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 out there? It’s Friday, December 20th. I’m Frank Curzio, host of the Frankly Speaking podcast, where I answer all of your questions on the market, stocks, comedy, sports, and anything else you want to throw at me. Okay, this podcast can answer some more of your questions that you would send me through my Wall Street Unplugged podcast, which I host, as you know, every single Wednesday. Want your questions answered? Just send me an email at frank@curzioresearch.com, that’s frank@curzioresearch.com. Be sure to put Frankly Speaking in the headline. You never know, your question may be the one I read on this podcast.

Frank Curzio: So I’ve got a question from JT. Finally, finally, a sports question. One sports question, it’s been a while. Don’t get tuned off. I’ll be very, very quick because it’s a very important question. He says, “Hey, Frank, do you think the Eagles will beat my Cowboys this week and make the playoffs? To be honest, both don’t deserve to be in the playoffs, but I do hope it’s the Cowboys instead of your birds. Have a great holiday and thanks for a great year.”

Frank Curzio: You’re right. They both do not deserve it. They don’t deserve it, absolutely not. You’re looking at the Cowboys played great last game so they are favored. I could tell you that the Eagles do very, very well when they’re underdogged at home. They were underdogged in the first two games with Nick Foles when they won the Super Bowl, even though they had home-field throughout and they winded up beating Atlanta, which was a close game. They blew out Minnesota and then they beat New England, which was not at Philly.

Frank Curzio: But I’m going to make a bold prediction here and I’m agreeing with you because if I look at the Eagles, their defense is atrocious. It’s atrocious, and they’re not hurt anymore. They’re just that bad. They don’t sack the quarterback. They get no pressure on. Their quarterbacks are horrible. There’s no communication at all. They give out so many big plays. Wentz is playing better, but he has zero wide receivers. He has no wide receivers, none. Wide receivers are hurt.

Frank Curzio: But look at Dallas. Dallas has a really good team. They’re underachieving much, much more than the Eagles. Eagles have been hurt all year, but I’m going to make a crazy prediction for you. I’m going to predict that the Eagles are going to beat the Cowboys. And then next week, they’re going to lose at Giants and Dallas is going to make the playoffs. Let’s see if that happens. If Dallas wins, they’re in the playoffs. If the Eagles win, they’re not in the playoffs yet, they still have to beat the Giants and Dallas has to win their final game. They’ve got who they’re playing, but they’re not playing that good of a team the following week.

Frank Curzio: So that’s a very important game. It’s tough. I mean I don’t know if I want the Eagles to make the playoffs because I think they’ll lose at least by four touchdowns by anybody they play. But yeah, you never know. I mean if you can get a little bit momentum and the Eagles do have momentum, Wentz looks good, they won the last two games late in the fourth quarter, very good drives, and you never know. You just look with Foles. It’s just about believe in momentum. The Giants had it when they played New England at the last game of the season and they almost beat them and they knew that they could play with them. They made the Super Bowl. Then they beat New England and killed their undefeated season. So a lot has to do with momentum. Let’s see.

Frank Curzio: I mean Dallas, they had one game, one good game at home. The Eagles I think won three in a row now. But both of these teams have significantly underachieved. It’s disappointing to see them. It’s sad that you’re not going to have the better team make the playoffs, but that’s the way the system is. Whoever wins the division automatically gets the playoffs. Not only that, they get to play first game at home so … And the team that, whether it’s Dallas or the Eagles, they’re going to have that home game, and the team they’re playing’s going to be much better than them and have a better record than them. So it will be interesting. Thanks for asking, and thank you for asking a sports question. Man, I don’t get them anymore, which is okay. But now, let’s get to some fun stuff.

Frank Curzio: Next question’s from Robert. He says, “Frank, hope all is well. Saying prayers for you and your family. Hope your mom is getting better.” She is. She’s going to a rehab center now. She’s leaving the hospital and yeah, she looks great. Things are good. It’s a long road to recovery. She has a colostomy bag. She hasn’t gotten out of the bed in two months so the whole rehab process we’re hoping it takes three to four weeks. And as soon as she builds up her muscles and things like that, but she’s eating well, she’s drinking and now, she’s getting more energy, hopefully, that process is sooner rather than later. And then, she could possibly go home, which is going to be really good. But it’s been a long road and I appreciate your thoughts, prayers, everything. I really appreciate it, guys.

