FOX Business Network’s Charles Payne talks with Opportunist’s Managing Editor Leslie Stone about his brand-new TV show, his thoughts on the U.S. economy and GDP and how he will inspire viewers to take investing seriously and establish long-term goals.
Charles Payne joined FOX Business Network in October 2007 as a contributor. He is also a contributor to Fox News Channel, where he frequently appears on ‘Cashin’ In,’ ‘Cavuto on Business’ and ‘Bulls and Bears.’ Today at 6 p.m. ET, he will begin hosting a one-hour program called “Making Money with Charles Payne". Drawing from his more than 30 years of experience as a Wall Street broker and analyst, he will explore investment avenues based on the day’s top stories. “There are money making opportunities behind every headline and each day I am going to debate and analyze these potential investments,” he explains. “What bugs me about financial TV is that it’s always gloom and doom. A company can have record earnings and record numbers but they think something’s not right here and they’re constantly dissecting the numbers and waiting for the next crash. My hope is that viewers get a sense of empowerment and gain confidence in the markets and realize their long-term dreams and goals.”
Opportunist: Congratulations on your new show! Can you tell us a little about it?
Charles Payne: My big thing is I want to help people in general. Making money is important but more important than that is helping people believe in themselves. If I can achieve that I will be extremely happy.
We will also talk about mistakes people make. First and foremost is not being in the stock market and not owning great companies. The idea of not being in the stock market because you’re scared of the next crash or you think you don’t know enough should not keep you out. If you stuff your money under a pillow, inflation is going to destroy it and your purchasing power is going to dry up. I would like to remove the barriers of intimidation and doubt that have been erected over decades. The stock market is the best way the average person can change their economic life. It’s democratic; anyone can set up an account today with or without a college degree, regardless who their friends are. People are told they don’t know enough to invest and should just write a check to a professional. The irony is, if you go to Cracker Barrel once a week with the family but don’t own the stock and then you give your money to the professional they will take a piece and then tell you to buy Cracker Barrel. [Laughs]
Opportunist: So you don’t see the stock market as a gamble?
Charles Payne: When people say the market is a gamble, I say that for the most part they make it one. About 40 percent of people who are in the market own just one stock. If you roll the dice on that one thing and it goes up 20 percent you’re happy and telling your buddies, and when it goes down 20 percent you’re angry and selling at a loss.
Opportunist: We understand you will be joined by a panel of business and market experts who will debate the headlines.
Charles Payne: I don’t like the term debate as much as unlock because, for me, I think all these headlines tell us a greater story about ourselves, our country and where we are going.
Opportunist: Why do you want to help the little guy?
Charles Payne: Partly because of the way I grew up. I was an Army Brat who went from living in Fort Lee, Va., straight to Harlem after my parents divorced when I was 12. My mom, my two brothers and I were penniless. That was my introduction to the real world. Up until that point I thought heat and hot water came with the house. [Laughs] I didn’t know about crime and poverty and bums sleeping at the foot of your stairs. I had this epiphany, as the oldest, that I had to do something to help and I immediately started working. I wanted to make money and I associated money with the stock market, so I started reading the Wall Street Journal. By age 14, I told my mother I was going to work on Wall Street. I made my first investment in a mutual fund at 17, with my mom as cosigner, and at 18 I joined the Air Force so I could go to college. I also bought my first stock.
My job out of college was with E.F. Hutton as an analyst. I was mostly researching other people’s trades but always had this analytical bug. I remember reading a bunch of magazines about mavericks that would change telecommunications: pre-scam MCI. The only problem is I wasn’t making any money on the analytical side so I decided to become a broker at a small boutique firm.
Opportunist: How did that work out for you?
Charles Payne: I didn’t realize I would be a glorified salesperson. [Laughs] I had envisioned this romanticized business I dreamed of as a boy and thought I’m going to do all this research and find amazing opportunities for my clients. That is what I did but, again, I wasn’t making a lot of money. Only the brokers selling the house stock made the money. My daughter was a year old at the time and I was under a fair amount of pressure—she had gone more than 24 hours wearing the same Pampers because I worked on commission only—so I had to start selling the house stock too. Many days and nights I thought I was in over my head and wanted to quit but I didn’t. I would go through the Yellow Pages and call people who had been called a million and one times. It was tough. Fast-forward a few years and I founded Wall Street Strategies out of a one-bedroom apartment in Harlem with less than $10,000 in start-up capital. I eventually worked my way up to a small office on Wall Street to be with the action and I eventually started to gain a pretty good reputation.
Opportunist: How did you make your way from Wall Street to broadcast journalism?
