CHARLES: THE DOW IS UP A LITTLE
BIT.
THE S&P IS DOWN A LITTLE BIT.
NASDAQ MAYBE ON THE VERGE OF ITS
LONGEST WINNING STREAK SINCE
AUGUST.
IT HAS WORK TO GET THERE.
ALL EYES ON GE.
THAT'S RIGHT, YOU HEARD ME
RIGHT.
GE IS THE STOCK OF THE DAY.
RIGHT NOW IT IS UP 7%.
THIS AFTER ANALYSTS WHO TOLD THE
WORLD TO SELL THE STOCK AT 30,
SAYS THE CARNAGE IS NOW
OVERDONE.
THE QUESTION, IS THIS SIGNAL FOR
BOTTOM FISHING?
JOINING ME MACK FUNDS.COM, JONAS
PHARIS, MONEY MAP PRESS, KEITH
FITZ-GERALD AND SCOTT MARTIN.
KEITH, YOU WERE UNCOMMONLY
UNKEITH-LIKE BEARISH, NAGGING,
GNAWING, HONORARY LAST COUPLE
WEEKS.
IS THERE A LITTLE BOTTOM-FISHING
HERE?
COULD THAT BE THE CASE?
>> I WAS ORNERY FOR A REASON.
WE HAVE A SHIFT FROM OPTIMISM TO
PEST MINIMUM ON RETAIL
INVESTORS.
WE HAVE 175 HEDGE FUNDS BLOWN UP
IN THE LAST QUARTER ON A REPORT
I JUST SAW BEFORE COMING ON THE
AIR.
THAT TELLS ME POTENTIALLY GREAT
CONTRARIAN TIME.
WHEN EVERYBODY IS SCARED TO GO
SWIMMING, THAT IS THE TIME TO
START PUTTING YOUR TOE IN THE
WATER.
CHARLES: SCOTT?
>> I DIG IT.
I WOULD LIKE TO SEE A LITTLE
MORE PAIN, NOT PAYNE, BUT MORE
PAIN.
REALITY, KEEP IT ON SOMETHING,
CHARLES, THIS SENTIMENT, THIS
BLOW OUT OF HEDGE FUNDS, SOME
BIG DOWN VOLUME WE SEE ON A DAY
LIKE TODAY, MARKETS WERE UP,
THEY WERE SANGUINE.
NASDAQ TURN ITS OVER IN SOME
AREAS.
THIS IS PART OF THE PROCESS.
I DO WANT TO SEE ONE MORE ROUGH
DAY.
ONE MORE TEST OF THE LOWS A WEEK
OR SO AGO, MAKE SURE THAT IS A
FIR BOTTOM.
THOSE IF THEY DON'T HOLD BY THE
WAY, KIDS, WILL PROBABLY LEAD TO
MORE SELLING AT LEAST BIT
MACHINES.
CHARLES: BY THE SAME TOKEN, ONE
THE ARGUMENTS THAT IS ONE OF THE
SUPPORT POINTS WE KEEP HOLDING.
ONE THING I THINK, GUYS, THE
BREADTH.
FEW WAYS TO MEASURE THAT, NEW
FIFTHS HIGHS AND NEW 52-WEEK
LOWS.
ON NEW YORK STOCK EXCHANGE,
THERE WERE 248 STOCKS THAT MADE
52 WEEK LOWS.
YESTERDAY THERE WERE ONLY 128.
FEELS FEELS LIKE, JONAS, PEOPLE
ARE PICKING AT SO OF THESE
STOCKS, QUALITY VALUE BLUE CHIP
NAMES THAT MAY BE OVERSOLD.
>> I THINK THIS BOTTOM CAME IN
BECAUSE THE 10-YEAR DROPPED.
MADE BELOW 3%.
THAT MADE STOCKS CHEAP AGAIN
WITH THE CORRECTION THEY ALREADY
HAD.
TECH STOCKS ARE MORE THAN 10%
OVERPRICED.
