U.S. equities closed higher Tuesday but have had a rough month.
The Dow Jones Industrial Average is down nearly 6 percent for October, its worst performance since May 2010. The S&P 500 is off by 7.9 percent, its worst month since February 2009.
Saut said the sell-off has been about China, midterm elections and the Federal Reserve having a more hawkish tone.
Earlier this month, Fed Chairman Jerome Powell said rates are a long way from neutral. That led to concerns about rising rates and inflation, resulting in a sell-off
However, he called the fear of the Fed an "overreaction."
"Stocks are cheap and I do think they are going to bottom here in the next few weeks," he said. "After raising cash at the beginning of October, we're looking to put that cash back to work."
He specifically likes technology, energy and financials even though they have been disappointing. He doesn't like utilities or consumer staples.