Frank Curzio: Now let’s get to Robert’s question. He says, “What are your thoughts on the U.S. shale production in the U.S.? Many reports state that production is falling in both oil and natural gas. If the production of natural gas begins to fall, then the price will likely rise and may eliminate some of the export advantage that the U.S. has enjoyed and may affect one of our plays in CRA, which is Cheniere Energy, LNG is its symbol, by making them less profitable and drastically slowing the export market. What are your thoughts on this? And how do you typically analyze changes in the market like this? Appreciate all that you and your team do. CRA”, which is Curzio Research Advisory, “and your podcast have been a huge contribution in overall portfolio performance. It’s been a great year. Thank you.”

Frank Curzio: Thanks, Robert. I really, really appreciate it. It means more than the world to me. It’s why I do these. I’m hoping … Again, we’re independent. If I’m not making you money, you cancel your subscription. My job is just to help you guys become better investors and make money. So it’s really good when I see you having a great year because of us.

Frank Curzio: So a lot of things in here, okay. So first thing is the advantage that we have, and you’re saying that if production of natural gas begins to fall. Production will never fall because we have an unlimited supply of natural gas. People say, “Unlimited supply, Frank, you’re saying that. It’s not true.” It’s not unlimited unlimited, but we have more, probably three, 400 years’ worth. And if prices go higher, we’re going to drill deeper and deeper. We have so much natural gas that companies … It’s a byproduct of oil. I’ve seen this firsthand. I visited every major shale area in the U.S. That companies are burning it because they have so much excess, they’re burning it. So when I look at the natural gas market, one thing you said is, “Hey, you know what? What happens if prices go higher?” If prices go higher here, they’re going to go higher every place else.

Frank Curzio: Now, the key advantage that we have is we have so much natural gas that … Was that 2006, ‘7, ‘8, around there that we were trying to … We created these … If you look at Cheniere Energy, import facilities, right, so we’re looking to import natural gas and then, we realized that shale production took off 2008, ‘9, ’10, ’11 and we’re like, “Whoa, whoa, let’s turn these into export facilities,” right? So Cheniere Energy was first to the party. I think there’s two out there, but if you’re nervous about demand, there’s probably 20 companies that are setting up facilities to export.

Frank Curzio: Now when you get a chance, look at, if you go to Google and put in World LNG Estimated Landed Prices and it’s November 2019. So it’s World LNG Estimated Landed Prices, it’s going to come up with a map and it’s going to show you Lake Charles in America. They show you about 10… They show you a whole world, right? They show you it’s a map of the world and it’s really good. It’s busy or anything. It just has prices on it. There’s no … It doesn’t list the countries or anything, but obviously, you’re going to tell which country is which country, but Lake Charles, LNG prices at $2.55. The UK, over $5. Canada over $6. Spain, $4.75. Then when you get to China, $5.52. India, $5.35. So on average, they’re doubling. It’s double the price of where we are.

Frank Curzio: Now why is that? It’s because some countries have natural resources like Canada, America and others don’t like China. China has rare earth metals, which we use for so many different things. I mean the whole trade deal, that’s the big advantage that they had. It’s used in our weapons and almost every technology product, but we have no choice. So we have to import rare earth minerals. Now we’re one of the largest exporters of natural gas now and that’s going to continue to be huge. But when you look at our production in shale, there’s one thing’s for certain is that they’re going to continue to drill like crazy because these oil companies and natural gas companies have to, they have to because they are basically the most leveraged industry you’ll ever see.

Frank Curzio: They got into a lot of trouble in 2014, ’15 when oil prices crashed from $90 all the way down to whatever it was, $28, $29. And what did these companies do? Some of them went out of business. Others restructured their debt and pushed out the debt a little further, two, three years out. That debt is coming due now. So if you look at a balance sheet of some of these companies, they’re absolutely horrible. Not all of them. The majors are okay. The mid tiers are okay, but a lot of natural gas producers and oil producers are getting smoked. The only way they make money is by producing oil and natural gas. It’s the only way they make money to pay down a debt. They’re going to continue to do that. They’re not going to stop it.

