August 10, 2022

CIO Scott Martin Interviewed on Fox News 7.22.22 – Making Money With Charles Payne

Charles Payneconstructive stocksEconomyFox NewsKingsview Investment ManagementKingsview PartnersScott MartinThe Fed

Kingsview CIO Scott Martin discusses the Fed rate hike philosophy, emotions in the market, and constructive stocks.

Program:  Making Money with Charles Payne
Date:  7/22/2022
Station:  Fox Business News
Time:  2:00PM

CHARLES PAYNE: I want to bring in Kingsley Wealth Management CIO along with Scott Martin rather and Surevest CEO Rob Luna. All right. Let’s start with this, pal pivot, guys. I mean, when does it happen, Scott?

SCOTT MARTIN: Soon, probably up to the next two meetings, Charles. Because as big of a hero to me, to that Bob Dole is. I don’t think it’s right, man. I think the recession is here. If you want to ask my percentage chances of recession. How’s 99% sound? We’re in one kids. And so the Fed knows that. And maybe they don’t. Maybe they want to wait on the GDP data for Q3, whatever. Look at input costs, Charles. Look at interest rates, open market interest rates, all dropping like a rock, sinking like a stone. Therefore, the Fed has a baked in the cake that they’re going to do a hike very soon with the July rates coming up, the July meeting after the rates on that and then obviously the next meeting in September and then dunzo, they’re going to hang out. So two more rate hikes and then we’re done with this hiking cycle.

PAYNE: You know, Rob, it would be like, Scott not to be really committed, right? Only 99%.

MARTIN: Saying there’s a chance. Charles.

PAYNE: There’s a chance. Listen. Yeah, the Fed’s wedded to that 75 basis points for a number of reasons, including credibility. But do you agree that after that or sometime really shortly they’re going to start to change their minds? Rob

ROB LUNA: Yeah, I think so. I don’t think it’s going to be as quickly though as people think. I mean, you remember back well, I don’t know that you remember you’re pretty young, Charles, but back in the seventies and you know, they’re looking at this data, this there’s the stop and go policy back then didn’t work and they needed to get unemployment all the way up to 10% before they were finally able to cripple inflation. So I don’t think they’re going to be as quick of changing their mind, but I do believe probably two, three more hikes than they’re going to stop. The language will start to change a little bit. But look, you know, I’m still in this camp, the minority camp, that we might have a soft landing. Look at American Express today. The high end consumers still doing well, reported great earnings. I don’t think this is going to be as bad as a lot of people think. But I do believe we are in a technical recession right now.

PAYNE: Now, the last time we spoke, both of you guys were what they call a Wall Street constructive, which means you were buying stocks and everyone else was afraid. Let me go back to you on this, Rob. Do you grapple with the idea like, okay, because I know I bought a few stocks in the last month and some of them popped. Right. And then you see names like Coinstar. I mean, Coinbase went up 60% beyond me. 60%. How do you handle if you start to nibble and then all of a sudden a name, you buy pops and you know, you want to hold it long term, it’s going to have to pull back a little bit and then maybe resume that move up. Do you take it off the table sooner rather than later or do you go ahead and let it back and feel a little bit?

LUNA: Yeah, it’s a great question. And I think for viewers out there, it’s about your time frame. If it was a trade, you got a huge pop in some of these ark names, Coinbase Roblox, you’re probably closing those out right here. But to your point, if it’s a long term position, what I do is just trim a little bit, take a little bit off the table. It was a 2 to 3% position. That’s now 4 to 5. Bring that back a little bit. Take a little bit. I do think, though, looking at the technicals, looking at what’s going on, this might not be just a bear market rally. It could be a bottoming process. So don’t get all out and wait on the sidelines because you can miss a big pop next week.

PAYNE: So while you guys are buying, like I said, 95% of my guess, most of Wall Street were selling or holding off. And now we’re starting to see big time short squeezes. Right. And in fact, during the same period that the S&P is up about 8% coming into today, the 50 highest shorted names were at more than 20%. And, you know, so, you know, Scott, I bring that up because you know, these names, they’re attractive down here on a risk reward basis, aren’t they? Because I’m looking at some of the names that you like. And, you know, I think the Best Buy is one, Ford is another. These names have been hit pretty good.

MARTIN: They’ve been crushed, man. I mean, they’ve been thrown out with the baby, the bathwater. And then, oh, by the way, for good measure, they threw out the bathtub as well and then burned the house down. So sometimes the data, the stocks look so ugly and so terrible, like some of my dates in high school. Whoops, they actually you need to buy them. You need to take them out. You need to take them for a ride. Because here’s the thing. Some of these stocks, Charles, just get caught up in this emotional swell, this emotional wave that drops point. You just got to kind of mitigate it and sometimes hold your nose and buy them. The ones we talked about two weeks ago on the market bro segment both of us amazing. I mean, last lam research, we talked about Kohl’s. We talked about Cleveland Cliffs. Even after a bad day today, boys and girls, those are still stocks that are constructive here because they’re way oversold. And oh, by the way, they’re cheap. So if anything improves, if the Fed does get out of the way, if the economy we do get a soft landing here, it’s a very shallow, short recession. When the economy comes back, these things will explode.

PAYNE: Yeah, there’s no doubt that these stocks and stocks in general are going to come back a long time before the recession is over. And Scott, you got to be careful with those zingers because you’re going to get me back in human resources. All right.

MARTIN: My phone’s been ringing. I know, man.

PAYNE: Already. Yeah, that buzzing in your office is from the third floor, wherever they are. Hey, really appreciate it. Good stuff. And like last time you guys were here, you made people a lot of money. Scott, Rob, appreciate it. And of course, folks, we’re going to stay in these markets throughout the.

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