tv The Willis Report FOX Business August 31, 2013 11:00pm-12:01am EDT
we're on root every weekday 3:00 to 6:00 p.m. eastern time. we'll have another great show for you next week on fox business, and in the meantime, i hope you'll tune in on show. tune in. charles: hello, everyone. i am charles payne, it is time to make some money. no more days at the beach and the stock market the toughest month of the year. i will tell you what to look out for in september. and the notion of so-called cheap stocks and the idea we play the market. the worst is the false idea of diversification. more than likely have fallen into that trap. we cered a lot this week and we will give you coverage othe week and months ahead, because it is all coming up on "making your market."
stocks fell across the board today, this is not taking long heading into this holiday weekend. especially not with the uncertainty in syria. one of the worst months for stock since last may. ulities and financials led the market lower. the dow lost four and .5%, the s&p 500 lost over still the market up easily double digits so far this year so let's get to our panel. i will never mess that up again. and this one, our friend. uys, let's talk a little bit about this month, the worst month since may of last year. although i never sensed any panic, that is the odd thing about it. >> it is the summer, it is august.
we have had a lot of external shock. syria being one of them. charles: we were aeady week before this happened. >> we were, but it added fuel to the fire. charles: that fire was the federal reserve. probably more than anything else. you are right about it all day long. it seems like that is the darkest cloud over the market right now. >> i think i like miley cyrus more than i like ben bernanke at this point. the market is correct. it is not the end of the world. 10% corrections happen. we are in the midst of one. syria did light a little fire. earnings and sales growth not very good. we are up there 16 times earning. the market is tired. i would suggest it is normal at this juncture. charles: do youhink the fact
it felt like this month good news was good news, but that ne was bad news. we started acting in a way that tells me maybe we can live in a post-fed world in this market. >> i think what is going to happen next is the job number will tell the market whether the fed will taper five, 10, 20. charles: isn't it the fact you are going to taper, for me tapering at this point is a sign of surrender by the fed. ey are acknowledging our policies don't work so no need to take on more risk because we are not nowhere near the targets they put out for us. ben bernanke knows the jobless rate. if everybody quits the job market soon we will have a 1% rate. >> i think the market is used to $85 billion per month. when the fed stops printing money the market dumps 15, 20%.
that is big worry. back in '10, '11 they were not printing at all and they lifted up again. my point is what happens when we normalize? we're already seeing the rates normalize. no longer listening to what the fed does. that is my issue going forward, i am worried the fed knows they have to be really careful of how they go about this. charles: right now i want to bring in the managing director. we're talking about this wek, the normal pullback despite the fact it was the worst month of the year. there is a lot of confusion over what the fed will do. walk us through what you are saying. >> i think we will have a normal pullback because of earnings. i hear this tak about the fed,
yound i have talked about this, where is the dotted line behind pending bonds and earnings and having the stock market go up or the stock market go down. i don't understand how people in our business continue to support the idea printing of money is pushing stocks higher. stocks will go lower. i don't get it. >> i wated the market and i watch what the market has done. >> how does it connect to earnings, gary? >> it doesn't. but go back to '09 when the fed announces it and printing, the market goes up, the stock market corrected. the jury will be out when they slow down again. that was '09 at the most sensitive time our market. they were hypersensitive to anything and supporting it, that was the iea. i don't understand why in the world everybody is saying when will the fed quit printing
because nobody can prove to me there is an impact the fed has printed money and that pushed stocks higher. i wish people would stop saying that. charles: what do you say? earnings have been pretty good. the bottom line numbers have been relatively strong. what is more responsible, more credible with respect to the market rallying? >> i think there is a bit of a story with my supply metal in the financial market but also rassets as well. what you have seen is not only financial assets going up i'm a but also real assets. charles: but that is supposed to go up the most, gold has been a major disaster. many who have bought gold think thinking it would create a bubble looking at 1000 points below where they thought it would be. one of the things i love about this year has been redemption. i have to tell you something. we write off companies and
