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VRA Investing Podcast: Economic Optimism Soars and a Closer Look at Market Trends – Kip Herriage – January 24, 2025

In today's episode, Kip takes a look at an incredible week for our markets, highlighting a significant shift in sentiment and optimism about our country's direction, thanks to the new administration. Kip also dives into the recent ...

Posted On January 24, 20251539
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About This Episode

In today's episode, Kip takes a look at an incredible week for our markets, highlighting a significant shift in sentiment and optimism about our country's direction, thanks to the new administration. Kip also dives into the recent changes we're seeing on Wall Street and Main Street, discusses the unprecedented capital expenditures in AI, and explores the financial strength of American consumers. Tune into today's podcast to learn more.

Transcript

Don’t look back because the market is closed. Good Friday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. What a week this was. What a change. What has changed in sentiment? What a change in just, I don’t know, maybe the feeling we all have about where this country’s headed now with a real president in place. And everyone’s talking about it.

It’s not just you and your wife and your friends and your clients. Literally everyone’s talking about it. Hearing a lot of people. Tyler told me the story today. You know, Tyler and Sam live in Austin and I think it’s safe to say Austin’s a little more liberal than maybe Sugar Land, Texas is. Austin can be very liberal. Of course, they happen to have a lot of friends that when they were talking about it, admitted they were going to vote for Kamala Harris. And now they’re coming clean.

[00:00:50]:
And just within a few four days of Trump being president now they’re already having a change of heart and realizing they made a mistake and the right guy won. So like that’s the obvious. We know that. It’s good to see the Waco call happening. We think it’s going to continue to happen. Great week. Let’s cover it more in a moment. Big week next week, by the way, with a big tech earnings.

We’ll cover that as well. Also got some very good news today from Meta, which hit an all time high today about the amount of money they’re throwing into capex spending $60 billion they’re adding to capex for this year for AI. It was a common theme, right? We’ve seen this time and again. Remember the total over just over the next three years, more than $2 trillion has been committed to capital expenditures by big tech cap. Big cap tech companies in three years, $2 trillion. We said this for a long time when AI first started becoming a thing. Nvidia first made it a thing with their first earnings report where they just blew everybod. Many had never heard of Nvidia before then, but that marked the beginning of this AI boom.

And we’ve seen so many people that were doubters early on even. I was on with Charles Payne yesterday on Fox Business and he asked me about what my thoughts were on the Stargate deal with OpenAI and their group of assorted companies that Trump stood and helped them announce. And you know guys, I said yesterday, I’m skeptical. I think, I think you’d have to be $500 billion in size, even 100 billion from OpenAI. They don’t have the money. The, the Japanese guy with always forget the name. I forget his name anyway. He’s part of the consortium as well.

[00:02:50]:
They don’t have the money. They, none of these companies had that kind of money. So I think it’s smart to be skeptical of these big dollar deals that Trump likes to announce. But it’s the direction, that’s what matters, the direction we’re headed in and the fact that it’s hard, it’s hard fact that we have more than $2 trillion being spent in CapEx in the next three years and that means it’s filtering throughout the society, right? First, second, third, derivative. You’re seeing companies that maybe on surface have nothing to do, it looks like with the artificial intelligence or even, even technology really, but they make parts that go in these machines. They make something specific or they’re going to be a benefactor of this bending. So it’s filtering through society. Now this is what happened during the dot com boom again, we think we’re very early.

This is very different than dot com. If you’re new to us here, I’ll just tell you quickly. Look, I was, I was a financial advisor then money manager. Managed about $100 million from 95 to 2000, helped take two, we’ll call it two and a half companies public one spilled over into the 2000s. But I was very active in it. And so when the whole dot com thing started, we didn’t know what it was. The dot com, we had no clue. We just started using email pretty much.

