In today's episode, Kip breaks down the vibrant landscape of this current bull market, and where to look for buying the dip. He also covers the latest in the housing market as we are seeing demand driven by millennials with an entrepreneurial spirit. Lastly, diversification remains key, with personal insights into our VRA portfolio strategy. Tune into today's podcast to learn more.

Don’t look back to. The market is closed. Good Thursday afternoon, everyone. Kip Herriage here with the VRA investing podcast. Hope you had a great day today. Got some important things to talk about, folks. This is when we get paid. This is when we get paid.

It’s on these shakeouts that we get paid for now close to two years from the October 2022 lows. But we’ve said a couple things. This is that bull market, right? This is a innovation revolution. This is the roaring 2020s. It’s a generational bull market. And that buying the dip has been the smartest of smart money strategies. That’s not going to change. So we look at these overbought shakeouts.

[00:00:41]:
I’ll cover that more in a minute. But we hit extreme overbought stores. Todd and I’ve been talking about this week on the very investing system we had, extreme overbought. We were knocking on the door of extreme overburden steroids, really, right there. And that’s in the market. That’s just when bad things happen. So talk about that. I’d also have to say as we start this podcast, rest in peace to the great Lou Dobbs, truly a great american, unquestionable patriot.

Patriot who, by the way, was fired from Fox. Fired from Fox for talking about the stolen and rigged election and he wouldn’t stop talking about it. And that’s just, that’s just wrong. Lou Dobbs, phenomenal, phenomenal man, consistent patriot, conservative, stayed to his principles, didn’t waver, asked the hard questions, broke the tough stories and never deviated from it. Rest in peace, Lou. You will be sorely missed. I think we should all aspire to have the strength, the inner strength that Lou Dobbs had from cradle to grave. That’s how you came in and that’s how Lou Dobbs went out.

And let me salute Dobbs. Going to talk about Netflix’s reported earnings. Just going to mention that stocks down on the news, but these tech stocks, and it’s considered a communication stock, but Netflix, I’ve always thought, as I think most people do, frankly, as a tech stock, and stock is down on the news, but it was down sharply. Stock dropped to 600. Now it’s back to 641, only down 1% on the day. First moves, just know this. These first, especially with tech stocks, the first, the initial move on earnings should never be trusted. I don’t trust them.

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Matter of fact, if the stock, if a tech stock opens sharply lower, my first instinct after doing this all these years is to want to buy it. And I think that’s what we’re going to continue to see throughout earnings season in a lot of names. Any big sell offs are going to be a buying opportunity. Also. Interesting, and I have to say this before I forget it. The semiconductors, as you know, they are our tell. There are, they are our primary market tell when it comes to leading the market, because they lead in both directions. Right.

What happened? Well, the semis peaked. It was recently, by the way, it’s pretty fascinating how quick this happened. The semis peaked. I’m talking about SMH. The semi ETF. The semis peaked on July 11. Okay? That was a week ago. They peaked July 11.

And today, July 18, they fell to an intraday low to as much as down 11.6%. So again, here we go again. We see it again. Semis led lower. The market played catch up to the downside move. That’s what we’re seeing now. But an 11.6% move in your market leader, that’s interesting. I’m going to share this chart, and I’ll just have to kind of visually, kind of verbally explain it to you here.

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It’s going to be in tomorrow’s very letter, our go to chart of this bull market. From the very beginning of this bull market, we focused on the semis. It was the first group we pounded the table on. As you’ll know, we bought Soxl. We were already long going into it from just a short while back, but we pounded the table that day on the podcast, the next day’s letter, you said, buy Soxl it was $5, and we wrote it all the way up. We did take some profits, but now it’s dollar 52 right now. But it was 70 soxl. The three time leverage semi etfemen was 70 a week ago.

And now it’s hit an intraday low of 49 52 right now after I was trading. But the point being, we’ve had this big shakeout. The Semites have done what they do. They led lower. They were our tell. And today they may have just bottomed. I don’t know. We’ll have to wait and see.

