In today’s episode, Kip is back behind the mic after a brief break, sharing his signature insights on the current state of the markets and what investors should be watching now. Kip dives into the latest market action, discussin ...
Don’t look back to the market is closed. Good Wednesday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. I want to thank Tyler, my partner and oldest son, for covering for me for several days as Cindy and I were out of town. Tyler did a great job on these podcasts. Of course he does video podcasts, which is going to ultimately force me to start having to do these again, which I frankly rather not do because they’re more work and he includes charts and that’s more work. And you know, again, I may sound lazy, but with my schedule, frankly, I like to do a good podcast audio and then move on with the rest of my day.
But again, thank you, Tyler. Great job on these. A lot of great feedback. Thanks for all your feedback and comments. And you’re not going to get that kind of quality from me today, but I will hit a few important points, I think. Listen, this market, it’s no surprise. This market has been overbought for some time. This market is, is it started hitting extreme or bought levels on Friday and Monday.
[00:00:59]:
And as we tell everybody, you know, this is that bull market. Just because you’re extremely bought doesn’t mean it’s time to sell, doesn’t mean it’s time to hedge. But for us, it’s just a discipline thing. We stopped buying and that’s what we’ve done here. We’ve now had back to back days, nothing big, but back to back days of downside action in the SP 500, NASDAQ and Dow Jones. And today was kind of similar to yesterday. But I’ll tell you that this is something we’re, we’re on days like this and a couple days like this, we really start then running our various system, running our screens and scans because now we’re looking, okay, where’s the next opportunity? You know, we added home builders back to the very portfolio here. Just, I guess it was Monday.
That’s right, it was Monday. Weeks flying by already. And we just got news today, by the way, very good news. The home builders were up today in a down market as new home sales hit their highest levels in three years. Just blew away estimates. And I will tell you, if you read some of the things online I’ve seen about this, nobody’s believing the data. You know, and I love seeing sites like Zero, Zero Hedge and Gateway Pundit. And you know, Gateway Pundit really has gotten a lot more positive now that Trump is president.
But Zero Hedge, anytime they can find a negative part of his story it becomes the story instead of the news itself. And that’s a tell for us. So as you know, if you notice at all, you know, we’re very bullish on this group. We were very much looking forward to getting back into the home builders after taking some very nice profits over about a six week time frame here a couple months ago. And now we’re back long and strong, the home builders. And I tell you this news is going to continue because not only do we have new home sales at three year highs, not only do we have 30 year mortgage rates at three year lows. You see this combination starting to play out. We got the Trump economic miracle.
[00:03:00]:
The economy is so much stronger than almost anybody is giving it credit for. I’m talking about anybody that I’ve seen, period, almost. Now there are more bulls. We do have more people saying, hey, this is a, this is now strong bull market. The economy is clearly getting stronger. But if you watch and read the media like we do, you know that is, that is a big time minority view. And for us as contrarians, it’s exactly what we want to see. I just want to remind people that that doubt the strength of this economy and folks, it is really strong.
We’ll be at 5% GDP growth, I still believe by year end. You know, our official target, we’re saying no later than the second of the second quarter of next year, which is June of next year. I really think we’re going to be at 5% or very close to it at year end. Atlanta Fed already has the GDP now estimate the third quarter GDP growth estimate at 3.3% and they just continue to inch up. And again, I think that’s what you’re going to see more and more happen because animal spirits are back. All you have to do is look at the stock market. It’s a leading, you know, it’s a, it’s a leading, a trend. It’s a leading indicator is what I’m trying to say.
And any kind of, anytime you get a stock market that’s this strong, it tells you some very good things are happening in the economy. And the news just continues to come, by the way, on home builders. One of our favorite topics, again because no one talks about this, these are the kind of things that drive you crazy, number one. And also as a contrarian, make me extraordinarily bullish. $34 trillion sits in home equity all time high. Never been anywhere near that high. 40% of homeowners have no mortgage paid off their homes. Average home equities at 70% again, total of $34 trillion in home equity in the United States.
[00:04:45]:
And now that rates are coming down, the housing market is picking up. What the moot is just going to keep getting better and that’s all it’s going to take for these homeowners with all this massive amount of home equity getting $34 trillion. I keep saying it because it’s mind bending. We have $37 trillion in debt. We have $34 trillion in home equity. There’s something, there’s something different with this picture. I may have more on that. Just a moment on the debt picture.
