tv Making Money With Charles Payne FOX Business October 28, 2022 2:00pm-3:00pm EDT
monthly plan premium in many areas; and your doctor and hospital may already be a part of humana's large network. there is no obligation, so call the number on your screen right now to see if your doctor is in our network; to find out if you could save on your prescriptions, and to get our free decision guide. humana, a more human way to healthcare. neil: all right. many and out of session highs, we're also showing you nancy pelosi's home in san francisco here. her husband's going to be all right. some, you know, brain surgery issues that might have to be addressed, they'll keep him there a while. growing questions as to why this kind of stuff keeps happening. here's charles payne. charles: thank you very much, my friend. have a great weekend. good afternoon, i'm charles payne, and this is "making
money." the market's making an impressive move, and i can't point to any headline news. beneath the service, we are seeing shifting. now, all that said, the titans from mythology were banished to the underworld, so the question, of course, what's going to be the fate of these titans that once rules to -- ruled our stock market? joe lavorgna's here, he's got a timeline on the pivot. plus, the bird is free, long live the bird. now that musk is in control of twitter with, will americans cherish freedom of speech yet again, or have they been brow-beaten so much into shutting up they just don't now 40 -- know how to speak up? rebecca walter will speak up. and why i'm bullish on opportunity and why you should be as well. all that and so much more on "making money." ♪
♪ charles: so, you know, this might be a seminal week, certainly this session acts like it could be something that we'll look back for a long time. you know, the market has been looking, you know, the broader market's been higher, and this is interesting because, you know, these rallies have happened today in particular we've had a smattering of economic data, and it really, to me, the numbers themselves on the surface don't do anything to necessarily dissuede this extremely hawkish federal reserve. nevertheless, we're up bigtime. and then there's amazon which has now joined the fall of the titans. and to roman poet covid and his famous -- ovid, that's the story that tells of the reign of the race of gods that consisted of cyclops and other giants, and they were ultimately defeated by the olympians headed by zeus. and from there the they would
cause earthquakes, volcanos and eruptions. so it is that the once-mighty, invisible stocks of this market, they've fallen to earth, folks. and even their earthquakes as they land are not dissuading this market. so what is it? what's this market holding on to? and is this, indeed, the official changing of the guards? as the olympians took control there, are the also-rans taking control now? joining me now, jim paulsen. jim, i'm not sure if you're a fan of rowing man mythology, but i gotta tell you, i think it's an appropriate analogy with. these stocks ruled, right? the metas and the amazons and all these names, and for 10 years, 15 years, wherever they went, that's where the market went. you've been pointing out that this market has been essentially flat for five months despite a litany of bad news and, you know, listen, maybe the fact that it's been flat and it has this resolve was something we should have seen as a positive. >> yeah, i think so.
i think we were going straight down through june in this market. every rally failed, and since then we went way up, we've come way down, but we've basically been flat over the time. i think it's basing up overall. you know, the thing i'd say is this kind of like inexplicable day that you mentioned today, you know, in the face of really bad titan earnings and the market still goes up, you know, i would say that's been going on since october 13th when we got that bad cpi inflation report and briefly in the opening the s&p fell to 3500 and then rallied back way up on the day. if ever since then the market has been continuing to decline in the face of hawkish talk, bad reports, bad inflation if numbers, and i really think it says there's a real sentiments change going on that is more positive. when i look at tightening cycles back to 1980, charles, what i find is it's almost always the case that the bond market blinks
first, that it stops going up, the 10-year yield stops going up. the fed may continue to raise rates thereafter, but once the bond market blinks, the stock market takes off. and i think we're kind of seeing that. the bond market's already suggesting the titan cycle's getting close to being over. charles: so then within the market itself, one that has found a way to rally without these mega-cap names, do you with change your approach? >> well, i think that -- i don't think a lot of these mega-cap names are done forever. i really hi they might come back into focus again next year when the economic growth rate is much slower in this economy. and we're not, no longer worried about inflation and rates, we're worried about recession and slow growth, i think they might come back into their own. but i would point out it's not really a new era problem because s&p 500 technology sector is actually up over the last couple days. it's actually up since mid october or early october. it's been outperforming the
