Kingsview CIO Scott Martin discusses reallocating to more growth and aggressiveness when the economic climate is murky. He also talks about oil, energy stocks, and the Russia/Ukraine dynamic.
Program: Cavuto Coast to Coast
Station: Fox Business News
CHARLES PAYNE: So this has been a crazy, crazy week. Here to help us hash it all out. We’ve got Kingsview Wealth Management CIO Scott Martin Scott. You know, first I got to just ask you, the last two weeks in general, this market. You know, everyone that came on was cautious. They were out in the market. They were in defensive plays. I mean, have you been caught somewhat by surprise at the resolve of this market the last couple of weeks?
SCOTT MARTIN: Yes, I have. Charles, it’s one of those things, though, where you get surprised, you get caught off guard. But you also have to think back in recent history as to this is what happens when data gets really bad, when the economic climate gets a little bit murky, and when there’s geopolitical issues all around and everything looks really terrible and everybody’s telling you to get out of the market, the market’s going down, rebalance, reallocate. That’s actually the time you should be reallocating. But to more growth, more aggressiveness. And so while I am a little surprised at the resolve, I’m not surprised in the sense that we’ve seen this movie before it and we’re seeing it play out right now.
PAYNE: Let’s talk about some of the niches that have come on chips. Yesterday, NVIDIA was up 10%. You know, are you are you buying chip stocks at this point?
MARTIN: Well, I wouldn’t chase them on a week like this week. Now we own Nvidia and a lot of our ETFs that we run through Monarch funds as well as through a lot of the accounts that we run for our clients. We already have Nivida, which has been good. I would look at some other chips though. Charles maybe is seeing it spread over to maybe the Andes of the world or the Texas Instruments. But I wouldn’t chase someone on a week like this week because there’s a lot of froth in those names now, at least in the reaction to in video so far. So watch them come in a little bit, maybe 5% down from these levels and I’d be a buyer.
PAYNE: What about oil stocks, fossil fertilizer stocks? A lot of these names getting an extra bump from what’s happening over with the war on Ukraine.
MARTIN: Yeah. They’ve been good and they’ve been good. Diversifier. I think that’s the biggest news about oil this year is that it’s been great. Even though it’s equity, you know, if you look at Chevron, Exxon and some of the others, it’s like that’s been a good diversifier away from traditional equity because those have been up. Well, a lot of stuff’s been down. So we have some energy stocks in our portfolios here at Kingsview would tell you this, Charles, right now, I like the pipelines. So if you look at stuff like MLP, higher dividend, close to 78% and that’s the mover and shaker of the oil in the crude that we need to start going in this country as we try to develop, I think, some sort of energy policy maybe.
PAYNE: What about cannabis names? You know, we all know cannabis was hot then they fell off. They’re on fire this week, no pun intended. A lot of rumble rumbling about legalization or not decriminalization, if you will. You know, they’ve come down a lot. Would you be a buyer here?
MARTIN: They’ve been crushed and it’s tough with cannabis because they kind of were that forgotten asset class, like you mentioned, Charles, in the last six months. I mean, dare I say a lot of those stocks went up in smoke and that is a pun intended. So with respect to where cannabis valuations are, I think they’re attractive. But to your point, it’s largely politically driven right now. And if you get bad news in political land from the cannabis area, that’s not good. If you get good news, it’s obviously good. But no, no telling how that’s going to pan out short or long term, really.
PAYNE: You know, Scott, I was reading a headline today and Ukraine, you know, there’s a counteroffensive. They’re going on the offensive. They’ve held the ground. The war is a month old. Russia is not winning. In fact, many think they’re losing. And it feels like there could be a correlation to, you know, we’re rooting for Ukraine. And every time we see something positive there, maybe the market going up, I’m not sure. But if the tide turns and it looks like Russia is on the verge of some sort of decisive victory or their atrocities start to increase, would that start to hurt this market, in your opinion?
MARTIN: You might. Charles as you know, the market usually preempts that good news or bad news in some cases. So it may be too late when we finally get that news weather. Like you said, it’s good or bad. But look at any kind of resolution, any kind of positivity out of that area of the world is good. Longer term now, short term, there may be a little bit of gamesmanship here to play on that. But longer term, look out, six, 12 months, that’s going to be a largely positive development for the S&P 500 and frankly, probably for fixed income as well.
