Program: Making Money with Charles Payne
Date: 1/7/2022
Station: Fox Business News
Time: 2:00PM

CHARLES PAYNE: All right, folks, are some data suggesting retail investors starting to lose some steam here over the last couple of months. Options trading activity starting to move up to a big time record. But at the same token, some of the investing in regular equities have not now. You know, one of the things that’s propelled this market has been a new investor revolution. I want to see that continue. I want to bring in Rob, Rob Luna and Scott Martin. First and foremost, guys, a happy new year to both of you. And Rob, I’ll start with you this the market activity here. I mean, still, gobs of money have piled into this market. Record amounts of money into ETFs. A lot of new accounts are still being opened, but I’m a little concerned that, you know, when people turn the page on a calendar, retail investors may look at this and say it was fun for a while, but I’m ready to do something else.

ROB LUNA: Yeah, Charles, I know you’re a huge champion of the retail investor. I mean, that’s evident by the show that you’re putting out there today. And look, a lot of the new retail investors came into this market just over the last year and a half two years. And like you and I both know, this has been a little bit of an all up market. It’s been a little bit easy. And now they’re starting to see some of this volatility. And I think they’re getting a little bit nervous. But I think what I’m here to tell them is this is a normal part of investing. You got some tax loss selling that happened last quarter. A lot of what’s going on at the beginning of this year is just people being a little bit nervous. But look, some of these big names that we’ve been talking about are down twenty five, 30 percent. And for those investors out there that miss some of this are looking to get in the market, this is the type of discount that you’re looking to enter.

PAYNE: Scott, you know, buy low, sell high is the first axiom of the Wall Street. But another part that people do have to grapple with is occasionally you will take a loss and occasionally you will be down in a stock that maybe you just have to ride it out.

SCOTT MARTIN: Yes, Charles, and emotions typically, I mean, I’ve been through them as well as an investor keep you from buying low and selling high. You actually buy high and sell low because you freak out and you forget for the first reasons why you bought the stock and how long you want to hold it for and why you’re holding it for so long. So I think to Rob’s point, you need to have a game plan going into every position. And simply, that game plan could be to hold a stock for the next five or 10 percent, or it could be to hold it for the next five or 10 years. But once you commit to that game plan, once you commit to that stock, as we do for investors, we stay on that game plan. Investing is a rollercoaster. Life is is a waterfall of emotion. That’s a coast modern song. That’s a line from a postmodern song that I like. The point is, you have to go through the ups and downs of investing to get the rewards.

PAYNE: So with that in mind, it feels like to your point, you can have a strategy. And some people say, I like growth, I like value. I like this. I like that. It feels like right now, the only thing moving this market is how we game the Federal Reserve, and I’ll go back to you and Scott. I mean, how much of the Fed? I think this is going to be short term. I think whatever we think the Fed is going to do collectively, we’ll digest it in the markets. We’ll trade the way they normally trade. But how much of this could be overkill right now with respect to the Fed?

MARTIN: Totally agree. Overblown. I mean, this is a typical buy the rumor. Sell the news when the news actually happens, Charles. The fact is actually realized with the Fed here. Say maybe it. That’s in March, June, whenever the market’s probably not going to do much. So I agree with you. I think there is some gamesmanship to be had here in the near term. I think that’s chasing things. Yes, guys. I talked about with Cavuto a few weeks ago. Sorry, my man. We talked about this back in December about energy and materials. I think those are ways to play this inflation trade into the first rate hike. Certainly, financials are responding well, but don’t be too committed to those things because those will wear off, as you, as you said earlier as well, and then go back to the typical trade of, say, tech and see more communications and information technology.

PAYNE: We saw that a couple of times this week, you know, even yesterday it was the Nasdaq that found a way to climb off the canvas and rally pretty strong a close flat after Bullard’s comments. But it feels like there’s some buyers out there. And how do you do this, Rob? Did you start trying to be nimble and catch these waves? Or do you just just solidify your real long term positions here?

LUNA: No, I think, Charles, look, you know, I talked to a couple of weeks ago about getting into some of these names that were going to respond better, like Capital One to rising interest rates. We’re looking at some BDCs like areas right now that are really set to capitalize on that. But what did I do with my own money, I think is the most important thing this morning. I bought some Airbnb this morning and I bought CrowdStrike because those are they’re going to be the winners long term. They’re down twenty five and 30 percent. And like Scott said, when you have a plan, no matter how bad it feels, this is what you do. You buy high quality names when everyone else is throwing them out. Buy low, sell high is how you make money. If you’re going into the financials after they rally 10 12 percent, that’s probably not the thing you want to be doing, even though that feels like the best thing right now.

PAYNE: Yeah, there’s no doubt about it. I mean, the KBW ISS, I think, is up 10 percent this week alone. I got a minute to go. Then we now we’re talking about the Fed running off the balance sheet, not just tapering anymore, it’s tapering rate hikes and balance sheet. Is there anything else we should be worried about? Rob is there. What’s the next negative that can derail this market?

LUNA: Yeah, tax hikes, right? I mean, let’s let’s let’s remember that’s going to be on the table this year, we’re not hearing a lot about it early on. But you know, you start raising corporate taxes, you start raising personal income taxes. That’s definitely going to put some pressure on the market that I don’t think is really been priced in.

PAYNE: Yeah, I got to leave it there, guys. I really appreciate both. That’s how I wanted to end the week on a tough week for the market. Two guys that have done it well and done it really well for a long time. See you both very soon.