So understanding the Internet age was, was, was a, was mind bending at the point but you know, we didn’t know how exactly it was going to work. Took a couple years first to get our feet on the ground and then, and then it was off to the races. Right? We had a better idea what these companies did, which ones to invest in by the way. Buy, Buy the winners and hold your losers. That’s, that’s the key that I learned from 95 to 2000. We have no intentions at any point soon of selling companies like Tesla or selling investments we own like Bitcoin. These are the, these are just, these are just now beginning to move higher. And that’s the key point again.

[00:04:52]:
95 to 2000 taught me that. But the difference here is going to be this won’t be just a five year boom time and followed by you know, followed by.com followed by. Bomb. This is not going to be that. This is also not something new from us. We’ve Been saying this now for more than two years and it’s in our book the Big Bribe. We think this is going to be longer lasting, much broader in scope. It won’t just be tech.

We already seeing the market spread out significantly. So it’ll be longer, broader and bigger, much more impactful throughout the entire economy. You know, we think it’s going to be a couple decades and I’ll repeat as bad as the post two decades, post 911 war worst two decades in American history. There’s not a close second worst two decades in American history. We had not only had two horrible wars all based on lies, right? With weapons of mass destruction in Iraq did not exist. But then we had of course the great financial crisis where so many Americans lost their home, lost their businesses, took years to recover. Then we had a rigged election. We had the plandemic.

So really horrible, horrible two decades. But you know what, it’s the, it’s the testament to the strength of Americans and really the world that we survived that and we got tougher from it and we learned from it. Did we ever learn from it? This is one of the big mega trends that’s driving this bull market now is the strength of the consumer. And I’m going to ask you again to ignore what you’ve heard in the mainstream media because it’s just not, it’s not, it’s not accurate at all. The consumer we learned from the financial crisis. We learned that we never wanted to allow ourselves to be put in that situation again where banks could take our stuff. So we started paying down our debt and we did it aggressively and the evidence backs that up. Again, you’re not going to hear much of this in the mainstream media, but it’s all true.

[00:06:54]:
40% of Americans own their home without a mortgage. Again, these are all time highs. Consumer net worth continues to hit all time highs. Net equity in homes is an all time high. When you have kind of debt to. Debt to income is at 25 year highs. So when you have that kind of a setup for those that are still worried. We hear this all the time.

I hear it all the time online on Twitter X. Now here comes the next housing crash. There are so many people that still believe that and it’s the fear factor. Look that, that wasn’t that long ago, okay? It’s the pain is still fresh for a lot of people and I get it, we get it. But it’s just you, you cannot have, it’s impossible to have a housing crash and a high housing or financial crisis when 40% of Americans own their home without a mortgage. Because now if things were to get tough, we consumers have the ability to lever up to access that home equity or to use their credit cards. So the media has had a lot of fear mongering about some of this. Some of it’s accurate.

There are two Americas, no question about it. But the very tough reality is that the only America that Wall street cares about is the first America. First America is driving everything looks. It’s a haves and have nots. This is not a new story, but it’s more, it’s more, more the case now than it’s ever been before. And it’s certainly not that we don’t have sympathy for the second America. I come from second America. Okay, we were, we were poor, but we’re not anymore because I didn’t, I didn’t want that to be my future.

[00:08:43]:
So I worked my butt off to make sure that wasn’t going to be it. Right. And I had a lot of breaks along the way. I had great mentors that helped steer me in the right direction. They were very patient with me because I was a complete idiot when it came to Wall street when I got out of college. But I worked hard and learned from it. Again, had great mentors and was able to have a lot of success because, you know, things felt my way. Right.

I wake up every morning with a lot of appreciation and for the things that have come my way. But, but the markets do not care about the second America, the one I come from. They care about the first American. This is where I think so many have gotten this wrong. And again, I just don’t know how you can see that 40% of Americans own their home without at least one home, without a mortgage, at least one home. Okay? Many own two now and three and four. So you’re just not going to have a financial crisis in that environment. This market is set up, this economy is set up to go bonkers.