industries pretty quickly. you look at the winners this year, best buy, amazon is going to eat their lunch. game stop. netfx, they shot themselves in th foot a couple of times, so i want to ask is it possible for other companies to emulate what i have seen. i have radioshack, blackberry and jcpenney. these are stocks that are down, in the news, people know them. could they have a shot? >> when you look at individual stocks and individual market, lot of return as well. look at stocks, part of it is yet to look at the fundamentals. the other side of it is supply and demand for that security and what it has done technically. charles: radioshack, this article came out in business
week talking about it being of what it was 14 years ago. another new strategy called less play. should anybody play the stock? >> i wouldn't. anybody on their back can get better. netflix came up with new stuff. apple was dead in the water. th came out with new products everybody loved and what best buy did, the earnings e better because they streamlined the company, companies can come back at any time. charles: jcpenney, there is a big tug-of-war. he believes in the company, blaberry a lot of people buying back stock. the show was about investors who have gotten burned in the market. sometimes a market comes back, sometimes individual names come back, but these are three that i worry about. >> the three stocks you are talking about, jcpenney is funny
because i went to high school with accident. i believe they can come back because it is so broad-based and can make money in so many different ways. blackberry has just got the life kicked out of it in terms of the shortening of it. when these stocks get punished, they get punished ferociously by computer programs and when they hit the different support levels and they go down lower and lower, eventually nobody looks at them and determines it is time to buy them again. charles: jcpenney has a shot, radioshack yes or no? >> not a chance. charles: jcpenney, what does it stand for? >> cash. charles: imagine that. coming up we all suffer from the d of the summer blues. how it is reflected in the sock market and september is shaping up to be a critical month for the stock market from syria and
charles: we are making your market today with a look ahead to the critical month of september. feels like it will be do-or-die for the market. historically september is the worst month of the year for stocks. we have the political and economic clouds in the horizon. it could be a stormy month indeed. here with me now, chief equity strategist and senior portfolio manager. looking at your piece from august 26, the title is looking beyond the fed to earnings growth, i'm glad you said that. are these investors, professional investors putting too much time looking at the wrong thing?
>> if this market goes up or when it goes up, i think it will be because revenues will accelerate. i don't think it is tomorrow or the next day, but that is what drives the market. charles: i tend to agree with you. the transition, they go from the asset purchases down to eventually zero, and what happens in between that time? we know what happens when they raise rates, but i don't think we have been here before. that would create a huge buying opportunity if the market overreacts. >> i am hoping unsuspecting they know the fed will start tapering probably sooner rather than later, that they will do it in a measured pace, evenally the rates will still be zero.
charles: lets point that out. it has been discussed before, the distinction, huge difference between the fed slowing down and eventually axing wishing its bond assets purchasing to hiking rates. when do you thinthat will actually happen? >> i think that is at least a year, probably more like two years away. i hope i am wrong, sooner than that. it means the economy is grabbing hold and doing better. it could be a coue of years before the fed raises rates. charles: i think it will be muddled through because of policy. the other is earnings growth we had a lot of people questioning earnings, especially the numbers that have come out this earnings season are abysmal on the top line.
almost every day virtually every company missed the top line. corporate america crafty, they find a way to make the bottom line. does not take away the legitimacy of these earnings? >> to some degree we would like to see the bottom line improvement with topline growth and eventually you will have to go there. as you well know, corporate earnings are at an all-time high, revenues are at an all-time high, are we disappointewith the growth rate? yeah, a little bit. we need a little bit of time to go up from here. it will take continued help from the consumer, capital out of corporate america, continue less bad news out of europe and some combing in the emerging market especially china. we will get a mix of that to get some better revenue growth. it will not set any records, but we will get a little better.
