CNBC Power Lunch Invites Lee Munson to talk Telephones, Credit Cards, and Plywood

Today was a fun hit - puns were everywhere.

We disconnected from ATT as a mild slowdown to recession isn't going to help new subscriber growth - but more importantly new phone sales could slow as people hold off on big purchases. Plus, the whole reason many hold this stock is for the juicy dividend. Today it's not much more than a short term treasury - and the dividend isn't protected.

Don't leave home without it. American Express had a so-so quarter, telling us what we know, defaults are coming, and more bullish talk of 15% revenue growth. I simply said it's the only stock I like in that group. Why? Wealthier consumers don't slow down as much when times are tough. And their focus on getting young people wrapped up into expensive status credit cards is smart. Really, does a business owner want to give up their Platinum card? Time will tell.

As for homebuilders - I reminded everyone I said they were a speculative buy last year - but that was more about expectations the Fed would pause by now. What really made this stock perform well recently is simply the lack of housing supply. 30% of homes for sale are new construction. However, when stocks jump like this, with continued high mortgage rates, one might consider taking some profits off the table and right sizing the position.

Munson Talks Tech Rally, AI hype, and Earnings Risk with Dave Briggs and Seana Smith at Yahoo!

It was great to see the old crew at Yahoo! Finance. While boomers are worried about the price of oil, interest rates and inflation - it was clear the kids just want to know what's up with the tech rally, AI hyped stocks, and the banking crisis.

For those that were too young to remember, we saw a huge rally the summer of 2000 in names like QCOM ("it's down 70%, it can only go up, right?"). Those speculative stocks which were down over 50% rallied hard and some even doubled. Then reality set in and by the end of the year new lows where everywhere. It took some time. Is that happening now? Time will tell - but I'm not buying tech at a valuation higher versus the overall SP500 than we saw in the boom boom days of late 2021.

As for the whole AI thing - I'm out. Some of these companies are little known or just hype the "AI" moniker not unlike 23 years ago when firms would add ".com" to their names to get a quick pop in the stock price. I said that AI will be dominated by the big tech firms with the scale and money to develop it - we will see.

Regarding banking - we talked about what Jamie Diamond, CEO of JPM had to say. Turns out the banking titan thinks the only way to really make money doing mortgages or some consumer loans is to sell data on their clients to the highest bidder - wow, how the world has changed.

Munson Talks Oil Cuts and White Collar Recession with Maria

My first trip back to NYC since the Covid lockdowns - where did the time go? While the news that day was all about the Trump arraignment (I know, how did I pick that day to have meetings right by Trump Plaza and then downtown in the afternoon!), the markets were focused on the OPEC cuts. By cutting production right before summer, we could see higher gas prices and potentially an uptick in inflation - thus making the Fed's job harder. All of this right at the time of a banking mini-crisis. I explained this isn't the time to be taking a ton of risk, how I'm sticking with what was working last year and still avoiding the more speculative areas of the market that have shot up this year. Sometimes a little patience, prudence, and proper planning are in order.

CNBC's Three Stock Lunch: Hot Sauce to Yoga Pants

The twitterverse thought Ryan Seacrest was on with Kelly Evans today but it was just me. Kelly even mentioned it at the end of the interview. I like that better than the usual "you look like Timothy Olyphant."

All kidding aside, remember that while I’m speaking about a specific name, my whole point is about how to approach any company or market and these are just examples of the type of stuff you see. My clients and I prefer index funds and keeping it simple. But the idea of cost cutting, the bottoming of earnings estimates, and where growth will come from never goes out of style.

First on the list was McCormicks - you like Franks's RedHot sauce or Cholula? They make that along with spices you find at the grocery store. The key to any staple like this going into a recession is if they can pass along costs to consumers and continue to cut humans for automation. They are attempting both.

Next up was Walgreens. In short, it's not for me. The firm needs to decide what to do with the dog we call Boots (drug store in the UK), and growing its primary care segment - which could be huge, but it's not big enough to really move the needle. Plus, the Covid gravy train has ended - so no more easy revenue from testing.

Last is Lulu Lemon. Expensive yoga pants going into a recession? Sure. It's a premium retailer with strong numbers similar to Nike. While a premium retailer like LULU always trades at a rich valuation - I would rather see how earnings shake out, and if you can get management to guide down margins enough to bring the price down. Of course, everybody already knows this and expects that news. How the market will react is simply unknown. I would take a pass and see how the year goes.Show less

Warren Buffett’s most important lessons according to Lee Munson

Back on Friday, February 24th, the day before Warren Buffett dropped his annual letter to shareholders, Yahoo! Finance asked me to give the young people some thoughts. Basically, it comes down to three concepts.