We haven’t gotten to a, what we consider to be even a near perfect buy signal. We’re just not quite there yet. However, in the trial this year, in the morning, that tells a different story. It is there. The semis to the s and P 500. The relative strength chart of the semis to SB 500 is the most important chart, has been the most important chart of this bull market. This channel, if you’re with us, in the VRA. You know what I’m talking about.

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I only share it a couple times a week probably. This channel is so tight. I’m looking in front of you now today, this relative strength chart, the semis SB 500 hit the exact lower channel line this morning. That lower channel line has not been violated for the entirety of this bull market. In other words, that flashed a strong buy signal today. If we hadn’t been so early in this tech sell off, we would have already been adding it. We’re just going to be a little patient here. We don’t see a need to rush.

Look, we’ve had a phenomenal year, been a very good couple of years now, and there’s just no reason to rush. We believe in discipline. And again, you see the red candles, right? That we’ve had from tech speak, these big red candles on these charts, those are, you’ve heard the phrase catching a falling knife. There’s no reason to do that. So we may not get the exact low, but that’s okay. We’d rather just not buy it and see it keep going lower. We’d rather see a dependable below the noise work. We got too cute and missed our housing ETF nail.

The three time leveraged housing ETF we were about a day or two from, by way from buying it again, looking for perfection. The enemy of good waited a little long, could have bought that at 80, $85. It’s 131 now. Okay, this is in a few days, folks. Housing stocks were a house on fire again. XHB, as Tyler just told me in our pre podcast meeting, the housing ETF XHB be just at an all time high today. So the reason that really matters is, again, we get a lot of trades, right? We don’t get them all and we miss this one. It’s right, we’re counterpunchers.

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We’ll look for an opportunity to buy nail and we will do that. But we’ll need for, we need it to pull back a little bit if it’s going to do that. If not, we’ll just have to say we missed it. But the reason that’s significant is that if you are investing system, housing is our most important leading economic indicator. It’s also one of our five big bribe mega trends in our book, the Big Bribe. So housing is just that important for the obvious reason. For 99.9% of american families, the most expensive thing that every buys will be their home. And of course, the emotional attachment.

There is no important, no more important economic indicator that was happening in the housing market. And what we have to know about housing market is it’s really a very similar story to bitcoin, isn’t it? Supply, demand. There’s not enough supply, and there’s a lot of demand. The demand is coming from the generation that’s been shit on the most, excuse my french, millennials. Horribly wrong characterization made of this fine group of young, not so young now, Americans up to 43, 44 years old. Right? But millennials are powering this again. That’s another of our big bribe. Mega trends.

The millennial generation, largest segment of the population now 71 million strong, in the process of inheriting more than $70 trillion. And, you know, they’re born entrepreneur, very smart, born into technology. They get it. That matters in the age of AI, having that instinct, just knowing what, you know, it’s just like a birthright for the millennial generation. Extraordinarily important. They can find the answer to anything in about 5 seconds. And they are entrepreneurs. They’re really born entrepreneurs.

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Most millennials saw their parents go through a world of hurt. I from the financial crisis. They learned from that, you know, didn’t want to go through what their parents or grandparents went through. And at the same time, they are born entrepreneurs. They love housing, they love cryptocurrencies. Again, they’re the crypto generation, and they love equities. So it is, it is. They are driving the housing boom.

They, of course, think they are driving it. And so they’re loaded with cash, very little debt. I again, it’s a really story. It’s a story that’s been mistold so poorly that you have to think it’s almost purposeful. But again, as long as we know the truth, it’ll set us free. I think we do have a good handle on what’s happening here. So very bullish for housing, which is very bullish for everything else. So we are, again, extremely bought now.