I think the debt picture is going to be dealt with in a very creative way. I’m writing this up for tomorrow morning and I may come back to it here in a little bit just to give you a little snapshot on how Trump and Scott Bessant are going to use a little, a little trick called inflating away the debt by by purchasing gold and bitcoin in massive amounts for U S Government accounts. If you’ve seen what gold and bitcoin are doing, especially gold of course been a massive run here and bitcoin of course is as well not been a little dead of late but of course bitcoin has, has had extra historic runs. I think the government sees what we see. You got to own these two asset classes and you know, again, I finished the thought. I’ll share the rest tomorrow morning. If gold and bitcoin do what we think it’s going to do, Trump and Bessant could pay off half of our government debt of $37 trillion and could do it within 10 years. And that doesn’t include monetizing the debt with again with another creative strategy which would be issuing, doing a big bond issue again with underlying backing of a reserve consisting of gold, bitcoin, maybe, maybe other assets as well.
[00:06:25]:
So very creative things that are happening here as Tyler covered yesterday, all under the umbrella of financial engineering, one of our five big bribe megatrends. So I have more on that tomorrow morning. But you know, then today we also learned. One second here. Oh, big, big news in the world of tech. It just keeps coming, doesn’t it? Now we’re hearing from multiple analysts that they’re looking for 4 to 5 trillion dollars in the next several years in total AI spend. That number just keeps going up. We got of course the OpenAI deal, $100 billion deal.
We learned today that app this afternoon Apple and Intel may be coming together very similar to what intel’s already done with the Government, what Intel’s done with Nvidia. Again, that was a $5 billion deal there. And then we learned from Alibaba Chinese, a giant Alibaba, that the amount they had said before they were going to spend on AI, which is 50 billion, is going to be low. So these are the kind of announcements we’re going to keep getting. And for those wondering why oil prices are up today, I’ll come back to commodities later. Before I forget, oil prices, they were up solidly. Yes. Part of that probably due to some saber rattling with Trump and Russia, no doubt about it.
A little short covering maybe, but there’s a bigger picture going on here. It’s why we’re long this group as a lot of people have given up on energy stocks. It’s twofold. Yes, Trump wants oil prices to stay low because that’s how you handle inflation. And he wants to get that dealt with. He doesn’t want people to say you were wrong and we were right. Inflation is coming back. Of course, yesterday’s speech from Fed chair Jay Powell, Powell said himself we’re just not seeing it.
[00:08:06]:
We’re just not seeing inflation from tariffs. He basically admitted he was wrong. Something we’ve been saying for many, many months. Yes, he’s wrong as the worst Fed chair of our time, wrong about most everything. But this AI story and these data center stories are so massive, that’s going to take a lot of energy to power these things. Right. And so we know a lot is going to come from natural gas, obviously along that group with Lost Soldier Oil and Gas and ERX who owns both. We know that.
Nuclear again, one of our favorite stories as well. We own of course SMR New Scale Power Corp. Nuclear story could not be any sexier than it is. I think they’re in the middle. They’re the early, very early innings of their own.com kind of moment. Nuclear demand is going to be through the charts and you know, look, they say these take about five years to build. Everything’s being fast tracked now, isn’t it? So I wouldn’t, I wouldn’t think it’s going to be five years. But, but in addition to that, oil of course is in the picture as well.
So energy stocks look really good here with the, especially with the strength of the global economy that we see. We like this group a lot. And today also of note, Micron announced really strong earnings, you know, and the stock was up, you know, big time this in the pre market this morning. But then it changed, didn’t it? You saw the close. Let Me give you a current close here. Yeah, micron finished down 2.8% of that. Again, a major chip maker. And it just tells you this market’s overbought.
[00:09:37]:
When stocks start selling off on good news, you know, the market is tired and it needs a breather. Well, it makes sense that would happen now. We’re still in the, the right in the. We have what, six to five days left of the worst 10 days of the year. We’re in that stretch now. We’re also still in one of the worst two months of the year, that being September. That’s almost over now, isn’t it? And now we’re going to go into October, November, December. Now October is crash month.
That does, you know, make you perk yours up a little bit. But also the fourth quarter, which of course is October, November, December is the strongest quarter of the year. One more thing that I mentioned about the markets being down and why this is kind of par for the course right here is in addition to being extreme robot levels and that’s on our major indexes, that’s on the semis and it’s on the gold miners. Right. And gold itself. And now those are selling off here a little bit. But this is all healthy actions, natural healthy action. It’s what you want to see followed by a bit of a pause.
