Munson On The Correction That Wasn't

I got a call early in the morning, asking me if I wanted to be on. Of course, I checked my calendar and said yes. The open that day (July 8th) was bad. It was looking like the start of something interesting, but that faded fast. Like the last few months, we have seen a few bad days like May 12th and June 18th.

Here is my bottom line: bad days are normal. For me, unless I'm just looking to add some fresh cash (think dollar cost averaging in a long term portfolio over time) - I really need to see a few more days in a row, or a proper 10% correction. And no, it doesn't count if that lasts for 5 minutes, I want to see the close look ugly. Why? Because then you can ask yourself if this is a time to rebalance your portfolio, using volatility as your friend.

If you know what you want to own longer term, use 10% off sales to your advantage. However, that Thursday was another tease, because the market does not make anything easy.

Munson Is Asked: Is Wall Street Rigged?

I was asked to hang out with Steve Clemons and Richard Vague to talk about markets from high level. Specifically, is Wall Street Rigged? Well, yes, it’s rigged, but what can consumers to do prevent getting ripped off? While I literally wrote the book called Rigged Money, Richard has decades of insight and currently the Pennsylvania State Secretary of Banking and Securities.

What I really want to talk about was what we talked about off air. After the interview Richard made the comment to me that, despite my suggestion that investors should think more like institutional investors rather than retail gamblers, institutions get ripped off on a scale inconceivable compared to retail investors. You know - he’s right! In my defense, I suggested that the bulk of individual investors don’t know this, and assume that large pension funds are run by competent managers. I like to point out Calpers or very large pensions that have rid themselves of expensive underperforming hedge funds and focus on low cost index funds and reasonable strategies. Yet, I can only point to a handful that really run pensions well. In short, I was telling people to invest like they think pension funds invest, not how most actually do it. Crazy, right? And what I mean by all of this is to have a structure, a plan, and not wing it. Looking at the fundamentals of investing and not simply buying whatever your neighbor is doing for fear of missing out should be the focus. So, let us continue to lie to ourselves and believe that major pension funds make thoughtful decisions based on hard work, math, and a little bit of luck - because the truth is, an institutional investor is simply a retail investor hiding in a blue wool suit who expects a lobster dinner from a Wall Street wholesaler. . . hardly a setup for success.

Are Rates Telling The Truth About The Spring Rotation?

Nobody wants to hear about how the aggregate size of Treasury issuance being materially below funding requirements distorts inflation expectation and causes a misunderstood rotation in equities. Well, you want to hear about, right?

And, some thoughts on volatility heading into the fall, as if we all know how this is going to play out.

It's pretty simple in my mind. Watch the 10 year Treasury closely this summer. Why? As investors and traders try to second guess the threat of inflation (as if anybody really "knows"), there may be a fade in the short term momentum of economically sensitive stocks - think value over growth. If we see the 10 year dip below 1.5%, that could give a bullish signal to tech and other long duration assets. While the future is unknowable, it's best to have a plan to rebalance or sit on your hands this summer. My view is to let the market make the first move. If you want to build a portfolio that is geared to address inflation, don't think that is a smooth ride.

Munson Talks Inflation, Gold, Small Value

Just a general rundown on how I see the inflation trade. Also, some comments on how most people don't get what drives gold. But that would suggest I in fact understand how gold trades. Markets will humble you if you forget the golden rule that, it's not what you know that hurts you, but what you think you know and don't...

As always, Yahoo is a blast with unlimited energy - and most importantly we have the time to actually discuss a topic beyond a sound bite or 8 people yelling at each other.

Munson Takes a Different View on Tech Investing

When asked about the tech sector I take a different view. Here I explain how you can use some basic capital weighted index funds to get an overweight in Chinese tech stocks - which are a huge part of the emerging market index just like FANG stocks are a big part of the SP500. Enjoy!

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.