In today's episode, Kip examines the current market dynamics amid political shifts, emphasizing potential opportunities driven by the Trump administration's bold policies. He also discusses misconceptions about tariffs and their actual economic impact. Finally, Kip covers contrarian investment strategies and a bullish future outlook. Tune into today's podcast to learn more.

Is closed. Good Tuesday afternoon everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Gonna talk today about a lot of things that have to do with the Trump administration and what’s happening here. Look, it’s no secret that the get Trumpers are out there again. Although I don’t think it’s as bad as it was in the first go round, but it’s clearly happening. I can tell you this as well.

Having come from Wall street, know this group pretty well. I would say more than 80% of the wall street gurus. This includes the hedge funds, this includes that entire world, analysts, etc. They’re liberal, they don’t lean left, they are leftist and they are not fans of Trump. So a lot of the panic, and as I’ll show you in a minute, we are getting true panic now in the market, which is great, which is when you get really dependable bottoms here. Okay? But I think a lot of the panic is coming from this because if you watch any financial media or if you read any, you’re seeing the same thing. All the tariffs are going to get us right. Tariffs are going to slow the economy down.

Kip Herriage [00:01:05]:
Tariffs are going to cause inflation. We’re seeing exactly the opposite of this already. We’re already seeing the opposite of this. Okay? But we are going through, I think it’s very clear the United States is going through a complete metamorphosis. That’s just the word that I use this morning in our morning letter. Going through a metamorphosis both politically and economically, culturally as well. This is Trump doing things very differently than our previous state backed rulers have done. Matter of fact, this is even a very different Trump than we saw in 2016.

This is a Trump that is very grounded and not just grounded is American first beliefs, but it’s surrounded by always Trumpers instead of never Trumpers. And he’s moving forward unapologetically. We’re seeing it left and right now. I just saw the news break a minute ago that previous FBI director Jim Comey is now under investigation by the Department of Justice for his, they call it honey potting trying to get Trump in his 2016 presidential campaign. Tyler just told me that they’re now arresting NSA employees for shredding documents. And of course, you know, adding, adding cash. Patel as the head of the FBI, along with Dan Bongino, the new deputy director, I think that there’s no question that there’s going to be an attempt to really clean up our government, get rid of the Deep state. And again, that’s not a risk, that’s not a risk free environment, you know, because when they’re cornered, you know they’re going to fight with everything they got.

So look, this is what we get with Trump and I think this is, this is all what we wanted to see. We want to see this corruption, Justice Department, FBI, Department of justice, the deep state that has been infiltrated, frankly, by, by people that don’t have our best interest as Americans, don’t have our best interests at heart. This is very, very clear since, since 9, 11, this has been building and getting only worse. So this is not a risk free environment. But I’ll tell you the truth, as I told my wife last night, I would rather suffer through some financial losses. And we are seeing, you know, the market get hit a bit. Tesla got hit slammed today, you know, Musk, Doge, you know, they’re screaming left and right, sell Tesla, sell Tesla. But I would rather go through a period of this, and I frankly do not think it’s going to last long again.

[00:03:26]:
I’ll get into that more in just a moment. I’d rather go through a period of three months, six months. It takes a year to have some slight financial losses because we don’t think these losses are going to be big. Again, I’ll get into that more in just a moment. But I don’t mind having some short term losses if it means we’re going to take our country back. And that is the track that it looks like we’re on. And of course, Doge is just going through the shredder and exposing really these, these frauds that work in our government. I mean, look, as Trump’s press secretary said today, if you’re offended by having to send in five bullet points of something you’ve done in the previous last week, then you shouldn’t have a job in the first place.

You are accountable to the American people because we pay your salaries. This is so simple to understand. And the public is behind this, by the way. So Trump’s on very firm footing. Again, this is short term, get Trump kind of an attitude. And just to back it up, I wrote this up last week as I researched this, because we have a history here of beating the markets and we beat the markets 18 to 21 years since I started the VRA in 2003. And frankly, one of the ways we’ve done that is by being contrarians and a slam dunk for me. This is taught to me by my first mentor, Ted Parsons.

I thought he was crazy when he first told me this. But a slam dunk to being right about the economy or about the markets, but specifically about the economy, is whenever you see more than 90% of the economist agree on something, they’re wrong. It just know you can take the flip side of that and it doesn’t matter what the issue is, I’m taking the flip side of it and I’ll be right and they’ll be wrong. That is the history of mainstream economists and economics, because they are groupthink. They all think and act together. They have to stay in line. If they don’t stay in line, then they’re essentially kicked out of the profession, if you will. They’re no longer, no longer sitting at the cool kids table.