I just don’t think these pauses are going to last long. But the other reason is, you know, the largest buyer of shares today are companies. The share buybacks every year hit record highs. They’re going to do that again this year. Well, right now we’re in the buyback blackout window it’s called. And so until companies report earnings, they will not be able to buy their shares back. Now there are some workarounds there. If you have a predetermined buyback program, a lot of these companies do, you’re not impacted.
[00:11:06]:
But there’s still a lot of companies that don’t so that those buybacks right now aren’t in the market. So again, it makes common sense that, that we’d have a bit of weakness here and I think really more sideways pause action because for the reasons we’ve been covering here so long, we have an ocean liquidity, folks. We have an ocean of liquidity. Tyler covered it well. Now we just Learned yesterday afternoon, M2 money supply is at another all time high. Looking at now just in the US at $22.5 trillion into money supply, 7.7 trillion in money markets, that’s another all time high. And so again, 34 trillion in home equity. That’s what’s driving this market.
In addition to the Trump economic miracle and to the innovation revolution, this ocean of liquidity out there will continue to make sure that these dips are short lived. And we are early in this phase. So don’t, don’t let, don’t let your, your friendly neighbor perma bear shake you out of this market. Even if we get a slight pullback, all that would represent is a buying opportunity. What else? Today I’ll just mention Tesla before I move on. Forget about it. Tesla today up 16 bucks a share is up 3.8% at 442. That’s a new closing high.
We’re now I believe this month will represent an all time closing high for any month for shares of Tesla. As long as they stay in this 420 plus range, you can work at 442. Now remember the all time high was just after Trump was elected in December of last year at $488 this year. Let the good news roll. I got to tell you again, I’m writing this up tomorrow morning but let me just share this with you because it’s worth sharing. Here are some of the reasons that Tesla must not, not should be, must be on here, right? Elon got his new compensation package. Did you happen to notice the, that that day he got that done represented the, the lows of, of for the stock for this, for this current move. It marked the bottom.
[00:13:09]:
His shares were set in stone and his options set in stone. So a billionaires play a different game. If you can do it, do it. He’s done it. That’s one reason Elon’s back all the way. Then he bought a billion dollars worth of Tesla stock in the open market at 400. Again we’re at 442 now. He’s already at $42 a share on his billion dollars worth of Tesla stock.
We got the robo taxi launched widespread for next year again. Right now it’s still in test mode in a couple of states. That’s going to change very soon because what’s about to happen we’re hearing in the very near future, let’s say by the shareholder meeting, which is November 6, that Tesla should have out at least for employee testing. And it may be happening now, but at least by November 6th it may be in full release mode. By by November 6th by the shareholder meeting is FSD version 14, which Musk has said is so incredible that it will feel sentient. It will feel like your car is alive. My Tesla already feels that way, so I know what he’s talking about. But they also say that’s the point, that these cars get about 10 times smarter than a human being.
I think they’re frankly as smart. Now, when I. You use FSD for my Tesla, I very rarely have to do anything. But the new version 14 is going to have things it’s never had before, like self parking. Because right now it takes you to where you’re going and then you park. And it’s got a parking feature too, but it’s a separate, you know, process. Right now we’re talking about it doing all in one same thing with my garage. When I pull up in my driveway, the Tesla will not drive in the garage.
[00:14:49]:
It’s a very small opening. Again, these are things, just a couple of things out of about 100. They’re going to be included in FSD 14. Again, we think that’s being launched here in the next, I would say month and a half, probably sooner. Again, employees may be testing it now, of course, under, you know, complete confidentiality agreements not to talk about that. Next year Optimus, the robot will start to scale and it will be in there by end of year. It will be in their facility, several thousand throughout Tesla facilities and then begin to scale next year. And then it gets crazy.
Tesla semi. Again, no one’s talking about this. By end of next year, they, a Tesla plan is to be making 50,000 semis a year. If that sounds not possible, because right now the facility is not even built. It’s in the process of building it. If that sounds not possible, listen to this today. And again, these are rough numbers, okay? In their, in their, in their gigafactory in Shanghai. Shanghai Giga, right.
