Munson talks Bank stocks and the Fed with Maria

Bank stocks have outperformed the Nasdaq over the last month, so what is going on here? Real interest rates are negative at around -1%. When you consider the financial sector has better dividend yields, an actual positive real yield, along with lover leverage than 12 years ago, and massive loan loss provisions they may not need, you can see why some investors would rather see their money in those names than sitting in a 10 year treasury.

Plus, the Fed has been clear, they need to see 2% inflation for months, not a few weeks to change course. We can't even get to 2%, wake me when it happens.

Munson Talks Revenge Travel

We focused in on the travel and leisure stocks, but really, it’s about the return to normal. Yes, after we get a vaccine, we will most likely go back to our normal lives, and start catching up on travel and activities lost during the crisis.

What didn't get mentioned is the change in inflation from the demand shock this may cause. Remember that the market is a future looking machine, and has shown its hand this week. It’s all about a vaccine with a speed bump heading into the election.

Munson Talks The US Dollar with Maria Bartiromo

I love getting asked the harder questions and breaking it down into an understandable response.

So, the big news this week is the US dollar hitting record lows not seen for several years. Why does this matter? It's effects your portfolio. Emerging market stocks have had a tailwind along with Gold, and as long as the dollar stays weak, this should continue. Even economically sensitive stocks like industrials can have some upside as our exports are cheaper to foreign buyers.

If you need to get more wonky or impress at your next Zoom happy hour, just say this:

1. There is a ton of emerging market debt that is priced in dollars. So, when the dollar falls it helps pay back money at a cheaper cost - kind of like lowering interest rates. Plus, emerging markets are super cheap compared to hot tech stocks and over the past three months have done just as well.

2. Gold has a negative correlation to the dollar, -0.98 for the math geeks. So, it's not a mystery why gold has surged, just look at the US dollar. As long as the Fed keeps supporting the economy, real yields will be negative and gold will keep rising. (Then spend the rest of the happy hour avoiding gold bugs, they are a little cooky).

3. As we come out of the recovery, a cheaper dollar will help the cyclical stocks/value stocks/not tech stocks as our exports will be more attractive to foreign buyers.

Considering how everybody seems to love tech stocks like it's 1999 all over again, I just wanted to point out that there are other things in the world to invest in.

Munson Hangs With Charles Payne And Raging Bulls

I love to hang out with Charles Payne - his show pre-notes are excellent and coming on the show is very smooth. He just lets you rip into it and let it out. Here is the thing, I'm not quite as bullish as he is, or the other guests. I get it, tech is doing well. But there are other options than just sinking cash into high flyers.

I suggest looking at what is still on sale. Every time markets head out of recessions, the unloved cheaper and smaller stocks lead for a year or more. Heck, emerging markets are doing as well as tech the last few months and have a fraction of the valuation. But, as with every market top, people will say valuations don't matter anymore and it's different this time.

My last point is simple, you can have a world where the hot stuff doesn't crash, but stops going up while the unloved catch up. That appears to be what is happening this summer.

Munson and Maria Talk Bank Stocks

My first time doing a Skype interview for cable TV from my office! I have to say, I'm impressed considering the other guest had professional studios.

So, the bank earnings were decent, no disasters. While the media may paint it negatively, it's easier to cherry pick a few grim sound bites from the conference call rather than dig into the numbers and see through the noise.

The heart of the matter is clear: the average stock has been going down for six weeks, while Apple and the hot tech stocks have been ripping higher. As a contrarian, and someone who was at ground zero for the 2000 dot.com disaster, I just don't care for the buy high and sell higher routine, preferring to buy what's on sale with some margin of safety. I see the banks, or broadly speaking the Russel 1000 Value index (think the biggest cheap stocks that don't include the FANMAG names), along with some smaller areas like the MLPs and REITs are more my cup of tea when putting new cash to work. Why? Overall, the market is above what I calculate as more of the fair value of the SP500 - closer to 2800 than 3200. We saw that value can rise again back in late May into June, so it's not dead. However, you need to have a longer time line than the next month. Put another way, either the unloved areas show some signs of life - or it's bearish for the general markets. A bull market can't live on a few stocks going higher. But few remember what happened 20 years ago, and nobody said history has to repeat.

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Munson Explains Courage In A Melt Up June 4, 2020

A quick interview - where I stand now. It pretty much says it all. Sometimes you have to be blunt. My basic message is that when you have the support of your client’s, why not stick to your guns and the courage of your conviction?

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Lee And Jen: Two Camps And The Physical Indicatior, April 7th 2020

My talk with Jen Rogers on The Final Round - the two camps and my physical indicator. Yesterday we took off equity exposure as my theory came to fruition: the market rallies when we can see the peak. Today I believe we still must address the recession that was brewing before this started. There are two camps: those that believe there is a retest, and those that believe the bottom has happened. While I’m the retest camp, nobody knows. Prudence. Then she asks the best question: how do you feel? We talk about how I feel ill near bottoms - while anecdotal - it’s still worth mentioning.

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Munson Shares His Top Three Lessons On Bear Markets, April 6th 2020

I discuss my three main lessons I learned the hard way in bear markets. 1. You will never top tick the market - get over yourself. 2. Don’t forget to add to the bad kids at the bottom. 3. Going conservative at the bottom is dangerous to returns long term. We show a chart of the potential pain of owning small companies near the bottom, and how changing your strategy midway through a bear market can be dangerous. While I do rebalance and tweak the portfolios as we go through the bottoming process, it’s important to realize that the suffering is part of investing. Trying to avoid the suffering will lead to more suffering in the future as markets recover. This interview was exactly what I was telling my crew today - as we just completed a rebalancing program that took a good amount of equity exposure off the table. No matter how much experience I have gained over the last 22 years, you can never separate yourself from emotions, you just learn to live an examined life.

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Munson on CNBCs Power Lunch Talks Strategy On Virus

What can I say? It's CNBC Power Lunch. Kelly Evans and Tyler Mathisen asked great questions and let me talk. Needless to say I very much appreciated both the comment that I was on two weeks ago discussing my sells of stock and the other guest saying I was, in fact, not crazy. If you want to see leadership in times of trouble - check me out! My wife thought it a good idea to put some happy thoughts into the interview and suggested the colorful tie.

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Munson Evaluates Disney Amid Coronavirus

I have kids, so I know about sending cash to Disney on a regular basis. This interview highlights what separates wisdom versus experience. While the segment was focused on the streaming angle (competition for Netflix), the reality is that 40% of what Disney makes comes the old fashion way - getting people to fork over huge amounts of money to visit theme parks. To quote myself: "Theme parks are the cash cow. you take away a cash cow in a bearish market, you're toast." Now, do I think that is the case? I don't care, because you buy the stock and not the company. Right now we are seeing a market price in problems for parks. We can only guess the recovery if virus fears end and people keep on spending. We can also guess what would happen if Disneyland closed in the US for a week. It's another reason I like to buy index funds instead of betting on individual stocks.

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