What Munson is Watching and Buying

My main point is that the reflation/inflation trade is a basket of asset classes from small cap value to silver miners. If I had to commit capital today - I would want to own the entire basket, but perhaps be quicker to fully invest cash on the precious metals side than small value. In the long run little of this matters to real investors. My only caveat is that historically gold has been a very poor investment and only works in times of political upheaval and unexpected inflation. And to those that think they really know the gold trade - you don’t. Everyone has a theory based on the past. And never have we been in the current situation of central bank money printing.

Munson on consumer staples and Buying Volatility

What can I say, it was Friday afternoon and they wanted to chat about consumer staples and my general market outlook.

Does every interview need to be short bursts of sound bites? Clearly not.

I discuss a few individual stocks - but I’m really just trying to use a specific example to contextualize the broader zeitgeist of the market.

What I love about this interview is it’s much like how I would discuss a topic with another pro or CFA about the topic, not necessarily how I would talk to clients or the general public. This is a key advantage of doing stuff with Nicole. She is super patience with me, the producers give me the time, and on a Friday afternoon everyone wins.

While I caution people about small value, it’s done well this quarter and has a lot of potential as we reflate the economy. The problem is the short-term attention span of investors and the general momentum centric feel of the market. In other words, buyers are found higher and sellers found lower. That may be the case for a while.

Bartiromo asks Munson about reaction to Presidential Debate

It's always an honor to be asked to react to major news, like last nights Presidential Debate - perhaps the worst in history. While many on Wall Street won't want to step into that discussion, I have no fear laying out my game plan going forward - and it hasn't changed.

Last night proved to the American public and investors that going into November, we may have an answer on November 3rd and this could get dragged out for weeks and weeks. I’ve been saying for the past several weeks it’s going to be an opportunity for investors to take advantage of that downward volatility. It’s a phenomenal opportunity for people to start buying that weakness. Because ultimately, we’re going to move forward.

And if that doesn't happen? Well, it was a good move to get neutral weighted last week on the correction that nobody seemed to want to buy - funny considering all people could talk about it over the last few months was buying on a dip. Then when the dip happens, people freeze.

Maria Bartiromo Talks TicTok Merger with Munson

I know, what’s up with my hair - it’s was 5am my time, give me a break!

Are we really solving anything by forcing Oracle to buy TicTok, but allow the Chinese firm to remain majority owners? It’s the shape of things to come, as boarders are drawn, not taken down, in the Chinese/US tech sphere of influence.

This is a story about big data concerns, but also the difference between a WeChat ban (few in the US know what that is, use it, or care) that just emphasizes China's ability to have their own tech systems - and TikTok, that has quickly reached the entire planet.

In any event, I see this as an opportunity, along with the recent rebound in the US dollar, to add to emerging markets longer term. Resonable valuations, tech and consumer discretionary heavy, China heavy, and over 4 times the dividend yield compared to 10 year US Treasuries.

We will see.

Munson on Q3 GDP and Buying the Dip

Clearly I'm having a bullish moment. Responding to GS's new GDP forecast of the week (it's hard to keep track of their constant revisions....) I point out that employment has improved and the avalanche of white collar layoffs isn't being seen, yet.

Keep in mind my sentiment that day - we just got off of a mini-correction that I was using to add to my equity exposure.

I said it best with "It’s going to take a year to get earnings back but the market knows that. It’s already pricing it in. As soon as we get a vaccine announcement, I think tech’s relative performance, the mega techs are over."

To which Maria responded, "I think you’re right."

Time will tell.

SHOW LESS

Munson: Is This The Top? Short Gamma and Dip Buyers

Please! Tops are a process, not a single event. But, today a lot of people are trying to exit through a very small door in tech-land.

In this interview I discuss what fascinates me the most - the short gamma effect. Essentially, that means in the options markets there are so many speculators that are betting big tech stocks will go up, the dealers that sell the options must hedge themselves by buying up those same shares. So, when things rise, they must chase it. Well, today the opposite happened.

Here is the unknown - will retail investors buy the dip? I give my thoughts, but nobody knows. Time will tell.

Munson Talks Macys, Retail In General

Just a quick interview discussing the Macy's earnings beat. They are and will always be a dog - but the beat is part of a larger recovery in retail. Problem is, online can't replace the total volume of sales lost from store closings.

The broader message here is the pent up demand once we can get past the virus. While the stock market today is living on stocks that either help firms cut costs, cut people, or mainly sell online - the economy can’t run “online” forever.

Munson Discusses Mortgage REITs

Today I discuss the most compelling yield vehicle in our portfolio, mortgage REITs. As markets continue to charge higher, how do you commit new cash? Easy, keep buying what is on sale and mREITs have the Fed stabilizing the MBS markets to the tune of $1 trillion of assets owned. . .

Munson Talks To Maria Bartiromo: What I'm Buying

Friday Morning hits have a little more energy - even for me!

Maria wanted to know what I'm buying in light of oil stabilizing around $40 a barrel, and the Fed controlling rates for the next few years.

Easy, my post-Covid down and out mortgage REITs and MLPs.

If you know the Fed will control rates, use that knowledge! I quickly lay out my general thesis.

Munson Talks MLPs, REITs, and Gold

I’m back on The Final Round discussing REITs and MLPs. It’s such a pleasure to be able to develop a few ideas without the pressure of sticking to sound bites and limited time. I mean, come on, they gave me 7 minutes to let it roll like water off a ducks back. Let me give you the short version.  

One of the places we look for yield over the next few years are mortgage REITs, which don’t own physical property, they just hold the mortgages backed by residential properties. With the Fed keeping rates low for a few years, these firms have lower funding costs, lower hedging costs, and they are yielding over 10% after many have cut or reduced dividend payments. 

Same idea with energy infrastructure MLPs – high yield even after many have cut dividends. Yet, with oil over $40 a barrel, the bad news is old news. I’m just more interested in pipelines that have minimum fees and minimum contract commitments versus the more sketchy exploration companies.

Gold miners are easy – negative interest rates. We saw this back in 2000-2006. Rates were relatively stable, but real rates slowly dropped as gold and gold miners went up. 

With the tech sector up huge this year, I explain what I’m buying now for the next 1-3 years. 

Enjoy!