And it has been for some time now. We’re getting traction because we got the right president. Right. And so we are extremely bullish. Yes, the markets have hit short term overbought. Tyler covered this yesterday. I wrote it up this morning on the very investing system on our shortest term momentum oscillator stochastics. Yes.

[00:10:06]:
We are at extreme overbought levels now. The readings are over 90 on every, every, every, every one of our broad market indexes. All right, so, so that’s SB 500, Dow Jones, NASDAQ and Russell 2000. They’re all short term Overbought. But look at the last, the run we’ve had the last two weeks. It’s been extraordinary. SB 500 up more than 6.7percent in less than two weeks. All time highs.

Intraday again today, the SPF 100, the rest of the index aren’t that far behind, hitting all time highs except for small caps. They got some more work to do, but at the end of the day, the markets are broadening out. We have the right president in place and do we ever. This guy appeared at Davos. I’m sure you’ve all seen or heard about this now, but he opened his Davos presentation again. He was, he was live, you know, via, via, via streaming. Because this of course is in Davos, Switzerland. His first, his.

He opened it by saying, a revolution of common sense and a golden age for America has begun. A revolution of common sense and a golden age for America has begun. Now, this is a familiar theme. A golden age for America. Trump has been repeating this often. He’s also said, now we have a common sense president. And that. Such a great point.

[00:11:25]:
You know, the tags they stick you with, you know, Republican, Democrat, conservative, liberal, they really don’t matter anymore. What matters is what makes sense, what is common sense. And I think that’s where Americans are rallying around this point because we realize everything we just watched happen over the last four years and the Obama’s eight years before that, we saw a lot of things that were insane and made no sense whatsoever. So Trump’s coming back in office at exactly the right time. He destroyed the globalist elites at Davos. Some of. He went right at him. He went right at him.

All right, there was no, I’m going to be, I’m going to be gentle because I’m right in front of these people. He talked about over regulation in the eu, basically prisons in the European Union house, destroying their society and certainly from an economic point of view as well. And it is, this is what we’ve called the Trump mandate that he’s bringing back free market capitalism and the power of that, the animal spirits that come with it. When you do put the people before the government. Right? And obviously EU’s got a lot of work to do there, but they’ve got a choice to make. They don’t have to come up, they don’t have to follow Trump’s lead and allow the insanity to stop happening and put people back and make them more important than the government and the elites. But if they don’t do it, their economies are going to continue to shrivel compared to the United States. That’s the Trump mandate.

I think globally we’re already starting to see, because again, they’re having these conversations now about dei, about esg. These things are dying off really fast. And so these are all very good signs for the US and the global economy. They also went after them on the climate change scam, on the Ukraine war. Basically, he said this started by very stupid people and it must stop now. Started demanding, demanding the interest rates fall. This has been something, if you’ve been with us for a while, you know that we’re, that’s, that’s our message. Interest rates are going to fall because it makes zero sense for our 10 year, which closed today at 4.62%.

[00:13:40]:
Makes zero sense for our yields to be this high. More than double what you have in Germany and almost three times what you have in Japan and even more Japanese. Four times Japan and three times what they are in China. And I can keep going, but it’s the demand for our US Higher yielding debt. And also investors get the safety and security of the United States. And of course, we have the world’s reserve currency as well. So there are a lot of advantages to buying our debt and the demand of global institutions of size that will be buying our debt versus global debt that will continue to bring rates down. A classic supply demand story.

On top of that, again, we do believe that inside of three years, we’re going to have deflation in this country. That’s the power of the innovation revolution. That’s what innovation does. It brings down the prices of things that exist today. So we’re looking for rates to really crater from here. You know where they’ll finish up this year, I can’t tell you. But we’re looking for a sustained move lower in interest rates. Of course, that’ll be very good for the economy.