[00:05:28]:
And this is what’s happened across pretty much every industry, certainly every sector of government in the United States is, it’s all group think and you must think one way. And if you don’t think that way, you can’t be part of our group. And so look, people have, they have bills, they got to take care of their families. You know, you have a career, you build a career now saying, you know, like, I better tow the company line because what am I going to do if I don’t do this? And so I can tell you straight up that when these economists all agree on something, they are flat out wrong. So why do I bring this up today? Because again, we learned this last week, more than 90. This is well sourced. More than 90% of economists believe that tariffs are bad. More than 9% of economists believe that tariffs will drive inflation.

More than 9% of economists believe that tariffs will be bad for corporate earnings and hence the stock market. So again, this is what the mainstream is putting out there. This is what the Congress are saying, folks, I’m just going to tell you, I can’t look over a 3, 6 month time frame. Who knows? We live and work in a world where we want to be right year to year. And I think that what we learned from Trump’s first term was that his tariff policy did not hurt the economy at all. The economy was rocking and rolling until Jay Powell started hiking rates eight straight times. And then we had the Christmas from hell in 2018. And then of course, we had the pandemic.

So look, I think that we know on tariffs they don’t cause inflation. We saw that in Trump’s first term. Over his four years in office, inflation averaged 1.9%. I would not call that inflationary, would you? Well, what do we see now happening? And again, we’re Seeing it in a very short term nature. The 10 year now 10 year yield is down to a 4.29% yield below 4.3%. This is the lowest since middle of December. And this is not what the economists said said happened. What it they said rates are going to go higher.

[00:07:37]:
Tyler just told me the CME Fed Watch tool which just last week had only one cut on schedule and that was like in December all of a sudden now the CME thwart Watch tool is up to three rate cuts and a 53% chance of a rate cut taking place in June. So again we’re seeing it in real time how wrong the mainstream world of economics can be and has been. We’re seeing the same thing by the way in the US Dollar. That’s another of our macro calls. The dollar has fallen pretty sharply from early 2025 just like rates have. And that’s another macro called that the US Dollar will continue to move lower. That is what Trump wants. That is what Scott Best and wants.

Yes, they believe in a strong dollar policy, meaning that they don’t the world, the dollar needs to remain the world’s reserve currency. When you see them talk about a strong dollar policy, that’s what they’re talking about. But if you read all the insiders papers on what they really want, they want the US Dollar to go down versus global currencies which have been manipulated against us for forever. This is part of the, if you will, the tariff policy that Trump has because look, we know that China has manipulated their currency, the yuan, forever. Same thing is held true also throughout Europe and, and against the US Dollar. And that’s been another form of attacks against Americans. So it’s a weaker US Dollar, not a weak US Dollar, but a weaker US Dollar combined with lower US Rates will have an extraordinarily positive impact on the economy and certainly on the stock market as well. So that’s, you know, again we’re seeing this play out in real time and this hasn’t changed our view at all.

We may remain extremely bullish on the market. Short term shakeouts do not impact that view. Matter of fact, we’ve seen this movie before, haven’t we? That’s here this morning or this afternoon with our folks. You know, we’ve now had seven instances since the bull market started in, in just October 2022, we have seven cases where the S&P 500 has pulled back to its 100 day moving average. And that’s where it is now. All right, we’ve had seven pullbacks to the 100 day, those were all met except for two. They were all met as a buying opportunity and then we had the other two. We had a pullback to the 200 day but we’ve not been below the 200 day.

[00:10:15]:
And again I only hit the 100 day moving average seven times. So we’ve seen the movie before. We’re also seeing an extreme amount of fear. This is something that I think smart money investors really key on here. The fear green index today started okay at a 35. It hit 22 by mid morning. All right, that’s extreme fear folks. We had all time highs three days ago in the SP 500 and NASDAQ 100 and we’re already down to a 22 or extreme fear in the fear and greed index.

That is bonkers. It’s just I, I don’t know that I’ve seen anything quite like this before. And no, that does not mesh with reality. That’s just not how the markets work. It’s another sign that of how early, how young this bull market is. It really is. And also today another sign of a bottom here. The Trend or the arms index hit a high this morning of 2.28.

