Lee Munson talks market volatility with Neil Cavuto

Shut-Down Low-Down with Neil Cavuto

When markets are down big, I usually get an invite to be on TV to talk about it. Today I got an invite to be on Fox News with Neil Cavuto. Regardless of how you feel about Fox News, it’s a huge platform to discuss what I think are the important aspects that investors should think about. Plus, I get to explain a big complicated idea simply.

Here are the big points to remember as we enter a time of volatility. First, the only real policy issue in America that affects markets deeply is the trade deal with China or the lack of it. Everything else is noise. Second, housing is soft, and most recessions start with a big blow-up in that market. Well, soft housing isn’t a blow-up and rates are lower today than they were last quarter, which produced weak housing numbers. Third, we already know that China had a bad year. It’s the reason why their markets are down well over 20%. So, volatility should come to no surprise today.

In the end, there are things that are uncertain that we have known about for many months. This gives us the opportunity to buy low and sell high. Considering that the market has rallied for weeks since the Christmas Eve low, it’s not really news that there was a down day coming.

Lee Munson's thoughts on the volatile Christmas markets with Bar Rescue host Jon Taffer

Bar Rescue is a late night guilty pleasure of mine. So, when Fox Biz called and asked if I would spend some time on the show Jon was hosting, I jumped.

Feeling introspective, I realized something about the wild market movements of the past few weeks. I made a weak bear case to show the tremendous effort it takes to pull down earnings fast enough to justify the Christmas Eve prices – of which, I did buy for all our clients. Why? I don’t believe the bear case. Neither do most in the business nor most of our clients. I pulled the trigger to buy on Monday’s low of 2350 on the S&P 500. My hand got a little sweaty when I pulled the trigger, but that only proves I’m human.

During the interview, I told Jon what I really thought. We don’t need justification of a bearish fundamental case to explain the market’s action. Eight-five percent of the volume is computerized algorithmic trading (a computer program that only looks at price and not fundamentals).

I think, computers don’t. Let computers stretch the prices too high and too low. I’ll have my “buy prices” set ahead of time. So, rejoice in the volatility. It proves markets work, and that those patient with trades succeed in the end.

Lee Munson on Market Volatility

My monthly residency at Yahoo Finance. Jen Rogers, my favorite person to interview me, asked questions for Yahoo Finance's The Final Round. Miles and Brian got in there too.  

I loved the interview. I got across exactly how I feel about markets. The first question Jen asked was, “What are you selling right now?” I explained clearly, "Why would I be selling because that would be a form of capitulation? I want other people to capitulate so I can buy their shares."

That's exactly how we run portfolios, and that's why we have both bonds and stocks.  

What's most interesting about the last month is that the market has gone no place. After four, five, six weeks of volatility people wonder, ‘Should I be doing something?’, ‘Should I be changing things around since all we hear is bad news?’.

My answer is straightforward: News, while it can move markets, is not as important at the particular levels that you want to buy or take profits on.

To use a real-life example, I have a trigger to strongly think about purchasing stock if the S&P 500 gets near 2500. Now will the news make it go there, I don't know, and I don't care. Could a strange announcement from the Trump administration or the Federal Reserve or Apple Computer cause the market to get down to that level? It could, but again, I don't care. What I do care about is what the price of the market is since all we can buy is price. I look at a few other things like how volatile the market is when it gets to that price, what the trading volume is, and honestly you do have to take the pulse of the planet and figure out where the crowd is heading.

That's different than trading on the news itself, as in the content of the news, because you can't buy a trade war. You can't buy a financial blog. The only thing you can buy is price, so while the news is interesting, sometimes entertaining, and sometimes depressing, the reason I keep abreast of it is because it lets me know what the mood and what the sentiment is for investors and speculators when the markets get to that magic moment where I have to make a hard decision on behalf of all my clients.

Now for the fun stuff: I got to say New Mexico, I got to mention the type of clients I have, and I got to tell people that they should be skiing right now instead of watching the news. Lastly, I’m at the point in my career where I’m able to wear a cool sweater by Ted Baker instead of a white shirt and tie. Thus, it was a success.

FBN: Munson on Markets, Tech decline

Last month all the shows on Fox Business were changed around. As most know, I like the 5-7pmET for interviews because they fit with my family time.

So - the new show at 6pmET (still produced by the incredible Charles Gould who rocketed Charles Payne to crush Kramer in the ratings...) is now the Evening Edit with Elizabeth MacDonald. Okay, I'm not a fan of the name, at all. However, Elizabeth is a host that I respect. She's tough, all business, and I've had the pleasure of sitting next to her a few times when I was back in NYC doing on set work with Payne.