Now Trump is demanding lower rates. He’s already putting Jay Powell right in the crosshairs. You got to love it. He’s got to just not back down. Then he also, Trump at Davos went after the big banks again. They’re right there. The CEOs of JP Morgan and Bank of America, basically to their face saying, stop debanking conservatives. What you’re doing is wrong.

[00:15:18]:
And of course it is. And it has happened, happened to me. It’s happened to so many people. And finally, basically on the tariff issue, it’s pretty simple. He says, make your products in America. You don’t worry about tariffs, otherwise you got to worry about them. So again, it’s the carrot the stick. Trump knows what he’s doing.

That is, by the way, the reason they’re saying the markets were a little bit soft today is because tariffs supposedly start kicking in February 1st. I think they probably will for a lot of countries. That’s not bad for us, that’s bad for them. And I think basically we just had this big run in the last week and a half, two weeks. The markets, as I said a minute ago, have reached extreme about levels on our short term minimum oscillators. But they’ve got a long Runway in front of them before they get there on our other oscillators. So there’s not a reason to sell. It’s just as we say, it’s a reason to be more cautious in the near term.

If you got new money to put to work, it’s not a great time to buy the broad markets. Now if you’ve got your favorite growth stock like we do here, we buy those. It doesn’t matter when we get funds in. We’re doing dollar cost average. We do every month monthly dollar cost averaging. Then we add to our positions once a month there, regardless of what the price is or however bought the market is. But with respect to ETFs that we like to use both non leveraged and leveraged ETFs. Yes, not a great time to buy again.

[00:16:36]:
We had extremely bought readings on our short term memo oscillator beginning yesterday. So I think that’s kind of a combination of some scaremongering about the tariffs and the fact that, you know, we just got very overbought. Not a bad day by the way. Everything rallied off the lows. We actually had a pretty good last 30, 45 minutes. Dow Jones today finishing down on the day 140 points, down three tenths of 1%. Same thing was 2000 now 3. 10%.

SB 500 down 3. 10%. But remember SBF 100 hit an intraday all time high before moving slightly lower today at the close. And then Nasdaq today was our loser down a half percent. You know, we don’t like seeing Nasdaq leave but again it’s been leading to the upside. We never want to see it lead to the downside. But when you, when you’re talking about a one or two day event, that’s, that’s, that’s a completely different story. By the way, SMH and Semi ETF today was down 2%.

Textures Instruments today was down over 7% on some earnings related news. Not earnings related but demand related news if you will. But Again we saw this again Tyler Code yesterday. Tuesday we saw a significant breakout in the semiconductors right? Significant breakout that took over four months for this pattern to finally play out and broke out on Tuesday. We think that the semis continue to move higher. Wednesday we saw the big tech. We saw NASDAQ 100 breakout from a also a long running in this case a bull flag formation. And so we had Tuesday, Wednesday breakouts are two most important groups from a market leading point of view.

[00:18:17]:
And we think that, we think that’s going to continue next week because again next week is a big week. Next week beginnings for Q4 earnings of course next week beginning on Wednesday. Here’s what we got on schedule after the close on Wednesday Tesla, Meta, Microsoft, IBM all report then on Thursday Apple and Intel both also after the close we get about three chip companies reporting next week as well of size. So yeah next week’s going to be a big week. We believe that the trend is your friend and right now the trend is higher. We believe it’s going to remain higher. We also think the Federal Reserve is going to continue to cut rates. So you got the don’t fight the tape, don’t fight The Fed are still both in your favor.

The Trump 2.0 bull market’s in your favor. Innovation revolutions in your favor and the Trump doctrine as I think that’s good for global equities. By the way, you know we’re long the only global equity that we have a position here is M ETF and we like Chinese tech stocks which by the way had a very good week this week. That’s the only non US ETF that we own. But I’m you know we have not bought a European investment. European ETFs is what we use right for, for the diversification, exposure, good exposure to 20, 30 different companies in Europe. We have not bought a European ETF for 13 years. I’ve not been active in that in that market, just avoided it.