PAYNE: And, of course, for the world and humanity. Scott, thank you so much. We covered a lot. Folks, we’ll be right back.
Kingsview SVP Paul Nolte takes a deeper dive into retail sales, oil, automobiles, inflation, and the raising of interest rates that will invert the yield curve.
Kingsview SVP Paul Nolte takes a deeper dive into oil, automobiles, retail sales slowing, inflation, and the raising of interest rates that will invert the yield curve.
Kingsview CIO Scott Martin discusses the “war” on the oil industry, and what it means for gas prices and supply. He also talks about the current administration’s impact on businesses and new regulations.
Program: Cavuto Coast to Coast
Station: Fox Business News
DAVID ASMAN: The Biden administration’s push to solve inflation, meanwhile, by cracking down on businesses using antitrust violations, essentially blaming businesses instead of government for inflation may actually cause bigger inflation issues. This, according to a Democrat, former Treasury Secretary Larry Summers. He tweeted out quote the emerging claim that antitrust can combat inflation reflects science denial. There are many areas like transitory inflation where serious economists differ. But antitrust as an anti inflation strategy is not one of them. Joining me now is Kingsview Asset Management CIO Scott Martin and Point Bridge Capital founder and CEO Hal Lambert. Good to see you, gentlemen. Thanks for being here. Scott, you got to hand it to Larry Summers. So I mean, he’s going against the woke crowd on this one. That’s that’s brave to do for a Democrat.
SCOTT MARTIN: Looking outside the box, Larry, and thank you for
ASMAN: looking inside of this argument.
MARTIN: Well, yeah, inside, but then wanting to jump out of the box is David, as far as figuring out the right way to deal with this and we do have evidence. I mean, Larry Summers hit on some of the science of it. I mean, let’s just look at history in the last two year, the war that the Biden administration put on the oil industry let the closing of the pipelines, other special assessments, other rhetoric, other talk against the industry. And look, what’s happened to gas prices and supply. So if you look at it going forward, especially, you say the meat industry, could we just have the government to just leave the businesses alone? Look at what’s already happened to what the government has done for the businesses with respect to the COVID breakout? And now they’re going to come in with regulations and any kind of trapping, let’s say, on some of these businesses as far as how they should operate going forward looks terrible for the consumer. It’s going to drive up costs because supply is going to go down.
ASMAN: Hal, let’s face it, this is an anti-business administration. I mean, there’s no getting around it. There aren’t business people in the administration. I can’t think of one offhand. Maybe there are one or two, but I can’t see any and there does. There literally seems to be an anti-capitalist mentality. And also in an attempt to divert blame that they have their own responsibility for creating inflation through deficit spending and all sorts of things and putting it on the backs of businesses, right?
HAL LAMBERT: Oh, absolutely, I mean, this administration is filled with academics and lifelong bureaucrats that have never created a job in the private sector, none of them have, including the president and the vice president. So they don’t have a clue how to create jobs. So yes, they are trying to play the blame game and blame the businesses for their failures. It’s not going to work. And what Larry Summers is basically saying is, look, get off the campaign trail and get real. And let’s look at the real causes of this inflation. Now, I don’t I don’t agree with Larry’s assessment of it. He thinks it’s because we need to outsource more jobs to China and take tariffs off of China. That’s his solution for it. He thinks we have a worker shortage. Well, we do have a worker shortage because of the policies of this administration to basically create a universal income and pay people not to work. So we have a worker shortage that creates higher prices in labor and causes people to sit home. And they’re handing out money and people are spending money and it’s driving up prices because we don’t have a supply chain that can handle it. That’s the that’s the reason for this. It’s all their policies. And that’s that’s what they don’t want to admit. And they’re going to continue to play the blame game all through 2022 as we go into the next election.
ASMAN: All right. But very quickly, Scott, we only have about 10 seconds here, but there is a tool that scares me that they may pull out, and that’s price controls that always leads to shortages. Do you think they’re going to use that next?
MARTIN: I do insert awkward Kamala Harris laugh here, because any kind of price controls take away the free market, David, and that hurts consumers in the end.
ASMAN: Empty shelves. That’s what price controls lead to, gentlemen. We’ll be seeing more of you.