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CHARLES: FINANCIAL MEDIA TALKS
ABOUT THE STOCK MARKET AS IF IT
WERE A SINGLE ENTITY, NOT A
MARKETPLACE WHERE THOUSANDS OF
INDIVIDUAL STOCKS ARE BOUGHT AND
SOLD.
NOW, I BRING THIS UP, FOR THOSE
LOOKING FOR TRUE LONG TERM
INVESTING SUCCESS, THE STOCKS,
IN THE STOCK MARKET, YOU WILL
HAVE TO GO BEYOND THE HEADLINES,
FOLKS.
IN MY BOOK, UNSTOPPABLE
PROSPERITY, I FOCUS ON THREE
DRIVERS OF INDIVIDUAL STOCKS
WHICH EMPOWER THE OVERALL STOCK
MARKET.
YESTERDAY WAS A GREAT EXAMPLE OF
THE THREE DRIVERS.
10% OF MOVES IN THIS MARKET,
THAT COMES BEHAVIORAL.
ALL ABOUT EMOTIONS.
WE GET OVERBOUGHT AND OVERSOLD
CONDITIONS.
THIS IS HOW WE GET MONEY OFF THE
SIDELINES.
IMPROVED TONE BETWEEN THE U.S.
AND CHINA YESTERDAY, COUPLED
WITH DAILY NEW HIGHS, HELPED GET
US THAT EMOTIONAL LIFT.
THAT IS ONLY 10% OF IT.
30% OF INVESTING WHAT MOVES
MARKET IS TECHNICAL FACTORS.
THESE MEASURE CONFIDENCE AND
UNCERTAINTY OF CURRENT
SHAREHOLDERS IN REAL TIME.
I GOT TO TELL YOU, REMARKABLE,
HOW EFFECTIVE THIS MEASURE
PREDICTING NEAR TERM MOVES IN
INDIVIDUAL STOCKS.
BUT THE BIG ONE, THE MOST
IMPORTANT THINGS, FUNDAMENTALS,
FOCUSING ON FACTS AND ACTUAL
REAL, LIVE, DEVELOPMENTS.
YESTERDAY, THE MOST TRADE
RELATED STOCKS, LET'S FACE IT,
THEY WERE MOSTLY FLAT OR DOWN.
THE BIGGEST INFLUENCE, WINNERS
YESTERDAY, POWERED THIS MARKET
HIGHER.
IT WAS FUNDAMENTAL NEWS FROM
EARNINGS.
NOW ULTIMATELY FUNDAMENTALS
DETERMINE WILL THE INDIVIDUAL
STOCKS GO.
THEY IN TURN DETERMINE WHAT THE
OVERALL STOCK MARKET GOES.
WHEN YOU KNOW FUNDAMENTALS, YOU
CAN BETTER WEATHER MOVES
TRIGGERED BY BEHAVIORAL OR
TECHNICAL FACTORS.
HOW YOU HANG IN THERE WHEN THE
MARKET GETS HIT.
BIG FACTORS THAT HELP AGAIN,
CORPORATE EARNINGS, MONSTER
ECONOMIC DATA.
IMPROVEMENT IN MANUFACTURING.
I APPRECIATE EVERYONE WHO
WATCHES MY SHOW, I FEEL EVERY
SINGLE DAY I COULD DO A LITTLE
BIT MORE.
YOU SHOULD BE BETTER INFORMED.
IT IS YOUR ECONOMIC FUTURE.
I WANT TO HELP.
I'M BRINGING IN TWO OF THE BEST
TO HELP US NOW.
MONEY MAP INVESTMENT STRATEGIST,
KEITH FITZ-GERALD, AND CODY
SANCHEZ.
LET ME START WITH YOU.
SOME PEOPLE ONLY USE TECHNICALS.
SOME ONLY USE BEHAVIORAL
ANALYSIS.
LONG TERM INVESTORS,
PARTICULARLY MONEY MANAGERS NEED
TO KNOW FUNDAMENTALS.
THERE IS A LOT MORE TO THE
MARKET THAN THE HEADLINES, ISN'T
THERE?
>> I THINK YOU NAILED IT.
WE SEEM TO PAY THE MOST
ATTENTION TO THE THING THAT
MOVES THE MARKET THE LEAST, IS
ALL BEHAVIORAL.
EVERY CALL IT TUMBLES BY TWEETS.
WE PAY ATTENTION TO PROPOSEED
WAR IN IRAN AND IMPEACHMENT.
THOSE DON'T MOVE THE MARKET.
IF YOU'RE INSTITUTIONAL MANAGER,
THINGS LIKE HEY, PRODUCTIVITY
GROWTH IS TAKING UP 1.4%.