Those conditions are disappearing rapidly. We are looking at a potential bottom already in the semis, and that’s the case. The market’s going to bottom in the very near future. But there’s so many other reasons to be bullish. I won’t go over all of them today, but, you know, I’ll just, I’ll throw this out real quick because I’ll cover in a minute in our internal watch. But this is an indication of how strong this market is. The Dow Jones today was down 533, down 1.3%. Right.

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Nasdaq down another 125 points today. That’s down eight tenths of 1%. Anyway, so we had an ugly day, right? Rose 2000 down 1.8%. After this huge run it’s had. Just, again, these, all of these groups hit extremely bought levels. SVI 100 down eight tenths, 1%. The point being, even with this sell off that we’ve had, the internals check this out. Today we had 471 stocks hit a new 52 week high to just 76, hitting a new 52 week low.

So under the surface, things are much better than they appear to be by looking at the primary major indexes, specifically tech stocks and Nasdaq, and now Dow Jones playing catch up with the downside. I want to back up just for a second, because I do want to cover this today. Look, we don’t talk about politics much on this podcast anymore, but there are times where it has to be talked about because it’s playing a role in what’s happening throughout the markets, and I believe that’s what’s happening. I think some of this trepidation in the markets is clearly coming from political uncertainty. Look, we just had a president, a former president, that was almost assassinated, missed by probably less than an inch. I mean, it’s just unbelievable. And now Biden, who’s contracted Rona again, third time, he got all his 27 boosters, and he’s still getting it. Real shocking, right? Remember Joe’s words.

It’s a pandemic of the unvaccinated clown. But I’m pulling for Joe. I am pulling for Joe. I want him to keep fighting. I want him to. I just love to watch the left eat their young. This is so, so much fun to watch, right? In Texas, we call that karma, because this is the mess they brought on themselves. They stole an election.

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They are trying to take America rapidly in the direction of communism. That’s really the fight that’s happening here. I think most of us understand this, and this is good versus evil. This is what we want to be versus what we don’t want to be. We don’t want to follow our country’s leaders, our state, our planners that want to china fi us, right, which means all the elite have all the power, really, what that’s about. So we want him to stay in the fight. As I said on Twitter today, run, Joe, run. I corrected that.

Said, scratch that. Walk, Joe, walk. And then I corrected that. Shuffle, Joe, shuffle. Stay in the race, Joe. We want to see you go all the way to the finish line against, against the Trump. And also, by the way, I’m sure a lot of you watched last night’s RNC convention, the secret Service running from senators at did you see it last night? It’s all over the news now. Fox.

Unbelievable what’s happening here. Clearly, there’s a lot more happening here with this attempted assassination that we’re being told. It looks, it couldn’t look sketchier, in my opinion. We’re absolutely looking at a conspiracy to assassinate the former president. Like the Las Vegas massacre. We may never know. Like, like Stephen Paddock. We may never know what happened here.

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They’re almost certainly covering up this story now and, you know, racing things. We’ll never see them. I’m certain that’s what’s happening because we know we can’t trust the FBI, secret Service, of course, FBI, both under department, Homeland Security. We know we can’t trust these fools. I mean, this is the mess this country is in. But, you know, walks like a duck, quacks like a duck, folks. It’s the duck. So we know what’s going on here.

I believe that this kid did not act by himself. And now the betting odds have Kamala, of course, Biden almost certainly going to resign this weekend. It will be Kamala and whoever she chooses as a running mate. But I think all of this geopolitical, political uncertainty, of course, was happening globally. Yeah. It’s having an impact here. And again, it’s a fragile market. When it’s extremely robot, that’s when bad things happen.

Add it all up and we have the market that we have today. So I do believe occupation, by the way, when it comes to assassination, I think the simplest explanation is the likely explanation. What’s the simplest explanation right now? I believe it’s that the Secret Service plan was to allow Trump to be assassinated and then sit back and say, exactly what are you going to do about it? I saw this analysis. Tyler actually was one of the first to give me this analysis. I believe it’s spot on. Had they been able to assassinate Trump before he selected a VP, then there would be no republican ticket. They might get a rhino, they might get someone to be a stand in. Nikki Haley, for example, that would do the state’s bidding.