charles: we saw some answers to your china part there. i think that is getting better. a lot has that europe is going pretty good at a lot of diverse sectors. i think the question, bob, the u.s. consumer has not taken the bait. they have learned a very powerful lesson, putting off debt and they are not eager to take it back on. they will spend their debit card and every penny they make but they are not using the credit card and not willing to go into debt we had is that critical to really getting some speed behind the numbers? >> we need the consumers to do better, charles. i don't think we are going ge that. the consumer will participate but will not lead the way. you point out they are spending, using their paychecks, not a lot of debt. charles: have a fantastic
[ villain ] well mr. baldwin... it appears our journey has come to a delightful end. the capital one purr to redeem my venture miles for this trip. purchase eraser? it's the easy way to erase any recent travel expense. i just pick a charge, like my flight with a few taps, it's taken care of. impressive baldwin. does it work for hotels? absolutely thank goodness. mrs. villain and i are planning our...
you scare me. and i like it. let's go what's in your wallet? let's go nascar is about excitement. but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. charles: do you have a sense of melancholy today especially if you have to work?
♪ charles: melancho, a feeling of sadness often times with no obvious cause. synonym: sadness, sorrow, unhappess, dejection, dependency, gloom and misery. this morning's commute was the epitome of bittersweet as each friday before labor day the commutwas easy as pie, like driving down the pacific coast highway without any other cars on the road, doobie brothers blaring and putting the jaguar to the test. yet i knew this was the last time this year i would have it is easy. traffic would be back on tuesday and it is supposed to rain on the east coast. i get a sense of melancholy every time it this year. this matched by the mood of the nation. it manifests itself in a range of emotion of anger to indifference and it weighs in
the economy and it weighs on personal decision-making. our knee-jerk reaction is always defensive with a narrative of shifting brain and assigni punishment. yesterday we had the founder of london liquidators on the show because i have been singing the praises as another great american success story. tom sullivan started as a natural progression of life when he saw an opportunity selling lumber in a way that wasn't being done. people invested in the company including our subscribers making a lot of money. so one of my biggest goals was to get people to see hind the numbers and make sure the numbers are not just numbers and stock symbols, they are people. they start the business and establish a culture. tom was a great guest. lively, excited and inspirational but then he did it. he talked about the fundraiser he recently had for president obama. naturally we were shocked somebody who could contain so much of the system the president
is trying to dismantle. he says he likes the president and things he means well. in my mind if dismantling america and peace it back together as a nation that scores success is well-meaning, then so be it. on the interview was over somebody wrote to me he would never buy from london liquidators again. i get where he is coming from bui have to say it is a slippery slope. a woman e-mailed me earlier in the year with a list of companies she had her husband shop at and it is shorter than the list they are boycotting because of management. i did not make her day when i told her cost to probably to be struck off considering the money the ceo race for president obama and the speech he gave at the dnc. i wonder how old she and her husband were. maybe they should watch duct honesty and learn to hunt to make sure a penny of her might does not end up with the wrong
organizations. i understand it, i still have a copy of "milk." i have not opened it. this has stopped some great people from investing in the stock market. conservative have missed one of the greatest stoc market rallies in a lifetime because they had the notion of defense against success helping the enemy. it is a pity because we all have to be very careful our disdain for a political party or the ideology running america doesn't cloud our appreciation or our love for america we had onto it tonight's city quiz, it is something we have done all week to show the importance of looking at other countries. it is a world and a big market out there. last night i told you about in the report said the first time ever the world's developing countries have greater purchasing power than the so-called rich nations. taking out the u.s. and china,
that is an amazing statistic. here is tonight's city. impressive, look at that skyline, this country is a very important geographic location, tourism is a big part of it. not a huge population, but it is growing rapidly and if you think you know where it is, e-mail me or tweet me right now. still ahead on "making your market." taking apart when the worst worst mistakes investors make and it is a mistake they are encouraged to make eye the pros. and if you are not ready to plunge into owning individual stocks, i am not excusing you to sit on the sidelines. there are still ways to be invested. if you're ready to own a great american companies i have stock buying opportunities.ñ@ç@çpçpç
charles: is your money sitting on the sidelines under the mattress? if so, listen up. i brought all kind of t viewers to the sw to convince them to get into the game. all of them are just starting out their careers and wanted to learn more about the market and an edging their money. approaching retirement and working on a patent in his retirement but all these guys have an eagerness to live life but they are all unsure of themselves with respect to the stock market and their ability to unleash their money's potential. i will try one more time to convince a 40-year-old to jump in. the freelance sportswriter in new york city. you are a little bit intimidated by the market. >> a little skeptical. chars: you write a sports blog fo the boston red sox and you live in new york and you are
afraid of the stock market? >> i am skeptical. charles: why are yoskeptical? >> i have lived long enough to see the ups and downs. it seems like people who really experience success in the market tends to be people on the inside of the market. a limited amount of very wealthy people in this country and that number is shrinking. a vast number of people kind of struggling. charles: don't you find it ironic to a people who have made money during the great recession are the top 1%, don't you know most of them have their money in the stock's that you can buy the same stocks that they own? >> but there is very little mobility within the classes of the country right now. i think it is because people who buy stock and make the big money are already having money to begin with.