Frank Curzio: And you say, “Well, Frank, if prices come below and they can’t make … ” Well, a lot of these guys lock in prices for the year through the spot market … through the swaps, I’m sorry. Spot is the current price. In the futures market, they’ll lock in … Maybe right now, obviously, they can make money where you’re looking at again, Lake Charles, 2.55, maybe you have companies that are locking in 2.55 and saying, “Okay, that’s fine. You’ll be able to sell it for higher prices every place else.” It’s not going to go to 2.55 every place else. If it goes to 2.55 every place else, it’s going to be 95 cents or a dollar in Lake Charles, which is America.

Frank Curzio: So I wouldn’t worry about it. This company is in prime position. They have contracts out for 25 years. They’re building more, they’re called big trains. So this LNG, guys, to let you know, to export it, you got to freeze it all the way to temperatures, very, very low temperatures, turn it to LNG and that’s how you transport it by boat. But there’s only … They’re the main company that does this and you’re looking at Exxon, Chevron, all these guys want to do the same thing, but that just goes to tell you how big this market is. And I wouldn’t say, “Well, that’s going to lead to more competition in the market and that’s bad for them.” These guys are already locked in tons of contracts with some of the biggest global companies in the world that distribute natural gas, not just for five, 10 years, but out 20, 25 years.

Frank Curzio: So I wouldn’t worry about this. This is a company that’s well positioned. It has a moat around it for now. Man, I did so much research on this sector. It was something like $20 billion plus to build one of these facilities. It’s insane, the amount of money it costs to build these facilities, but the big guys do have that money. These guys are already set up. They already have the contracts in place. I would think that it would probably be easier for a company like Exxon, Chevron to actually go in and just buy this company here because I do think it’s trading at cheap levels. It’s one of the stocks that are … They’ve been kind of flat, right? I mean we’re doing well in CRA, Curzio Research Advisory, but this is a company that I really, really like a lot that I wouldn’t worry about prices. If prices are lower here, which I don’t see, if prices do go lower here or actually what you stated, I think you said that if prices go higher, is it going to impact that difference where those margin’s going to be tighter.

Frank Curzio: But remember, the prices, if they go higher here, they’re going to go higher every place else, they go lower here, they’re going to go low every place else, okay. Because they need our natural gas. Every country needs natural gas. One of the cleanest, cheapest fuel sources we have in the world and demand, it’s always going to stay steady and even go higher and higher and higher as economies are doing better. You’re looking at Europe bouncing back, China with the trade deal, China looks like it’s going to bounce back. The U.S. is probably the greatest economy that I’ve seen in my lifetime is right now. I mean I’ve never seen an economy this good in my life. It’s crazy.

Frank Curzio: You said, “Well, certain periods and bubbles …” We’re not in a bubble. We’re trading at 17 times forward earnings, we’re not … We were 40 times earnings when we looked at the tech bubble heading in. NASDAQ was trading at 40 times earnings. I mean some companies are in a bubble, but no, the market is not in a bubble. And plus, we have much lower interest rates today. So you’re looking at the spending, you’re looking at how easy it is to raise capital for new ideas. It’s pretty incredible. The housing market’s starting to boom again. There’s just not a lot of supply in the market and look at your neighborhoods. This isn’t me just making stuff up. Look in your neighborhoods. Every time a house goes for sale, it’s gone, especially in decent neighborhoods.

Frank Curzio: So the economy is very good. That means it’s going to be continuing to build. Infrastructure has been so-so on the weak points, but still, natural gas, electricity, big, big market and I see demand there and I think … not I think, but the price differential, it’s … we have such a significant advantage to be able to produce this stuff and everybody else needs it. And when you’re looking at the prices and you bring up that map, again, it’s really cool. I’d like you because you’ll learn a lot about the LNG industry, it’s World LNG Estimated Landed Prices and they have them every month and this is November 2019, which is the latest, but it’ll show you the price differential and you realize why Cheniere Energy has so much potential because almost every price that they export to is double the current price, which is $2.55 for LNG prices in the U.S.

