Program: Making Money with Charles Payne
Date: 3/12/2021
Station: Fox Business News
Time: 2:00PM

CHARLES PAYNE: I’m going to bring in Gibbs Wealth Management’s Erin Gibbs, the Delancey Strategies president, Jared Levy and Kingsview Wealth Management CIO, also Fox Business contributor Scott Martin. Let me start with you, Erin, because I got to admit, you’ve been ahead of the crowd. You were on cyclical names. You talked about them a lot. And of course, now they are benefiting from an improving economy. But you can almost argue that some of them look like they’re getting expensive, and growth may be getting oversold. So are you making any adjustments yet?

ERIN GIBBS: No, I don’t see them as really turning or having any change in trend while they are getting more expensive and growth. I wouldn’t call it quite oversold just yet when you look at some of those valuations. But just taking example, one of my favorites, financials, the financial sector is still trading at a thirty percent discount to the S&P. Five hundred. And that historically is an extreme discount even in a low yield environment. We’re normally talking about a twenty percent discount, not thirty to forty. So I still don’t see this as overbought by any means. And there’s still room for it to grow.

PAYNE: All right Scott, a gusher of money coming in, it’s got to go somewhere, how do we get positioned for it?

SCOTT MARTIN: I think it goes to stocks, Charles, into Erin’s point, just to dovetail that we actually took some money from, say, weaken tech to the beaten up tech last week. And what that means, Charles, is looking at things like Square, looking at things like Invidia, DocuSign, Teladoc, things that got way blasted down, down a linear regression support lines, as well as things that just got, frankly, oversold on say, the RF side and the Mac D’s to get technical on you. And so those are areas, too, to your lead in there, Charles, where you I think you can start picking up some positions, and that’s what’s

going to make a good stock picker this year is waiting for those stocks, those high flyers from last year. Yes. To come back to you at a price level where you can take another bite.

PAYNE: You know, I’m inclined to agree with you that the – that the stay at home, the tech side of that probably way oversold. Someone, in fact, a third-tier firm, put a sell on Square today. So to your point, there on my watch list as well, Jared, how are you playing this?

JARED LEVY: You know, I like everything that Scottie said. You know, I think that the way I’m kind of spinning it is I’m looking for two things. A, I’m looking for sort of there’s transformational names, the maybe haven’t gotten all the love. You know, I’m liking Best Buy right here. They’re transforming into digital. We’ve got all this sort of pent-up potential in Consumers are now getting back to the streets. They’ve got savings. They’ve got cash in hand. They’ve got optimism on trying to play that. Also looking at Johnson and Johnson, a little defensive, but I don’t think people are taking the efficacy and convenience of their shot plus their every day, you know, sort of play to the consumer as seriously as they should. So I like those two names, you know, and that’s that’s what I’m kind of moving into here watching for some of the high flyers in Leisure. There has been a lot of big buying in like PEJ, which is an ETF to buy a lot of leisure, watch out on those names. I don’t know if I would be gobbling up here, I’d wait for a pullback.

PAYNE: It’s so weird too with Staples, right? I mean, they had a flash at the very beginning as a defensive place and then they have been totally under water. Let’s stick with this theme, though. The consumer we had sentiment numbers out this morning came in stronger than expected. It was powered by an almost ten percent spike in expectations. So we’re feeling more confident about six months down the road, in fact, the second-highest level since last March. In addition to that, L brands posted a strong financial result. They up their first-quarter guidance, almost doubled it to sixty-five cents from thirty-five. They’ve reinstated the dividend for the year. It’s going to be sixty cents. This company following Gap saying it’s going to be a huge year. Jared, I’ll go back to you. First, I’m going to take a victory lap because last year I was pounding the table. I told people to buy brick-and-mortar retail, and they have gone through the roof. In fact, I still own some Gap stores at thirteen. What about some of these other names? Because, again, it’s so crazy when Wall Street seems to be warming up.

A lot of these names have taken off to the point. You wonder if you missed it.

LEVY: Yeah, I think there is some room there. By the way, kudos on that call. I know you’ve made I know you’ve stuck with this one, and sometimes it’s hard to do right. I think what we’ve got to remember is this remember pent-up consumer demand. We just had a year of pretty rough times for a lot of retailers, a lot of brick and mortar guys that had to kind of reinvent themselves. So right now, you’ve got these lean, mean fighting machines that when the consumer returns to the normal buying levels or normal activity, a lot of them will flourish. I think you’ve got to look at a name by name basis. I think you need to be sort of, again, careful just going out and buying a retail ETF, you know, get the Macy’s of the world. I would watch a little bit some of the smaller plays that you were talking about. You know, Gap could be interesting. I think you just got to be a definite stock picker there. Just don’t go by brick-and-mortar retail. But I like the sector. I think it’s going to continue to perform generally well.

