- 2024-02-16
- Posted by: kimsite
- Categories: Commentary, Insights, News
Click here to listen to the full interview.
CHARLES PAYNE: This week, we observed a significant decline in retail investor bullishness. It dropped to 42% from 49%, which is a dramatic one-week decline. Meanwhile, bearishness climbed at a more modest pace, rising to 27% from 23%. It appears that most investors are becoming more neutral. Joining me now is Scott Martin, CIO of Kingsview Wealth Management. Scott, I have to say, despite Wall Street’s skepticism towards retail investors, I believe their sentiment has been a more accurate indicator of market trends than the predictions of professionals, who, ironically, are overwhelmingly bullish right now. What’s your stance?
SCOTT MARTIN: Well, Charles, I’m somewhat bullish, I suppose. I’m in agreement with you about the significance of the individual investor. We’re all emotional and heavily invested in various assets. Our sentiments fluctuate rapidly, especially in response to events like this week’s inflation numbers. What’s interesting is how individual investors quickly shift from bearish to bullish and vice versa. This is in contrast to professionals who often seem too slow to react to market changes. I value the ability of sentiment indicators to reflect real-time market dynamics.
CHARLES PAYNE: Late last year, an intriguing study, I forget which university conducted it, discussed how higher IQ often correlates with increased ego. Ironically, it suggested that those with lower IQs tend to be more optimistic. I find this interesting because I consider myself optimistic and hope to have a high IQ. Ego plays a significant role here. Let’s discuss how this might relate to the economic data released this week, which, in my view, weakens the bullish argument.
SCOTT MARTIN: Indeed, Charles. And on a personal note, as a friend and colleague, I believe your ego reaches new heights daily. But, jesting aside, ego can be a major impediment. It’s like the old saying, “Stay out of your own way.” This applies especially to investors who might overestimate their knowledge or insights. It’s crucial to set aside ego and focus on fundamentals, as we do at Kingsview, to make informed portfolio decisions.
CHARLES PAYNE: Alright, let’s quickly discuss some of your investment ideas. You’ve mentioned Yum Brands, which hasn’t been a common topic lately.
SCOTT MARTIN: Yes, Yum Brands has been somewhat under the radar. Apart from my Taco Bell experience a year and a half ago where I spent $28, Yum Brands, including its subsidiaries like KFC, has shown great margin and demand. Even with inflation, which seems to be easing – I only spent $22 at a Waffle House in Myrtle Beach recently – these brands maintain strong pricing power.
CHARLES PAYNE: $22 is what it costs to order food in New Jersey through GrubHub! Speaking of food, let’s talk about Costco and their famously affordable hot dog.
SCOTT MARTIN: I love Costco’s hot dogs, pizza, and the value they offer in bulk items. Costco is a company that’s really surging ahead. Talking about ego, this is one that boosts mine a bit. We’ve been recommending Costco for a while now, and it’s proven to be a great investment choice. Their profit margins and net revenue numbers are impressive. We’re big fans of COST at Kingsview.
CHARLES PAYNE: Sam Walton once said that Costco was the only retailer he couldn’t outdo, and he was right. Scott, thank you for your insights. We’ll speak again soon.
SCOTT MARTIN: My pleasure. See you soon.