THAT IS IMPORTANT, MAYBE NOT AS
SEXY, BUT THAT SEGMENT OF THE
MARKET ABSOLUTELY WHERE WE
SHOULD BE FOCUSING.
I THINK IT IS IMPORTANT CF NEWS
13 SEGMENTS POINT THAT OUT.
CHARLES: KEITH IT HELPS PEOPLE
ZERO ON WHAT TO BUY, WEATHER
TOUGH TIMES IN THE MARKET.
EASTERN THOUGH DOWN IN THE
MARKET IT, PROBABLY CAN COME
BACK?
>> WELL THAT IS SOMETHING I
AGREE WITH, VERY, VERY STRONGLY,
CHARLES.
THE BEST COMPANIES TEND TO FALL
THE LEAST AND RECOVER THE
FASTEST.
WE HAVE COPIOUS APARTMENTS OF
DATA.
DOESN'T MATTER TALKING ABOUT
1929, 1954.
'70s.
EVERYTHING THAT FALLS QUALITY
COMES BACK FASTER, FARTHER THAN
THE STUFF THAT IS NOT.
CHARLES: CODY TALK ABOUT WHERE
WE ARE RIGHT NOW.
RETAIL SALES REPORT OUT, PRETTY
STRONG.
MORE EVIDENCE OF HOUSEHOLD
FORMATION.
PERHAPS A RENAISSANCE IN THE
HOUSING MARKET.
EARNINGS AND GUIDANCE, SO FAR
EARLY, BUT VERY STRONG, VERY
POSITIVE.
WHAT ARE WE MISSING HERE?
>> I ACTUALLY DON'T THINK THAT
WE ARE MISSING TOO MUCH.
I MEAN MOST ECONOMISTS, WHAT
FOOLS ME AT THIS MOMENT, MOST
ECONOMISTS FOR NEXT YEAR ARE
PINPOINTING SOMETHING LIKE 1.8%
GDP I ACTUALLY THINK THAT THE
NUMBER IS GOING TO BE HIGHER.
WE'LL DO BETTER IN 2020 THAN WE
DID THIS YEAR.
EVERYBODY IS DECREASING THE
IMPORTANCE OF THE TAX
INCENTIVES.
SINCE I'M ACTUALLY NOT A
KEYNESIAN ECONOMIST, BUT I'M
ACTUALLY A FRIEDMAN ECONOMIST, I
ACTUALLY THINK INCENTIVES NEXT
YEAR WILL LOOK PRETTY GOOD.
CHARLES: WE KNOW ONE THING,
KEITH.
SUCCESS BEGETS SUCCESS.
THERE IS REAL THING AS VIRTUOUS
CYCLE.
THE FED TRIED TO CREATE IT IN
THE PAST BY PRINTING MONEY AND
DIFFERENT THINGS LIKE THAT, BUT
MOVING MORE ORGANIC WHEN WE SEE
NOW.
WAGES GO UP, WHAT HAPPENS IN THE
ECONOMY, MIRRORS WHAT IS
HAPPENING WITH WAGES.
IF THEY KEEP GOING UP, I CAN'T
SEE HOW WE CAN BE STOPPED?
>> ME NEITHER, SHORT-TERM MOVE
BASED ON TWEET OR HEADLINE OR
SOMETHING UNEXPECTED.
YOU HAVE ALWAYS GOT THAT IN THE
MARKETPLACE.
IF YOU HAVE GOT COMPANIES IN
YOUR PORTFOLIO, WITH A CLEAR
PATH TO PROFITS.
THE ABILITY TO PROTECT MARGINS.
YOU KNOW WHAT?
THAT IS FORWARD-LOOKING
MECHANISM.
IT IS VERY HARD TO GO WRONG WITH
THAT VERY SIMPLE EQUATION.
CHARLES: CODY, LAST WORD FROM
YOU.
WE'RE OUT OF THE GATE PRETTY
GOOD.
AGAIN, I JUST TALKED EARLIER IN
THE SHOW WITH SOME FOLKS.
FEELS LIKE MANY ARE CHASING.
WHAT DO YOU SAY TO CLIENTS WHO
ARE NOT SURE RIGHT NOW.
>> WE'RE CONTRARIAN.
TRYING NOT TO BUY ON THE HIGHS.
WHEN THOSE TWEET HAPPEN TRY TO
BUY IN.
CHARLES: TAKE ADVANTAGE OF
BEHAVIORAL ANALYSIS OF THE
CROWD?
>> 100%.
CHARLES: BINGO.
>> SECTOR LIKE SOMETHING LIKE
CANNABIS, DOWN 20, 80%.
FIND THOSE SEGMENTS NOT TRENDING
AT ALL-TIME HIGHS.
CHARLES: I'M LOOKING AT THEM.
LOOKING AT THEM.
MOMENTS AGO, ILLINOIS HIKED A