DECLINE LIKE THAT DOESN'T MAKE
IT THE BARGAIN OF THE WORLD.
IN 2000, WHEN STOCKS WERE DOWN
10% THEY WEREN'T A BARGAIN.
PEOPLE WERE MOVING OUT THAT INTO
VALUE, OTHER AREAS ABROAD.
YOU DON'T WANT TO DO
BOTTOM-FISHING JUST BECAUSE AN
AREA IS DOWN 10%.
I DON'T THINK WE NASDAQ 5000
BEFORE 10,000.
IF INTEREST RATES CREEP UP ABOVE
3%, THIS MARKET WILL FALL AGAIN.
CHARLES: GOING AGAINST THE GRAIN
ACCORDING TO THE AMERICAN
ASSOCIATION FOR INDIVIDUAL
INVESTORS BEARISHNESS AT 49%.
THIS IS THE HIGHEST LEVEL BY FAR
OF THE YEAR.
INDIVIDUALS ARE ONLY 20%
BULLISH.
IS THAT A CONTRARIAN INDICATOR
FOR YOU?
>> IT HAS BEEN HISTORICALLY.
5%, OTHER RESEARCH SHOWS, 85% OF
ALL BUY-SELL DECISIONS ARE MADE
INCORRECTLY.
AS YOU AND I BOTH KNOW THE
INDIVIDUAL TENDS TO BUY WHEN
THEY SHOULD BE SELLING AND
SELLING WHEN THEY SHOULD BE
BUYING.
PROFESSIONALS HAVEN'T DONE MUCH
BETTER.
THAT DOESN'T CHANGE THE FACT
PEOPLE OVER HISTORY DO EXACTLY
THE RIGHT THING AT PRECISELY THE
WRONG TIME.
IF YOU'RE AN INVESTOR YOU HAVE
TO TAKE THE LONGER TERM VIEW.
LOOK FOR THE QUALITY COMPANIES.
THAT IS WHAT MARKETS LIKE THIS
ARE ALL ABOUT.
EVEN IF WE GET ANOTHER BOUGHT OF
DOWNTURN I HOPE WE DO TO CLEAR
THE PIPES, BECAUSE THEN IT IS
REALLY CLEAR SAILING.
CHARLES: BY THE SAME TOKEN,
GUYS, THIS WHOLE IDEA OF
PRECISELY PICKING THE BOTTOM IS
A LITTLE BIT OF FOLLY, RIGHT
SCOTT?
IF THERE ARE VALUE NAMES, YOU
ARE AN INVESTOR, NOT NECESSARILY
A TRADER YOU HAVE TO BE AT LEAST
SPYING OR TRADING SOME SORT OF
POTENTIAL BUY LIST HERE?
>> YOU REALLY PUT IT UP
CORRECTLY, CHARLES.
THE TRADER VERSUS THE INVESTOR
AND YOU DON'T NECESSARILY IF YOU
HAVE THAT LONGER TERM HORIZON,
FACE IT, ONE, TWO, THREE, FIVE,
SIX, YEARS, MAYBE PICKING A
BOTTOM ISN'T EXACTLY IN YOUR
BEST INTEREST BECAUSE IT WILL BE
A HARD THING TO DO.
JONAS MENTIONED SOMETHING
REALLY, REALLY APPARENT WHICH IS
LOOK WHAT HAPPENED TO INTEREST
RATES OVER THE LAST FEW WEEKS.
EVEN AS THE MARKET TRIED TO
STABLIZE, RATES HAVE COME DOWN.
YEAH, IN RESPONSE TO THE FED
WHICH HAS GOTTEN SURPRISINGLY
MORE DOVISH.
LOOK AT FED FUND FUTURES RATES
FOR NEXT YEAR.
AS GOOD OF A CHANCE OF ONE RATE
HIKE OR TWO AND EVEN A CHANCE OF
ZERO BELIEVE IT OR NOT, WHEN WE
HAD FOUR CHANCES TWO WEEKS AGO
IN 2019.