Frank Curzio: So thank you for the prayers and everything. I really, really appreciated that, Robert. That was really cool. And again, very, very happy to see that you’re having a great year.

Frank Curzio: Let’s get to one last question, this is from Stephen. He goes, “Hey, Frank. I’ve been a podcast listener for about a year and a half now. Love listening to your market thoughts and ideas. I’m in my low 30s with a family and therefore, lots of expenses so my funds available for investing, that’s not counting the 401K, is pretty limited, but I do subscribe to your research advisory and Dollar Stock Club. Maybe as I get older with some more money, some of your other higher end subscriptions will make a little more financial sense.

Frank Curzio: My question is related to cloud stocks. It seems like every other IPO the last few years has been a cloud company. All these companies have great valuations and bring in a ton of revenue. What I don’t see though is actual profits. Even the ones that do have profits like the mega company Salesforce have huge multiples that would have to continue to grow profits massively for years just to have a reasonable PE ratio current prices. So my question is what do you look for in cloud companies? And do you think this trend is in a bubble? Are we still in the infancy and all these companies will eventually grow into their valuations? Thanks for all your hard work and providing the masses with great financial insight.”

Frank Curzio: Good question, Stephen. Cloud, we’re still in the infancy. I’m going to Consumer Electronics Show in two weeks. Guys, follow me on Twitter please just because I’m going to do live interviews, live everything. I’m bringing a film crew with me and you’re going to see things that are just absolutely amazing. And plus, you’re probably going to see me look like an idiot because I sample all these technologies and have fun. I don’t care how I look, but it’s really, really cool. I’m only going to show you really good stuff. So I’m not trying to get you to my Twitter handle or anything. It’s @FrankCurzio, but it’ll definitely be worth it.

Frank Curzio: And I remember, I think it was two years ago or three years ago when I was talking about cloud and cloud was such a big theme. When I talked to people at Ericsson and there was an engineer there … and it’s great because you get to talk to a lot of brilliant people and you don’t have to worry about them being like an executive. A lot of these guys are doing speeches there. And he’s guy that’s just on the ground level. He’s like, “By far in our infancy.” He’s been in the industry for 20 years.

Frank Curzio: But if you’re a believer that we’re going to continue to see more and more data, which is a fact, which it’s growing unbelievably because of video, because of everything else, well, you need a place to store it and that’s cloud. So as long as we continue to use video, think about streaming and how big streaming is now, how big it’s going to be. I mean Disney is so small in streaming. Yeah, this is a great company. I just don’t like the valuation here. More and more companies are going to start streaming and streaming, get bigger. Their libraries are going to get bigger. People are going to download more of this information. Again, a lot of this, storage, everything done online, more people coming online still and the data, I mean you look at all statistics here, cloud is still in its infancy. I’d say it’s in its third or fourth inning.

Frank Curzio: That is a lot here because you’re asking, well, how would I find the best cloud companies? There’s a ton of them and you’re right, there’s been a lot that have IPO-ed. Some of them, private companies, get taken over right away. I recommended a company, MindBody, we did very well in. I think that was in Curzio Venture Opportunities. We took profits. Then it came down. Then I believe it got bought. I don’t know if it got acquired. Definitely, a bid came out, but it was basically the price that we sold it at so we took profits. It was good, but MindBody’s exercise, fitness cloud, they’re specialty cloud companies that just focus on certain industries and then, you have the Amazons, the Microsofts, the IBM. IBM’s going to be huge in cloud because they’re focusing on hybrid, which is public and private markets, which they’re saying is a trillion dollar market. That’s how big cloud is. That’s just … Again, that’s what they’re saying, their company, whatever. If it’s half right, it’s enormous.