overall s&p 500. small cap technology's been outperforming. charles: right. >> so it really is just the mega-cap pullback that's going on here, and i don't -- some of those could be more challenge, but i think a lot of those like the apples and such are still going to be a player as we get back into next year. charles: yeah. and i think there are some new tech names and, by the way, semiconductors are holding this thing up as well. i've got a minute to go. i know you like consumer discretionary and financials, and those are the old economy names, so people should certainly have exposure there, right? >> i agree. this, to me, bull markets don't end with good nudes. they typically end when the news is terrible and hopeless, and they start taking off almost in inexplicable fashion, no one understands why. i think that's where we're at, a new bull market, and i would look a, certain -- at, certainly, the industrials, the financials and the consumer
discretionary which haven't yet done really well, i think, do better as we move into next year. but i'd also sprinkle in some growth stocks. maybe not the mega-cap, but i think the growth's going to come into its own next year as we get more worried about recession than inflation. charles: jim, you're not afraid to put it out there, man. you you know we record these and keep them to play them back later. >> i know, it's scary. [laughter] charles: have a good weekend, my friend. speaking of the titans, amazon joined the whole thing today. it's been waffling in and out of that there are drag valuation -- trillion dollar valuation. it was down a whole lot more last night. i want to bring in tigris financial partners ivan on this. ivan, what's gone wrong here? that is it with the metas and the amazons all of a sudden? and obviously, you know, it's -- a company can have a misstep here or there, but the reactions have been so harsh and violent,
what's happening? >> this is not the first time we've seen this trend. i mean, overall the tech sec sector has -- sector has let led the market up in the past 20 years, but we've also seen significant corrections in all of these stocks that have had pullbacks of 25 to as much as 50% retrenchments from their highs, and then they resume again their leadership position. as we see these shifts in sentiment toward them and shifts in money flows and shifts in economic outlook. and history has shown every time we've seen selloffs like this in leading companies like these, like amazon, facebook -- meta, alphabet and apple, they've been tremendous buying opportunities, and i continue to believe that will be the case. i mean, last night after we got results, apple sold off because it was a miss. it was hardly a miss. and it was slightly less than expected iphone revenue because the iphone 14 really wasn't even available until the last week of the quarter.
and unfortunately, they've experienced some supply chain -- charles: sure. >> -- constraints that they will overcome. charles: a let me ask you, ivan, let me jump in here because we don't have a a lot of time. you're one of the top analysts in this area. let me quickly ask you about amazon. what went wrong there? as i look at it, it looks like the only place they're making money is the cloud. when will these other segments deliver to the bottom line? >> it's not that they dhoant deliver it, they do, but amazon consistently reinvests in their business. so the capital expenditure for the growth and support to create an even more efficient operation that they keep investing in, and if they ever were to pull back on the capital expenditures, their earnings would go up significantly. they have cone so well because they continue to invest. now all of these big cap companies like apple and metaa and amazon have significant cash balances. they could further optimize their balance sheet, return more
cash to shareholders and and buy back stock and create a lot of value that way, but they continue to earn a greater return with each incremental dollar of retained earnings invested, and that's how they've created so much shareholder value over time. charles: so, meta, you're not in the camp that losing three billion in a quarter where there's absolutely no desire to be a part of that, that that's okay? listen, we know these models work, right? bezos ignored critics, he built this incredible machine and, obviously, everyone wants to replicate that. from time to time, they all have to, but is that the way to go in this environment where investors are looking for more profitsesome. >> no, i think they gotta operate to their strength. and if their strength is constantly developing and moving forward because, by the way, in technology unless you're moving forward, you fall behind. and we've seen that with, you know, other leading tech companies from back in the day. so it's the important to
continue to innovate and to invest. and we've seen this before. charles: yeah. >> when facebook, when mark zuckerberg bought instagram and whatsapp, they said this is crazy, he's overpaying. turned out to be two of the greatest acquisitions ever. charles: ever, yeah, yeah. >> and ten years ago when he was shifting to mobile, they said this is crazy, he's spending too much money. now everybody interacts on all these apps on their mobile devices. paid off bigtime. charles: no doubt, i think instagram is ranked the second best acquisition in the history of business. i forgot what number one was -- >> i would say youtube is probably number one. and google was criticized at the time when they did that. charles: absolutely. well, i'm glad you're staying the course because so many on the street haven't. of course, we'll have you back in the future. in the meantime, folks, credit card debt returns to levels before covid-19 pandemic.