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So they had to try and take him out before he selected his vp. But now that he’s got JD Vance, again, phenomenal job last night with his speech. Family man. It’s a very compelling story. Frankly, I did not know. I’ve kind of pulled away from politics a little bit. A lot of, you know, probably why that is no reason to get into it again here. But obviously, I’m engaged now.

Most of us are. But now, now that Trump survived and now that he selected JD Vance. Look, if they take Trump out now, JD Vance becomes the guy, and he’s probably worse news for the state than Trump would be. So, again, we all pray. I know I do. For President Trump’s safety and security. Hopefully, they took their shot at the king and they missed. And now it’s over, and we can get this country back on the right track.

But again, all of this is combining to add some uncertainty for our markets. As I wrote this morning, I do think this is a time that it’s important to be reminded about staying diversified. I. I don’t like anyone telling me how to invest. Okay? I’m not trying to tell anyone what to do. I write, really. I just write what I’m thinking. That works for me.

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What I’ve learned over the years, it’s never meant to be, you know, a judge, judgmental, or preacher. I know I can probably come across like that sometimes, but it’s just I. I believe in being plain spoken, and I think that’s where I can best help people, is to tell you exactly what I’m thinking. Yeah. And exactly what I think you should do. Based on the mistakes that I’ve made and what I’ve learned that works and what I know works, is diversification. Look, when I was a younger man, I love loading the boat. I often have my portfolio, two, three, four, or five stocks.

It’s just not the case anymore. I’ve learned it’s not the best way to invest. That’s why in the VRA portfolio, which is our portfolio, it’s our family office. What we’re doing, we’re telling you how we’re investing with our own money. We don’t invest in more than 13 to 15 stocks at a time in that range. We might at one point have 16 or 17. I think right now we’re under 15. We have taken some profits over the last couple months, but diversification is important.

If you have 50 stocks, you’re over diversified, and, you know, you can’t make money but buy an index fund if you’re going to do that, in my opinion, unless it’s just what you enjoy doing, it’s what you’re good. I can go for it. Right. But for the average person, most people can’t own that many stocks until it’s top of them. But I think this number we’re at, say, in the 15 stock range, I think it’s a good number, because that way, when we have our big wins, right, we have a stock that gives us really good gains of 100 plus percent. Our portfolio feels that we really see the portfolio pick up speed because of it. But it’s times like these where just the security of knowing that in addition to your equity investments, you also own gold, you own silver. Now I’m about 70 30, 80 probably right now, 80 20, frankly, because of the appreciation of gold.

[00:18:23]:
Probably 80 20. Gold and silver right now. I like the yellow metal. Always have. I think most people do. Silver is hard to accumulate because again, it’s worth a lot less. You have to buy a lot of ounces. There are solutions to that.

By the way, I don’t like these paper. I don’t buy the paper stuff. I only buy physical gold and silver is what we recommend. But gold, silver and bitcoin, having those, plus keeping ten to 20% of your portfolio in cash. I know cash is trash by and large because of inflation, but still, you know, keep it in your equity account, keep it in savings, have it there. So when we do get a shakeout, you have some money to put to work. So as you take some profits, again, keep some of that in gold or in cash. But that’s what allows us, in my opinion, to be true smart money investors.

So we’re prepared for anything. Look, nobody likes these pauses. No one likes these shakeouts because these aren’t times where you make money. And the markets, you don’t typically make money when the market goes down, not if you have a long portfolio that just comes with the territory. No one likes it. It’s just the way this works. That’s why we discipline ourselves. We don’t buy at peaks, but we do make sure we’ve got cash to work with on pullbacks because that’s, that’s, again, buying the semis here.