Frank Curzio: And the Red Hat acquisition was huge for this company. They acquired this company, biggest acquisition of the company in IBM’s history. That’s the reason why I like IBM so much and not only that, you’re getting paid like 4, 5% yield so it’s actually a weight to this thing. We’re up, I don’t know, 16 to 20% on the stock, but I mean it’s such a small company here compared to everybody else. And if it doubled, it’d still be 1/10th the size of Apple. That’s how small IBM is compared to so many of the big guys. And same with Microsoft, Microsoft, one of the leaders. You go down to Salesforce as you mentioned, VMware, Adobe as well, but the specialized ones, even 2U is a company that we recommend. I don’t give this a one away because … And this is going to go to your point here, Stephen, this is where I’m getting to. 2U is a company that focus on online educational software, also a cloud company.

Frank Curzio: And you say, “Well, how do you buy these things?” And for me, when I bought MindBody, I loved it. It was an expensive valuation. We did well on it. When I looked at 2U, it’s a company that got beat up tremendously. And I said, “Okay, this is well overdone.” I don’t get it. Algorithms kick in. Everybody rushes out of the stock right away. A lot of these big hundred billion dollar firms, I mean they’re just whipping in and out of these things, hundreds, thousands and tens of thousands of trades a second. So once they break key levels, they don’t care about what the stock does or whatever. They’re kind of like, it’s a momentum algorithm system. They go in and out of these things and 2U just got smoked and we bought it, and a couple months later, I’m pretty sure it’s up like 20, 25% for us already, so it’s above the buy-up-to price.

Frank Curzio: I’m not giving away tons of stocks here. I’m giving away stocks that are above a buy-up-to prices. Now when I researched this whole entire industry and I’ve done it for the last three, four, five years and I always go back to it, I think it was 2017, I said, “Okay, who’s going to be the best in cloud?” And I went through all the companies by about a good 10, 12, again, the large cap companies for CRA, which I focus on, large and midcap, and Amazon was the king. I hated recommending Amazon because you don’t need me to recommend Amazon to you, but you know what? We recommended Amazon at $9 and change, and we took … It was $17, $1800 today. We took profits close to a hundred percent and the other position’s up around 70, 80% for us, the second half position, but my job is to make you money and if that’s buying the biggest company in the world at the time, then that’s it.

Frank Curzio: But they had such a huge advantage and everyone says, “What about Microsoft?” Well, Microsoft might be at the large cap level, when you’re looking at risk adjusted risk-reward, right, not just buying, this is companies that outperformed Amazon, but you’re going to take on more risk and Microsoft might’ve been the better buy, but somebody asked me a question about Microsoft and said, “Oh, they’ve been killing Amazon. They’re getting all these … ” They haven’t been killing Amazon. They’re just growing. It’s an industry that’s incredible. They’ve gotten at the right time in 2013 with their new CEO coming in who had a background in cloud and the guy’s done a fantastic job. I think, I’m pretty sure, I’m not sure of these percentages, but probably pretty close. Last time I looked that Microsoft even today has a 15% market share. Amazon has a 45% market share. They’re not eating Amazon’s lunch. They’re not. They’re gaining market share, but not at the expense of Amazon, at the expense of everybody else. So those are the two major players. IBM’s also a major player.

Frank Curzio: And I want to end by saying this to you, Stephen, which is important because like I said, they’re specialty companies like 2U. There’s MindBody that focus on exercise and fitness. You’re looking at companies that focus on healthcare and so just pure plays, Adobe as well with software, but Oracle, SAP, all these big companies, but some of them are just specialized in certain like healthcare, exercise, like MindBody has one of the greatest apps where no matter where you go, you can look and it’s going to tell you exactly where these classes are, but it stores all this data and it’s a cloud company.

Frank Curzio: It’s just anyone that’s basically providing a service online, you can almost call a cloud company. They should have this capability to basically track client, be able to store everything and then, put data analytics on top of it, then throw AI in there, be able to predict what everybody wants in the future. It’s pretty crazy. All right, so it’s not just cloud. Cloud opened up the door to everything because you couldn’t store everything on these servers. You can, but it cost a fortune. That’s what killed IBM. Everybody still talks about that. IBM is not a server company anymore. They’re a cloud company. They’re a data analytics company. Same with Intel. These guys understand the markets and they’re getting into better markets, more growth areas, but once you had the storage capacity, now how do we analyze all that data? And then you throw in AI on top of that and saying, “Okay, not only are we analyzing the data, but AI’s going to be able to predict what’s going to happen in the future.”

