December 2, 2024 • 9 mins
Wall Street Sausage Factory. www.watchdogonwallstreet.com
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it will have on everyday Americans. Author,
investment banker, consumer advocate, analyst and trader Chris Markowski.
Speaker 2 (00:16):
The Wall Street Sausage Factory, How the sausage is made.
I got a big kick out of a story today
in the Wall Street Journal, in the Wall Street Journal,
and they were going after going after Cantor Fitzgerald's Howard Lutnik,
(00:37):
who Donald Trump picked to be the Commerce Secretary. And
they went after Howard Lutnik and his involvement in SPACs
and investments that went bad. Here Canner Fitzgerald CEO or
(01:00):
Lutnik was pitching a startup that said it made a
key component of self driving cars, which would soon be
valued at two billion dollars. And I quote Howard, I'm
brilliantly successful because I select brilliantly. This was in a
twenty twenty one video call selling investors on a company
(01:24):
called AI Capital a E y E. The company had
no revenue at the time. This was one of the
many SPACs blank check companies that were flying off the
shelves at that point in time. Now, long time listeners
(01:49):
of this program know that we told you to avoid
that crap. We told you to stay far away from
the spa. They those those deals were booming. Oh my god,
hedge fun manday traders plowing money into all of these
(02:12):
unprofitable startups in search of the next tesla. Yeah. I again,
every day, every day I would get emails, you know,
trying to get uh, trying to get us at Markowski Investments,
to get our clients involved in all of these things.
(02:34):
And these are exciting pres newer clients calling us up
and asking about all these great opportunities. Uh no, no,
you see, I've always mentioned that scene from the movie
Big always sticks out in my mind when the young
while he was young, was basking, but he was he
(02:56):
was an adult at the time. Tom Hanks is sitting
there as a child and they're they're breaking down or
at a meeting with all these executives the latest toy
they're about to put out, and he raises his hand
and he says, I don't get it. How is this
fun again? I don't get it. I don't get it.
(03:18):
Has served Markowski Investments and our clients very very well
over the years. I don't get it. I don't touch it. Well,
these A I shares are now nearly worthless again, okay,
Wall Street Journal talking about this, he said, oh, this,
(03:40):
this guy is going to be an international deal maker
and he was involved in some of these investments that
have failed. This we get into the Wall Street sausage factory.
Wall Street, We'll sell you anything if you're willing to
(04:01):
buy it. If there's a market for it, they're gonna
sell it. They're gonna sell it. They don't care if
they can package something together. That's what they do. It's
not for everybody. Wasn't for me. It wasn't for me.
(04:24):
I couldn't. I couldn't work in that world. That's why
I do what I do. I like to protect investors.
I like to look out for their interests. I don't
like the shoves shit into their portfolios. And that's what
Wall Street will do again and again and again and again.
(04:45):
This Wall Street Journal article, which is the irony behind
them writing this, Just a Wall Street Journal. They know
this goes on. They cover this industry. What do you
think these firms do for a living? In twenty twenty,
for instance, Canter Hell set up a Spack, endorsed by
Shaquille O'Neal. It merged with fitness firm Beach Body the
(05:07):
following year. Shares are down about ninety nine percent since
their debut at roughly ten cents when adjusted for a
reverse stock split. Guys, again, I'm going back. I'm gonna
go back to the nineteen nineties. Do you remember Do
you remember a restaurant called Planet Hollywood? Remember that? Oh? Yeah,
(05:30):
that was a publicly traded company. Who remember the people
behind it was? Was it Sylvester Stallone, Arnold Schwarzeneger, Bruce Willis? Yeah?
How did that? How that stock deal work out? Again?
You know what they tried. I took a look at
(05:51):
that back in the day and I said, I, yeah, No,
this is a celebrities endorsing a restaurant. Flash in the pan.
