Kingsview CIO Scott Martin discusses finding the things the market is leaving behind, and adding to a portfolio during a pullback.
Program: Making Money with Charles Payne
Station: Fox Business News
CHARLES PAYNE: Joining me now. Market watchers Scott Martin and Ryan Detrick and Scott, you know, the theme for the day really is for twenty twenty one of these new opportunities, I’m talking investing versus maybe the traditional approach. You know, I’ve always seen you as a sort of an older school guy, but I know recently and bought you sold Amazon and you bought Netflix. And some people were saying, Golly, why would you do that? It’s been absolutely huge. Is that an example? Maybe now some of these newer names starting to emerge, not the fang names per se, but maybe a new set of names starting to emerge that people should be aware of.
SCOTT MARTIN: Yes, trading my age, I guess. Charles, you know, with respect to making some moves that are just frankly out of the box a little bit because nobody would have thought to sell Amazon in the spring. But if you look at that, like you said versus Netflix and video was part of that trade too. That was a great move. As well as that we made. And that’s just, I think, Charles, you know, kind of letting go of the traditional, like you said. I mean, some of the fang names have obviously been part of our portfolios for a long time, and it’s time to roll some of those out. And I think find some opportunities in some of the names of either people aren’t talking about or frankly, folks are hating on as it’s pulling down the stock price in some of these names that are coming down to levels where they’re very attractive, and that’s when you have to take off things that are at their all time highs.
CHARLES PAYNE: Ryan, of course, you know, the stock market, the history of the market better than anyone. This combination that we’re dealing with right now. Have you seen a time? OK, you’ve got inflation that’s rocketing higher at the same time, you’ve got slumping sentiment and then you’ve got this runaway rally. I mean, that seems like an odd combination to a lot of people looking at this from the outside.
RYAN DETRICK: Does Charles before I go there? That was a great answer by Scott. Turns out Scott and I are both from Springfield, Ohio. We went to the same elementary school, so he ever had that on your show. But oh, Springfield, Ohio, on the map today. Now. But anyway, Charles, you’re right. I mean, honestly, no, we’re we never really quite seen a scenario where inflation’s high confidence is low and stocks are up. But I love what Jim just pointed out when when your confidence is low, that tends to be a time you want to be an investor. But what have we seen before that we know the playbook gets when earnings are this strong earnings of the S&P. We’re supposed to be one sixty five at the start of this year. We’re looking at probably 208. That’s like a 25 percent increase in the expected earnings. How much is the S&P up this year? About 25 percent stocks are actually cheaper today than the were at the start of the year. So as long as we have that tailwind, which we think is still the case, we’d still think your stocks are going to keep beating bonds and his bull market still has some legs left to it. No, I
PAYNE: love that you bring that up. You know, there’s always that debate over cheap and you know and value and you know, people aren’t factoring that in, and that’s an important point. But you just said it. It feels like the fix is in, at least for the rest of the year. Is there anything that could change that, Ryan?
DETRICK: Yeah, I mean, the fix, everyone. Everyone’s bullish, right? Everyone feels pretty good. I mean that right there, everyone’s on one side of the boat. Maybe you could get something there, but I’ll tell you what, Charles, you’re the middle. First part of November is usually strong. The last part of November is really strong. November is the best month of the year. You know the troublesome area, it’s right in the middle. So we’re in that area, but also at the same time, small caps, industrials, materials, you know what they’ve done the last eight months? Like nothing. They went sideways from April until just recently went up a Todd’s being passed around and it’s the lifeblood of a bull market. Different areas are taking leadership. Small caps and close to us still look really good here.
PAYNE: Scott, as a professional, you know, buying and selling the market. How do you grapple when you’re buying at a market that’s already at record levels? This is a common question that I get, and when people see me in the street and I like to get, you know, different ideas, how do you do it? How do you say, OK, we’re at all time highs? It feels like it’s Topsy, but I still see value.