PAYNE: Erin, you know, a lot of people are gonna have alot of money burning a hole in their pockets. I mean, how how do you positioning for that?

GIBBS: So I’m still hesitant about a lot of the apparel retailers. I mean, I think Elle Brands is different because they had the bath and body which really helped them. But aside from that, when you get all your new clothes, you want to go out. So my idea more is looking at restaurants, look at Leisure, right? You get these new clothes. Darden Restaurants, a little more upscale. It’s not your fast food that we’ve been living off of. And so I think Darden Restaurants and those types of slow, fast food, family eating could really take off over the next six months.

PAYNE: Oh, I agree. I was trying to figure out a way to take this equipment out of this room and to the front lawn. That’s how beautiful it is outside and how eager it is. I want to get out there. Hey, Scott, let me ask you about Gold. There was a report out earlier this week. It’s not living up to the hype in terms of being a hedge against inflation. Is it time to reconsider some other hedge against this inflation story that won’t go away?

MARTIN: Yes, I believe it is, Charles, and, you know, I’ve been a Gold lover on Gold was great last year. I mean, Gold really helped out our portfolios as far as reducing volatility. So it did serve its purpose and now it’s just not doing

much. So there’s two things. One, I think that love is kind of going to Bitcoin, which obviously we’ve seen take off for Gold is kind of slumped. But I’ll tell you, man, if there’s real inflation out there and this is true, do inflation that’s coming down the pike here, stocks, stocks are going to be that hedge because you’re going to see the inflation pace pick up in stock prices. And so I think stocks here are good hedge against any inflation expectations that we have.

PAYNE: I got to ask all of you about this report out saying that stock pickers underperformed the market yet again, eleven straight years of lagging the S&P 500. I’ll go back to you on this first, Scott. I mean, what’s the argument for professional stock pickers?

MARTIN: Well, at least for ones like me, I hate to say it, but we actually did beat the market. So I don’t know who we are talking about. But you can go back on the tape, Charles. You know, I like something that Erin talked about because we talked about stuff like Darden Restaurants. We talked about stuff like Bloomin last year –we talked about Southwest Airlines. I said, I love Southwest Airlines. LUV is the ticker. So I don’t know how these stock pickers missed it. But you’ve got to stay with good themes and you have to be able to deal with volatility. I think on some of the stock pickers I’ve seen and looked into, they sell too early or they sell too late and they don’t hang on.

PAYNE: Jared, I got to tell you, I do find the data to be very suspicious, particularly last year, because the winners won big and the losers lost big. And I don’t see how some of these general funds could have beaten people who really just saw things like we talk about on this show every day. But what do you tell someone who says, well, maybe I should just buy a regular old ETF?

LEVY: There’s two bits of this, right, I mean, Scott, he’s right, you know, I look at my numbers, I look at a lot of my my colleagues numbers they’re doing great. Here’s the thing you got to remember, right, when markets are sort of straight up parabolic in one direction over a long period of time, everybody is a genius. All of my friends, all of my doctor buddies are out there like, dude, I’m killing in the markets. Yeah, you are because stocks did nothing but go up. Now, remember, as pros were diversifying, were buying insurance, we’re spending money on the just in cases and we’re also protecting ourselves for when the term does come, so some of that money, some of that upside might

be spent on protective measures. So I would think that’s the general theme, that as an investor, you got to think about. You know, if you put your money just in an ETF and let it sit there, be prepared, like Scotty said, for some volatility to wild ride, whereas the is going to massage that a little bit. And usually when markets are volatile, they will return that volatility then than the average.

PAYNE: That that reminds me of our old colleague here, John Stossel. He did a show once where he put a bunch of symbols on a dartboard and threw darts. And then at the end of the year, he said he outperformed the market, but he didn’t deal, Erin, with the emotions of it. You know, you buy Boeing, for instance. How many people have sold Boeing at a loss in the last year and now it’s through the roof again, the emotional part of this, I think a lot of people have to understand in hindsight, it looks easy.

GIBBS: It does, and I think part of it is is really sticking to our convictions and an understanding of the thematic changes, and certainly with the advent of ETFs, it is harder for managers to beat. And we’ve known that. The more ETF there are, the harder it is for active managers to beat. But when you look at the big changes years like two thousand nine, twenty ten, those are the years where active managers actually beat. Same with two thousand three, four and five. So when you see big thematic changes, those are the years where managers can really help and you look ahead and stick to their themes and beat the market.

PAYNE: And then last year and a half has been all about things, I’m telling you, I think I think only what less than sixty percent of the stocks in the S&P were winners last year. You really have to be spot on, Erin, Jared and Scott, thank you very much. And that’s why I had this conversation with you, because you all have amazing, impeccable track records.

.