Charles Payne, of Fox Business, interviews Kip Herriage of Vertical Research Advisory, who shares his bullish outlook on the roaring 2020's, AI and tech space. April 11, 2024.

Bring a vertical research advisory managing partner, Kip Herriage. Kip, let’s kind of pick up on this. Right, because, again, I started the show with the notion that, you know, where the economy is and where it’s going is so central to modeling where you want to be invested, how you want to manage risk. And so what are you saying? Because for the most part, you have been really optimistic for the past year or so, and it’s paid off well for those who follow you. You’ve done so well in this market.

Thanks, Charles. Always great being back on your show. Yeah. 18 months ago, we published a book called the Big Bribe. You were nice enough to have me on to talk about the book at the time. And we said that we’re in the roaring 2020’s, and it’s being driven by the innovation revolution. And that’s exactly what’s happening. Here we are, in the early innings.

[00:00:45]:
The economy is on fire. It just is on fire. I don’t even think the government modeling and their data is keeping up with the real growth that’s taking place throughout the country. I was just in Las Vegas. It’s a microcosm of what’s happening around the country. Absolutely on fire. There are big conferences going on there. Everybody you talk to says business is booming.

It’s happening throughout the country. And I think more and more people starting to wake up to this, this great bull market that we’re in again, is only in the early innings here. And there are two key things driving this. Number one, it’s a structural bull market, a size and scope. That’s the most important thing because it’s based on the strength of the consumer who’s cut debt 25% to disposable income in the last 15 years. We learned from the financial crisis and American companies now trading at 50 year lows, debt to market cap. These things are not being talked enough about, we believe, but we think the stock, the price action, is going to convince more and more people they must be in this market to beat inflation.

So then let’s talk about the Fed’s role in all of this, because with the economy that you described, it doesn’t seem like there should be a sense of urgency to pour more money out there. I mean, we just heard from Craig, talk about overcapacity. I’m in Miami. One of the questions here with these boomtowns, Vegas included overcapacity when it comes to real estate. I mean, there’s such a thing as pouring so much money into a good thing. You can make it a bad thing.

[00:02:02]:
No, no, you’re right. And it does. It does raise the question, one that we’re now starting to consider. Is our rates going to stay higher for longer? Is it possible that that could even raise rates? I never would have thought I’d be having this conversation a couple of years ago. But also then, you know, it’s keeping things in perspective at the same time. During the 1995 to 2000 melt up, which is an era we think is exactly like what we’re in right now, the average on the ten year yield was better than 6%. They were bounced over 7%, but again, an average better than 5% in that five year melt up where Nasdaq was over 500%. So, you know, at four and a half percent here, the ten year yield obviously is not doing any damage to this economy.

Yeah. Could the fed raise rates? Sure. Would it matter? I don’t think so.

All right, 15 seconds. Are you still concentrated in the AI space? Tech space?

[00:02:52]:
Yes, very much so. We love tech. We love that. That’s the theme. That’s where the money is being made here. We also love bitcoin and gold. So it’s kind of a strange portfolio right now, but it’s working well.

You know what? At least with that portfolio, grandpa and the grandkids can all get together at thanksgiving, right? No one’s going to argue over which one is better if you own both. Thank you so much. Appreciate it. All right, folks, listen.