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We’ve got a couple other, I mean, we, we’re looking at, for example, small caps. We want to get longer small caps. Well, they’ve had this monster move in a very short period of time, and today they were down almost 2%. So it’s on these shakeouts. We look at our charts, look at the bureau investing system, look at all of our screens, and then make the most informed decision possible. So that’s what we’ll be doing, the VRA, in the near future. Stay tuned for that. We’ve been talking about the Trump trade.

I just have to point this out, because what we know for certain is in the first couple of years before Rona, we know how well the market did. Market was a house, house, house on fire. Right? Trump brought the GDP back to plus 5% growth. And again, pre Rona in a market soared. So the Trump trade is what everybody’s been talking about. Here are some numbers, okay, here. And I think this is going to hold up. This is, first of all, for the entirety of Trump’s term, gold jumped 83%.

Trump is maybe he may be calling himself, not the new crypto president. And I got some data that says he is exactly that. I’ll share that with you next. But before that, Trump and gold were synonymous with each other. So during Trump’s time in office, gold rose 83%, but the miners GDX, the gold miners jump 210%. If you’ve noticed what’s been red hot of late. Yeah, it’s been the miners, they’ve been the leading index, leading sector from the end of April, excuse me, the end of February, which is massive gains, better than 50% gains. The silver was 40%.

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So, yeah, we expect, again, we believe we’re in the bull markets of bull markets for precious metals and miners to charge back that up, these massive ten year long technical breakouts. This is when gigantic moves take place, and that’s how we’re positioned. But also, know this just in the first year, because, you know, looking at four years, well, that’s okay, it helps. But how about the first year? From the time Trump was elected, November 7 of 2016, through the first year in office, he checked these numbers out. K Web, which is the China Internet, we own these. Kweb, the China Internet. ETF rose 80%. That’s in just over 14 months, folks.

Oil jumped 20%. By the way, energy stocks did not do that great, only up about 5%. Again, this is the first year in two months. But the biotech ETF XBI jumped 50%. And we don’t own that, but we are looking at it. So those are the groups that did among the best in Trump’s, early in Trump’s first term, along with gold and silver in the miners. Here’s the biggie, though, again, Trump has been calling himself and others as well, the crypto president. We have proof that he is, in fact the crypto president in just the first year that Trump is in office.

Again, from this November election day 14 months forward, the first year of Trump’s term, bitcoin jumped more than 3000%. It’s like 3270%, right? In 14 months. So we think, and again, I think that the charts back this up as well. The fundamentals certainly back it up. Buying bitcoin here at just below 64,000 is a phenomenal move. It puts it about 10,000 below its all time high of a couple months ago. But now we’ve had the halving. Now we start to see things start to turn because just after the having, it’s not a great time to own bitcoin.

[00:23:26]:
And then that begins to change because you have your biggest gains that take place over the next twelve to 16 months. So I think that’s underway now. And again, I think there’s some rumors that Trump may even talk about cryptocurrencies and bitcoin tonight. I’ve seen the rumor that he may announce tonight he wants a bitcoin reserve. Like he wants bitcoin to be owned by the government now. What a great idea. Right? Wow. Could you imagine? I kind of don’t think he’s going to say it tonight because it might, I would have think it would have, I would have thought it would have leaked a little bit, at least from somebody.

Loose lips sink ships that didn’t appear. At least if he, if he’s going to say it, he kept it very close to the vest because bitcoin was down today. So we’ll see. But if that were to be announced, I mean, without question, bitcoin soars overnight. So be ready for that. We’ll all be watching Trump’s and I believe it starts at 10:00 p.m. eastern standard time. Going to be maybe the most watched, maybe the most watched accepted speech in history.

I would think that’s probably actually a pretty safe beta. Okay. I think that covers most of the territory. Let’s get to the internals today. Good, good for the, for the decline we’ve had. The internals have actually held up pretty well. It was a little worse than yesterday. The football ratio today, by the way, only hit.