record card issuance and increased spending help push to $916 billion last month. i want to bring in lisa ellis. all right, lisa, so debt is piling up. you know, the average, i will say the average can credit card debt is $5500, and that is below pre-pandemic levels. is this something of a sweet spot for the payments industry? >> yeah, it is. i mean, it's amazing. there's a lot of nervousness out there because we're seeing these balances start to climb back up. we're starting to see clip again delinquencies and chargebacks start to inch up a bit which makes people nervous about the health of the consumer. but the reality is you have to do the comparison that you're doing, which is that relative to even where we were just prior to pandemic which was a very healthy economy, we're still well below in terms of loan balances, delinquencies, charge-offs. so there's actually still a lot of money to be made for the
credit card companies just in having their loan growth return to where it was pre-pandemic. charles: now, there are three names that you kind of always mention when you're on the show, and they've been reporting earnings, and i feel there's some divergence. american express offered guidance below consensus. it felt to me that travel and entertainment maybe was peaking a little bit. do you still like american expressesome. >> i do still like american express but, you're right, because they are tied to domestic travel, domestic travel is really back to pre-pandemic levels. that's no longer a big driver of this one. but they do, because they have a balance sheet, they still have a lot of tailwinds from loan growth which, as i was highlighting, is still well below pre-pandemic levels. that's really the driver for amex. as for visa and mastercard, they're seeing -- charles: their loss provision went up a little bit, and that spooked a few people, but it's nowhere near red flag zone, right? >> oh, no. i mean, miles below.
pre-pandemic charge-off rates were 2.4, 2.5% for am a ex, they're now at 0.8%. the reason that that they have to provision has more to do with the macro economy. it doesn't have to do with their own delinquencies and charge after offs -- charge-offs. charles: you were talking about mastercard when i interrupted you. i did see cross-border up, is that because of the strong dollar? >> yeah, it is strong dollar, yep. meaning you're seeing a lot of u.s. tourists travel thing internationally. also, we finally had a lot of borders reopen in asia which were actually still closed. and so cross-border travel was a nice, positive surprise this quarter both for visa and mastercard. it jumped up, it's now running about 116%, 15, 16% above where it was in 2019. charles: right. >> still, you know, still a lower mix but coming back really nicely. charles: lisa, i've got a minute to go, and i want to shift gears
a little bit because twitter now officially is private. a lot of scuttlebutt on what elon musk is going to do with it. we know his roots go to paypal and there's been talk about making it a payments platform. your thoughts on that in this very, very competitive industry. >> yeah. i mean, unlikely. that's what i'd say. [laughter] i know that's always an appealing idea because people look at china where you've got the ali pays, the wechats of the world. but the reality is that the regulatory and consumer privacy environments in the u.s. are just fundamentally different and really preclude the concept of a social media platform from really being a payments platform. there's a pretty hard line there when it comes to compliance, you know, kyc, aml, all of the regulatory messiness. that's the reason why, you know, the paypals really haven't made that successful. charles: all right, saw.
watch out for a call from elon this weekend. [laughter] thank you very much, appreciate it. >> thank you, charles. have a good weekend. charles: talking about all of this, the elephant in the room is tiktok. every single one of these large communication services names we've talked about, they've been hit by tiktok. and many are complaining that the white house is allowing this to to happen. should it be banned? tweet me @cbpayne, do you think tiktok should be banned? meanwhile, evidence is piling up that inflation is going to be here for a very long time except joe la lavorgna. before that, we're going to bring in ryan dietrich. so get ready to learn something so so you can make something. we'll be right back. ♪ ♪ ♪ ♪
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charles: all right, so right now the market-defying week, earnings and economic data that does not to dissuade us from the fact that the fed will continue to hike rates. so what's up with this counterintuitive action? what's going on? my next best says there are two reasons not to be surprised that it's such a strong day. a, it's his birthday, b, history is just pee meeting it. joining me now ryan dietrich. happy birthday, my man. [laughter] >> thank you.
