion now because I can’t believe it’s trillion. I made the same mistake in my video yesterday. $2 trillion valuation. So say you’re looking at $200 billion, a little bit less than that of a market move. That’s what the options are pricing in on the print, basically. So, to put this in perspective, the $200 billion is a little bit higher than the market caps of McDonald’s or Disney. So, looking at it that way, in a matter of seconds that’s like McDonald’s either doubling or Disney doubling, or them going to zero in a matter of seconds. Just to put in perspective the numbers behind this. That’s what the markets are pricing in. I don’t think there’s a firm on Wall Street that hasn’t raised this number considerably in target price over the past two weeks. Daniel, do you think that they could actually meet these expectations?

06:19 – Daniel (Host)

Yes, and the only reason I think they can meet these expectations is because Stanley Druckenmiller, who I respect like crazy my favorite hedgy guy, even though he trimmed his position, I believe, from the 13 Fs he has long been on the camp that, listen, this is not a bubble and AI is not a bubble in general. There are pockets, of course, and bubbles all the time, but this is one of those trends that don’t just last a few quarters, and we’re not, you know, okay, this is a year in, that’s four quarters. We’ll see how that goes, but I just think the guidance is going to be more key. And what you hinted at earlier, I would love to see a pullback across the board just to give us some entry points into some other stocks. But, man, if their guidance is strong, it’s NVIDIA’s world and we’re all just living in it, Frank. So, but yeah, I do think I don’t. I don’t expect them to come out and lay an egg, which that puts me in the camp of no, nobody.

07:10 – Frank (Host)

You know, I think that the stock’s going to fall today. Maybe I should look at tomorrow.

07:15 – Daniel (Host)

Or you think it’s going down today before.

07:16 – Frank (Host)

Well you know as soon as they report.

07:18

I mean the expectations are so high and it’s different this time. I made that mistake when I was at 300. But you know the numbers that came in were insane. I think they were expecting like 9 billion. They said they’re gonna come into 12 billion, which is the greatest increase in a quarter. That seriously in the history of the markets and that’s a fact, right? So you’ve never seen something like that ever, that type of growth. Now you’re at the point where analysts have raised estimates so much and I’m not saying it’s going to stay down. I think it’s going to be a good buying opportunity because the catalysts that are coming up for the future in this the Blackwell chips I’ll get to in a second, not to get too technical, and I love saying this because the time you listen to this it may be like, right, when they report. So you could say, Frank, you’re an idiot or not. So I like doing that predictions out there and then you can make fun of me tomorrow. But I think it’s going to go down.

08:09

Just to understand the growth of this company, right? The upcoming quarter is expected to report growth of 242% year over year. Okay, we’re not talking about a small company here. That 242% is crazy enough. But three months ago, after they reported, do you know what the growth was expected for this quarter? Well, under that 197%. So call it 50, increase of 50%. Okay, in the past three freaking months, guys, you don’t. I mean, I can’t put that in perspective Right now. A company would die If their growth, sales growth, is supposed to be 5%. If they could increase that quarter over quarter and the expectations of 5% and they come in at 7% growth, they are throwing a party. They’re throwing a freaking party Management. Oh my God, this is a great quarter. This has been increased by 50% in the past three months. You’re looking at these numbers going holy cow. I got to tell you the story isn’t going to be so much on these sales. It’s going to be guidance because people are worried, amazon’s halting orders because they want to wait for the Blackwell chip to come out, which makes sense.

09:12

People might look at that as a negative. I think that’s a positive, since it’s like going to be probably over 40 grand, maybe 50 grand for that chip, but their listing is 30 to 40. But even the parts and the components you’re talking about 50 grand, it’s going to be a lot more than their current chip, which is the H200. To put it in perspective not to get technical that the H100 chip, which most people have, the whole world and AMD are trying to catch up to the H100. They’re selling the H200, and by the end of this year they’re going to start selling the Blackwell, which is light years ahead of anybody else.

09:41

So if anyone says that they’re an AI player, they’re going to make chips to compete, I get it. They’re going to report 77% margins. To put this in perspective, intel reports 41% margins. Right, and this is, you would say I remember people used to call this industry commoditized, right? So with those kinds of margins, you’re going to have people coming at you. It took 10 years for NVIDIA to build to what they have right now, which is the software around these chips in every single industry. I think they’re going to report.

10:10

I think the guidance might be maybe a tiny bit light, lighter than expected, or maybe meat, but it’s not a person in the world doesn’t think they’re going to blow out these numbers. So for me and I’m playing the quarter, because during this quarter specifically, what do we see? Companies with high expectations met those numbers, or raised a little bit and got hit. We’re going to talk about a name like that in Target, norwegian, another one, several names, microsoft, right and then the numbers that have very low expectations, that were already hit, came in with estimates like Tesla, which weren’t too great, but the stock surged because the expectations were so low. So it’s hard to have a high expectation stock and beat those numbers and the stock go even higher. But I think, off the print, I think we could see a little bit of a pullback here.

10:54

But the Blackwell chip guys and the growth that you’re going to see for the next 18 months from this company is incredible. As a trade, I would bet that it’s going to go down and then you’re probably going to see buying over the next week or two. And we’ve seen that in the past. I think November when they reported the stock went down. Then it went up like 90% into the next quarter. But I would. I just I’ve never seen a company with this high expectations.

