Fox Business Maria Bartiromo Talks Apple and Jobs with Lee Munson

I'm still thinking about my Friday interview with Maria Bartiromo - we talked about Apple's inevitable slowdown and reliance on services, but the real story is that iPhone sales will continue to be important - why? You may see 25% margins on iPhones and 70% margins on services - but what people don't get is that Apple has it's own hedge fund in Nevada that invests the float between sales and paying vendors. Yes, they get a 60 day float! For those value players that just can't understand why these firms keep printing money, it's the structure of these firms that has never existed before.

Then it's just some obvious stuff on jobs data - forget stressing about the numbers and focus on wage growth.

CNBCs Kelly Evans Asks Munson About Tech Earnings

Kelly Evans asked me to come on and break down the biggest names in tech announcing earnings after the bell. It's a bit of a continuation of our chat a few weeks ago when I was in studio.

MSFT is straightforward. Hype around AI and Copilot aside, most of the revenues come from Cloud services with a fat 70% margin. That is the driver.

GOOGL has a similar issue that ads are how the firm makes it's money. I love YouTube, but it's only 10% of the business. Some analysts are talking up their own third tier cloud service, but it just started to turn a profit.

V - Visa is all about the macro environment. Sure, they are a great firm that prints money, but if we get a slowdown with the consumer and the actually spend less, investors may question why a firm that is growing at 10% a year is worth 30 times earnings. I would rather buy great companies at a good price.

Time will tell. You can also just buy a low cost tax efficient index fund as and get exposure to these mega cap names. But I love to look at these firms because they tell us about the broader economy. Sometimes, stocks are worth more as macro indicators than specific investments.

CNBC Power Lunch Lee Munson MSFT, LULU, SCHW

What fun to be in person on the awesome sets at CNBC. Tyler and Kelly wanted my take on how trade or position MSFT, LULU, and SCHW.

My take was pretty simple. MSFT has a great opportunity with AI by bolting on what they call Copilot to Office products. I'm just unsure how investors are going to feel about the losses at first.

LULU is just a great company that has the unusual skill of appealing to my teenage daughter, yet it doesn't freak her out that her dad also wears the stuff to the gym. What other clothing brand can do that? The valuation is high, so some caution here.

Then SCHW, who for full disclosure is our primary custodian at my firm, has been hit hard with the duration challenges from rate hikes at their banking arm. This will pass over time, and now that the merger with TD Ameritrade is over, I expect the net new assets that were negative recently will flip to positive.

So, all good firms, but buying individual stocks is difficult, riskier than a simple tax efficient index fund, and should be looked at the dessert, not the main dish. And yes, there is nothing wrong (and a lot of things right) by just keeping things simple and sticking to basic index funds with an appropriate allocation. And if you must dabble, start slow.

CNBC Power Lunch The 60/40 Mix Was Never Dead

I made my return to being on set at CNBC with Power Lunch. The producers were kind enough to give me a few hits during the show and great to see the gang over in Englewood, NJ.

The other guest was a nice guy from a big LA firm. It was his first time on set and I can just imagine what that feels like - I've been there before 15 years ago and he did a great job. We agreed on rates, as in this is a huge buying opportunity for long dated treasuries as well as short. We also agreed that while long term markets look good, all one needs is a single rate hike, a Fed official saying something the news media misquotes, or a day to end in "y" and we could see a proper sell off like early October.

Then I got the question I really wanted - defend the 60/40 mix, as if eating a well balanced meal is ever out of style. But in doing that I was able to showcase exactly how I run my stock and bond mix and my game plan going forward. It's easy to explain when you are the one making the decisions.

Lastly, I do want to state for the record one thing I don't agree with the other guest: private credit. Illiquid, high fees, fully taxable. If you think as a retail investor you are going to get a good deal before all the other massive sovereign wealth funds, hedge funds, insurance firms, pension funds - come on even pension funds get low quality stuff in the grand scheme of things, then you are California dreaming and I'm looking at a long cold winter. But then again, I'm not a favorite of inside my own industry because I'm always trying to cut costs and be more efficient.

Oil and Banks on Friday the 13th

I love doing a TV hit on any Friday the 13th. I see it as good luck not bad. While the focus started out on oil prices, the effect on markets will be more about a hot CPI print due to energy and food prices. This further complicates Fed policy. For me, it just means don't get surprised, keep you eye on the longer term trend.

Then Maria wanted to talk banks. So in perfect Lee Munson fashion, I break down the major banks and what really matters. Each has something they want to sell Wall Street on. But in the end, nothing really matters but the expansion (or lack thereof) their loan books.

