CIO Scott Martin Interviewed on Fox News 1.21.22

Kingsview CIO Scott Martin discusses margin liquidations, crypto and market malaise. He talks about expectations for a bounce, plus market sentiment and psychology

Click here to watch the video

Program:  Making Money with Charles Payne
Date:  1/21/2022
Station:  Fox Business News
Time:  2:00PM

CHARLES PAYNE: So yesterday at 10:30, it felt like a sigh relief. You know, there were a lot of unanswered questions, but you know, just we had a lot of grain on a screen and we felt pretty good. But of course, later on in the day, it all changed. In fact, just about every stock in the market went the exact opposite way if something was up one and a half percent and closed down one and a half percent. And I got to tell you it was the inverse and everything really looked really, really crazy. And I put the blame on Peloton. I really do. It’s I think it was a gut punch for individual investors. But let’s face it, the last hour trading sell offs this this week and this month have been amazing, and to the point where now I think they’re self fulfilling. And so with that in mind, I think the big buy signal would be when we get a big rally in to the close. Nevertheless, buying into the close is when you make most of the money. At least it’s worth goodtime over the last 10 years or so. To help us find some ideas, I’ve got Scott Martin and David Dietze with me and Scott. Just, you know, first of all, your your thoughts on these sell offs in the last hour of trading, it feels like now it’s sort of just it’s just knee jerk at this point. What’s what’s causing

SCOTT MARTIN: that status quo? Yeah. And to be expected, it’s a lot of things, Charles. I mean, there’s probably some margin liquidations going on. There’s rebalancing and there’s other things going on too, especially today with crypto that seems to be pushing other things down. So look, the sell offs, as you said a

PAYNE: But wait a minute now, so crypto is leaving the equity market now?

MARTIN: Well, here’s the thing, man, that a lot of the malaise that’s been in equities say today. I think this week has spread over into crypto today because they’re way outpacing the losses in equities today bounced a little bit, but not near as much as equities did this morning. And now you’re seeing accelerated selling into the equity close close just now. So I think that’s one thing feeding the other, maybe the cat leaving the dog. The point is Charles just quickly on the sell offs. The problem with the late day sell offs is once you get a few of these, like you mentioned in a row, that becomes expected and typical. So once the kind of glass of milk starts to tip over, the whole thing spills out. But to your point, we just need a reversal of one of those two things maybe one or two days. And all of a sudden the sentiment can change, but it won’t change until we actually have some real buyers come in, which I don’t see coming in today or even Monday.

PAYNE: Well, it was really tough on a Friday, the week ahead of the Fed meeting and all that stuff. But Dietez? Same thing with you. I mean, what do you know? Is it just one of these things that begins to happen? It’s a pattern. People anticipate the pattern. It becomes self-fulfilling.

DAVID DIETZE: Well, I think the last couple of days, the smart money did get out in advance. Charles, when you look at the overall market, those companies, which have the highest valuations, have taken the biggest beating, while the more value cyclical stocks have held up better. So when you’re coming into earnings, Peloton, I mean, you know, the ultimate stay at home stock that was going to keep thinking further and disappoint Netflix the same thing. They’re getting huge competition from Disney and similar. And so I think the smart money wanted to get out. But I’m more optimistic for next week because we’re going to get some of the heavyweights reporting the ones that are the rock of Gibraltar. And so I think things in terms in selling off at the end of day may start to shift next.

PAYNE: We’re already starting to see the sell off. Scott, I know I see you did a pretty intriguing trade here. I think you sold your Amazon and you’re buying Netflix. You like this Big Dipper?

MARTIN: Yeah, we’ve been out on Amazon for a while. Look, I just like stuff on sale, Charles, and not when I’m buying shoes or something, for example, or other things. I won’t mention the fact that Netflix is the fact that when a stock is down 20 plus percent on a day when the market malaise is widespread, typically you can get a bounce out of that name. Not maybe on Monday or even the day of like Friday, but you can get a bounce in the future. So we’re playing that one for a short term trend. A quick note on what David said. He’s right about the earnings heavyweights coming out next week, but the market sentiment and psychology has changed, meaning that you can even get good earnings and a lot of those companies that he’s referencing and the market could sell them just because that’s what the psychology is right now. So don’t be discouraged if we get good numbers and they sell off, the media is going to go nuts about that. That actually could be a buying opportunity, saying that fundamentals are still strong in the markets, just selling them willy nilly.

PAYNE: David, I got less than a minute. I want to go over some of the ideas that you like or that that you’ve been buying. AT&T, Gilead and Walgreens feels like safety is the key here.

DIETZE: Yeah, absolutely. But, you know, I want to highlight Walgreens. We are seeing a nice move and CVS is up over 100 as people are coming back and seeing the value of the local drugstore during this pandemic. But they seem to have stayed clear of Walgreens. You know, 80 80 percent of Americans are within five miles of their stores. They just upgraded the number of jabs they think they’re going to put in arms in the next 12 months. 30 million versus twenty five. Yeah, three point eight percent dividend. There’s all sorts of levers they can pull in order to monetize, for example, a 29 percent stake in major source burden. I think the will do well with higher interest rates. Citigroup.

PAYNE: We gotcha. Hey, Scott. David, thank you both very much.

Get updates to your inbox

Enter your email below to receive the latest news and insights from our thought leaders.

    unsubscribe at any time

    How to access this strategy?

    There are many ways to access our strategies. By clicking on one of the sections below, you will be leaving the Kingsview Investment Management Website.