11:15

Every analyst has a buy rating on it. They all raise their estimates considerably. Obviously they know management well. They’re putting out numbers there. But it’s going to be pretty incredible it really is to see this quarter and see the growth and this is what’s driving. This is what pulled the market out of that 2022 bear just horrible right in 2022. This is what pulled it out. It was NVIDIA and it’s still driving the market because everyone’s feeding off of AI right now. It’s going to be interesting. Look at the numbers. This is something we don’t see in history. Often, a company with this kind of growth that’s controlling, near monopoly on the biggest trend we’ll see in a generation that everyone’s dying to get into and just trying to create anything they can, even if it’s good. Dollars in free cash flow, spending a ton of this all to Nvidia to buy the next generation chips and software. It is pretty incredible. Enjoy it. I think the first move is going to be down and then probably going to be a buying opportunity, but we’ll see. It is going to be interesting.

12:20 – Daniel (Host)

Yeah, I would definitely buy it if it pulls back. I mean, like you said, they’re head and shoulders above everybody else and that’s not going to change anytime soon. So definitely put your trader hats on for that one if you want to no and let’s switch gears to Target.

12:31 – Frank (Host)

Target’s down 10% reporting earnings this morning. Target’s in our portfolio. It’s been a portfolio for a while. We’re doing pretty well on it. Yeah, we’re still up. We were doing well in a pullback. We held on to it long-term. This is one we bought during COVID, which just was a great play, nice dividend. I think Target’s a really strong buy in this pullback and that cuts in a portfolio. If I didn’t like the numbers, I’d say forget it. But you just saw Walmart report unbelievable numbers. So expectations were very high for Target going into this quarter and they basically reported in line slightly lower. They expected negative comps right between 3% to 5%. They came in at negative 3.7%. They maintained next quarter guidance, maintained their full year guidance. But I just think expectations are high and the sell-off is overdue here. But what are your thoughts?

13:19 – Daniel (Host)

I think you can own both. I mean, you’re right, we still hold this in Curzio Research Advisory. I don’t. Walmart and Target are morphing into these companies that you just own and forget about, because they may have hiccups here and there with quarters depending on the consumer trading up or trading down. Right now, with inflation trading down on lower cost products, these are just great boring names to me. I think they’re a good read on the consumer. I have another one I’ll get into that in a moment, but I just think that’s how you use them. I think they’re a good read on the consumer. I have another one, I’ll get into that in a moment, but I just think that’s how you, that’s how you use them.

13:52 – Frank (Host)

I wouldn’t trade these, I would just buy them and hold them, because what other game is there in town? Really? Yeah, I mean, look, you got Walmart, you got Target. I mean you know TJ Maxx and we’ll see how they report. But when I looked at Target specifically and even on the call at management, you know, when I looked at Target specifically and even on the call at management, they expect gross margins to go higher. Comps are going to be positive starting next quarter. Ulta Beauty Partnership is killing it right now. Digital sales were up year over year.

14:13

So when I see that and this pullback, it reminds me of Norwegian, which pulled back. That was in our portfolio. I was like guys to our subscribers for Curzio Ventures. I was like guys, buy this. I mean, Norwegian has never been in better shape in the company’s history. And, sure enough, just the other day they came out and raised guidance. They provided like 2026 guidance. It’s just cruises are on fire. Guys, they’re on fire. I mean so much cheaper than almost any other means of travel. You can get the whole red carpet rollout, everything first class and it would cost an average of what it costs to go to Disney World right now. Right, so you know they have pricing power and they’re just really really perfect position restructured debt, you know.

14:54 – Daniel (Host)

Speaking of sorry to interrupt, have you? I saw a commercial the other day and I had no idea that the Ritz-Carlton I’m not sure who they partnered with, what company you know? I’ve seen Disney cruises and theme cruises. Did you know that there was Ritz-Carlton cruises? Yeah, I mean, can you? You wouldn’t believe, you, you would believe, cause it’s not like the Ritz-Carlton is going to put their name on a crappy ship. The ship, the cruise ship, is just unbelievable. I mean, it’s wild, but to your point, why not get in with a great brand name in a market that is absolutely on fire? So good, call on.

15:19 – Frank (Host)

NCLH. And tough I mean the barriers of entry, I mean you know the amount of capital you need, especially in this market with interest rates where you know, okay, you build a boat or two, but five, seven, nine, I mean it gets pretty crazy.

15:31 – Daniel (Host)

Not to mention, you order a boat today and it’s going to be done in three years, probably even longer than that, right, and then, and then just to manage it, right.

15:37 – Frank (Host)

That’s what the hotels industry like. The hotels are like, managing businesses now, right, they’re like, hey, let’s make the money off the services, but knowing how to manage a boat and stuff like that and getting into the industry, it’s very, very difficult. Can’t just think about doing it overnight. But you know, get back to Target. I think it’s a buy.

15:51

On this pullback, we’ve seen this a lot with companies. I think expectations were just a little high because of Walmart. Walmart had one of the best quarters. I mean, holy cow, they blew out the consumer being resilient. But you know, it’s just that they’re spending on certain items, not others.

16:11

I love the fact that they’re actually lowering prices for, uh, on groceries because, uh, you know, over 5 000 items they said they were. I mean I just said chipotle yesterday. It’s uh. Yeah, I got a gift certificate from a family member. It was $150, I hope no. I mean it was like $20, man, it was $20 just for a bowl, you know. And with queso on the side, it was like 18 and change with a drink, and there was nobody in there. And this is 530, 545. There was nobody in the place man. Seriously, there’s nobody in the in place like the third one I saw, but prices are really getting out of hand.