It’s been the right move because European stocks have been pummeled. Compared you look at a relative strength chart of US investing to a European any pick a country now Germany is hitting all time highs. Now you’re starting to see some positives even though their economy looks to be going into recession. But the key point being many of these UK markets, European markets have not done well over a longer time frame and it’s probably time that they do better, you know as they, as they realize the importance of rediscovering free market capitalism. So again we’re very bullish about next week we think these tech, big tech earnings are going to be good. I would look beginning on Monday, Tuesday I would look for the semis to begin leading again. Again they were soft last couple of days. I do not believe it’s going to last.

[00:20:31]:
I think we’re going to see a resurgence in this group. I think the breakout’s going to hold and that you want to be long the semis and big tech and that that is how we’re positioned here. Let’s take a look today under the hood eternals. This is, this is refreshing and it might surprise you. The internals today trifecta positive across the board for advanced decline. Up down volume and new 52 week highs. The lows NYC today positive by about 300 issues. Advanced Decline Nasdaq today positive by 100.

Still positive but slightly positive but it was positive volume today almost 2 to 1 positive volume for Nasdaq on volume. Very very good there and one and a half to one positive for NYSE. And we had what 130 more stocks hitting a 52 week high but hitting a 52 week low. So again a trifecta. Good to see the internals have been broadening and be getting much better after a pretty ugly stretch in December that’s now looks to be behind us and our sector watch today it was pretty much split. We had six sectors finished lower, five higher. Led to upside by communication services of a better 1%. Utilities also up better than 1% to the downside tech given by some of its Recent gains down 1% on the day.

We also saw energy give back some of its gains. Energy stocks today also down 1% as oil lost a little bit of ground in our commodity watch. Gold today continues its run. We’re now less than $50 an ounce away from all time highs. Gold today at $12 an ounce. Working on a new report on gold now. Love this group. Charts looking very constructive.

[00:22:13]:
I think the miners are getting to have an amazing year this year. GDX hit a new high. Title just reminded me gdx, the minority gold miner ETF just hit the highest level that it’s been at so far in 2025. Still feels weird saying 2025, doesn’t it? Writing on a check. Who writes checks anymore, right? But we are in 2025 for sure. Thank God for that. Thank God for the President. We have gold again closely today.

2777 an ounce. We think an all time highs will be hit this month meaning next week gold is going to be on a tear because just because we Have a good president again. Doesn’t mean the money spending is not going to stop. It will, it’s going to happen even more globally. So it’s just that it’s the debasing of the currency. That’s inflation and that’s exactly why you want to own gold. That’s just not going to go away for a long time until we have a reset of some kind. Keep buying gold, keep buying silver, keep buying the miners, especially silver today up 20 cents announced at 3104 an ounce.

Copper today down just a penny a pound at 431 a pound. Crude oil again down slightly, down one penny a barrel. Not a big deal there. 7460 has had a very good run. You heard Trump yesterday also say that we need to double our energy production. Double, we need, we need two times more energy production than we have now for the AI boom for data centers for what’s happening in utilities, of course, as they try to handle this. And what he’s doing is he’s, he’s doing away with almost all, all cumbersome regulations are going bye bye. So the amount of time it’s is very, very good news for us that involved in Lost Soldier oil and gas.

[00:23:59]:
These guys are jumping down about this. I can tell you over in Colorado, Wyoming, talk to him today. Steve Richards, the CEO of Lost Soldier, very excited about this as he reminded us through an email today where he sent the Trump’s order demanding an executive order cutting all these wasteful regulations in the energy business. It’s game on for Trump. He knows that you bring down energy cost, then you’re going to break down inflation. That of course is number one goal. And again, that also is going to bring down interest rates, isn’t it? So, yeah, this, if you’re in the oil and gas business, you’re celebrating right now. And he does want, he does want prices to drop.