[00:24:50]:
.91 did not. And that was a close, it never got above that level. Fairly steep short term sell offs. You really want to see the put call ratio jump to 1.2 or higher. That’s been our experience. That hasn’t happened yet. That may mean we have a little more downside here. It’s one of the reasons we haven’t acted on the semis again, although I think, I think the lows may have taken place today based on the chart I just talked about.

But we want to see the book haul ratio skyrocket. That has not happened yet. Maybe it’s going to happen soon, but hasn’t yet. But today we had, NYSE had, its volume was down, a down volume led 75%. Nasdaq was at 64%. Advanced decline was better still, almost three to one. Negative for NYSE. And it was three and a half to one negative on Nasdaq.

So those readings are starting to get a little higher. But again, four and 71 stocks high to just 76 heading into 52 glow. This market has been broadening for a while. That serves as strong support for this market, and I believe that’s what you’re going to see here in the very near future. Stocks moving back to important support levels and then rally again from there. But again, we are in a fairly negative seasonal period. That’s the one bugaboo here that has people talking. This is not the best time to own stocks, some sectors more than others.

[00:26:19]:
Historically, this is the summer low. It’s kind of when it takes place to move into August. So that is just the backdrop we have to deal with. It is reality. But I think, again, our primary macro case is what’s really going to supersede any other negative possible issues, which is this is an innovation. Revolution is a roaring 2020s. It is a generational bull market. There’s so much money out there looking to buy dips.

I just don’t believe we’re going to have any kind of excel off here. I just don’t believe it. I think. I think, I think that’s, I think that’s passing. I think that’s over now, barring some kind of unforeseen disaster. Because if Trump had been killed, this would have been an absolute. We’d had, we would have had a global financial meltdown. I believe that.

I believe markets would not been able to open next morning because they’d be limit down. I think that would continue for several days. I think it would have been ugly. I think we’d had frontier justice breaking the streets of, I think the boiling point would have been reached for so many Americans. I think bad things would have happened. So, again, pray for Trump’s safety. And he believes, he believes he’s blessed. He believes that our power intervened here.

[00:27:30]:
I think he’s right. And by the way, I think that’s bad news for these perpetrators, plural. I think that’s bad news for them. Trump is, Trump has an angel on his shoulder. I think he believes he’s got God at his back. Certainly got enough Americans. Pray for him that it does feel that he’s, he’s being watched over. And we just have to continue to hope and pray that will continue to be the case.

Right. All right, sector watch today was ugly. Okay. Not good today. Ten of eleven sectors finished lower. Not a lot of damage done, really. Just again, this ten of eleven is not a real good look. The downside, healthcare, which has been red hot, down 2.3%.

Consumer discretionary, down 1.3. A lot of sectors down right at 1%. The only sector higher was energy, up three tenths of 1%. And a commodity watch today, I would tell you if I could find it. Where. There we go again. They’ve been a house on fire. Right a bit of a day.

[00:28:35]:
They’re all investments, aren’t they? When you get a sell off, you have a liquidity call yet. People selling, taking some profits and things they’re making money in. Yeah, that’s just not a great backdrop for anything that’s been red hot. Of course, gold has been gold today only, down $12 an ounce, down half percent. 24 47. Of course, at an all time high just yesterday. Silver down 1.2%, down $0.36, announced at just over $30 an ounce. Copper today down 3.2% to 426.

Copper’s been getting hit here a little bit, and I. I think it’s more of a technical, short term, seasonal thing, but I think copper represents a very good buy here. Copper stocks as well. Crude oil today down a half dollar a barrel, 80 87. And finally, crypto. Look, we’ve already talked about the reasons we love it. You know that pretty well. If you’re with us today, right now, down, though on the day, down from the high about, over the last 24 hours, about 1%.

Last trade here, just below 64,000. A bitcoin. All right, folks, that’s it for today. Hope you had a good day and even better night. We’ll see you back here again tomorrow after the close. Bye.