charles: most of the people it depends on the study, i have studied this a lot, anywhere from 70 as much as 90% of all millionaires in this country are self-made. we have had people all the time in this network think they made the money themselves and what they did was a lot of times they will go public and make it so anybody can invest and share in the wealth with them. there are ups and downs, a lot of times the stock market reflects life. those are some of the major misconceptions out there that people have that it is an exclusive club, there's no y i can wiat this, and yet we are the people who drive it up. have you ever seen black friday, the day after thanksgiving? i have seen people tried to give away their money. on thanksgiving people eat pounds and pounds of food and they still go the mall at midnight and give way every nickel they have made for two months.
sell them goods, you got something, you have a nice chop. there is a way you can become part owner with the rich and get in that game. >> you look at historical speaking i am a little skeptical. talk to the ownership society, that did not work out very well for the whole country. the myth buying stocks, not technically gives you a very small portion of the company you buy into, but i d't think it ives you an ownership stake the same way, you are not a decision-maker in that. charles: you are a part owner. if someone, i remember i had my knees, she wanted to buy the first iphone. by a $30 cell phone and the rest you can buy an apple stock. she would have had so much money
and still had a cell phone. history is what we wanted to be. you remember all the negatives but is a doll closer to being an all-time high or an all-time low? >> an all-time high, and so is the income gap. yesterday we had fast food workers all over the country going on strike. now they are going on strike for higher wages but the companies who employ theinimum wage employees if they give them raises that will cut into their profit and lower the stock prices. the market works against low income people ia lot of ways. charles: the problem you have is you are so clouded by politics that you are hurting yourself. have you looked at a mcdonald's income statement? have you looked at yum's income statement?
they are growing because of china and india if this on a of food in china i don't owe anybody in america and nickel. you have you shed the anger. you seem like you don't like this country. you are missing out on an amazing opportunity. >> i like theountry, i like living here, but i think it has problems. charles: is it the best country in the world? >> have not lived in enough countries. charles: you have not read enough. now the other novice this week, they actually did very well. my favorite of course, mike had a huge week. remember they had a good earnings number up 9.3% for the week, i am no fashion expert, did not think anybody was buying
them. joanne had ds w, designer shoe warehouse. phenomenal earnings report. her numbers were absolutely phenomenal as well. it is just amazing to me people will go out, spend their money and have so much resentment for the country, i have been all over the world and i appreciate every aspect of america. i know it is the best and i want a piece of the action. when we come back we will bring the panel back and look at next week and next month trading. just unforgivable especially when it comes to your money. we will look at some pet peeves and whatnot to do next.