MARTIN: Yeah, you got to find the grenades out there, Charles, I mean, you got to find things that basically the market is leaving behind. I mean, a couple of names that come to mind recently, Disney. How about that name recently? Very much left behind in this rally, Peloton and PayPal or two other names that we’ve actually started to add to in this pullback? Tesla even pulled back some when Elon Musk sold that big share that he had there the other day that he put on Twitter. So the reality is that the market is going to go up. We do agree with that, but the names within the market that are going to be left behind are ones that need to pick up because that’s where the value lies. I don’t like to chase big, high flying names that everybody’s talking about, like Ryan mentioned these days, because those are names get, get, get, get really crowded. And when they start to pull back the weak hands get out. But if you start picking off names that have already sold off have already got the sellers exhausted. Those are names you have to go after in a raging bull market like we have today.
PAYNE: Yeah, full disclosure, I’m I’m counting a table on PayPal among some of those names that you just mentioned. All right, so Ryan, great here this year, monster a year, almost in the books. Take us to twenty twenty two. What’s what’s your crystal ball saying?
DETRICK: Yeah, we still think it’s a bull market, but let’s take a look. You know, a couple of years ago, getting 30 percent last year gained 16 percent on the S&P this year. Twenty five percent. We think it’s going to be quite that good. But Charles, I’ll leave you with this. The last 11 times, the S&P 500 gained at least 20 percent for the year, so probably going to be in that situation this year. The next year was higher 10 out of 11 times, up 14 percent on average. So, hey, maybe we’re all getting 30 percent. But I’ll tell you what, Charles, things still look good and history would say the bull market still here.
PAYNE: Sprint, it was Springfield, huh? I just think the other thing you two guys is the most famous person from Springfield.
DETRICK: John Legend
MARTIN: Pitcher for the Cincinnati Reds.
PAYNE: All right. John Legend Dave Birbhum, Yeah, they’re up there. All right. They’re not on the same level as you two guys, but they’re getting there. I’ll tell you a shout out to Springfield. Shout out to two of the best Scott and Ryan. Have a great weekend, guys. Great talking to you.
Kingsview CIO Scott Martin discusses the Strategic Petroleum Reserve, inflation and what we might expect at the pump.
Program: Cavuto Coast to Coast
Station: Fox Business News
NEIL CAVUTO: All right, let’s get to read on all this from Scott Martin. Scott, I’m just wondering, let’s say the administration goes through with plans to tap the Strategic Petroleum Reserve is a lot of at least 11 Democratic senators have urged without looking at increasing oil production in this country. Isn’t that like a Band-Aid approach? In the meantime, yeah.
SCOTT MARTIN: Just what I was thinking, Neal. A temporary fix to a long term problem is you and Dan just talked about. I mean, sure, you can tap the SPR and maybe alleviate some of the price pressures that we’re seeing in the holidays. But come January, February, March and beyond, you’re going to see the administration’s attack on fossil fuels, especially oil. So you’re going to still have price problems next year. And you’re right about just the process by which the administration has attacked the pipelines and just driven up price. And we’re starting to see that now come through.
CAVUTO: Let’s talk a little bit about the general inflationary picture oil coming a little bit down today. It’s still eye-popping at more than 82 bucks a barrel gas, now increasingly costing over $4 in some locations over $5 a gallon. How long do you see all of this dragging on
MARTIN: A long time? Because demand is there now, see, that’s the problem. Not only have we had obviously reasons that we mentioned just a second ago about price pressures to the upside, but now we’ve got demand really coming in with the economy fully reopening. So I see Neal some real issues at the pump and some real issues with respect to prices of oil prices at the barrel because you have demand coming back where that’s going to drive up price, even if we do to tap the SPR or actually increase production, which is probably unlikely anyway.
CAVUTO: You know, Scott, I notice in the latest quarter, you know, consumer spending was running at about a one point six percent clip that is down from more than 12 percent in the prior quarter. So it’s very clear that Americans are slowing down a little bit. When does slowing down become nothing? I mean, with no change reversing,
MARTIN: It could be soon. I mean, you see these price pressures with the energy side of things, you see some of the other pressures that we’re seeing at the grocery store. Obviously, consumers are feeling the pinch here, so it definitely could turn into something maybe a little bit more of some sort of malaise, especially with now the Federal Reserve question marks going on with Jay Powell and whether he gets renominated or not, Neil. So therefore, you’ve got some pressures on the consumer now that weren’t there, as you mentioned just even six months ago.
CAVUTO: All right, Scott, be talking to you in a bit. Thank you, my friend.