16:43

It’s pretty crazy and you could see it with food where people like, look, you know, I’m just gonna cook, I’m gonna go to other places and it matters because you can get the same food at certain places. Seriously, I’m not talking about really high end to low end, but you can get like similar food at places and it’s gonna be a 20 difference in your check, I mean all over florida, depending on what place you go, and you’re not going to see a big difference in taste, which is amazing. Say, pancakes from Crackabell is cheap as hell to IHOP. You’re probably going to pay 30% more, right, seriously? I mean, okay, maybe you like IHOP pancakes a little bit more, but that’s how people are looking at it. It’s pretty crazy out there. So, target, I like. I think it’s really good, but let’s get into some of the names. We had a lot of names report here. Let’s get into Lowe’s. Right, they beat stock went up a little bit on the news.

17:30 – Daniel (Host)

What are your thoughts? I didn’t really look at Lowe’s. I did think what stood out to me was the do-it-yourself customer. They said they saw a pullback in the do-it-yourself. Did I read that correct? Yeah, Now, I didn’t check Home Depot’s, but if the do-it-yourself is pulling back, I think this is just a great stock to keep sentiment on the consumer. And the stock reacted decent, which kind of shocked me, because when I was reading through the headlines I thought, okay, this stock’s going to be way off. But it wasn’t. I’m not sure what they said on margins, but I can’t stop laughing because of the comments you’re going to make about the management team.

18:05 – Frank (Host)

I talked to you about it.

18:06 – Daniel (Host)

Lowe’s is not my stock. This is a Frank Schroeder.

18:08 – Frank (Host)

Yeah, I had a mini rant and it’s about Marvin Ellison I mean. So if you look at Lowe’s, the reason why they beat is because of buybacks and cost cutting and it’s run by Marvin Ellison, who was vice president of Home Depot for 14 years and built up his name before going to JCPenney. He basically turned that brand from slow growing but actually promising when he was there 15, 16, 17, that even Bill Ackman invested in it right To one that you know he basically bankrupted and you know you could say, well, it was on the way there and JCPenney wasn’t that good. There was a time when we recommended JCPenney. It was okay and things were turning around, things were working and he came in and some of the stuff that he did initiatives I was really deep dive into it when I recommended it. None of it came to fruition and he really crushed the company. And then what did he do? He made an absolute fortune and JCPenney shareholders got annihilated and he left in 2018 because Lowe’s poached this guy and he left on a surprise. Like it was like hey, I’m gone Bye.

19:05

In 2018, because Lowe’s poached this guy and he left on a surprise. Like it was like hey, I’m gone by. You know what I mean. And this guy made like $10 million one year. Again, shareholders got got wrecked and I was like man, it’s just these CEOs, golden parachutes, all this stuff. Whatever it did, they just make so much money, no matter what they do in performance wise.

19:16

And it took a long time for JC Penney’s again, it caught him off guard to get a new CEO. Sales and earnings were crashing and then eventually it went to shit. But since he’s been at the helm of loans since 2018, look, the stock has done well, but housing has been in this roaring bull market. You could have had basically Garfield, which is a new movie. He could be the CEO of this company and it’s going to do well. I mean housing prices everything was great.

19:39

Low interest rates from 2018 to 2022. In the beginning, I mean just a massive boom market, right. So the stock did well. Every stock would do well. You’re selling. You know, again, there’s lines out the door for people that that need.

19:50

Again, I built my house in 2021 and you know it was difficult to find. They had like so many different suppliers because they just couldn’t find them right. I mean demand was that insane, that crazy, right? So fine, you know you well, but this guy has very little experience operating a business in a tough environment. Okay, you might have been vice president. That’s not running your business. And I’m not talking about COVID, since that was a one month pullback, right. And then you had flooded money from the government trillions. Let’s talk about 2022. That’s when Fed started raising rates, right.

20:20

And then housing has been challenging. You know the home bill isn’t managed, there’s low supply and stuff, and you know there’s certain pockets doing well. You say, well, home prices are going up, but still you’re not seeing like lots of sales bills, right, a lot of this shit is down Now, since then, 2022, listen to these numbers and lows. Their revenue in 2022 is $96 billion. You know what their revenue is projected to be this year. So, $96 billion last year, what do you think, daniel? $100. Small increase $84 billion. Okay, so you’re talking a 12% decline. Sales went down every year. Earnings per share have declined, declined for two years and are expected to decline this year as well Expected to decline by another 7% for this year. Now, why is the stock holding up? Well, they do a great job buying back stock and cost cutting.

21:12

But when I look at this name, have you been into Lowe’s lately. Do you go to Lowe’s, do you shop? I mean, you have a house and stuff like that. You go into Lowe’s, you go to Home Depot. I was going to say I’m not. No, I don’t go into Lowe’s. Yeah, if you go to Lowe’s, it’s like going to one of those ghost malls in China. There’s nobody in there. There’s no. You can hear your echo. There’s like five workers in there and maybe three, four people and the place is massive. Okay, there’s nobody in there. There’s nobody in there. If you go to Saturday or Sunday, there’s hardly anyone in there. The fact that they make this work is pretty incredible.

21:46

But this is a company that’s not cheap. It’s trading at 19 times forward earnings. That’s very, very expensive. Right now, the average company trades at 20 times earnings for S&P 500, 20, 20 and a half times earnings. And yet you look at growth of double-digit earnings growth as expected and. And yet you look at growth of double-digit earnings growth is expected. And you’re looking at sales growth of 5%. Sales are declining tremendously. Earnings declined three straight years, going to decline again. This deserves a 10 multiple, 12 multiple. I mean this stock is incredibly, incredibly overvalued. If you own lows, you’re taking a massive risk here. I mean you just to me. I look at.