First, find your See's Candies or GEICO. Buffet bought these companies over 40 years ago and uses the cash flow to fund other investments. For most people that means funneling money from your day job to your portfolio. No way around this. So choose your career wisely.

Second, be flexible. Buffett said he would never invest in airlines or tech. He has done both in the last 10 years. Markets and trends change over time so don't get stuck in a rut. Have timeless principles like buying at reasonable valuations and taking money off the table when appropriate.

Third, hold on to your big winner while understanding why. Buffett bought Coca Cola, KO, after the 1987 crash at a really cheap valuation. Today the dividends are in the hundreds of millions each year. It may not be a huge grower, but over time dividends can grow and profits compound. Turtles win races often and over time.

Fox Business With Maria Bartiromo and Lee Munson talk strategy

I get down to it - you sell into strength - otherwise known as trim higher after a year of adding lower.

Earnings are coming in ok, job market is still tight, and we have yet to see unemployment or inflation get low enough for the Fed to ease policy. I've been overweight since last year, adding lower, and explain I don't have a desire to chase tech and I'm concerned about earnings going into the end of the year.

When you can't tell if you are in consensus or out of consensus, it means nobody knows what is going on. Plan accordingly.

Seana Smith and Dave Briggs get the Friday Afternoon Special on Bank, Skiing Taos

Oh what fun it is to have an interview right before popping off to my favorite place in the world in the winter - Taos Ski Valley.

Dave Briggs was ready to jump on the plane and join me, but first we get to the heart of the matter when looking at bank stocks.

Then I get into my thoughts on all of the annual prognostications required of Wall Street CIOs and analysts. Bottom line, there is a lot we don't know about earnings, so allocate accordingly and be prepared for at least one more add lower/trim higher situation.

Lastly, remember the lessons of last year - if the year end really happens too soon, trim higher!

CNBC Power Lunch Invites Lee Munson to Talk Disney, Nike, American Airlines

I love to talk shop with Tyler and Kelly.

We covered the non-event of Peltz having a fit over profitability - I say the cash burn worked. Now if the stock price will only go up.

Nike is winning, direct to consumer is strong, China is opening up, and dollar is weak. So, stocks that have big non-US sales with China customers should have a tailwind. Same with EM in general.

American I'm not so sure about. They have to increase the amount of seats they have to sell, which involves more pilots, more planes, and most of all more business class seats. I'll take a pass - they seem to cancel my flights too much!

Munson talks energy stocks on CNBC's 3 Stock Lunch

This is less about energy stocks or individual stocks in general - and more about how analysts come up with their top picks for the new year, or what is known as their high conviction bets. My lesson here is that you have to read the actual report, not the short summary at the top to understand exactly what these Wall Street people are assuming to get their price targets. Yes, price targets matter.

For instance the first company had a conviction buy based on the idea that OPEC would really bump up capital expenditures next year. Well, I hope so because oil firms here are not reinvesting like the past. This is a big IF for a stock that has pretty much mirrored the more diversified energy sector ETFs.

Then the second company I talked about the price target on a stock trading at a nose-bleed 70x on 2023 earnings was only 10% higher. 10% higher for the risk of owning an individual stock? Hmmm.

The last one is more a craps shoot. Come on, if you are going to dip your toe into an individual stock, at least have some upside to taking the risk - but be aware that the huge upside was based on government permits, big increases to lithium prices and continued demand for EVs. There is nothing wrong with individual stocks or taking risk, or even speculating, just know than when you invest in something based on somebody else's work, know their assumptions.

Lee Munson Talks Big Picture with Maria Bartiromo on Fox Business

What a great time!

I got to talk big picture and share my trading thoughts. Here is the bottom line: we are still in a bear market. I've been able to buy asset classes at good prices this fall after taking some money off the table back in August - but ask yourself, do you really think the Fed is going to let the market trade significantly higher ahead of inflation over 7%...5%...4%?

If you are super overweight stocks right now, you may want to consider taking some exposure off and get back to just overweight. With tax loss harvesting coming into play next month, a December Fed meeting, and earnings just starting to cave in, we could see some type of replay of December 2018. Meaning, lots of volatility.

Think about it - every growth player out there is hoping for a fast pivot back to cheap money - I'm looking for the Fed to do what they say they are going to do - finish off the hikes over the next few months then pause until inflation comes down, not cut just so your money losing tech stocks can trade higher.

As for bonds - I'm simply staying shorter term for now. Why step into a complex, risky environment?