Kingsview CIO Scott Martin on Fox Business Making Money with Charles Payne 5.19.23
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: And remember when Dow was approaching 10,000, how popular those Dow 10,000 hats were? That was back in ’99. I’ll ask Scott Martin, who going to be wearing his S&P 4,200 hat, next. All right, folks, the FAANG acronym, it’s been around for about eight years right now. And in that time, that group of mega cap growth stocks has never started a year as strong as this. Look at that out-performance. Ironically, Wall Street, all last year, every single big guest on Wall Street said, “FAANG is dead.” Although my next guest says they were wrong, and he’s been right so far. Kingsview Wealth Management CIO, Scott Martin. And, Scott, the question I guess is, why is it working? Okay, you can argue it was oversold last year. Maybe you got to bounce this year, but this is more than just a bounce.
SCOTT MARTIN: It’s a revolution. It’s a new way of life again, or a re-way of life, I guess, or redux. Because you’re right, Charles. I mean, the biggest thing for me, man, that we talked about, as you said in January and February, is that the value trade was the foregone conclusion. It was like the easiest trade that any individual investor or money manager like ourselves could have ever made. And it was probably the worst trade you could have made because it’s one of the worst, at least, sectors of the market so far this year, at least when you compare it to some of the growth areas. So, to me, that’s a situation that’s setting up a lot, Charles, with the AI trade. I mean, you and Rob Luna talked about it last segment about how some of these trades just get so loved and so overdone and so good. These trees get so tall, you got to fade them, man. You got to chop them down a little bit, and you’ve got to buy things that are still down and being hated by the market because that’s where that next round of money’s going to go, I believe.
PAYNE: Yeah, but isn’t that the tricky part though? Because the first axiom in Wall Street though is buy low, sell high. However, if you sell something up 20% and then a month later it’s up 30%, I mean, it’s like… Listen, we closed out a CRM earlier this year. We left a few bucks on the table. I’m not upset about it. A lot of these other names we’ve held so long that we don’t ever have to really sell them for a long time. But if something is working, when do you determine, when you take a hunch that it’s going to stop working? Because if you’re wrong, just as the masses are getting in, you’re going to leave a lot on the table.
MARTIN: You are, man, but then the old adage too is you never lost money taking profits. I think your word working is a really interesting one because how much is it working? If something is working, like you mentioned with Rob, Nvidia in that case, or CRM even, I mean, man, I just have to take those profits. I think in most cases, especially given that this market is still a little jumpy. It’s still a little frisky. So when it’s working and it’s working to a point where maybe you’re comfortable with… Because, remember, what the thing is too, man, when you take that working money off the table, what do you do with it is the key. If you leave it in cash, yeah, that’s probably a problem if that original stock goes up in price, like you said, the 30, 40% up. But if you add it to things like we’ve been adding to with some of the cash we’ve raised, I’m excited about that new capital deployment.
PAYNE: All right, so let’s talk about that. I know you like Home Depot, Tyson Foods, Danaher. Home Depot is sort of a mixed number there. I guess you’re buying weakness here. What’s the motivation for being in these names, and how long do you hold them?
MARTIN: Stuff that’s been trashed, shops I go to and companies I know well. Between Tyson Foods, they had a terrible earnings report, bad outlook, like Home Depot did, Charles. And Danaher hasn’t been strong lately either, but the fact too, man, that if you look at the charts, they’re starting to round out that really, really heavy volume sell that those three names have received in the last, say, three to four weeks. And then, secondarily, starting to base out and starting to get the RSI and the stochastic to cross. And two, to your point, fundamentally looking at, say, valuations on the stocks, the fact that a lot of the bad news is already in. And these stocks have been thrown out with the baby, the bath water, and then had the house burned down on them.
PAYNE: All right. Before I let you go, are you going to break out a S&P 4,200 hat or not?
MARTIN: No. Because, man, don’t call it a comeback, but the economy’s been here for years. I’ve been wearing this S&P 4,000, S&P 4,100 hats, and everybody looked at me all cockeyed. Now they want me to wear the 4,200 hat. No way. I was already there. I probably would actually sell the 4,200 hat just because of the fact that everybody’s going to start wearing it.
PAYNE: Well, if you wear the S&P 5,000 hat, please let us know. Scott, have a great weekend, my friend.
MARTIN: I’ll meet you at Taco Bell, buddy. We’ll see ya. Thanks.