It's going to go away. No one holds a gun
to your head and tells you to buy something. You
have to choose. And one of the interesting things is
(06:14):
is that people get involved in these things because they
get greedy. What have we told you again and again
and again, greed and fear set the trap. And what
happened during the lockdowns and COVID and all of these
SPACs and all of these great new ideas you had
(06:35):
fa Mo all over the place, and all of these
disrupt their companies, and we warned you what was going
to happen. Lutnick and other proponents touted spacks as a
way for regular people to invest in companies such as
sports betting firm DraftKings or space tourism Virgin Galactic that
(06:59):
they couldn't normally access. Spacks are really private equity for
the public market. No, we told you that's what Lutnick said.
We told you. No, they're not. No, they're not. Listen,
there's a right way to do private equity, and there's
a wrong way to do private equity. Spacks and taking
(07:21):
out early investors not the right way to go. Again,
he talks about this guy. I mean, Polatnik is worth
a couple billion dollars with the firms that he runs.
He actually makes a higher salary than Jamie Diamond does
over at JP Morgan Chase. Again, I want you to understand, Okay,
(07:47):
and you're dealing. I've tried to get this across to
people for a very long period of time. Okay, this
is what Wall Street does. Its sells stuff. It sells stuff,
some good, a lot bad, okay, and you have to
(08:10):
be able to discern between the two. And there's ways
of recognizing this. I'll give you an example. We're looking
at ways right now to get in because there hasn't
been many new offerings and there are some great privately
held companies that are cash flow positive, that are doing well,
(08:31):
that aren't running out of money left right all over
the place. And now this area is starting to evolve
to some degree where I will feel comfortable putting clients
into some things. But again we set parameters. No, I'm
not taking out any early investors. No, this money is
(08:55):
going to be used for whatever it may be, certain
research and development, expanding a plant. But again, I want
companies that are doing well. I'm not looking to take
out early investors. But again, the sausage factory, it wins
over common sense and what we try to teach here
(09:17):
again and again and again. I'm going to file this
into the Dopte doubt me files. We told you what
was going to happen with all of these SPACs. Don't
be surprised, okay, don't be surprised. And you got to
understand a shark's a shark. Howard Lutnick is shark. It's
a shark, and you know what, you gotta be careful
(09:39):
around sharks. Watch Dog and Wall Street dot Com
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it will have on everyday Americans. Author,
investment banker, consumer advocate, analyst and trader Chris Markowski.
Speaker 2 (00:16):
The Wall Street Sausage Factory, How the sausage is made.
I got a big kick out of a story today
in the Wall Street Journal, in the Wall Street Journal,
and they were going after going after Cantor Fitzgerald's Howard Lutnik,
(00:37):
who Donald Trump picked to be the Commerce Secretary. And
they went after Howard Lutnik and his involvement in SPACs
and investments that went bad. Here Canner Fitzgerald CEO or
(01:00):
Lutnik was pitching a startup that said it made a
key component of self driving cars, which would soon be
valued at two billion dollars. And I quote Howard, I'm
brilliantly successful because I select brilliantly. This was in a
twenty twenty one video call selling investors on a company
(01:24):
called AI Capital a E y E. The company had
no revenue at the time. This was one of the
many SPACs blank check companies that were flying off the
shelves at that point in time. Now, long time listeners
(01:49):
of this program know that we told you to avoid
that crap. We told you to stay far away from
the spa. They those those deals were booming. Oh my god,
hedge fun manday traders plowing money into all of these
(02:12):
unprofitable startups in search of the next tesla. Yeah. I again,
every day, every day I would get emails, you know,
trying to get uh, trying to get us at Markowski Investments,
to get our clients involved in all of these things.
(02:34):
And these are exciting pres newer clients calling us up
and asking about all these great opportunities. Uh no, no,
you see, I've always mentioned that scene from the movie
Big always sticks out in my mind when the young
while he was young, was basking, but he was he
(02:56):
was an adult at the time. Tom Hanks is sitting
there as a child and they're they're breaking down or
at a meeting with all these executives the latest toy
they're about to put out, and he raises his hand
and he says, I don't get it. How is this
fun again? I don't get it. I don't get it.