22:21

You know I haven’t really looked at Home Depot lately. We put in a portfolio, we did okay with it during COVID as one of the names that remained open, one of the five names. The government said, okay, only these names remain open. Everyone else has to close, which I loved. But you know why not own Walmart or Costco, you know, and they do have some exposure to housing, not as much as a pure place, but you’re not dealing with a high interest rate environment that’s going to be here much longer.

22:44

Housing is not going to get much better, guys. I mean, it’s a tight market supply but you’re not seeing like these sales. You’re not seeing tons of sales. You’re only seeing new homes being built, which is okay. That’s where these segments are doing okay. But still, even you know you’re going to see a slowdown in that eventually because they’re going to catch up with building. They’re going to catch up. They’re building like crazy and that might be over the next couple of years. But I just don’t see Lowe’s as a great play here and I’m not a big fan of Ellison or CEOs that make money when shareholders get annihilated. I’m just not a fan of that. I know you loved Macy’s.

23:14 – Daniel (Host)

Yeah, Macy’s. All I want to say on Macy’s is that is the turnaround story that keeps on turning around. If you’re waiting on Macy’s to turn around, boy, I don’t even know what the stock’s doing. Let me check real quick. It actually rallied. It’s been sideways since the start of the year give or take $20 to $22 a share. But this is a great lesson, because we spent some time going through this on the turnaround story and looking at their real estate and things. And it was. It just wasn’t a good situation. So there’s just a lot of. There’s so many carrots out there you can chase. I would avoid this one. So that means the stock’s going to rally, Frank.

23:51 – Frank (Host)

Probably Five billion dollar valuation. You’re trading a low PE. I have to look at the debt. They have a ton of debt here. So I I’m looking at it, but I mean, it’s not just looking at the debt, how much it is. I like to look at how much is due over the next couple of years. They’re probably able to restructure their debt before interest rates went higher. But yeah, it’s a name that I don’t know.

24:15

I’m not crazy about the. Not only that, if you look at Under Armour, you look at Levi’s, what are they doing? They’re trying to rely less on being in these stores and going direct to the consumer, because they’re making more money going direct to the consumer. Now, especially Levi’s. Look that stock turned around. They were getting killed and then China’s kind of coming back Eight months you’re seeing a nice rally in China and you’re seeing it even in companies and even some numbers, preliminary numbers, out of Apple, out of China, supposedly good by analysts that cover that stuff for the last 15 years saying by analysts that cover that stuff for the last 15 years saying that China sales are bouncing back.

24:43

But if you go in direct to consumer, which you could do now, right, with e-commerce, it’s really easy. It’s like you couldn’t do that a long time ago. I don’t know, I’m not crazy about Macy’s, I just see other better plays. No-transcript, if you have real estate on there, you can leverage the hell out of it. That’s why you always see these private equity guys always try to buy these crazy companies that you’re like, wow, that’s a shitty retailer, but they own a lot of the real estate and they’re going to own a lot of the stores. Now they can leverage it, build it out, cut costs and just you know Macy’s is going after to your point.

25:28 – Daniel (Host)

Because in my opinion, it’s more of an experience. It’s a nice store, they’re in nice locations and all that kind of things. But when I think about the big picture, the macro picture of the environment, you’re going to have a lot of cost cutting and you’re having consumers struggling with all kinds of inflationary higher prices across all kinds of different boards. So that’s why we continue to hone in on Walmarts and Targets and the Kohl’s TJ Maxx had decent numbers today.

26:07 – Frank (Host)

Oh, I didn’t see those numbers. Did they report?

26:08 – Daniel (Host)

Yeah, yeah, I mean they were in line and such, but the point is is that there’s so many in that category that consumers have to choose from, and yet you have to compete for those consumers through cost cutting and lower prices. That’s why I just think the lower hanging fruit. I would just keep it real simple with retail, unless you want to dive into the real estate and all that. But as Frank talks about, yeah, hedges and all that, like to talk about the real estate, and I’m not saying there isn’t value there, but A you need movement and then you need them to take action, and that does not happen overnight. So don’t feel like you’re missing the boat. They’re not going to unload all their real estate tomorrow and the stock’s going to pop. They may make announcements or they’re going to signal. That way, in my opinion, this is just a fun stock to. Just like I said, it’s like a merry-go-round, this turnaround story just keeps going on.

26:50 – Frank (Host)

Yeah, it’s the biggest turnaround story for the last 20 years. Yeah, let’s go to Palo Alto. I don’t know if you took a look at that one, but this is a name I said that you should avoid after the quarter. It was a horrible quarter. In February, the stock fell from 370 to 260. And investors decided to buy the dip and say, hey, this is one time, it’s Palo Alto, this is a great company and ran it back up to 325. And they thought it was a one-off, and that’s fine. A lot of times you see that I didn’t think it was a one-off and then they came out with earnings and disappointed again.

27:18

I’ve covered growth stocks for a very, very, very long time and when you miss two consecutive quarters, it means there’s something going on under the hood. The stock is still at 307. It’s trading at 55 times forward earnings guys. So 55 times forward earnings. You better meet your numbers and it’s not. I can’t believe this stock’s. I mean this stock could fall another 20% from here and still be extremely expensive To me.

27:43

This is a very dangerous, dangerous name to own because there’s no more room for error and it’s trading at such a high valuation. It reminds me of Under Armour. It’s always trading at 40 times forward earnings. It was just so hard to get ahead. The estimates are always so high. You always saw this growth. If you’re not able to fulfill that growth that analysts are expecting, you’re going to get hit. And this one doesn’t look like it got hit enough, because that run to 370 was huge. It did go down to 260.