They can produce right now a single model Y every 33 seconds. They have a box process that just got patent approved. 1. Okay, imagine that making a car in 33 seconds, putting it together. The robotaxi is going to be one Robotaxi every five seconds when that factory opens. So this is the, this is the future that, you know, the market’s waking up to. Analysts are starting to come around. You may have seen a lot of analyst upgrades until this week, as Tyler covered as well.
[00:16:26]:
Only 48% of Wall street analysts had a buy rate on Tesla. That’s beginning to change. We’ve seen, I think six or seven major upgrades just over the last week. There’s going to be an affordable model that, I don’t know they have a name for this yet, but it’s going to be a very inexpensive model, similar, I would think it’s going to be in the 20, 25,000 range, similar to what a robotaxi would cost. And that’s going to be widespread release that’s also happening this year. Tesla Energy, again, this is something very few people are talking about because there’s just so much going on with this company. But with these AI data centers, they just have to have so much energy. And what, what can, what they, what they can’t allow to happen is to have brownouts happen or have power surges or just power go out because of shortages.
And that’s, of course, a real concern with electrification needing a lot of work in this country. That’s where Tesla Energy really comes into play because there’s big storage units they have that store energy. They’re going to be. And they’re making them like crazy now. They’re going to be all over the world and there’ll be likely hundreds of these right at every single data center. And this is all a story we’re talking about over the next 12 months, folks. These things are being built right now. So look, the stock, look at the chart.
The stock has been coiling really for four years, consolidating here in this area, and now is really ready to go. So we’re aggressively long Tesla, it’s a Ted bagger here. We, we buy every single month in VR portfolio along with our other 10 baggers, which. You know what, come join us@vrinsider.com two free week. Get everything we have. Vrinsider.com come and check it out for two, three weeks. See what you think. Our daily updates, all our special reports, all of our newsletters going back many, many, many years.
[00:18:11]:
And, and see what you think, because that’s, that’s the only freebie I’m going to give you today is Tesla. I might have thrown a couple out there too, but, and come and join us. I think you’ll like it. What else today? All right, let’s take a look on the hood today because again, the market was down today. By now you’ve probably seen Dow Jones down 170, NASDAQ down 75 again. These are, these are 3/10 of a percent. Okay. Rust 2000 today was down 9/10, but again, it’s been red hot.
We think it will stay red hot. I shared this relative string chart this morning. Two of them, actually. And when, when the miners are leading gold, you know, you’re in a major bull market and the miners have gone parabolic. Right. GDX today was down, of course, 2.8%, 2.4%. But again extreme robot levels. This is what we expected to have happen.
But when the miners leading gold, it’s indication of big bull market. And then when the junior miners are leading the senior miners, that’s GDXJ lead leading gdx. That is another big tell because when the small caps get going, that means the market is broadening. There’s really very little more bullish than a broadening market, meaning a rising tide eventually lifts all boats. Same thing though in the rust 2000 small caps they have underperformed their large cap brethren, meaning you know, primarily SPF 100. They’ve underperformed for over a decade. There have been big rallies and then they’ve gone nowhere. And you’ve made far more money owning large cap stocks and small caps.
[00:19:42]:
As you’ve probably seen however in the chart that I shared this morning for the junior miners, the junior miners now are really beginning to lead. They actually have been all year. This is how this, this, this bull market in the miners is really going to broaden. And again it’s extraordinarily bullish as is the Rust 2000 leading the SP 500. So we love relative string charts. I have one for you tomorrow as well. They, they give you a picture that’s just almost impossible to get any other way than by looking at a relative strength chart to give you kind of inside baseball on what’s happening in these most important sectors and, and equity with equity analysis. So again, a slight day back to back down days today again seasonality is not great here but four quarters right around the corner.
And our under the hood today, the internals today, you know, again no, no damage done whatsoever on a day with some, some decent selling pressure. Today we had NYSE was 1.7 to 1 negative events decline. Nasdaq 1.4 to 1 negative. Again, not even 2 to 1 for either one of these. NYSE volume was 58, downside volume however, Nasdaq volume was 57% upside volume again on a day when the NASDAQ was down a decent amount. Very good to see. We also had today 240 stocks hitting a 52 week high to just 115, hitting a new 52 below. Folks, there’s nothing about these tunnels that are bearish.
Nothing. Not a single iota of these internals are bearish. Sector watch. Not the same as the internals Frankly. We had five sectors finish higher, six finished lower to the downside materials down 1.6%. Just know that the dollar is extreme oversold with almost I think it is record high short positions. In other words the dollars do for a counter trend rally. Just like rates are having a counter trend rally now.