It’s a combination of using a volume plus advanced decline on the NYSE and when you have a high reading like this, anything over two, it represents a near term bottom. That’s been the case over my career. Frankly don’t follow it much anymore because we don’t get many of these signals. But when I saw the fear Ingredients was down to 22, I checked the AR day of the trend at the ARMS index and I saw that it again hit a high of 2.28. That’s just a flat out buy signal as it just tells you things are too cheap and they’ve gone too far. Also the put call ratio today was highly elevated, not extreme so but traded much of the day in the high 90s so we never broke a one. But still this is definitely a lot of people starting to buy. Puts here again three days away from all time highs.

[00:11:58]:
I just have to repeat that again and also, and I’ll cover this more in a moment but you know again when the market at one point the NASDAQ was down almost 400 points, closed down 260 points one time the Dow Jones was down over 100 points, it closed up 159. But during the entirety of today the internals which you know, advanced decline, volume and new two guys lows, we tracked this very carefully and closely. They just never, they never Flipped negative. They never, they never were highly negative, I should say. And they finished very strong as you’ll see in just a moment, compared to the losses we had today. So, you know, we’re seeing signs of panic. We know the left is in panic mode. The left, left would love nothing more than a Trump bear market.

They believe if you saw Jim Carr, James Carville, his long time leftist, a little bit of a crazy guy from Louisiana, I’m sure, you know I’m talking about, I actually had a chance to meet him many years ago. Pretty, pretty nice guy face to face. But you know, he’s now screaming at people, oh, it’s over. The Trump presidency is all over. We’re going to take the midterms. It’s all over. This is, the left wants this desperately to be the case. So it’s a bit of piling on.

But again, we’ve seen this movie before and I will just tell you that from the birth of the bull market on October 13, 2022, the smartest play of all has been buying the dips. And, and we’re not yet at heavily oversold or extreme oversold because we just hit all time high three days ago. So we’re not there yet. But the markets now have gone from being heavily overbought, which was the case just last week at all time highs, to now hitting oversold levels. So the signs of panic selling are there also today. If you notice, gold dropped 50 bucks an ounce. Now why would gold fall $50 an ounce just because the NASDAQ is down 400 points? Why does that make any sense? It’s just another sign of risk off. It has nothing to do with anything except it’s a risk off mood.

[00:14:01]:
And that’s again another sign of panic selling. Gold did finish well off those lows. And as we’ve been telling you also both gold and the miners have been turning at extreme overbought levels. Actually our most, most overbought levels. We’re not, that’s not a sell signal for us by the way. But it’s just, it’s just a signal not to buy here. You know, let, let the overbought levels cool off some. As with the broad market last week, again last Wednesday, we hit extreme overbought levels in several of our major indexes.

So these kind of shakeouts are very common. And again with the, with the get Trump mood that’s out there, you know, they really, really, really want to try to take this guy down and they’ll do whatever it takes to make that happen. So we Think that’s what it is. Also, I’ll tell you, we shared this with our folks this morning or this afternoon. Rich Ross, who we talk about a lot here. Rich Ross is the quant at Evercore. Really good technician, does great work and we tend to see things the same way. And when we agree like we do now, then it just makes us that much more confident in our views.

Rich Ross put out a piece this afternoon, said that we’re in the ninth, in the bottom of the ninth inning of this momentum unwind. And the bottom is ahead before the Nvadia. Excuse me, Nvidia. Nvidia earnings tomorrow, of course. Nvidia announces earnings tomorrow. After the close. They’re very late in announcing earnings, but of course, a lot of, a lot of eyeballs on that. Nvidia was down today, right? At about 2% on the day.

[00:15:35]:
So Rich Ross is calling a bottom in the market. He’s calling a bottom in the semis, a bottom in tech. He likes Tesla here as well. We love Tesla here. Just as a reminder before I move on, look, I’ve owned Tesla since 18. Finally recommended the VRA at 174. Stock got away from me, you know, it just skyrocketed. Waited for a pullback.

Recommended at 174 today, closed at 303, but the high was 488. Right? That was after the election. Stock went on a parabolic tear. Right. So I don’t like seeing this decline. But everyone’s talking about EVs are dead, Tesla’s, Tesla’s out of favor. Now with the left, people are taking their Teslas back. No one’s buying their Teslas.

That is a story that is only about 10% true. This is a transition year for Tesla. Number one, they’ve got a new Model Y that just came out. So a lot of, a lot of Europeans, a lot of Asians were waiting for the new Americans waiting for the new Model Y to buy. That’s one of the reasons first quarter sales had been lower. But as Musk said on last earnings call, this is a big transition year for Tesla. This is a year they’re no longer an EV company. Of course, we’ve never really thought they are, they’re a tech company.