Today was my first hit, and Blake Burman was filling in. What did we talk about? How Apple is a barometer for big tech, the oil prices that didn't spike, the so-called trade war, and the spiking dollar.

If you want to geek out and listen to what I really think this week - here it is.

I tried on a new tie, black with small flowers down the middle - current season for Paul Smith. Jacket is custom from Stitched in Las Vegas.

"The Auto Loan ABCs"

As many of you know, I like cars. All types of cars. When the local Land Rover dealership showed me this infographic, I asked if I could put it on my website as a general education piece. 

What you should really do is send this to your adult kids. And one piece of advice, I’m not a fan of open ended leases. My philosophy is to know exactly how much you are on the hook for, and when your financial obligations will end. 

Okay, one more piece of advice. Always read the fine print in what is called GAP insurance. In theory, it pays the difference between the loan amount and the fair market value if you total the vehicle. But, I know for a fact that some GAP policies will not pay for negative equity (owing policying more than the car is worth). Yes, how can that be called GAP insurance? I have no idea, so read the policiy and don’t rely on the salesperson to tell you what it will cover. You can’t go back to them when things go wrong. Becasue . . . wait for it . . . you always need to read the fine print. 

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Munson Talks Apple Earnings on CNBCs PowerLunch

Power Lunch called and wanted to know my take on Apple earnings a hour before the announcement. Simple, for a stock like this to continue to defy gravity, it has to surprise everyone. That is the risk of high flying stocks. It's not good enough to simply do well when the valuations are this high. I suggested that in order to keep the party rolling (I'm not saying to buy or sell this stock), Apple needs to both surprise on iPhone sales AND show huge growth in services revenue. Well they did both and the stock was strong. By the way, of course I'm so excited to be on Power Lunch with Michelle Caruso-Cabrera (she was the very first person to interview me 10 years ago on Closing Bell) I said "headset" not "handset" - oh well, better passionate than dull. . .

Munson Tell Jen Rodgers, "Just Relax" on The Final Round

Every second Tuesday Yahoo! Finance does a interview with me from the office (via Skype) on whatever it is that I want to talk about - what a treat! It’s been 10 years of slogging through financial media in order to get to the level where I call my own shots and only talk about what I want. I earned it. So, this interview was simply a referendum on the the earnings season, jobs numbers, and the so-called trade war. To sum it up, expect more volatility through the summer.

To be honest, I did my buying for our clients in a global rebalance back in early February, so this summer I’m just looking for big swings up or down to either add money for new cash, or maybe take some profits - I don’t have a crystal ball, but my guess is that we won’t see new highs until later this year. However, just to be clear, I really don’t know. All I do know is that around 2500 on the SP500 I would like to rebalance and add more equity exposure, and around 2900, give or take, I want to rebalance and take profits from what I bought in February. Everything else is just stuff to chat about on TV. Since Yahoo! Has a younger demographic, I usually skip the tie and dress adventurously. Here I have a coat and shirt from Scotch & Soda, last season. They are an awesome boutique design house out of Amsterdam that has some stores here, I usually hit the San Francisco shop, but they have one in Las Vegas now. Also, I put up my Dr. Strangelove and Blade Runner movie posters behind me. The producers suggested I put my marketing stuff up like I do on TV, but this is my only opportunity to show what my office looks like.

Shake Shack: Ask A Vegan

The title image says: no meat please...

 Anytime Charles Payne asks me to be on his top ranked show (yes, he beats Jim Cramer’s Mad Money in that time slot!), I say yes. It’s fun, and on this Friday May 4th they had me for a second spot talking Shake Shack earnings. We talked about the overall market outlook and the momentum that continues. However, I also wanted to share a little about myself - I’m a vegan. That means I don’t eat anything from an animal. Charles thought that was funny and offered to have a vegan burger with me next time I hit NYC. He’s a first class act.

If A Bear Pooh-poohs The Market, Does Wall Street Hear It?

The title image on this video says: Think happy thoughts . . . It was Friday, May 4th and I was asked to do a few segments for Making Money with Charles Payne. Always fun, always a pleasure. We talked the jobs numbers, of which I wasn’t too impressed with, and labor participation was weak as usual (since 2013). So, I made a joke I ripped off from Bob Clark (770 KKOB, the #1 radio show in all of New Mexico) and asked at 4:02, if a bear pooh-poohs the market, does anyone on Wall Street hear it . . . it’s Friday, what can I say?