Munson on CNBC The Exchange with Kelly Evans August 2023

It's a Friday and that means fun, easy segments with lots of energy. Well, CNBC delivered today when they asked me to talk about 13Fs from the big dogs in the business, Buffet, Tepper, Burry. A 13F is just a regulatory filing to show the SEC what you owned on the last day of the quarter, so it becomes public about 6 weeks later. So, nobody knows when they bought or sold something or even if they still have it - so you take it with a grain of salt.

We talked about NVDA and chips in general having the issue not simply with valuation - but the risks of getting chips to markets from the foundries. Then we breezed through Expedia (competing against the credit card points economy), CVS (Marc Cubans is competing for the high profit, somewhat evil pharmacy benefits management business), and I had good things to say about housing going forward and DHI is the leader there.

My point is to dig deep when looking at individual stocks. Don't just buy something because a big hedge fund or Warren buffet bought it. Holdings on a single day, revealed six weeks later is just a list of stocks that could have some potential.

CNBC Power Lunch with Lee Munson not Bullish

Yeah, not bulled up right now - just call me a contrarian, because I don't feel like a bear at all. Simply put, we will see slower growth going forward as the Fed said today they don't see inflation hitting 2% until 2025. When looking at individual stocks, you have to have a thesis of the cost of capital - because it's a headwind.

Now - we first discussed RGEN. It's a one hit wonder selling a great drug that Rouche may usurp while the FDA holds up the ability for RGEN allow for less cost and less needles in your eye during treatment. I'll pass.

Second was PINS. I only see this as a summer catch up trade - speculation that traders will get board and bid up lesser names. All the new CEO has done is cut costs, made a deal to sell products with AMZN (who knows how that will work out), and some fluff about a more positive social media platform. Like I said, gamblers only.

Last was Generac, which is the main established brand in residential generator back up systems. It's recently surged on news that, big surprise, Texas is pushing up sales as people worry about more blackouts. But the real story is the 2019 Pika acquisition that provides the batter backup systems. Something went wrong with the inverters and now we have a black eye for this firm, lawsuits, and I just want to see that simmer down since battery storage is the real secular growth story.

Munson on Rates, Earnings, and Japan

Jared kept me for another segment since I was in the New York studio and have a lot to talk about! We discussed how long the Fed is suggesting short rates to remain higher, how to view earnings projections versus reality, and my short thesis on why Japan may be going through a counter trend of their 100 year recession - because let’s not ever fool ourselves that Japan will ever be out of the deflationary hole.

Munson Talking Oil and Tech on Yahoo!

Always fun to hand out with Jared on set in New York at the studio. We covered two basic topics: what big tech stocks have decent valuations and what large down and out stocks I’m looking at. What comes out of that is the tug of war between the promise of A.I. and the surge in earnings it could create versus firms that are more economically sensitive to overall growth. But not to worry - the overpriced A.I. stocks are so huge now, anyone with exposure to the SP500 index has plenty of it.

Munson in Studio with Maria Talking Fed, FedEx, and Bond Markets

I love to be in the studio with Maria - always electric!

Today we hit the major news items of the day - first off we discuss the mostly likely outcome of the Fed's talk with Congress and tomorrow the Senate. While ostensibly it's about banking regulation and the potential for a central bank digital currency - all Wall Street wants to know is if Powell was joking about not raising rates for a "few years." Let's just say I'm still puzzled why bond traders think this guy is pulling our leg. Pull Powells finger at your own risk! Because that is the world in which we live. High rates for longer.

While many would love to see classic recession activity like a surge in unemployment, inflation back to 2%, and housing prices crater - we may instead see a recession in financial assets. In plain English, a retreat in profit margins. That would have the same effect of a more obvious economic recession. Markets will price all of this the same way - down! Yet, did we not see some downward action from early February into the March mini-banking crisis? Did small value not dip down 13-15% and now ripping??? Could that have been the markets pricing in a smaller more contained recession? Time will tell. I played it as such.

We also discussed the anecdotal evidence of FedEx blowing earnings. Sales down 10%. Perhaps it's idiosyncratic to that firm. That is how the bulls see it - but they see nothing but AI these days. At least I got to mention that those very same stocks we said in February were going up because of eminent Fed cuts are now deemed AI stocks and can only go up. In the end, I see higher prices and growth going forward, but not in a straight line. So, have a plan for any eventuality and a little caution here