charles: so what's the deal with october 28th being such a strong day historically? >> yeah, that's right. you look at all the days, charles, october 28th is the third strongest day of the we're. -- year. it's my birthday, maybe it's random. but we all know selling may be going away, charles, i've been saying august and september are rough. that's happened. i said look for a bottom this october. we think that's happened, right? six of the last seventeen bear markets ended in october, and the next six months, charles, when you look at a midterm year, here's what really matters for the listeners, the next six months have been higher the the last eight a teen times in a roa row. the calendar is a tailwind now, and investors need to remember that. charles: i give you props, you have been saying that, and i always tell folks you're the best market historian out there. i saw some research recently that while everything you're saying is true, it's different when we're in a bear market, and
the next quarter typically goes lower. i haven't been able to do the research. is there some truth to that? >> yeah, i mean, i guess that's the question, are we in a bear market still in we think probably the bear market's over as well. the fourth quarter of a midterm year is historically very strong. this could be, like, one of the best months the dow has ever seen. i know there's one more dayen on halloween. happy halloween, everybody, by the way. but if you look at that, when you gain 10% in a month for the dow, charles, the next year stocks are up, like, 6%. so what i'm -- 16%. so what i'm getting at is a super strong month like we're seeing here is not the hallmark of the end of a bull market or the middle of it, it's usually the start of a strong move. doesn't make much sense, but that's what it is, and we'd still be bullish here going out into next year. charles: man, i like this birthday ryan. you've got me all pumped up, man. so let me ask you, we're in this
bullish, historically, season, but the old economy names leading the way over some of bigger mega-cap names. are you buying into that? if so, does it change the way we should be positioned? >> well, put it this way, we could say it would change it. we like small caps. there's a lot more small cap names. this small cap leadership is nothing new. and if you look at energy versus tech, that's the big one, right? tech's done amazing for a long time, we know, and energy's up 60% this year. if you look the last 20 years on a relative basis, it's barely a blip. what i'm saying is this trend of energy and the value names and industrials, that could continue for a while. it's not that we hate big tech. we'd be even weight at best, and i've been saying that while now. charles: we had that chart that you posted on twitter, and that's fascinating because energy versus big tech, this has been a stealth rally for two years, and it began almost two years ago on this particular
day, you know? and to your point, you know, from 2008 it was the always the other way around, so maybe has legs. ryan, happy birthday again, my man. have a great weekend. >> thank you, charles. appreciate it. happy halloween, everybody. charles: thanks. as much as the fed wants to crush the economy, americans, they keep going and guess what? they expect prices to go up. the problem is, that's what the fed hates the most. we're going to have former white house chief economist joe lavorgna on what's going on with the economy and the consumer next. ♪ as an independent financial advisor, i stand by these promises: i promise to be a careful steward of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals.
company or a red flag for consumers in general or maybe both. >> well, charles, it is the reversal of the pandemic. so during the pandemic what we saw is that amazonned had enormous growth rates because of the stay at home orders, and now we're seeing the opposite. yesterday the company reported record in dollar values subscription and aws revenue. however, it reported it at a decelerating rate, and this is why the market punished it. what this means is the consumer is still engaged at amazon but not as much as they were before when that was their only web site of choice. and in general, when we look at the retail space, consumers still prefer to go into the store than shop online. still, having said that, given the inflation, the stronger dollar, yes, amazon has a tougher time going into the holiday season especially given the climate of the consumer. charles: okay. so it's more amazon than consumer. we saw university of michigan
sentiment numbers. by the way, i saw your sentiment about the same thing, unchanged, although from from a year ago it's down almost 7%. what was interesting9 with the university of michigan report, lower income households are more optimistic than wealthier households. what's going on? >> so, in general, the consumer that is employed is more optimistic. that's the only area of optimism we're seeing in our consumer confidence index, and that's really the key driver of the economy right now. as long as those consumers are employed, that's why they're spending. still having said that, the low-end consumer is still firing on all cylinders when we look at the expectations for dollar stores and dollar general, they're all expected to post north of 4% for this quarter and even better for the holiday season, telling us that the low income consumer is still engaged. charles: want to talk about actions that, you know, where the action is right now. because i know in your report there's 205 niches, if you will, and one blew my mind.