Frank Curzio: Now, if you could do that, any company in the world, that’s very, very valuable for you, right? If I knew everyone who wanted to buy a large cap newsletter and a lot of these people had money to buy it and they always do it in January, and I knew the exact sites that they were doing it, I mean this data is incredible than me just going and doing a commercial for the Golf Channel and trying to focus on retirees. But times this by a million, and that’s where Google is, that’s where Facebook is, and all the advertisers are like, “Wow, we’re getting so much more money for our dollar today than we were back then because we know these trends,” because they’re tracking everything that we do, including Apple, even though they deny it. But it’s pretty crazy, and Apple’s also a huge cloud company storing all the music, all the pictures now, everything. None of that stuff gets stored on your phone.

Frank Curzio: So I was going to get to this point. I got sidetracked, but I’m going to tell you this. Do not worry about PE ratios. Do not worry about it. I’m talking to you about experience, okay? These value guys are just going, “Frank, you’re an idiot. What are you talking … ?” I don’t care about them. Okay, I care about you. And the reason why I say this is because I didn’t buy Apple in 2004 because it was trading at 60 times earnings. Celgene was trading at 75 times earnings. Netflix had been trading over a hundred times earnings forever and that stock’s up probably 20,000% in the past 10 years, at least since 2004, so maybe the past 15 years. It all matters if you’re going to invest in the sector is the growth. You have to see the earnings growth. You have see the revenue growth. That’s why Salesforce continues to do well. They continue to grow.

Frank Curzio: If companies are continuing to grow, they have a significant advantage that some of these cloud companies do, they deserve a much higher multiple. And the companies that aren’t making money, if you say, “Well, small caps, mid caps,” look, these companies could be profitable tomorrow if they want. They don’t trade on PE. if you’re looking at a PE, stop looking at cloud, at most mid cap, small cap technology companies. They have a much higher valuation than the rest of the market, by the consumer staples, utilities and things like that, but don’t let it scare you off. It scared me off many times. And that’s one of the things I thank Jim Cramer focused, Cramer’s a growth investor and he explained that to me. And having that background with the value background that my dad gave me over the last two decades to, man, close to three decades now, helped me tremendously to go to different areas of the market.

Frank Curzio: I mean I’m going to Consumer Electronics Show for eight straight years, understand these trends, and the track record that I’ve had just by going to the Consumer Electronics Show and we could date back to Skyworks 2013 under $30 and that stock is over a hundred today. You’re looking at … Recently, Omron in CRA. I mean how many people came back from that and said Omron was the best company, Omron. I mean I really didn’t know Omron. It’s an amazing company. It’s all automation, all robotics. The heart pressure valve monitors, the best FDA approved, best in the business, huge demand. A lot of research on that company.

Frank Curzio: Intel, I came back after going for the first five years telling Intel’s one of the biggest booths. It’s right when you walk in, that’s Intel. That’s Intel, the main conference center in Vegas, and they were so far behind the curve … I hated them and all of a sudden, autonomous driving three years ago, four years ago. This is when the stock was $28, $29. So learning all these trends helped me out tremendously. Then also, what I learned from Cramer how to value growth. Listen, it’s been a growth market for a while. It’ll continue to be a growth market. Yes, value’s coming back into play, but don’t look at a PE ratio and say, “Oh, man, this is … ” Look at the PE ratio compared to what’s trading historically. And when you look at these companies, you’re going to say, “Wow, this company’s trading at 45 times earnings.” Well, five years ago, it was trading at 80 times earnings and that stock is up 600%.

Frank Curzio: So a stock is expensive. What does that mean? That means you better make those earnings. You’re going to take on more risk. If they miss earnings, you’ll see a 20, 25% drop in a day in some of these things. That’s why they’re risky. However, as long as they continue with that growth, as long as they’re innovating, as long as they’re seeing more customers, which they outline every single quarter, these companies are going to continue to go higher. Their stock price will continue to go higher.