28:11

But again now the investors report the dip and see this quarter. You got to be disappointed. It doesn’t seem like there’s a bottom there. They have to report blowout earnings going forward. The good news if you’re an investor is the estimates are lower right, just like Lowe’s. Lowe’s beat their estimates right. You wouldn’t think like the company’s seeing revenue declines for three straight years and earnings massive. Earnings declines for three straight years, right. Sales down 12%, earnings down even more over a three-year period. You wouldn’t think that because all you see is TV is hey, lowe’s beat their estimate right, so Palo Alto. They may lower the estimates, but they still have to manage that growth, that 55 times forward earnings.

28:46

It’s just really expensive for a growth stock that is in a prime market. That seems like it’s a one-off because a lot of other cybersecurity stocks and companies in this industry are doing pretty well. I just think there’s better names. Okay, we don’t want to cover too much. I’m going to cover some of the better names to play out of the Palo Alto, much better than that in tomorrow’s podcast, Wall Street Premium. But that’s a name I looked at and I would avoid at all costs. Still, I just don’t see why you would buy it. There’s just so much risk there just so much risk and it’s not going to get taken over at this valuation, not even close. So I’m a little worried about that name. Two quarters is really bad. Two consecutive misses in a row yeah, I’d be worried, be worried.

29:23 – Daniel (Host)

Moving on. Hey, I want to talk about one earnings. One of my favorite stocks of all time. It’s pullback. I would be a buyer of this. Pullback is Frank.

29:31

When I say get in the zone, you say auto zone. I can actually have a little pitch in my voice, even though we didn’t even practice that. That’s good. Yes, they actually. They beat earnings per share by 67 cents. That’s they actually have a rare miss.

29:44

On the revenue side. Same store comparison or comps, that’s the stores that are open at least a year, compared to last year, was 1.9%. That was very positive after last year’s 0.9%. What I want to share with you is this is a great keep, a great pulse or tone on the consumer, because we’ve recommended this in Dollar Stock Club in the past and traded it successfully. This is a wonderful company to keep an eye on the consumer and from the conference call they talk about the consumer a handful of times. But the CEO says while the do-it-yourself discretionary purchases were challenging in Q3, we continue to see a growing and aging car park. Miles driven are back to pre-pandemic levels. That’s a positive for these guys A challenging new and used car sales market and consumer that is likely to continue to invest in their existing vehicles. Well, why? Because as that consumer gets more and more stretched, you have to keep going on or you have to keep reinvesting in that.

30:38

And they talk about economic pressure due to inflation, not just in the category, not just in our category, but across all of retail and across of life. At the moment, frank, how’s life when an AutoZone guy calls out inflationary taxes? He’s talking about. The CEO of AutoZone is talking about big purchase items like tires for your car. That’s really causing a struggle for the average consumer. You know, if you need a new battery, which I don’t know if you’ve bought a new battery lately. They are Florida outrageous. I had to put one in the truck and I drive a regular pickup truck and it was a couple hundred dollars and I they’re like hey, you need a battery.

31:18

It’s only X percentage, you know you should probably replace it. My favorite question is hey, if it’s yours, would you replace?

31:26 – Frank (Host)

it.

31:26 – Daniel (Host)

I try to get them in, you know, being nice there instead of just a salesy guy, and they’re like, yes, yeah, of course, but uh, you tell, you tell a guy like me, and I’m going to have to believe you, cause I am not a handyman. Um, I do love AutoZone, though, and these guys talk about the consumer and how they’re under pressure, but that’s just going to draw them back to AutoZone. O’reilly is a great company as well. These guys, as well as O’Reilly Auto Parts, buy back a lot of stocks, and Advanced Auto Parts is just. They’re kind of like a Macy’s right now. They are falling apart. So it is pedal to the metal for O’Reilly and AutoZone. I would definitely put AutoZone on your list here going forward, especially since shares have pulled back very nicely.

32:02 – Frank (Host)

Yeah, and this is what Daniel and I do we like to look at all the earnings and then offer some ideas a little bit. But it’s more than just like looking at Palo Alto. We’d be looking at some of the competitors and then we’d really say, okay, put these on our watch list and then for Wall Street Premium, we’ll recommend one stock and throw that in our Dollar Stock Club portfolio and really go over the names that we’re actually buying and stuff. But it’s not just looking at the current quarter, it’s not just looking at Macy’s, not just looking at Palo Alto, not just looking at Lowe’s. A lot of things that are said in those quarters, like you know, going to Expedia and TripAdvisor and some of these companies talking about how cruises are killing it right now you know that’s what I take away from it, right, and looking at the cruise industry, this is their competitor saying, hey, we’re losing business to this right now. So it tells you that cruises have a ton of more pricing power. Right, they’re not charging enough if they’re already booked for 2025, into 2026, and people are going to spend more money on this thing, right, because they can afford to, because every other alternative for a trip is more expensive. This is how you find the best ideas by looking through these earnings Not necessarily for that current company that’s reporting the earnings, but they’re so broad-based Sometimes they have global and they really give you an indication. They can give you just some hints on what’s going on within the industry, which allows us to find lots of ideas.

33:16

And speaking of ideas, we’re going to move on to crypto, which is absolutely on fire. Bitcoin touched $70,000 today. I think it pulled off back a little bit, just off the all-time high. But crypto moving higher is not just a Bitcoin story. Right? I mean, you’re looking at Ethereum up 25% in the past seven days because of an increase in a percentage that the Ethereum ETF approvals are going to happen. It’s going to happen a lot faster. I’m not going to say out ofereum etf approvals are going to happen. This is going to happen a lot faster. I’m not going to say out of us two who said that was going to happen I’ll say it late birthday boy.