[00:16:44]:
But this as Elon Musk had his earnings call and he made, he made this point very clear over about a 20 minute speech, said, this is the year we transitioned from being an EV company to an AI company. And so this is the way we believe investors should look at Tesla. It’s the way we’re looking at it the way we’re advising people to act on it. This is a gift when, when the stock that you love like this, right that is transitioning instead of an EV company to an AI company is going to focus on AI. Going to focus. Of course the new Cyber Cab is going to roll out this year. It starts in June 1st and as I understand it, I think they’ve announced June 1st. I think that’s the date In Austin we know that FSD Full self driving Unsupervised is going to be out by the end of this year.

I drive, I use it all the time. Very rarely do I have to engage and disconnect from fsd. It is just stunningly good. How good? And I don’t even have the most up to date version. My particular model, I have an model S is only on what is it? 13.12. I forget exactly. It’s like 12.8. The, the most, the most current update is 13.4 I believe.

So I’m not even at the most current update. And they do all these software updates of course by just buy up, you know, do you want to upgrade your via app? You know you just, you just, you just, you just give up permission on your app and then overnight while you sleep, sometimes you take an hour or two for the software update really is remarkable and you wake up to your semi new Tesla here with all the new bells and whistles. Very cool stuff that they add by the way. So again cybercab is coming in June and then will be all over the place next year. FSD unsupervised in Texas and California by end of this year, in every state next year. So you see right there, not including the other things, which one of the Vickies of course is Optimus, the robotics division. By the end of this year their goal is to have at least 10, up to 10,000 Optimus being used for useful things as Musk said in Tesla factories. 10,000 and then after this year it will grow by a multiple of 10 every year.

[00:18:54]:
So 10,000 this year, 100,000 next year actually hitting the market next year, then a million after that, then 10 million and then 100 million. So you can see where this thing is headed. And this is the future of the company. It is robotics and it is completely autonomous driving. And I haven’t, we haven’t even talked about their energy storage and battery division. Have you talked about their AI work that they’re doing? So there’s a lot, there’s a lot to Tesla as we’ve said now for some time, if you have to own just one stock, the innovation revolution make a Tesla, it’s the one. And when, when your stock goes on sale, you know, as a, we call it a Kmart blue light special is, this is right here. That, that’s when you buy.

You’d have to buy low so high. It’s not easy. Everybody loves to buy at the top. That’s easy, right? Buying when a stock gets hit like Tesla has, even though it’s still up a lot from the election, even though it’s up a lot from where we recommended it. But you know, if you just bought it, say 400, 450 or whatever, you’re sitting here at 303, it doesn’t feel great. It feels like you made a mistake. You did not make a mistake. You might have been a little early, right? Or bad things do happen.

So look, this is when you take a look at your portfolio and you go, you know what? I own this, this and this. I got cash. Here’s my cash level. I need to rearrange my portfolio. Got to rejigger my portfolio a little bit, rebalance it and take advantage of what’s too cheap. And that is Tesla at this price. So again, I think it could be a little rocky over the next, let’s say three months. It’ll be a very volatile stock.

[00:20:23]:
I don’t care. We own this stock for the long run. Again, our four year target is that this stock will be $2,000 a share. And I think we’re going to be on the low side because robotics and fully autonomous driving, because no one else has got this massive like Tesla does. Every car company in America and on the planet is going to have a distribution deal, a software licensing deal, if you will, with Tesla for autonomous driving and the robotics. Just forget about it. Okay? So, you know, again, that’s the future of Tesla. That’s why we like it.

Just want to walk you through a little bit. I don’t like it. I don’t like to see this happen either. But I did add to my position today. I bought more at 320. I thought that was a steal and it dropped to 298. So again, we’re long term in this stock as we are with a lot of our positions here. Okay, let’s take a look and see what else I missed here today.

All right, I think we covered most of it here. Yeah, Nvidia earnings tomorrow at the close going to be, going to be a must watch. You know, again, the stocks haven’t hit so much is now this is the kind of time where you see even if they were to have bad news, we don’t think they will. We think their earnings are going to crush. Again, you start to see now this is when these stocks start to bottom, you know, because they’ve already filtered in any bad news. If that were coming, okay, and this not with don’t watch the news. That doesn’t matter. It’s the stock’s reaction to that news.

[00:21:47]:
And again we see fear in this market that is a reliable indicator of a near term bottom. And just as a reminder, we are aggressively long this market for the long run because this is a generational bull market that is just getting started. If you’re new to us here, our target from the October low actually before that we wrote our book the Big Bribe and published it. Our target was the Dow Jones 100,000 by 2030 and NASDAQ 40,000 by 2030. We could even be low on those numbers. So we’re going to give Trump a little more time. He’s only in his first month and the haters are going to lose once again. Let’s take a look under hood today.