[00:21:35]:
But the primary trend is both lower for dollar and lower for rates. But right now they’re just too oversold and that’s when materials tend to get weak, when the dollar rallies and when rates are moving higher. Real estate today also down 1% to the upside. And energy again up big today up 1.3%. And that was really about it for the, for the, for the sector watch today in our commodity watch today again this is where you see the damage from the gold being from the miners really being down 2.4 because they lead today. Gold was down 47 an ounce down 1.2%. 3768. That’s nothing.
We’re just what, 60 bucks? No. Yeah, about 60 bucks from an all time high that we had a couple days ago. Silver today down 1% at 4:41, 44.12 again. Silver’s broken out now to 14 year highs or excuse me 11 year highs and looks poised to move much higher all time high. There’s over 49. We look that for that to be taken out. Once this extreme overbought levels they’re trading at begin to dissipate again. Shakeouts will be short lived by the dip will continue to be the smartest of smart money strategies when it comes to shakeouts in the market.
Copper today up almost 4% today again all this a data center AI news. Copper goes in everything today. 482 a pound. Up almost 4% on the day again. Crude oil having a nice day today with everything we just talked about. Up 2.2%. That’s 142A barrel at 64.83 a barrel. And finally the day bitcoin consolidating in this range.
[00:23:09]:
It’s been like between 111 and 5 and 114 and 5 for the last. It feels like the last month and it’s really been about a couple weeks but we like it here a lot. 113, 113,518. That’s up 1.2% in the last 24 hours. All right folks, that’s it for the day. Hope you had a great day and even better night. We’ll see you back here again tomorrow after the close.
In today's episode, Kip breaks down the day’s market moves and zeroes in on what’s driving investor sentiment right now. In this episode, Kip explores why oil and the situation in the Strait of Hormuz remain at the heart of market volatility, sharing his thoughts on media narratives, the potential for lower oil prices, and the international power plays influencing the global economy. Kip also digs deep into the power of seasonality, noting that while the last few weeks have been muted, historical patterns point to a strong melt-up in March and April. He highlights the ongoing tech leadership especially from semiconductors and walks listeners through the crucial “first in, first out” indicator, which signals that a new rotation into tech, software, and Bitcoin is underway. Tune into today's podcast to learn more.
In today's episode, Tyler breaks down a wildly eventful start to the week in the markets, picking up where Kip left off with yesterday’s big reversal day. From the latest on the ongoing conflict in Iran and the impact of geopolitical headlines, to lessons learned about market psychology (including why you should never sell on a Monday), Tyler Herriage navigates through the market’s volatility and shares key themes like liquidity and optimism in the face of fear-driven narratives. Tune into today's podcast to learn more
Welcome to the VRA Investing Podcast! In today's episode, host Kip Herriage dives into a whirlwind Monday in the markets, sharing insights and lessons from historic trading days, including the infamous crash of 1987. He reflects on the wisdom of his mentors—especially Ted Parsons and his adage "never sell on a Monday"—and examines how those lessons hold true even amid today’s high volatility.
In today's episode, Kip breaks down a rocky week in the markets, spotlighting the surprising fact that in spite of heightened volatility and the backdrop of war the S&P 500 closed down just 2%. Kip digs into the main forces driving investor sentiment: the impact of surging oil prices, geopolitical tensions centered on Iran, and what he calls the “4D chess” of Trump’s strategies on energy and the Middle East. You’ll get his take on why negativity dominated the headlines, the role of the Strait of Hormuz in global energy markets, and how all eyes are on oil as the primary driver of this market pullback. Kip also examines the unusual behavior of interest rates in times of conflict, analyzes the technicals and market internals, and shares his high-confidence outlook for what could spark the next major move higher. Tune into today's podcast to learn more.
Welcome back to the VRA Investing Podcast! In today’s episode, Kip Herriage is here to break down a whirlwind Thursday on Wall Street and share his unique perspective on what’s really driving the markets right now. After a quick shoutout to his son Tyler and a nod to his recent appearance with Grant Stinchfield on Real America’s Voice, Kip dives into some of the hottest topics affecting investors—from the surprising rise in interest rates during a time of war, to the rotational action in software and tech stocks, and the persistent strength of gold and silver despite today’s dip.