33:48 – Daniel (Host)

Frank, take your victory lap. I was dead wrong on this. I didn’t think it would become anywhere near approved this year. Frank took the other side of that and he’s he’s like secretary, he’s way out ahead of there. Sorry, I coughed. I didn’t hear what you say. Secretary, he’s way out ahead of there. Sorry, I coughed it in here.

34:01 – Frank (Host)

What did you say? You were right, boss, I was wrong. It’s not about right or wrong, it’s just about. So what was it? I mean, you read into this more than I did because I was looking. There’s another bill that’s going to be passed. I want to talk about this.

34:13

But in the last process right, we saw Bitcoin and I was following all the approvals and when they file right, so you got to file with the SEC and the SEC comes back and ask questions and stuff. And when you see that process going and say, hey, we need these three things, okay, we only need these two things. And when you see that process as public, now you know they’re close and we were highlighting that in our crypto newsletter. It’s why we came out with our whole event, crypto 2024. And, by the way, ethereum is in our Crypto Intelligence portfolio, one of our longest holdings. We recommended it in April 2019. Our cost base is $139. It’s over $3,600 right now.

34:49

Okay, this is why I tell you that you should have some exposure to crypto, because these are the type of gains that you could see. You may say 2019 is a little bit old, far away, whatever. Well, in December, when we launched Crypto Event, because there was lots of positive catalysts and even before that, when we launched it actually, when we said, listen, the ETFs are going to get approved and you want to be able to buy this before the halving as well, because everyone was talking about the halving. But it was a different landscape, because now you’re going to see this demand stay the half and you’re going to see this huge amount of institutions getting into this market. Allowing for what is it? $30 trillion are going to have easy access to Bitcoin for the first time and even if a small percentage comes in, it’s massive and this is a game changer. This is a fundamental change in the market of why crypto is going to go high.

35:36

Every single time I pull back this year, we said buy it, buy it, buy it, buy it, buy it, buy it on this podcast. And it’s not because we’re guessing, it’s because the fundamental, when you’re cutting supply growth in half and you’re massively increasing demand for this, you’re going to see the underlying security commodity, whatever it is, absolutely surge and that’s what you’re seeing here. But when you see, with Ethereum, ethereum in December was 2,200, it’s up 63%. So I’m glad a lot of people took advantage of our offer for Crypto Intelligence. Again, I love this newsletter because it’s a lot of work, because there’s so much shit out there, but hopefully that shit’s going to change because it’s not just Ethereum right. There’s a big bill that’s going through right now going to the floor today, a bipartisan bill, and, dan, I know you know a lot more about that.

36:20 – Daniel (Host)

Yeah, so there’s a couple of big tailwinds here. There’s a uh, leave it to our pointy shoes wearing representatives the financial innovation and technology for the 21st century act. Okay.

36:30 – Frank (Host)

Frank, you got that. That’s actually not a bad name compared to like the inflation reduction.

36:36 – Daniel (Host)

the inflation reduction, All right Now all this does is create a new regulatory team. What it really does is it takes the authority or the oversight from the SEC, the Security Exchange Commission, and it gives it to the Commodity Futures Trading Commission, the CFTC, to oversee crypto. Of course, gary Gensler, the SEC chairman, and Elmer Fudd lookalike you know he beat Elmer Fudd in an Elmer Fudd lookalike you know he beat Elmer Fudd and Elmer Fudd lookalike contest is out against it to keep his paws all over it. Now, what’s interesting here is the timing and the bipartisanship. There was another bill that was passed by the Senate and it is a bipartisan act, and what it did was and it’s accounting it overturned, it reversed an SEC crypto accounting policy staff accounting bulletin number. Accounting policy Staff Accounting Bulletin number 121, sab 121, which basically says that the banks have to hold if they hold this, it’s a liability on their balance sheet, which it shouldn’t be. They quote roughly 20% of Americans have invested, traded or used crypto, so it’s not going anywhere. There’s a Democratic memo right left all this.

37:39

What’s really the takeaway for everybody listening here is that this is why you should pay attention to politics. I was wrong. I thought the ETFs wouldn’t get approved on the Ethereum side because it took an act of a court judge striking down different things to get Gensler to approve the Bitcoin ETFs. These guys, I have no doubt in my mind and I could be wrong. This is just good timing to buy votes. You’re seeing, when you look at the Twitter, Eric, how you pronounce it, he’s a Bloomberg ETF analyst. He’s a great guy to follow. He is talking about how this is one of the biggest 180s the SEC has ever done, because the odds even from those guys were like, hey, this is basically not happening. Now it’s happening all of a sudden.

38:23

There was another incredible piece because there was the Department of Justice. On May 15th, there was a court or a lawsuit unsealed and the Department of Justice is describing Ethereum as a decentralized, basically solid blockchain tool that can’t be manipulated. They were charging people with manipulation and then their own language sounded more pro-Ethereum and pro-decentralized than not. The key there is that’s because SEC Chairman Gensler was trying to say that Ethereum was a security, which is another total flip-flop. The big takeaway here is just like the government forgiving in student loan debt, which is in the news again today from President Biden forgiving billions and billions more in student loans. This is just simply a way to buy votes coming up into an election year. We’re all for it because we’re pro-crypto. This should be a tailwind for higher prices across the board, but what’s solid to see is that you have this bipartisan act for one of the few times in recent you know, there’s no kind of agreement on the Hill, in the Senate or on the House.

39:30

Now President Biden has threatened to veto this bill that would give oversight to the CFTC. We’ll see what happens there, but, like I said, the big takeaway here is this momentum is going to continue higher. It is an election year, and that’s why you ought to pay attention to politics, because it can make you a lot of money. And, to your point, ethereum has rallied what 20% in the last 10 days or so 25% past seven days. That’s incredible, so stay long.