Charles Payne: One day I was at my office at Wall Street Strategies when someone from CNBC called and invited me to come on a show. I thought, Are you kidding? Heck yeah! So I left the office and went to my favorite clothing store to buy a new dress shirt.
Here’s a funny side story. When I got to the store there were about 200 people outside and the doors were locked. Turns out, Mike Tyson was inside shopping. So I knocked on the glass and the salesman recognized me and let me in. I said, ‘Listen, this is my first time on TV and I need a brand-new shirt.’ He told me to hold on a minute and went down to the basement and came back with a couple of shirts. I was trying them on when Tyson started to leave and I said, ‘Hey Mike. Take it easy.’ He walked all the way back and hugged me and we talked for 30 minutes—about women, money and every topic under the sun. [Laughs] It was really interesting because I wasn’t a huge Mike Tyson fan, but he was a great guy.
After that first time on CNBC I was appearing on TV a lot. Neil Cavuto eventually left CNBC and went to FOX and invited me to come on. I was doing media appearances on CNN, FN and Bloomberg Radio and in 2004 FOX asked me to do their network exclusively.
Opportunist: You are known for identifying growth sectors in the markets. How do you determine which ones have the most potential?
Charles Payne: I ask a lot of questions and constantly check under the hood to learn the true implications of the news and the pros and cons of what it means financially and for the country’s economy and beyond. Just the other day, for example, when Google announced it was building a driverless car my first thoughts were: OK, how do you make money with that? Will they be fuel-cell powered and where will they set up charging stations? Who is making them? When I hear about something I immediately spring into action to find out how money can be made.
Opportunist: Which market sectors are you bullish on and why?
Charles Payne: Secure markets like the railroads, and transportation in general. I am always telling people to make sure they own a railroad in their portfolio. We all know investing in railroads isn’t about being ahead of the curve; it’s a sector where it’s hard to compete because new railroad companies don’t form every day. I love Boeing and believe it’s a stock everybody should own. Over the next 20 years 35,000 planes will be sold throughout the world for about $5 trillion dollars. Boeing will get a big chunk of that.
The world is on the march. I don’t think Americans grasp or appreciate just how rich the world is becoming. People all over the globe want more, they want to travel and they want a car. They want what they’ve seen Americans with their entire lives.
I love tech stocks too, with the caveat that they can be extraordinarily volatile. But I still think that’s a sector to invest in. I am a huge fan of history and the future. I love robots. I love the notion of where we are going with artificial intelligence and gathering and massaging of big data.
When everybody was talking about Apple taking over Andre ‘Dr. Dre’ Young’s Beats Electronics, people were immediately asking ‘Is it worth it? and ‘Is it Steve Jobs approved?’ The amazing story behind Beats is that cofounders Andre Young and Jimmy Iovine were born in the poorest and most dangerous town of California and are self-made billionaires in a country where people are telling us there is no more upward mobility! That’s what I see when I hear stories like that and all the debate about whether Airbnb should have a $10 million valuation. I love Airbnb’s story too. The two guys who founded the company went out to San Francisco and tried to break into the tech world but ran out of money and couldn’t pay their rent. One of the guys came up with a harebrained scheme to rent out a room in their apartment and it took off almost instantly. There are stories like that in this country every day.
Opportunist: What is your greatest fear in the markets right now?
Charles Payne: I am not really afraid of anything in particular. I don’t like to talk or preach the ‘market’ per se, but I am bothered by how few people have gotten involved. The market goes down occasionally and occasionally there’s a panic or a crash. At some point those who were too fearful to become involved will decide to enter the market and will be greeted by the very crash they were afraid of and history will repeat itself. I want to be right about companies but overarchingly I don’t have a fear. My day-to-day concerns lie with the global economy and the U.S. economy.
There are times when the stock market does extraordinarily well. History has told us that very few investments have outpaced the rate of inflation to the degree the stock market has. Those focused on gloom and doom will always worry about the next crash, but the DOW is at 16,600. We’ve had at least a dozen crashes in the last 100 years—the low was 66—and yet we are still several thousand percent above the lowest point.
Opportunist: Where do you see the DOW by the end of the year?
Charles Payne: Higher. We are looking toward 18,000—not necessarily this year or during this particular rally. I would like to see people look beyond 2014 and ask where the DOW will be 10, 20 or 30 years from now and start to position themselves for that.
Opportunist: How do you recommend someone get started with investing?
Charles Payne: When you go to the mall—unless you’re my sister-in-law [Laughs]—you probably don’t go to every single store. The same should apply to buying stocks. People can probably begin with their own world as the center of where to start and build from there. But the idea is to develop and manage a portfolio of great companies and study them periodically. Check on companies when they report their earnings four times a year, and avoid knee-jerk reactions and don’t live in fear.