Frank Curzio: And when they do miss like 2U, take a look at the company. The stock fell … You know what? Let me bring the chart up really quick here. This is important, guys. Stay with me here. Because when I gave it to you, it crashed almost twice. I love doing this on the fly, but when you look at 2U, you put up a one-year chart. I mean the stock was trading at 70 bucks, $73 in February, fell to $62 in April, then took another leg down at $39. And that’s kind of when I started looking at it and saying, “Wow, this thing came down pretty hard,” and then they missed again in July and the stock went from $39 to $13.

Frank Curzio: And I was like, “Whoa, no way. This is it. This is the opportunity.” And it’s funny when I bought this thing, I want to bring up, I think we bought it around $17, I don’t know, around there, but when I was looking to buy it, I was looking at it $13, $14, at the low and as I’m writing the issue and going on a date, the stock starts running tremendously higher. I think insiders started buying. And that’s a thing, too, when these things get hammered like 2U, are insiders buying? Yes. I mean these are guys that know the company the best. I love to see companies get smoked and insiders are buying. Otherwise, if they’re not buying, why should you be buying? I mean then you’re trying to catch a falling knife. 2U’s come down, the valuation’s come down. Now immediately, pop back up to $24. I still think it has tremendous upside potential.

Frank Curzio: So that’s how you look at cloud computing. Look at the ones during earning season that are going to get smoked, see why they got smoked. Maybe wait a quarter, see what happens, what’s management doing? Like 2U started getting nailed in February. It dropped a year in 2019 and then, fell from April to … It fell in April again. It got crushed again from $62 to $40 and then, that’s when I was kind of looking at it and boom, I couldn’t believe that it fell to $13. I mean when I looked at the quarter, the stock should have … It was already beaten up. I mean it should’ve fell to like $35, not $13. I was like, “This is crazy.” It’s just algorithms push these things down a lot further sometimes.

Frank Curzio: So that’s one way to look at it. And if you’re going to buy one of the big guys, don’t let valuation scare you off. Just make sure that they continue to grow. Listen to the conference calls every single month, quarterly calls, see what they do. Are they adding customers? You’re going to see a lot of these guys adding customers, working with partners, and that’s how you invest in this sector. But so many people look at this. Don’t look at it from a PE perspective. If that’s the case, you’ll never buy a cloud company and most technology companies. Always look at it from a growth perspective, how fast these guys are growing. And if you look at the PE, look back historically and say, “Where was this thing trading?” I could do that with a lot of my engines very, very easily in seconds, but you might have to do a little bit more digging.

Frank Curzio: And then it could be trading at 40 times forward earnings and you’re like, “Wow, this is crazy, a 40 … ” Well, it was trading at 75 times forward earnings on average for the last six, seven years, and the stock keeps going higher and higher. And that’s what happened to Microsoft. That’s what happened to Apple. That’s what happened to all the big market cap stocks. When they first came out, Windows launched Microsoft. I mean these things were trading at 40, 50, 60 PEs. Then they fell into their valuations and I mean look at the gains that you would’ve made on these stocks, but how many people avoided Microsoft, avoided Apple, avoided the Celgenes just by simply looking at a PE. Don’t do that.

Frank Curzio: That’s the best advice I can give you. It’s not just about PE. It’s about growth. If it’s expensive, why is it expensive? Because it’s growing faster than the overall market. It has big advantages. It has a moat. It has a better management team. There’s a reason why it’s trading at such a premium and you’re going to maintain that premium long term as long as you keep putting up those numbers. So hopefully that helps. That’s how I invest in cloud computing. It was a good question. I covered a lot of stocks today and hopefully, that helps you out a little bit. So again, I like doing this stuff on a fly and just bring up a whole bunch of things.

Frank Curzio: So guys, thanks so much for all your questions. I really appreciate it. A couple of notes here, final days of 2-Second Trader, which we just launched. You still have a few days to get a really nice discount on that newsletter. And look, we don’t launch products every week or every month. In fact, this is the first backend higher priced newsletter we launched in 18 months. And when we do, we want to give you guys the best prices. So that’s why I try to mention to you if maybe trading’s not your thing, you’re like, “I hate technical analysis,” that’s fine, that’s cool.