>> announcer: stop! living with hair loss, that is. losing your hair is no fun and no one wants to be bald, but there is hope. >> getting my hair back was the best thing that ever happened to me. >> i'm happy with the way i look now. >> i'm very excited about my hair. >> i feel beautiful. >> i love my hair. >> announcer: hair club offers all-proven hair loss solutions backed by our commitment to satisfaction guaranteed. if you're not 100% satisfied with the solution you choose, hair club will apply the purchase price to another proven hair loss solutionr transplant more hair at no charge. >> and that was the best thing i've ever done. >> it looks good on me. >> announcer: call in the next five minutes to get your free brochure at no obligation. it will tell you everything you need to know about your hair loss problem, and it's free if you call now. >> i am more pleased than what i had even imagined. >> i at least look, i would say, five years younger. >> i'm 52 and i look better no than i did when i was in my 40s. >> i feel great. >> announcer: and that's not all! the first 100 people who calllly hair loss solution from hair club. call now! [♪...]
charles: i have said all week you know more about the market then you give yourself credit for. they have firsthand knowledge of where companies are going. it is not the ivory towers. there is some real-world advice for you. they are encouraging you to make one of the worst mistakes with your money. i have my pet peev on investing and what you need to know about. here to break it down, author of worth it, not worth it, simple blend probable answers to financial questions. welcome to the show. >> thank you very much. charles: there is some a different things that bother me about the market. the idea of a cheap stock to how much people put in a stock. in other words i 100 shares of everything we ha.
so many common mistakes but one of the biggest ones are the idea to diversify the it >> you and i have taed about diversify because it on 16 mutual funds but they are all large-cap growth funds. when the s&p goes down, they get hammered. they bought last year's products, but in fact iny book i write the no-brainer portfolio. you can on three or four funds and you can have access to all of the stock market of the world and most of the bond market and so you are truly diversified. one country will do well, one country will do badly, you own it all. charles: i was a broker. my marching orders were getting money under management. it did not matter if somebody on a stock you call them, mr. jones, the stock is up, send
more money. we are not trying to diss the entire industry, but you have a family of funds, they are not that much different. >> absolutely, they're in the business of asset gathering. you go to a fee-only advisor who does not make a commission because one of the few things an investor can control is his cost. morningstar has done a study and found only correlation for fund performance nothing to do with past performance but if you break them down by cost, the cheapest funds do the best, the cheapest to the worst. with the fund it is the opposite, pay less, get a better fund. charles: they can control behavior. we are hardwired to make mistakes. >> there is this whole area of behavioral finance that i find
fascinating. if you think about this, we feel the pain of a loss much more strongly than the joy of a game. what people do is they don't sell the stocks that go down because they don't want to acknowledge it is a loser. the terrible tax planning, paying tax on the gains you are making, not getting deductions for the losses and you shld be writing it longer and dumpg the loser. charles: to be fair it is hard to grapple with the it we call pride and ego in the industry. before i let you go, i just had an interview before you, a person had bias against the market begins a certain system, there are so many stopping from optimizing the amazing system called the stock market.
>> i love my iphone, but do i buy the iphone at $500? no. that is number one. number two is if you're really worried about all of these things, insiders, this and that, on the whole market. if somebody is insider trading, who cares, you own the stock. charles: you were fantastic, great to see you. still to come, a look at nnxt week's market and what you need to keep an eye on because we are making your market after the break are
charles: traders are settling into a long weekend even though the market is closed on monday, it is a week chock-full of greeters. our panel is back again with your marching orders area di. i know i nailed it. we want to bring in dan shafer. since i'm giving you a hard time, let's talk about next we week, what are some of the important, critical things we're looking at? >> usually the day after labor day is one of the better ones. the money coming in. i think it will be the short lived. charles: we talked about this felt normal, no sense of panic at all area did >> you are
absolutely right. the market starts to decline. i don't think it'll be like 2008, 2009. it will be lower in the middle 2015. charles: a part of me is contrarian. people should know the term was created as a derogatory term. the conventional wisdom says fed tapering, the market down, i start to think maybe the experts are wron speak a lot of it has to do with expectations. more of a shock or supply probably would've had a bigger effect on the market. it is so saturated now that maybe the reason why. september has too much for us to predict where it is going to go. there is syria, other economic data. six of one, half a dozen of another. it is hard to tell.