Opportunist: Do you believe the IPO of Chinese ecommerce giant Alibaba will be a wild success?
Charles Payne: I never advise people to buy IPOs. If you can get it before it goes public, then take it by all means. I personally like to see a stock trade for a little bit. Alibaba does underscore the global opportunity. I like Caterpillar. People may not realize that if they buy Caterpillar, 70 percent of their business is from outside America. So they’re really buying a global play.
Opportunist: What do you foresee being the biggest financial news stories of 2014?
Charles Payne: The Affordable Care Act probably had the largest impact on the economy. The inability for the U.S. economy to gain any sort of traction continues to be a huge story, as well as the avalanche of regulations that have hamstringed business. On the flipside, we are starting to see companies spend more money on building themselves out, on capital expenditures and acquisitions. These are all budding positive stories. The bigger stories are largely negative or cautionary tales.
Opportunist: You have said the GDP has been a massive disappointment. What led you to draw that conclusion?
Charles Payne: Historically, when you have recessions people pull back on purchases and are kind of nervous. It’s the same with businesses. They hoard their cash and only spend when they think the coast is clear. That’s called elasticity within the economy. We should be gaining more traction by now.
When Ronald Reagan came into office the situation was worse than when Obama did. Crime was outrageous. People don’t factor that in but if people were afraid to leave home—back when there was no Internet—that’s a bad economy. Nevertheless, during the Reagan administration the GDP was up and the country had solid, strong growth. One month we created 1 million jobs. That would be four good months today. The same thing happened with Bill Clinton—even after all the shellacking he took during his first mid-term. If we would unleash our economy it would take off. I don’t believe higher taxes, an avalanche of regulations or the new healthcare laws are helping. It’s creating a big move to part-time jobs. The problem is more than just the Keystone Pipeline. When New York State can procrastinate on fracking and the jobs and tax revenue that come with it and a small California town is thinking about kicking the Sriracha hot sauce factory out due to the smell … Are you kidding me?! The GDP should be significantly higher. It’s a shame it’s not, but it won’t be because of policies that are in place.
Opportunist: Are you optimistic about America’s future?
Charles Payne: I am one of these people who is always bitching. [Laughs] I am pro free markets and pro capitalism and very critical of Obama’s policies and I’m upset about what’s happening. A disappointing GDP, unemployment and people making less money in general have caused pessimism and malaise. Marriages are at a low, birthrates are down and so is entrepreneurship and job creation. I understand why people are afraid—you don’t have to be that old to have lived through two tough crashes—but by the same token I have not given up and I want to remind people this is the greatest country in the world. That’s the big difference between what people feel when they watch the news and what I want them to feel when they watch my show. So I hope they walk away feeling better ... even if it’s all bad news.
Most people are looking just a few feet in front of them and living in the moment. They are saving a lot less for education, buying a home or retirement. Business creation has cratered and the malaise goes beyond investing. We are at a critical point—maybe not in red flag mode yet but at least yellow. America isn’t near what happened in Greece or some of those other countries that created a utopia where the onus is on fairness and redistribution of wealth rather than climbing the ladder of opportunity and wealth creation and entrepreneurship. If I can help people remember and re-embrace that then they can take the notions of investing seriously and establish long-term goals.
Opportunist: What is your formula for success?
Charles Payne: I have a pair of cufflinks engraved with the phrase ‘Labor Omnia Vincit,’ which is Latin for work conquers all. I am lucky in that I love knowledge and have had the opportunity to learn something new every single day since about 1980. So I would have to say my formula for success is learning every day coupled with the knowledge that work conquers all and my ability to use my life’s lessons to become better. I tell people all the time that I was this guy who took all those things that could’ve pushed me in one direction and used them as fuel to push me in another direction. I am extraordinarily determined to take the blows and body shots pretty well and typically come back pretty strong.
I hope ‘Making Money’ inspires people. I feel like I got into the position of getting this show by going out there and trying to prove my philosophy and my point of view and my assets over and over again. There were many times it was frustrating but I never gave up. I wanted my own show and I plan to make it a hit, but the journey was tough. I just want people to be able to look at me and be inspired.
Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance, real estate and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in Florida. Follow her on Twitter at @lescstone.
Watch “Making Money with Charles Payne” - Weekdays 6 - 7 p.m. ET on Fox Business
Follow Charles Payne on Twitter @cvpayne
Find Charles Payne on Facebook - https://www.facebook.com/CharlesPayneFox
Wall Street Strategies - http://www.wstreet.com/