The Magpies, who finished last season in seventh position, did not have any European football to offer new signings.
However, Montgomery felt they should have bolstered manager Eddie Howe’s squad in a better way.
Per Chronicle Live, he stated: "Really, it was a shambolic show from a club which rose to dizzy heights over a year ago. Newcastle needed to be positive and aggressive in the window not tippy tapping on as they did with Palace. They needed a Plan A, B and C to be able to move quickly and conclusively and it appears they didn't have one. Or they failed to activate it.
"The whole thing was crystal clear with Palace _ either you paid the going price or you got out. Liverpool made a move like Newcastle but when they heard the fee they withdrew saying they could be back in the summer. United on the other hand kept juggling the figures and going back while Steve stuck to his word from day one.
“What happened then? Palace sold Joachim Andersen to Fulham and Chadi Riad, the player they bought who could have replaced Guehi, got injured. The combination of Andersen, Riad and Newcastle's failure to meet the asking price killed everything stone dead.
"Maybe United and Liverpool will go back when the fee will have dropped because Guehi would then only have another year on his contract but Palace will still have done good business. If the asking price slashed from £70m to £50m Palace could still have guaranteed their PL position through keeping Guehi and that is worth £130m."