the one that stands out blew my mind, the hotel and restaurant area. is that just about, you know, the sort of post-pandemic let's get out there and, you know, splurge a little bit in and if so, are there some names that are standing out benefiting the? >> yes. we've talked about this revenge travel before, and that's exactly where the consumer is. they have all this pent-up demand from staying at home and travel, restaurants and hotels, all of those are expected to be the best performers in 2022 even when we look at the forecast for the holiday season, it's the gift of experiences. even halloween, we're seeing items flying off the shelves. consumers are definitely about experiences, about the names that stand out. analysts are very bullish on marriott, chipotle, ulta. ulta continues to be a favorite not only because of the reopening, but also consumers love the gift of cosmetics during the holiday season. as a result, that particular name is likely to not only beat
earnings estimates, but post a positive surprise this third or quarter. charles: and i feel like you were giving me a hint that -- there the too. like, take care of the people in your mouth. thank you very much, see you soon. once upon a time a politician declared, it's the economy, stupid, and he was right. these days trying to figure out where the economy is going is really making a whole lot of normally smart people look stupid and, let's face it, a lot of politicians look disingenuous. i want to bring in former white house chief economist joe lavorgna. joe, a whole bunch of economic data out today, this week. gdp, i want to talk about it, the media hailed it as being a great report, but what did it look like to you under the hood? >> charles, it was a disaster because the 2.6% gain, 107% of it was net exports meaning we imported more, we exported -- we
imported less, exported more, so it accounted for all the gdp growth and then some. business investment is down 5%, it's already in recession. housing is down 26%. private final demand was, essentially, flat in the quarter. the year on year trend is about 1% and slowing. i mean, this is really terrible. and we know the export side will get worse given how strong the dollar is. so this was about the weakest 2.6% gdp report you're going to get, and that was a catalyst for the bond yield rallying yesterday. charles: i agree. when you look at it yesterday, the final demand and all these things, it's so ironic because sometimes the media will flip-flop. by the way, you've been pretty loud about the fed going too far. you've warned and warned, and it seems like others are beginning to climb on that bandwagon. is there a sense that this next meeting they are going to find a way to signal that they'll take the pedal off a little bit, smaller rate hikes mt. future
in. >> yes, charles. they're going 75, but we had a "wall street journal" report last week, as you might recall, that said at the some point her going to slow the pace. does that mean 50 in december which is implied, or is it maybe 25? either way, charles, they're doing at least 100 if not 125 basis points between now and year with end in an economy that's slowing. we need to look no further than the index of leading indicators which is down 1.5% year on year. normally, a fed is easing policy into this sort of situation, not tightening it. they're going to tighten more. charles: but you believe though that easing, that pivot is going to happen much sooner than later. i mean, i think -- i don't think anyone is saying it's going to happen as early as you are. you think sometime early next year the fed's going to have to pivot. >> yes, i do. the fed was way too slow in raising rates, kept emergency level in place well beyond the time it was necessary, but now they're going way too far the
other way, and they're forgetting lags. based on what they're doing in the balance sheet in the expected tightening, i see a pivot sometime late q1, early q2, and they'll be easing and are reinstituting qe. charles: i've got a minute to go. people have been rooting stock investors for the pivot, but most of the time we get it the market initially goes down because it means they've blunderedded is so badly, the economy is in such bad shape. essentially, that's where we're heading. we're heading to some short-term, sounds like you're saying, a cataclysmic ending to this experiment. >> the stock market is a forward indicator, but it's not a forward indicator before the numbers have really begun to turn. so, yes, it's going to be very tricky for risk investors next year. the one caveat would be if inflation comes down faster and sooner than expected which is unlikely or if the fed stops or slows that balance sheet unwind which is going on, and that that's taking a lot of liquidity and credit out of the system,
and i don't think the fed fully understands and appreciates that. charles: wow. joe, thank you so much, my friend. really appreciate you. have a great weekend. >> thank you, charles. charles: coming up, i'm going to give you my takeaway on being bull i were. -- bullish. and elon musk, it's done, folks. the bird is freed. we're going to break down the latest developments and talk about whether or not we can reembrace the public square. have we been brow-beaten so much we don't know how? if rebecca walz is here. she does.. she does.. we'll be right back. they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.