charles: and we judge from the reaction of the street when all the stuff happens. >> since we are, if you invest in september 1, every single year since 1930 and sold out september 30, $1 would have dropped. september stinks three out of four years it was okay. i expe continued slow deterioration. i believe everything he said was spot on. i do believe we will see a slowdown inhe market, we saw ernie revisions down 3% last week, investor sentiment is down, lot of negative things we will see a crafty september. charles: the rest of the year. we have had a lot of crafty septembers. a whole lot of great november
and december. could we be set up for something like that scenario? >> if we see any kinds of positive stuff on the revenue numbers i think so. i don't see that forecasted so we will model alo and maybe a little higher from here. charles: muddling along is one thing. when do we get nervous? yes and pete gets under a certain number, is there a point a flag goes off in your operation? >> we look at a lot of data that goes into the art folios and i think it depends on the market you are looking at and a lot of charles: do you have a ranking like what is most important part of this component? >> we have a multilayered risk
management process looking at short-term and longer-term volatility measures of the market. it is a little bit complicated, i say i am the dumb one in the operations, but it basically looks at short-term three to six month meases and longer-term measures to see if we go into or out of a position entirely. charles: here is the thing, have you seen it? dan can take you back to 1708 when george washington tripped over a rock and said two days later the market was down. your chart and pretty right now. >> no, they are not. charles: have to give you some props up front. you saidugust would be really tough, you were right. how do we look now? >> we do not look good at all.
especially if you look at the close. charles: this is the island of misfit toys, this is us. >> my strategy is a look at stocks within 5% of the 52-week highs. all of those stocksent through their 52-week highs and cap going. we look forhe momentum. dollar tree is one. we look at them near the 52 week we screen them to see the earnings. charles: chasing stocks this year has been a marvelous strategy. almost every morning you see the stock with great news opening $3 higher. at the end of the day it is up 6 points more. do you have a stock we can look at next week?
>> i have a stock i own with clients as well. it uses leverage on gold. if you buy it, you will make some money. charles: i looked at that nugget going across. if you are right on this bad boy, you will make an absolute fortune. where should a stop level be that the rally starts to fade? >> i don't know exactly because they just did a reverse. it will drive you crazy. charles: something could be extremely risky, right? >> it is extremely risky every moment of every day. charles: you live dangerously, that is why we love ♪ nascar is about excitement. but tracking all the action and hearing everything from our marketing partners, the media and millions
of fans on social media cabe a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. do you mind grabbing my phone and opening the capital one purchase eraser? i need to redeem some venture miles before my demise. okay. it's easy to erase any recent travel expense i want. justick that flight right there. mmm hmmm. give it a few taps, and...it's taken care of. this is pretty easy, and i see it works on hotels too. you bet. now if you like that, press the red button on top. ♪ how did he not see that coming? what's in your wallet?
and and deal in debt in here is he's the seen preaching to the greedy he said? wait for the jury see what happens. wait just changed fierce that it is revolutionary ising tall to do not believe screen. daily problem:dash the only problem that sony try something they have a big lead the department with the samsung but it issconsistent execution but the last time they beat it exploded. insiders are buying. four to thousand shares they are putting their money where their mouth this. they will do very well 25% annual growth every year for the next five years. the answer to the quiz from the house cool is this city it is strategically located at pentagon city.
epicenter of the pitcher is the trump ocean hotel and condos the first to open outside of america when of the largest in latin america and of course, it epitomizes strategically located. have you ever heard of the panama canal? a major upgrade and expansion could beompleted next year and will be on the front page of every newspaper. a lot as business psychos to lay amigos' through panama city. although standard to e-mail me the answer this morning. i will go after my stocks from this week taser,
goodyear tire of a you know, the market. believe in yourself. it. thank you for watching. appreciated. >> detroit is now the largest u.s. city to file for bankruptcy it cannot match it -- manages self. >> were at the end of the road. we can borrow any more money. john: detroit was -- now in such a wreck. >> for $1,500 you could buy this house. john: for years politicians promised that they would fix detroit. >> detroit show againecome the great city that is its destiny. john: instead. >> they turned city hall into a den of bribes and kickbacks making themselves rich. john: is there hope for places like detroit? >> it willurn around the city of detroit. >> the motor city. this is will we