(03:18):
Has served Markowski Investments and our clients very very well
over the years. I don't get it. I don't touch it. Well,
these A I shares are now nearly worthless again, okay,
Wall Street Journal talking about this, he said, oh, this,
(03:40):
this guy is going to be an international deal maker
and he was involved in some of these investments that
have failed. This we get into the Wall Street sausage factory.
Wall Street, We'll sell you anything if you're willing to
(04:01):
buy it. If there's a market for it, they're gonna
sell it. They're gonna sell it. They don't care if
they can package something together. That's what they do. It's
not for everybody. Wasn't for me. It wasn't for me.
(04:24):
I couldn't. I couldn't work in that world. That's why
I do what I do. I like to protect investors.
I like to look out for their interests. I don't
like the shoves shit into their portfolios. And that's what
Wall Street will do again and again and again and again.
(04:45):
This Wall Street Journal article, which is the irony behind
them writing this, Just a Wall Street Journal. They know
this goes on. They cover this industry. What do you
think these firms do for a living? In twenty twenty,
for instance, Canter Hell set up a Spack, endorsed by
Shaquille O'Neal. It merged with fitness firm Beach Body the
(05:07):
following year. Shares are down about ninety nine percent since
their debut at roughly ten cents when adjusted for a
reverse stock split. Guys, again, I'm going back. I'm gonna
go back to the nineteen nineties. Do you remember Do
you remember a restaurant called Planet Hollywood? Remember that? Oh? Yeah,
(05:30):
that was a publicly traded company. Who remember the people
behind it was? Was it Sylvester Stallone, Arnold Schwarzeneger, Bruce Willis? Yeah?
How did that? How that stock deal work out? Again?
You know what they tried. I took a look at
(05:51):
that back in the day and I said, I, yeah, No,
this is a celebrities endorsing a restaurant. Flash in the pan.
It's going to go away. No one holds a gun
to your head and tells you to buy something. You
have to choose. And one of the interesting things is
(06:14):
is that people get involved in these things because they
get greedy. What have we told you again and again
and again, greed and fear set the trap. And what
happened during the lockdowns and COVID and all of these
SPACs and all of these great new ideas you had
(06:35):
fa Mo all over the place, and all of these
disrupt their companies, and we warned you what was going
to happen. Lutnick and other proponents touted spacks as a
way for regular people to invest in companies such as
sports betting firm DraftKings or space tourism Virgin Galactic that
(06:59):
they couldn't normally access. Spacks are really private equity for
the public market. No, we told you that's what Lutnick said.
We told you. No, they're not. No, they're not. Listen,
there's a right way to do private equity, and there's
a wrong way to do private equity. Spacks and taking
(07:21):
out early investors not the right way to go. Again,
he talks about this guy. I mean, Polatnik is worth
a couple billion dollars with the firms that he runs.
He actually makes a higher salary than Jamie Diamond does
over at JP Morgan Chase. Again, I want you to understand, Okay,
(07:47):
and you're dealing. I've tried to get this across to
people for a very long period of time. Okay, this
is what Wall Street does. Its sells stuff. It sells stuff,
some good, a lot bad, okay, and you have to
(08:10):
be able to discern between the two. And there's ways
of recognizing this. I'll give you an example. We're looking
at ways right now to get in because there hasn't
been many new offerings and there are some great privately
held companies that are cash flow positive, that are doing well,
(08:31):
that aren't running out of money left right all over
the place. And now this area is starting to evolve
to some degree where I will feel comfortable putting clients
into some things. But again we set parameters. No, I'm
not taking out any early investors. No, this money is
(08:55):
going to be used for whatever it may be, certain
research and development, expanding a plant. But again, I want
companies that are doing well. I'm not looking to take
out early investors. But again, the sausage factory, it wins
over common sense and what we try to teach here
(09:17):
again and again and again. I'm going to file this
into the Dopte doubt me files. We told you what
was going to happen with all of these SPACs. Don't
be surprised, okay, don't be surprised. And you got to
understand a shark's a shark. Howard Lutnick is shark. It's
a shark, and you know what, you gotta be careful
(09:39):
around sharks. Watch Dog and Wall Street dot Com
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