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twitter has now gone through. following this purchase, of course, he wasted no time cleaning house, twitter's hardship are. kelly o'grady has more in los angeles. >> reporter: good to see you, charles. he certainly didn't waste time firing the ceo, the cfo as well as the head of policy. she was heavily responsible for removing former president donald trump from the platform. but this is just breaking, i want to show you the tweet elon musk just sent out. quote: twitter will be forming a content moderation council with widely diverse viewpoints, no account restatements -- reinstatements will happen before that council convenes. that, of course, answers the imminent question of when or whether musk would allow former president trump back on. we won't know anything until that council meets. but it becomes a philosophical question about what content will be allowed on the platform, that's considered violence-inducing. some advertisers are already
making it clear they'll pause ads if trump is allowed back on. from a financial standpoint though, if musk were truly to create more engagement, they may be forced to change their tune. he did have a previous presentation to investors shah thoughed he want -- that showed he wanted to rely on prescription if revenue. he said, quote, it's important to show twitter advertising is as relevant the their needs. now, on the head count front, i'm talking to sources inside twitter, i can confirm layoffs are underway. portions of the software engineering team specifically, and we're receiving images of employees leaving twitter with all their stuff in their hands. but this is what happens in m&a. the owner comes in, cleans house. we'll just is have to see what's left of the house in a bit. charles: we'll see. i'm sure it won't be 75% of the staff, but cuts have to be made. kelly, thanks very much. i want to bring in rebecca
walser. you know, rebecca, there's so much hope that this will, indeed, mark a moment for the nation. and i'm talking about millions of americans who, you know, listen, we've been brow-beaten, shamed, afraid to say how or mention how they feel. it's not just on twitter, but almost every facet of life. is it too much to hope for that maybe this could be a big change in this country not just for social media, but in general? >> you know, i pray to god that this is a change, charles, and we hope that it will actually work out really well. but you don't know. now he's going to form a content moderation committee. what is that committee going to decide? the point i think he made there was it was going to be a wide, diverse set of opinions because, you know, i think twitter, obviously, has i skewed very progressive-leftist, and that's banned a lot of conservatives off the platform, obviously, the former president being at the top of that list. and i think people are just looking for more viewpoints and more breadth of viewpoints. let's see if he can do it. he actually made a really good point, elon musk, when he talked
about why he bought twitter. and he said that content and ads can be very good if they're relevant, targeted and meaningful to people, but you have to have a broad breadth9 of people in order for those ads to be relevant. so, you know, advertisers are going to have to get used to the fact that they don't run the show anymore, and i think that that's necessary. charles: i'm sure they'd like to have more eyeballs, not less. what did you -- you referenced former president trump. if they bring him back, what does that mean? what do you think that would mean for the platform? >> i think it would be very jarring, it would be a very bold move, and i think you'd have a lot of blue check marks saying, we're going, we're going. where they go, i don't know. telegram is more global than u.s.-based and though the twitter's global too, but definitely more of a global platform, so they don't have alternatives, charles. where are they going to go? charles: let me. >> cow concern ask you about the
broader market because metaa, snap, amazon, almost every major mega-cap name that's missed earnings lost a little bit of business to tiktok. now, obviously, you and i believe in competition, but they are cleaning the clocks of american companies. and in doing so, they're gobbling up the private information of a lot of people handing it to the communist leadership. should it be banned? should tiktok be banned in this country? >> you know, charles, this goes to irregular warfare that this country and the rest of the world has never seen before and what we need to have is real public hearings about what exactly is the data that's being collected? is it low location, is it gps influence, is it sphere of influence, your six degrees of separation? what is it that that they're collecting? we need to know. software developers could easily find out that information. we need it publicly reported, and then we need to decide if we want our children and ourselves tracked by a superpower that, obviously, is hostile to our
country. and that's what we need to know, you know? i'm tired of hearing about it. let's get the facts and make a decision as a country because, no, we won't adapt apps that can actually -- don't want apps that threaten our national security. charles: some people think it should be banned because of its addictiveness for children and others. they hi it's a dangerous thing. 30 seconds, quickly, i know you're scared about this market. you've been telling me for months to be concerned about pensions. you've been right. is it going to get worse from here, rebecca? >> yeah. we've got a liquidity crisis on the way which is why you hear everybody talking about the fed pivoting. this liquidity cry sitz is, unfortunately, it is the death knell of the system of debt fiat currency and the u.s. dollar reserve as we know it globally. we are already in the beginning of, unfortunately, the end of what we've known to be normal. so it's coming. there's no stopping it. charles: rebecca and hyperbolic
