Kingsview CIO Scott Martin discusses different reasons people buy – and sell – stocks. He also discusses the “fast and furious” nature of market phases, and how investors must realize that their portfolios need different things at different times.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: CEOs insiders, meanwhile, are cashing in their stocks at historic rates from Elon Musk to Google co-founders. Sixty three point five billion dollars have been sold through November. That’s up 50 percent from last year. Joining me now, Rob Luna and Scott Martin. And you know, Scott, I don’t really get too frustrated when insiders sell unless they sell a large percentage of their stock. But for many, it’s a it’s a problem. I mean, would you be buying? Tesla’s made a 50 point reversal off the low today, Alan, would you be a buyer if these insiders are selling?
SCOTT MARTIN: Sometimes it’s a good thing to do that, I mean, and here’s the funny thing, Charles, to your point about people getting so emotional and so wrapped up in what insiders are doing sometimes are selling for different reasons than you’re buying. I mean, they’re selling for four tax loss or tax gain type capture, as well as the fact that maybe if their personal situations that they’re taking advantage of or my goodness, as investors, sometimes they’re selling because the stock is way up and they want to just take some chips off the table. So what I like to look at in that particular notion of Tesla is I like to buy Tesla on big down days, big, big washout days. We had one recently, Charles earlier this week when the New York Times came out with that report about the self-driving technology. So yes, I like Tesla long term here. I think it’s a great part of our future. But I want to wait for those big down days because those are short lived when Tesla pulls back hard. That’s when you jump into buying news in the next couple of days, it’s up.
PAYNE: Of course, rob the reason one of the main reasons we’re seeing all the selling this year and the new laws and the tax hikes are coming and a lot of these folks are are cashing in stock just so they’re getting paid some of these tax obligations. So when you look at it on a company by company basis, when does it become a big deal?
ROBERT LUNA: Yeah. And I completely agree with Scott, actually, surprisingly, Charles, you know, from the standpoint of, you know, these executives look, they file something called a 10b5 one. Investors can look at that and you could actually see that these sales, a lot of times are predetermined. I work with a lot of corporate level executives. This is something we do just as risk management when you think about it, Charles. That’s where the majority of their income is coming from. So they have to go ahead and sell those stocks. But to your point, it is a case by case basis. Don’t sell the stock or buy a stock just based off of what insider is doing. And to Scott’s point, if you like these stocks when they get beat up for any reason, if the excuse does, your is the CEO is selling, go ahead and buy them then, but don’t let this determine your investment strategy.
PAYNE: And a quick note there is apparently the AMC CEO sold 90 percent of his stock. I don’t know. I’m not cool with that. The stock got hit is still on a lot of pressure. I’m really surprised he did that. I don’t know. I think he may have taken advantage of investors on that one. Let me ask you guys about today’s session because some folks are confused. Rob, I’ll start with you. Does a day like today when we could have easily been off a whole lot more? But we’re not. Does that signal anything to you?
LUNA: Yeah, I mean, I’m really surprised at your previous guest is a technical analyst, there was kind of talking about this. The market’s extremely resilient. We have so many opportunities and reasons to go down here. And now we’re seeing all the predictions of a twenty to twenty five percent pullback next year. What I’ve learned a long time ago in this market, Charles, is you want to go against consensus and the obvious set up for next year is probably what what you do not want to be doing. I think the market is strong as long as the interest rates stay low. You’ve got a 10 year cylinder, 1.5 inflation, as we saw this morning as an issue. Cash is trash. You want to be invested in assets. Use these opportunities as a pullback. This market’s going higher, in my opinion.
PAYNE: You know, Rob, I mean, let me let me start with you on this one, Scott. It’s it is interesting to me, though. Yesterday, the best performing stocks were the most boring stocks, right? The S&P 500 low volatility names. It’s just I mean, they’re right is the Pepsis of the world and the McDonald’s in the world. I mean, is there a time when you say, OK, I want to park a little bit more money than normal and boring, but steady?
MARTIN: Yes. And we’ve been doing that for our clients, Charles, but we don’t stay there. I mean, these market phases are fast and furious. And then some days, like you mentioned you, the staples, are there. Other days, energy is there. Other days utilities have been great and then other days tech. My goodness, which has been a great sector for us the last several years is lit up like a Christmas tree that may or may not have been set on fire. And so you have to realize that there are times you need to have different things in your portfolio. Doing different things at different times and having those experiences over a long term period is how you’re going to win in this market.
PAYNE: I got that one my man the Christmas tree set on fire. You know, we, you know, we’re in low shoe sales kind of analogies over here these days. That’s all I’m saying. I’ve got one for you, a spoiler alert for all your sex and the City fans. That’s Robin Scott. There was a big death on this reboot. A character was actually using a Peloton bike ahead of their demise. Now the stock is down today, but it really probably isn’t. There was a massive downgrade on it. And Scott, I think the notion here is a lot of people were going for these stay at home stocks, you know, and we were told even after the pandemic is over, the hybrid work thing is going to be there forever. Forty percent of us will work from home and all of them, one by one by one, have been taken to the woodshed. Is there any hope for Peloton or any of these other names?
MARTIN: There is I mean, I think some of these stocks, like you mentioned, Peloton, whether it’s these, these these documentaries or say these, this these comedies or whatever you want to call that that show taking shots at Peloton, I think these stocks get overdone. Charles, I mean, you look at know, Rob mentioned the technical analysis aspect to think, look at the RSI, look at the relative strength on Peloton, look at the stochastic, look at the MACD histogram. This is all really cool stuff and technical analysis like they’re way overdone. So you have the ability to kind of ride the wave here. I think you got to get into belts on here.
PAYNE: All right. Hey, here’s the good news. There will be a vacancy for a main character if they make another movie, Rob. I checked you out and some of those honeymoon pictures. My man, you are perfect for the role and you could be the new Mr. Big any day. Both you guys, Rob Scott, have a great weekend.
MARTIN: Yeah, maybe bigger.
PAYNE: All right, folks, I love hearing from you on Twitter