I’m hearing talk of 40 to $50 a barrel again. We’re today, all right, we’re at 74, almost $75 a barrel. So I don’t, I don’t know anyone in the patch that wants to see 40 or 50 bucks a barrel. But if they can get the growth that they believe they’re going to have at 55 to 60 dollars a barrel with the margins they have now, no one would complain. And so I think that’s what we’re going to see here. But again, drill, baby, drill. That is, that is, that is about to be well underway. Natural gas today, by the way, been on a Good run as well.

Again, these, these, these, these data centers, they use nat gas and they will start using a lot of nuclear, which is why we like these small modular nuclear reactor companies that we have a position in and we think the future looks incredible for those we like smr, which is the new scale. I always forget the name. New scale Power. SMR is a symbol. It’s been on a good run here. Again, small modular nuclear. Nuclear reactors is also going to be another part of Trump’s master plan here for bringing down cost and increasing production for all forms of clean energy. Trump even talked yesterday about more coal.

[00:25:56]:
Clean coal, he calls it. And of course there is. So we got rid of the insanity get now common sense has returned and we can all celebrate with animal spirits, which are fully returning very quickly. That’s going to result in GDP growth, we think over the next 12 to 18 months. I think it happens this year, we’ll get GDP growth of more than 5%. The markets are not expecting that. These corporate earnings models are not expecting that. And we think they’re going to be wrong.

We think it’s going to be an amazing year for corporate earnings that’s going to continue to propel the stock markets higher. What else today? Bitcoin, again, so much in the news here. How can we cover all this is happening? Trump signed an EO yesterday to create a commission to study and to, to really to lay down the law. What are our rules and regulations going to be about Bitcoin? It can’t just be the Wild West. He’s exactly right about that. But what everybody’s excited about, of course, is setting up the strategic reserve for bitcoin. And that’s going to happen. What’s interesting, also there was a quote from Larry Fink, BlackRock CEO, that he said they were in a meeting and with a sovereign wealth fund.

Okay. He didn’t say which one, but that sovereign wealth. Their question was, did we start with a 2% position in Bitcoin or a 5% position in Bitcoin? Now, if you understand what that means, with the trillions of dollars that are under management at these sovereign wealth funds around the world. Okay, Norway’s is the biggest one, like $1.4 trillion in size. And they’re so, I mean, you’re looking again, many, many, many trillions of dollars in under management sovereign wealth funds. If, if Larry Finks, Larry Fink said if they’re all having this kind of conversation, then bitcoin’s going to 5000-006000-00700,000 and he’s exactly right, of course. But what’s interesting about that is, and we look into this after Larry Fink said that we cannot find a single sovereign wealth fund that’s filed any paperwork admitting that they own any bitcoin. So that means this door is about to open, and it’s going to be a groundswell of massive levels of buying a bitcoin.

[00:28:17]:
So the dips, I don’t think will last long. We saw in this week, you know, back around 100 now, and we’re back to 105,200 now. But we think the next parabolic move higher is nearing again. Our cycle high is now 350,000 for this move. We think this year bitcoin will hit $200,000 again. Right now, last trade, 105,200. All right, folks. Hey, that’s it for the day.

Hope you had a great day and even better weekend. We’ll see you back here next week for the big earnings week coming our way. And we think again, continuation of the big group higher in the markets. Trump 2.0 bull market. Thanks, everybody. Have a great weekend. Bye.

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Time Stamps

00:00 Skepticism Towards Big Dollar Deals
06:04 Resilient Consumers Fuel Bull Market
07:19 "Housing Crash Fears Unfounded"
12:05 "Trump Mandate: Free Market Revival"
15:35 Market Caution Amid Tariff Concerns
19:42 "European Stocks Poised for Recovery"
21:06 Positive Market Indicators Persist
26:23 Corporate Earnings, Bitcoin, & Regulation Highlights
27:13 Sovereign Wealth Funds Eye Bitcoin

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