have never been in the same sentence together. [laughter] great seeing you, my friend. >> thank you. charles: all right, folks. my takeaway on cheering while the doom and gloom seeps in it. listen, it always gets better. but first, we want to take a look at this market a little closer with rob i luna. he's changing his approach a little bit, and you'll want to know what he's doing, next. ♪ ♪ ♪ ♪ ♪ ♪
charles: all right, so got a great session. also feels like a changing of the guards. so maybe you should be considering changing your approach. joining me now, rob luna. rob, obviously, you've been bullish. it hasn't always been easy in this market. a lot of noise, a lot of downside. the bear sentiment is outrageous and nuts, but you've insisted on buying as the market was melting down. what do you feel is driving this move to the upside now? >> i think there's a lot of seller exhaustion right now, charles. and what you're seeing is i think this market can move without some of the leaders that the market's needed over the last several years. weave seen absolute debacles starting with google which really was a realization, to me, that i think there's a big change going on followed by meta, even today amazon, but it's bouncing back nicely. so i think there's a lot of solace in people believing, hey,
maybe i can take a broader-based approach. so i think what you're seeing is people dip a toe back in at these lower levels right here, charles. charles: so as they dip their toe in, i know you've adjusted your barbell approach. >> yeah. charles: what was it before, what is it now? >> yeah. which you used to give me a a lot of flak for about a year and a half, two years there. and that's when you had no yield. we were looking at half of the portfolio in those dividend-grower types of names, the dividend aristocrats which have held up remarkably well this year, down about 9%, and the rest was the fang types of names, amazon, netflix, google, that have really led us over the last decade. but we're changing a-- that approach because high yields up there 8, 9%, even the 10-year over 4%, so that barbell's going now to some of these credit names, so across the board
high-yield, corporate treasuries. and on the other side i think what you have to do is what's going to beat us over the next decade, and i heard your earlier guest talking about small caps. that's worked historically well, but the last decade it's underperformed. look at smaller names, more undiscovered, more research on the oh side of the barbell -- other side of the barbell. charles: within that area, you've got the russell 2000, but you also have russell value and russell growth. would you still be more specific in terms of which area even among the small caps you want to be overweighted? >> you know, i'll tell you what i'm doing is i'm picking some individual names. i just got back into a name i've talked about before, got out a while ago, which is farfetched. and hen what i'm doing is i'm kind of splitting that and using vtwo, that's the vanguard blend. it gives me some value, some growth because i think right now
at the beginning of any new cycle, charles, you don't necessarily get paid to pick those one or two names. you want to take ad broader-based approach, and that gives you that etf to make sure you're capturing the move. charles: you mentioned farfetched, my godson is buying some too, so he's in good hands. should we be going back and looking at some of these disasters that were amazing on the way up? like roman candles, they blew up bright and beautifully, should we be sifting through those looking for opportunities? >> yeah, i think ouched. the new gig -- you should. the new gig economy, that's not going anywhere. farfetched, the names that have absolutely been decimated. and now the good thing is, charles, you can pair those with fixed income that's going to give you a little bit of a volatility dampener. don't be too conservative. look, at these valuations i wouldn't be selling google, amazon, but don't look at them to be the leaders for the next
fully been fully felt yet, but you and some of your guests keep acting like the bulls are going to run again soon. where is the disconnect? it seems to me that things are going to get worse for every economy. does the stock market live in its own bubble? this is from sean. i wrote back, i'm a cheerleader for investing and have been for close to four decades. i know millions of people that will drop out of this market and not get back in. i also believe that investing in individual stocks, so i cheer the market as the ultimate money-making machine. i've been through a lot of crashes including 19 # 87. i was in the business for just one year as a broker, and i thought my dreams had gone up in smoke, but in reality, it's the -- it was the start of a wonderful life. the stock market is more of a harbinger. in spring of 2020 that rebound was written off, and i got that be honest, i lot -- got a lot of e-mails, and all of them missed a huge rebound. the carnage has been horrific,
but i will always be a cheerleader for opportunities particularly when trying to navigate these rough patches. i hope you never partake in what could possibly be a life-changing experience. i'm never going to be the one that says sell everything and try to pinpoint the exact bottom. if you're playing that game, more than likely you're going to miss the bottom and, ironically, you'll pay more than people who are actually buying as the market goes down. my model portfolio went to cash, 60% cash twice this year. is so we do take precautions. i coappreciate you watching the show. i'm not the doom and gloom guy because i've seen this movie too many times, and the ending is always fantastic if you stay the course and don't lose your nerve. and liz claman will vouch for that, won't you, liz? liz: i know who the doom and gloom guy is, the intel ceo. ty -- did you hear that call? charles: yeah, and it's crazy, because the other chip
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