Again these were not bad numbers at all. As far as the internals we had an advanced decline. Nyse had had 500 more stocks advanced then decline. You know, again Dow Jones was up 160 points today but S500 was down almost a half percent. These are very good internals for that to be the case. Again the big loser today was NASDAQ down 1.3%. The semis today, by the way, they opened with gains but they did finish lower. Also down 1.8% on the day Nvidia.

Big, big day tomorrow. Advanced decline for Nasdaq was negative but only by 700 issues. Again this is Tom, this is, this is not a kind of a fear based sell off that we saw in the internals. Same thing with volume. NYSE volumes today was 56% down volume. NASDAQ a little bit worse, 66% volume. And we didn’t have about 300 more stocks heading into 52 week low than hitting a 52 week high. Yes, this was a negative day for the internals, but not at all like the fear that they were hearing which is a visceral fear that’s out there in our sector watch Today we had, what is this? Five sectors finished higher, six finished lower.

[00:23:36]:
Not much either way, tell you the truth. Consumer staples up 1.7%. Real estate up 1% again, rates moving lower. The 10 year helping quite a bit to get the rates down. Very, very bullish. Very, very bullish for housing as housing stocks were up today. And HGX, the housing index today finished with gains of 2.4% today. Again, Trump is focused on this.

Scott Besant, Treasury Secretary focused on this. Rates are going lower. INFL is going lower. This is what they’re committed to. The I’m just telling you the 90% of economists are going to be wrong. I will, I’m going to guarantee that. I don’t like to guarantee things. I’m guaranteeing you that because in my career anytime you’ve had the vast majority, I think 9% would agree is the vast majority.

Anytime the vast majority of economists say one thing, especially on something like this, it’s a bit of a controversial issue. It’s group think and they’re wrong. It’s group think and they’re wrong. To the downside on sector watch today, communication surgeons down one and a half percent. Energy also oil was down today. Energy down 1.4% on the day. Commodity watch today again, panic selling in gold. Why would you panic sell gold? You wouldn’t except gold has had extreme or bought levels.

[00:24:52]:
So a bit of a sell off is normal here. Gold was at one point down to $50 an ounce, finishing down $34 an ounce, down 1.1% at 2928. Silver today down a bit more, down 1.7%, 54 cents an ounce at $32.05 an ounce. Copper today up 3% on the day. As Tyler reminded me, Trump is now proposing tariffs on copper imports and so that would create domestic demand for copper. Up 3% on the day at $4.70 a pound. That’s a new, that’s a new hyper copper that’s been. Yeah, a copper essentially going parabolic here.

Let me pull up a chart. Recent chart. Yeah, that’s a new high for copper. Certainly if on the that’s a new nine month high for copper. The annual high for copper was 4.99 a pound. Also in our sector watch today, excuse me, commodity watch today, one second again, crude oil today finishing lower down $2. Excuse me, down $1.58 a barrel at 6912. That’s down 1.4%.

And finally the day bitcoin again, another risk off asset. You know they Bitcoin and NASDAQ tend to trade together if you’ve noticed that they are momentum plays. And so this is pretty much expected. Bitcoin today already seeing a major recovery move higher delay loan bitcoin today was 85,500. It’s already back to 89,161. So again, we love bitcoin on this pullback. Like Tesla, again, like a lot of our core positions here, anytime it goes on sale, we are buyers for long Bitcoin. Since 28,800, we have gains of over 200% and we use these oversold dips.

[00:26:39]:
That’s what this is to add depositions. We own bitcoin and the ARK ETF for a bitcoin which is symbolized arkb. And again, we’re long term investors here. We believe bitcoin’s gonna hit 200,000 by year end. Our stock go high, which is like a three, four year high at this point. Actually three and a half year high. Our estimate is for 350,000 Bitcoin. These dips are going to keep getting shorter and shorter because serious money is not like sovereign wealth funds now starting to come in.

And yes, folks, we are going to have a bitcoin reserve, a strategic reserve fund in the US These are all coming. Takes a while to get the legislation just right because these do have to be passed by Congress. So you got to get the work done in advance. That’s what they’re doing. Again, keep using these dips to add two positions. All right, folks, that’s it for the day. Hey, always appreciate you listening. Hope you had a great day and even better night.

We’ll see you back here again tomorrow after the close.