THE MARKET IS TELLING THE FED
SOMETHING OR MAYBE TELLING
SOMETHING ABOUT THE ECONOMY WE
HAVEN'T SEEN COME THROUGH YET
WHICH IS WHY STOCKS ARE HAVING
TROUBLE TO BREAK THOSE RECENT
HIGHS.
CHARLES: HARRIS FAULKNER JUST
HAD A GREAT INTERVIEW WITH
PRESIDENT TRUMP.
THEY COVERED A VARIETY OF TOPICS
INCLUDING THE STOCK MARKET.
LISTEN WHAT HE SAID WILL TURN
THE MARKET AROUND.
>> WHAT IS YOUR STRATEGY, IF YOU
WILL FOR BRINGING IT BACK AT
THIS POINT?
>> I HAVE A VERY SIMPLE
STRATEGY.
WE WERE UP ALMOST OVER 40%.
WE LOST A LITTLE OF THAT BECAUSE
OF TRADE.
I'M DOING GREAT TRADE DEALS.
>> YOU'RE WILLING TO DO THAT?
THAT'S DIFFERENT?
>> I WOULD BE GLAD DO IT UP 40%.
LET'S TAKE A LITTLE BIT OFF THE
TABLE AN FIX IT BECAUSE WE
CANNOT CONTINUE TO LOSE
$500 BILLION A YEAR TO CHINA.
CHARLES: I LOVE IT, HARRIS WAS
UP 35%.
HE CORRECTED HER QUICKLY.
NO, 40.
I THOUGHT HE WAS GOING TO SAY
440.089360445%.
ANYWAY HE KIND OF KNEW THE
NUMBER.
THIS IS ONE OF THE REASONS HE
CALLED OUT THE FED AS WELL, THE
MAIN PRESSURES ON THIS MARKET
ARE, AS MUCH PSYCHOLOGICAL
HAVING TO DO WITH THE UNKNOWNS
THAN THE KNOWNS WHICH ARE GREAT,
THE ECONOMIC DATA IS GREAT.
THIS MORNING WE WERE GREETED
WITH INITIAL JOBLESS CLAIM THAT
WAS THE BIGGEST BEAT THIS YEAR,
A 49-YEAR LOW.
THE ECONOMY IS GREAT BUT THE
MARKET IS NOT REFLECTING THAT?
>> SPEAKING OF THE PSYCHOLOGICAL
THING THE A LOT OF THE DRAG IS
JUST THAT.
IT HAS BEEN GOING UP SO MUCH IT
HAS TO BREAK AT SOME POINT.
THAT IS IN PEOPLE'S HEAD.
WITH THE YIELD CURVE FLATTENING
OUT IT HAS BEEN BAD IN THE PAST.
IT DOESN'T ME IT CAUSES
RECESSIONS.
BECAUSE IT HAS A HIGH DEGREE OF
ACCURACY, ONCE SKIRT LENGTHS
WERE A DEGRIEF ACT A I S
INVESTORS SAY THIS IS IT, I HAVE
TO GET OUT.
THE PRESIDENT WAS BASICALLY
RIGHT ABOUT INTEREST RATES THIS
YEAR.
THEY WERE GOING UP A LITTLE TOO
FAST.
IT WAS HURRYING THE HOUSING
MARKET.
IT WOULD SLOW THE ECONOMY.
ALREADY SLOWED SOME OF THE
ECONOMY.
THAT WAS MORE OF A DRAG THAN THE
TARIFF WAR AT THIS POINT.
FOR HIS OVERALL POINT THE
MARKETS ARE DOWN BECAUSE OF THE
TRADE WAR.
IF YOU LOOK AT STOCKS WE'RE
WINNING THE TRADE WAR AT THIS
POINT.
IT COULD GIVE INVESTOR THE
OPPORTUNITY TO GO INTO CHINA
WITH MONEY.
THAT MARKET WAS DOWN SO MUCH.