39:52 – Frank (Host)

Yeah, I’m a FUD thing. You can’t make me laugh because I still have phlegm down here and I cough my head off you do I feel a? Lot better buddy.

39:59 – Daniel (Host)

And that’s nothing against FUD. Oh man, I’m a fan.

40:03 – Frank (Host)

That’s awesome. So you know, look crypto, and you can’t really bring anything to market right now because there’s no rules and nobody wants to do it. Because you can meet you, you could actually bring something to the market and then the sec can come after you, or you know the ftc or whatever. You know what is it? The federal trade commission right? So they don’t really know how to regulate this industry. And now this provides a framework, which you need, and a lot of bitcoin. Like we don’t want anything.

40:30

Listen, you want this because this is how trillions not tens of billions, but trillions come into this industry. Because the things that I study, the things I’m looking at, the companies that I look at in this space, are unbelievable. These are software companies that are disrupting the financial industry, an industry that’s never been disrupted ever. It’s a boys club. No one can touch it. They have capital ratios. You can’t become a large cap bank from a small and mid. You can’t disrupt the industry like Netflix did, disrupting all media right, like Facebook did. You can’t the advertising industry. You can’t. You can’t do that in finance, the only industry that you really can’t do it in. I mean, you can even have a good defense company and actually build your market cap right. You can even do it in that industry, and there’s a lot of shit in this industry, though, and you got to be protected.

41:16

I mean, they’re looking to help protect consumers, right, so they want to require increased transparency. Digital asset institutions if there’s crypto exchanges required to segregate customer funds from their own, provide appropriate disclosures to customers. I mean, guys, this is normal stuff, right? This isn’t crazy. Reduce potential conflicts of interest in the registration operational requirements, right, you’re providing this framework. And, by the way, every exchange, right. Coinbase you’re looking at Galaxy Digital. Anyone who’s big in this industry wants this. They want clarity, right, because this way, they know how to operate, because there’s literally so much money on the sidelines.

41:53

It’s the most innovative industry ever that I still feel most people don’t understand, but, as you could see, the gains in this industry and from some of these things could be incredible. I mean, it’s often you see 10,000, 30,000 percent gains, not even cherry picking. You go to top 100, and you’ve seen this during bull markets, where maybe you see a 3X to 5X move in a mining stock, and it takes 10 years for that cycle to change. So this isn’t a cycle. This is a secular market. Now, with this demand coming in, this is good news and hopefully they’re able to pass it.

42:23

Now, what you said is interesting because Biden threatened to veto it. Biden right now is going between the people who fund his campaigns and actually winning the election right, which is normal, and people funding don’t want this right, because that’s why he’s been very outspoken of going after this industry. Surprisingly, going after this industry right and this is in 2023, right, going after the banks just unbelievable. I mean, you listen to Novographs, you listen to these guys. They’re like, out of nowhere, we’ve done everything. We’re going to the SEC. What’s saying, could we do this, could we do this? And they’re like, yeah, okay, they’re talking to them. All of a sudden, the SEC is like we’re closing your shop, we’re not allowing deposits to come in anymore. No bank can do business with cryptos. If they do, they’re going to get audited and they’re going to get fined. So all the banks shut off crypto and said we can’t do it anymore. The government won’t allow us Out of nowhere, right After they’re trying to comply. So now this puts these rules in place. But he’s in a tough spot here because let’s talk politics he’s losing a black vote. He’s losing a Latina vote. He’s losing the woman’s vote, despite being on the right side of abortion.

43:32

Again, I don’t want to get into whatever, but again, women should have the right. Whatever but women, that’s good for them. But on the other end, you have 51 Democrats in the Senate voting against the amendment to protect female athletes from keeping men out of women’s sports. Are you effing, kidding me? I mean, are you effing, kidding me? I mean, are you effing, kidding me? I mean, how are you women not? I mean, how long have women fought for their rights, for equal rights? And you have a man competing in a sport, kicking your ass when he’s ranked like a thousandth in the men’s division, throws on a freaking wig, wins and celebrates, not to mention a person that actually does that. Has to be really, really fucked up to do that. Like you know, you’re cheating on purpose and you’re going on a podium and you’re like, yeah, I want, like, imagine what type of person you have to be to do something like that. Again, it’s not calling out or transgender or anything, it’s it’s. It’s it’s that specific person to do that. But how could women compete? How is that fair? You know so. Now you’re trying to win back the younger voters by canceling student loan debt, but he may lose that vote as well.

44:38

If crypto, if he vetoes his crypto bill. Because the younger generation wants crypto. They believe in it. That’s like their thing. That’s their like. You know, hey, we hate Wall Street. You know this is our thing. We understand this.

44:50

If you try to talk to adults anyone over 45 years old about crypto, compared to talking to someone in their 20s and 30s, they notice industry and it’s hard. I analyze these companies and I have to read some of this shit three times compared to just regular stocks. When we analyze a stock, really in five minutes, determine if I should go further or not. I mean, in crypto, you have to dig down. There’s a million things to look at. Just the technologies. Why is it different? What’s the utility for the token? You know how many are outstanding. All this stuff crazy stuff. And these kids really understand this technology, you know.

45:26

So, vetoing this it’s going to come down to hey, he’s going to have a spreadsheet and it’s going to say if you do this, you’re going to get this many votes. If you do this, you do this many votes. I don’t see him vetoing this because I think he’s going to lose lots of votes if he does this, because, again, 52 million Americans have crypto in the US. They’re going elsewhere to do the business, the innovations and everything, because they’re able to launch in other places and you can’t really launch anything new here because there’s no regulation on it. There’s nothing. So this is going to provide the framework. It’s a very big deal.

