CIO Scott Martin Interviewed on Fox News 4.29.22
Kingsview CIO Scott Martin discusses the psychology of the market. He talks about taking advantage of buybacks and future market rallies, as well as names in the discretionary space.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: So once again, this market reeling into a weekend and that’s ahead of that big Fed rate hike we expect next week. Remember last Friday’s close? I keep bringing this up because it was so awful. I actually last weekend was thinking about a Black Monday situation. It was not an easy weekend. This may not be much better, even though I know it’s a good thing, folks, right, to wring out the excess and to shake out the weekends. Obviously, I’ve been around for a while. I know that’s a good thing. But, you know, what’s the message to this market right now? Like what exactly is it trying to tell us and what should we be hearing? I want to bring in KingSview wealth management CIO Scott Martin. And Scott, you know, before we even talk about next week, let me just talk a little bit about this week. I think you were long Netflix. I think you had sold Amazon. Just your thoughts on those and some of these other big tech names that reported this week.
SCOTT MARTIN: Oh, man, how much time do we have? You know, I think I need a therapist after all of this. And it’s just, you know, then of the days. I mean, come back to your point, Charles. We did try to bottom fish on Netflix. I’m still going to keep bottom fishing because I just think it’s overdone. We sold Amazon way higher for some of our portfolios and we’re talking like 3300, which is awesome, you know, I mean, Facebook was a surprise, which was great. So we have some of that and not as much as we used to. So here’s the takeaway. And you’ve been talking about this all show, and I like how a lot of your guests put it. I think Bob Dahl put it this way. His way is like it depends on your risk horizon or your risk tolerance and horizon. I mean, there’s a lot of reasons, Charles, to be scared if you’re in tech right now, if you’ve got a short horizon, meaning like something under a year, that’s frightening. Now, that could still work out. But if you’re like a lot of our investors and even like myself, I’ve got some spare cash. Our investors have spare cash. Our clients, and we’re using these pullbacks even today feels scary to pick up things like Tesla, maybe some pipelines, maybe some Chevron. I’ll even probably fish towards the end of the day here at 3:00 Central and just find some more stuff that’s getting just really pounded for no reason other than the fact that it’s just amidst the sell off.
PAYNE: I like that part though. The no reason part, right? I mean, you look at these companies that beat on the top line, beat on the bottom line, they’re expanding margins, they’re taking market share and they give strong guidance when they’re down in the market like this. I think those most times eight out of ten, they’re a gift.
MARTN: I agree. And I’ll tell you what’s funny about saying for no reason. It’s like the reason is that everything else is down, you know, like, you’re right. There’s no reason. And here’s the other thing I’ll say about where the market is just in general. There’s no reason, like, are you kidding me? There’s no reason. We know every reason the market’s going down and the market should have to. That’s what’s kind of the weirdest thing. I talked to you about this last Friday, man. Like, what’s weird about the trade, though, is we’re bellyaching about interest rates. We’re all scared about this. I almost said something else about inflation, and we’re worried about a slowdown. What? Like we’ve been talking about this for six months. The Fed is engineering all this stuff and the market’s deciding to sell off by, what, 15%, you know, over the last few months? That’s a little scary to me because it might mean something else is coming, right? But if it isn’t, this is a great opportunity. An opportunity over the last few years, frankly, similar to 2020 March.
PAYNE: Yeah, you always worry about what you don’t know because there is a point when the market can react to what the knowns are, even if the unknowns are harsh. To your point, one thing I think that could help is right now, because of earnings season, companies are what they call a blackout period, but the buybacks are going to come back. I mean, just this month alone, we heard 200 billion buybacks announce, Apple 90 billion, Amazon, $52 Billion. ExxonMobil tripled theirs to $30 Billion. Does that help you? I mean, do you want to own these kind of stocks or, you know, you’ve got that kind of firepower behind them?
MARTIN: Yeah. I mean, it’s nice to see them convicted in their own name. I think that’s good when executives are buying stock and not selling it to. The weird thing is, though, Charles, in this market and this and this psychology that gets announced in earnings and the market doesn’t even care, like you’ll even
see, like you’ll talk about it because you’re just so kind of devout into stocks. But you look at the other networks because I watch our enemies sometimes and it’s like they don’t even talk about it because the stock is not even even taking into consideration they don’t talk about it. And so even in articles, I’ll mention it one line, you know, and then that’ll be it. So my point is on that is it’s the psychology of the market that to your point, you should take advantage of those buybacks because then when the market starts rallying and those names start performing, somebody’s going to come out in like three months of, oh, wait, on their last earnings report, they’re buying back 200 billion of stock. That must be it. And it’s like, no, you knew that three months ago. You ignored it because you got lost in the psychology and you missed out. So a good point. And I think that’s something to keep in mind when you’re looking at names here.
PAYNE: So next week, let’s let’s handicap the Fed here right now. And it’s no, I haven’t crunched numbers. I haven’t done much other than just Wall Street experience. I feel like we could be in one of those situations where we know what’s going to happen. And to your point, we know it, but we’re still getting hammered because of it. But when it does happen, the the the counterintuitive move happens. In other words, the Fed hikes by 50 basis points. And I see a big rally on the same day. What do you see?
MARTIN: I say, I say the same thing, except I think there’s 250 basis point hikes in May and June. I think June is the one because I think to your point that you made with one of the other guests today, June becomes the next meeting. I think it’s May, but the next meeting becomes when they turn tail and they’re like, all right, inflation is starting to slow down. Demand is starting to fall back. We’re starting to get into an economic slowdown, etc., etc. Consumers being affected, rates are going up, housing, blah, blah, blah. They’re going to be like, we’re going to take a maybe a pause and we’re going to start being very careful about how we proceed from here. The ten year is pulling back, so like and, you know, just in the open market. So they already see that this is starting to work. So that I would just I agree with you on a percent. I just say the move is June, not May, because it feels like it’s too quick for that.
PAYNE: Yeah, right, right. Right. And so you mentioned earlier you were you’re buying a you probably buy something at the close. What are you going to buy? What are you looking to buy here at the close?
MARTIN: Well, I. Man, I wish I could tell you. You can’t keep secrets very close.
PAYNE: Can you? What? What sector are you looking at?
MARTIN: Well, I’ll tell you, man, I mean, I’m probably going to pick up something in the probably something more in the discretionary space. I mean, Booking.com looks pretty good. We own that already, but we got to probably pick up some more of that for our investors. TMS is one we own. Charles has been great the last few days. Costco, you know, there’s just stuff, man. If you look at the charts, you know, there’s kind of a a company handle type thing and it’s doing this sort of round out and it breaks a low and then closes above the open and then it starts to turn. Then you turn the stochastic up and you’re kind of off to the races, of course, until it turns down again, which could be Monday. The point is there is stuff that’s churning in. Those three names are ones I’m looking at.
PAYNE: Yeah, no, I love all three of those names as well. Thank you so much, my friend.
MARTIN: See ya.