Program:  Making Money with Charles Payne
Date:  2/11/2022
Station:  Fox Business News
Time:  2:00PM

CHARLES PAYNE: All right, folks, we’re now hitting the lows of the session as this news of a potential Russian invasion next week continues to hammer the stock market, by the way. Bond yields are also going down. The dollar is going up. There’s a serious flight to safety here. I’m going to bring in Rob Luna and Scott Martin Scott. Let me start with you. You know, the main thing that that I’m seeing here is that we kind of thought this was going to happen. At least I could speak for myself and many others. Is it just because the timing or just the realization? Why this reaction right

SCOTT MARTIN: Could be the timing? Yeah. Charles, I agree with you could be the timing could be the fact as we saw the Super Bowl kind of preview there. Maybe people are just taking off for the rest of Friday. And so it’s a thin trade and it’s easy to push the market around because I don’t get it either man. I mean, that’s where the market’s been, though in the last, say, three to four weeks, Charles. This is stuff we already know. I we knew the Fed was going to hike rates this year. We knew inflation was going to be a problem. We knew there was going to be fiscal contraction. So what’s the deal? So I think the basic takeaway, if you’re an at home investor or if we’re investing in our portfolios as we are every day, all day take, these is buying opportunities. I’m not saying it’s today per se, but my goodness, if this continues Monday or Tuesday, look at AMD and Nvidia for two names. Those are great buys right here in great base price, probably Monday or Tuesday as well.

PAYNE: And Rob, that is the big wild card here, right? How do you quantify something like this, an exaggerated event that’s out of our control that we probably thought was going to happen anyway? You certainly don’t want to be an aggressive buyer, perhaps today, but at some point next week, when there’s all of this, get baked into the cake. When is a 50 basis point hike? Get baked into the cake when there’s a Russian invasion of Ukraine, get baked in the cake because the Scott’s point. We kind of saw all of this coming anyway.

ROB LUNA: Yeah, and I completely agree, Charles, that both you and Scott and look, I think at the end of the day, I think we’ve known this for a while. The Fed is really chasing the team. Bond yields, I think are moving and have moved to a place above over two percent where they’re already factoring that into the market. I think the market, if you take a look at it, especially some of the laggards like technology, they’ve really been trying to hold up here as well, though. But to Scott’s point, look, it’s a Friday who wants to be long going into the weekend. We don’t know exactly the extent of what’s going to happen with Russia and Ukraine. Now we’re talking about potentially 75 basis points, which I don’t think will be happening. But look, there’s a lot of jitteriness out there and just the feel of the market right now. It’s not that all, you know, risk on bull market that we’ve been in for a while that everyone’s gotten used to.

PAYNE: No. Yeah. Well, we anybody was used to it today and they have been paying attention for the last four or five weeks. And of course, you both alluded to the Super Bowl on Sunday. I guess the biggest storyline other than Tom Brady not being there is all the betting, right? The biggest wager, according to the Babylon B, President Biden is going to double down double nothing our national debt, placing 30 trillion dollars on the Bengals. All right, folks, I’m just joking before you start to get out my Twitter. That’s a parody out, but seven almost $8 billion being bet on the Super Bowl in New York to open their betting up. Let me ask you, Scott. I mean, what the heck is going on? How can these stocks like DraftKings and others? That was a $74 stock. That it’s like twenty four bucks. How come they don’t move on this news?

MARTIN: It’s kind of odd. Now, quick comment on that, Charles. I would much rather have Biden put that money on the Bengals, for example, than put it in the hands of Congress to figure it out because that has not worked. So I’m taking I’m long, Joe, but I mean, you know, Rob mentioned long going on the weekend. One thing I’m I’m wrong is Joe Burrow in the Bengals and I’m from Ohio, too, so that’s maybe a personal story. The other point, though, you’re right, man. I think the one issue at DraftKings, though just real quick, is that they had this huge spend on getting new clients and kind of the marketing side of things when people are like, they like gambling people who like to gamble, gamble, and there’s a lot of folks out there that will come to DraftKings over time. So I think some of the business models, some of the planning needs to be re figured when it comes to how much the cost per client acquisition cost is,

PAYNE: you know, up until about an hour ago, Rob. DraftKings, it’s still up a little bit, but a lot of these really. I’m talking names that have been smoked have been doing well enough. There’s a stealth rebound there and the Russell was up. And so but here’s the problem one third of those companies are unprofitable. Do you go in there, though? Is have things gotten so bad that you go in there? Is there anything in there that you would be looking at to buy?

LUNA: Yet traditionally, you know, I would kind of agree with Scott, and I’d be trying to maybe dumpster diving to some of these in a name like DraftKings, but look, we’ve got high quality that’s also down 40 and 50 percent names like Airbnb and Vida getting beaten up. So I think right now there’s enough out there that I’d rather put my money into. And look, I think Covid’s coming towards an end. I was just in Vegas, Wynn’s booming. I don’t think you have to play the DraftKings. There’s some really good deals out there. Put your money into some of those. I’d stay away, particularly from this sector right now.

PAYNE: So what’s the worst case, Scott? The worst case scenario here? Because, you know, we can’t. We’re all kind of an agreement with respect to we have to be getting there. A lot of the worst cases. It’s got to be being built into this market. But we were extremely valued, you know, had high valuations and a macroeconomics are also changing.

MARTIN: OK. Yeah, they are, Charles, I thought you were talking about the worst case just for the world, what should be Paris Hilton putting out another music album? But here’s the thing. She was for the markets with

PAYNE: good video from the from the girl with the bitcoin. You know, you got to. That’s what I was thinking about.

MARTIN:  I mean, anything like that is probably the worst thing to happen to the consumer since the Fed would start raising interest rates here in March. But here’s the weird thing really quickly the markets are just to Rob’s point in a weird mood. You’ve got to take some of the down days with the good days and just keep some cash handy and layer into names like Rob said that are fundamentally strong that you believe in long term, but don’t look for those short term games right away because you may not get them exactly say on a Monday or Tuesday.

PAYNE:  Guys, you got to leave it there. Good luck to the Bengals. Rob Scott, thank you both very much.