45:56

Two very, very positive, positive tailwinds for crypto right now, and that’s why you’re seeing Bitcoin go to new highs and not just a Bitcoin story. Now it’s Ethereum surging tremendously 36, 3700, which is great. I think it hit 4000 recently. I think the all-time high was 4,600. But just a lot of names are going to benefit as well, as the whole entire industry goes higher, and it’s really, really good news. I’m glad we have lots of subscribers to that newsletter, Crypto Intelligence. If you’re interested, give me a shout or if you want to find out more information, just go to our website at CurzioResearchcom.

46:33 – Daniel (Host)

So, daniel, Frank, I got a fun fact for you real quick. I know it’s not just a Bitcoin story anymore and it’s not but did you know? This is Bitcoin Pizza Day, as they refer to it.

46:40 – Frank (Host)

Oh, yeah, yeah, yeah, I saw that, yep.

46:46 – Daniel (Host)

Zero Hedge put a tweet out a couple hours ago, which is hilarious, bitstein, the guy, replied and said today, a man can purchase 10,000 pizzas for two Bitcoins. Wow, but how cool is that? So, yeah, bitcoin pizza day, that’s a fun trend. But, yes, real quick Daniel’s opinion on this. The political side, the veto threat, the bipartisanship all that just solidifies the fact that crypto is its own asset class. They are fighting right, wrong or indifferent. You have to lobby, you have to fight under the rules in the environment that you’re within or you’re going to be a loser. So it’s great to see Bitcoin and crypto get some backing from representatives and also lobbying us and all that kind of thing. And, like I said, I’m not saying I like it. I’m simply saying you have to fight as dirty as your opponents. That’s what crypto is doing. That’s why it’s here to stay and, yes, buy it and make a Florida amount of money for it.

47:34 – Frank (Host)

Yeah, no, no, really really good stuff. So really good news on all that Covered a lot. Tomorrow, Wall Street Unplugged Premium, Daniel and I are going to have a new stock recommendation that we’re going to answer Dollar Stock Club Portfolio and also at least some profits in gold and silver stocks. Okay, I’m long. Gold and silver I know I talk negatively about it because I try to from my experience and how often you get you know effed, I won’t say it.

47:59

I’ll try to do a podcast where I don’t curse, so we might be the first one in a while. So I’ll tell you about a lot of stuff that’s bad within the industry and what these guys do and everything. But there’s two monster headwinds that are going to hit this sector like a tsunami I’m not kidding and it’s going to happen in the next couple of weeks. I’m going to break that down tomorrow because of the own gold and silver stocks. Please pay attention, because there’s also going to be a way I’m going to explain of how you can make an absolute fortune by investing alongside the people who really know what they’re doing in this industry. Okay, I’m going to show you able to get access to that. It’s not even through my firm. I’m not saying anything, but there’s a way to do it where you’re going to get in, where the biggest people and the smartest investors get in, because they invest a totally different way than all you people that go to conferences, who they just pitched this thing to, and you’re the last to know and you’re building it up so they can do financing and things like that.

48:47

Two big headwinds coming that you can’t ignore, and you’re probably going to see a pullback in some of these names, and it’s going to give you an opportunity. I’m going to show you how to buy these things at a great, great, great, great, great price, much better than you’re going to get the open market. So definitely listen to tomorrow’s Wall Street Unplugged premium podcast with Daniel. I will break that down. It’s going to be a really, really good podcast tomorrow. So, daniel, any parting words? No, okay, cool Me either.

49:12 – Daniel (Host)

We’ll see you tomorrow.

49:13 – Frank (Host)

Yeah, I don’t know if I can talk anymore. I’m coughing. I did pretty good. I’ll be better by tomorrow, hopefully by tomorrow. This thing’s killing me, man, I can’t really sleep either. Everyone’s sick out there too. Everyone I talk to.

49:26 – Daniel (Host)

Hopefully everyone’s better out there enjoying’t know what’s going on.

49:28 – Frank (Host)

Who knows, who knows, it’s not that hot every place else, daniel. Just by the way, that’s true In Florida. Anyway, comments, questions, email me frank@curzioresearch.com. Daniel.

49:38 – Daniel (Host)

Daniel at curzioresearch.com.

49:40 – Frank (Host)

Thanks so much for listening and see you guys tomorrow. Take care, love this episode of Wall Street Unplugged Premium. The Wall Street Unplugged Premium is my members-only podcast where I dive even deeper into this week’s events. Well, I’ll do even more than tell you what’s moving these markets. I’ll tell you specifically what moves you can make today. So this is going to be about trading. Put big money in your pocket right away, due to the inconsistencies I see daily in the market.

50:10

I’m talking about specific investment ideas. I’m recommending and tracking each week that I believe will be impacted directly by everything I just talked about today. Plus, you’re going to get the chance to go even further down the rabbit hole with me and my co-host, who’s Daniel Creech, as we discuss which of these week’s trends could turn into massive windfalls. The big, big trends that we see lurk in horizon. Also, the news we’re picking up from our network of insiders, which has gotten bigger and bigger thanks to you and so many people listening to this podcast in over 100 countries, and you’ll get a chance to talk to me directly in my special Ask Me Anything Q&A session. All that and a lot more like premium interviews with world leaders in finance, technology, industry and politics. This is all part of Wall Street Unplugged Premium and becoming a member is super simple and super cheap, so head on over to wsuoffer.com to check it all out. Sign up today and you won’t miss a thing. That’s wsuoffer.com.

51:12 – Announcer

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