Frank Curzio: But if you’re looking to subscribe, do it over the next couple days because the price is going to go a lot higher once you start marketing to the masses or marketing outside of our list. And those of you who already subscribed, thank you and great stuff. The positive feedback we’ve gotten back is amazing and that means everything to me. This isn’t, “Hey, here’s a product.” My goal isn’t to just create one product for you and that’s it. My goal is to have you a subscriber for life.

Frank Curzio: I mean, who was it? Was it Stephen that said he’s 30 years old, he has research advisory, Dollar Stock Club. Well, five years from now, seven years from now, if we make money, he’s going to be subscribing to all of our newsletters. That’s the goal here and the only way you do that is by doing the right thing with all of our newsletters, getting the right people there. Sometimes that requires bad decisions. Not bad decision, good decision, but tough decisions. It’s if the performance isn’t there, it’s my job to fix that for you guys, but I want to put some great products in front of you with great analysts and that’s what we’ve been doing so far, and we’re happy that a lot of you guys are doing well.

Frank Curzio: And I think when you’re looking at the CCI portfolio, you guys are going to be really happy with that because security tokens are finally starting to trade. You’re going to see a lot of security token recommendations in that newsletter because we put about 25% of capital exposed in a lot of these, even the good names. I said that in the utility token space that was about 85, 90% was all garbage. It’s like 97% the more I dig in and even at 3% of the companies that I like to recommend it, even those have gotten hit so those are utility tokens.

Frank Curzio: It’s a big difference from security tokens which trade like a stock. You get equity ownership. They’re backed by assets. Utility token just gives you access to their products and services which is a joke. Crowd funding’s the biggest scam in the world, right? I mean these companies want to get funded and they’re not even giving you equity. You put $20,000, okay, good. I’m going to get your products for free, whatever. And then, if the company gets taken off of billions of dollars, you get nothing. You don’t own equity, anything. I mean just the whole crowd funding platform is a complete joke. Utility token’s are a complete joke.

Frank Curzio: That newsletter, the performance is going to be amazing going forward because we have … We’re becoming one of the leaders in the security token industry, which is really exciting. You’re going to see that next year because now, we launch our token officially and we have a real company behind it. It’s not a BS company where so many of these things get launched on. It’s given us access to some of the biggest players in this industry. It’s a lot of fun right now. So you’re going to see more security token recommendations. You’re seeing more liquidity, more of these things trade on exchanges, and it’s going to get bigger and bigger and bigger next year, the year after, five years, 10 years, I mean forget it, going forward.

Frank Curzio: So lots to look forward to and yeah, if you’re interested in Rich’s newsletter, just click that link that we’re sending to the email. And if you didn’t get any of our emails, you’re not on the mailing list. And if you want to subscribe to 2-Second Trader, send me an email personally, frank@curzioresearch.com so you definitely get in before that discount offer ends.

Frank Curzio: Very, very last note here. Giving my entire staff the week off. I should let them work through Christmas. I should. I should be the Scrooge, but they certainly deserve it. I mean they put so much together, the launch of this, the launch of Curzio One, which is our full membership access to all of our products now and in the future. This month has been a very, very good month for us, one of our best months ever, and that’s thanks to you guys, but my team behind it and what they do for the company … It’s amazing. I get humbled by it. I’m like “Wow,” these guys are not nuts, but they love to work. I have to kick them … I don’t say out of the office because a lot of these guys are mobile. But yeah, they do a fantastic job. So they’re going to have next week off. So no Frankly Speaking next week, which is the 27th, right, Friday, 27th.

Frank Curzio: But I will be back the following Friday, which is January 3rd, so if you have any questions, I think you know the email by now, right, frank@curzioresearch.com. That’s frank@curzioresearch.com.

Frank Curzio: So guys, that’s it for me. Hope you have a great holiday. Be sure to spend time with your family and friends. Relax. Have a few alcoholic beverages. Just dial down. Don’t talk politics. I said, please not now. Don’t talk politics. It’s automatic fight. Don’t talk politics with family. And thank you for all your support. It’s been a great year for us. None of that would be possible without you so, thanks. And I’ll see you in 14 days, not seven, but 14 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.