In today's episode, Kip dives into the latest market action, breaking down why minor pullbacks are nothing to worry about. V-shaped recoveries, like we are seeing now, tend to be magnets for fresh all-time highs. He also unpacks the latest fund manager surveys that provide another example of the real power of retail investors. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Got some very interesting things happening here in the market. We finally had a bit of a down day today. This is nothing to worry about. Number one, in our opinion.

This is a V shaped bottom and we are going higher. The market’s got a magnet to it and it’s a magnet to all time highs, which is not that far from here now and then from there, higher again. The analogy we’ve been making is to the 2020 pandemic bear market. That’s what’s happening here. Remember when that bottom was in, in late March, we were off to the races. It was the V bottom. Sure, we had a couple of shakeouts there, but it was straight higher. Back to all time highs in August.

After that, it just sped up. I think that’s exactly what we’re seeing here. We’re back to folks, we’re back to where we were before the tariff insanity. Okay. Remember how bullish everyone was then, right? It was the AI boom, as we call it, the innovation revolution, the roaring 2000 and twenties. Trump is back in office, pro growth administration, laissez faire government with, you know, government is more friend than foe. All of those trends, all of those themes that we were talking about then, well, guess what, they’re back because, you know, we had another like 2020, another four week shakeout. You got everybody super bearish.

[00:01:23]:
Are we not seeing this in the data? Institutional investors, they are. This just came out from bank of America in their global fund manager survey. Fund managers, you probably saw this. Fund managers are the most underweight equities they’ve been since May of 2023. And this is, by the way, if you just, I’m just kind of eyeballing this chart. This is in the 90th percentile of the most underweight that they’ve been going back to when bank of America started doing this, which was like in the mid, like mid-90s. So this is a perfect storm for higher prices because retail, the Mrs. Watanabes of our era, as we’ve called it, that supported this market all the way, they did big time again yesterday.

You remember we had the Moody’s downgrade and one to one and a half percent lower open and that was it. Pretty much from first tick, the market was going higher because according to JP Morgan, retail investors came in and bought $4.1 billion worth of US stocks in just the first three hours of trading yesterday, and that’s why the lows were in. And now we’ve got, you know, again, institutions, fund managers that play catch up, not only covering the shorts, but now having to go long. There’s a lot of fuel for the fire here and there’s so many other things happening that are, that are bullish. We’ve had at least two breath thrust. What was the. The, the, the, the, the. The Whaley breath thrust.

[00:02:50]:
That’s the most recent we had. And for, for that, we had the Martin Zweig, the Zweig breath gains of like 14% to 25% over six and 12 months, with the markets up 100% of the time. So look, if we know this, these AI programs know this, right? And they are, they are aggressively buying every dip. I am kind of surprised the market even finished lower today. But when I tell you the next part, you won’t be surprised. The put call ratio today was extraordinarily low. And, you know, again, I think today it finished. Give you exact quote here.

Put call ratio today wrapped up today at a 0.77. Hit a low during the day of 0.69. You know, that’s just not extraordinarily bullish, but it kind of is. These are, this is when you do have a shakeout, when you have just too many people that are getting optimistic. But is it going to matter? I don’t think it’s going to matter here. Trump has learned a lesson here. When Trump learns a lesson, he pivots. And that.

[00:03:56]:
That problem is no longer a problem. I think the tariff thing, we might still have a hiccup or two, but by and large, that problem is gone. The other problem is what’s happening in interest rates now. That, that, that, that could be a black swan. We talked about this yesterday. That is the one thing that could be a black swan, but we don’t expect it. Matter of fact, we believe rates are headed to not lower, but significantly lower going forward. The Fed’s gonna run out of excuses for this, right? When they see inflation is just not popping up, they’re gonna run out.

Now their next excuse will be, oh, the economy’s too strong. That’s a good problem to have right there. Cause then we get back to our theme again of the innovation revolution. The drawing 2020s, the V bottom and FIFO. And again, semis have been leading. Again, this is all textbook bull market action. We’ve seen from the April 7 lows. The semis have led.

[00:04:50]:
They’ve essentially gone parabolic on the chart. Relative strength chart of semis, S P 500. And at the same time, we’ve also seen Tesla and Nvidia fifo, first in, first out. They also bought them on the same day as the market did and have led again parabolically since then. So they were first in again. They were first to break down Tesla in December, and then Nvidia broke down in January. So long before the broad market did. They started, they were first in and now they’re first out coming the other way.

So there are so many reasons to look at this market and say, you know, these dips just retail’s been right, they retail has got this thing right the entire time. And this is why this is one of our five big broad megatrends. It is the millennial generation. When Todd and I wrote this book and we spent a year researching it, I’ve said this many times, but we were blown away by the, by what we are learning about the millennial generation because we’ve been lied to about millennials the entire time. You know, I’ve said this, I’ve also told this story many times, but both our boys are millennials, Tyler and Sam. And we knew all of their friends growing up, right? They’re always at our house. That’s the way we wanted, right? Make sure we bought a house with a, with a nice pool, put in an outdoor kitchen. We wanted all their friends here so we could keep an eye on them, right? And I got to know them pretty well.

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I also coached, you know, basketball. And so, you know, I know these kids from many different walks of life. And what I knew is that these kids were incredibly smart. They’re industrious, they could find the answer to any problem in about five seconds because they’re born into the Internet. And now as they’ve gotten older, they’re loaded. They’re in the process of inheriting 80 to 90. The numbers keep going up because assets are increasing in value that when we wrote the book, they were in the process of inheriting 72 trillion. That’s now up to 80 to 90 trillion dollars that millennials are inheriting.

And they just so happen to know what to do with that money. They’re smart, there’s risk takers, but they understand how to evaluate risk. And they don’t like losing money. And they love equities, they love bitcoin crypto, and they love housing. This is where the leadership is. Because we’re also in an inflation driven environment because of unbelievable out of control money printing. There is no other reason that inflation has risen except for Money printing, of course that applied during the pandemic as well with both Trump and Biden being, being at fault for that. But the key is this is why inflation related assets, things that we can invest in besides housing, equities, bitcoin, pretty much any investment class that’s got credibility tied to it, they’re going to continue to rise folks.

[00:07:42]:
And the market’s telling us this. We’re now back again to our major themes of innovation, Revol, pollution, AI boom. We’ve got five of these from the big drive. They’re all playing out. But again we went through a month, month and a half freak out for the markets because of the tariff thing and now, but now I think that’s over. You know, I really think most of that’s over but people have yet to come back to being mega bullish. But that’s, that’s happening. The train has left the station.

This is why these dips will continue to be very light. Again today the Dow, we were down 1 point today. 250 points in the Dow finished down 114 points. Nasdaq was down 72 points. But the semis today only down 310 of 1%. Again semis have been leading Nasdaq. The Nasdaq leads the raw market. That is tech bull market action.

Russ 2000 actually finished higher on the day, slightly higher. And S P 500 again these are minor losses. You’re down 3/10 of 1%. Again our only concern is rates. And if you look at what’s happening in Japan, you know, unless you’re really naive, you can’t think that doesn’t matter. That matters. They’ve given up yield curve control for now. I think that’s a short term experiment because what they can’t do, they cannot allow interest rates to get out of hand with the amount of money again you got.

[00:08:59]:
The bank of Japan is the largest investor, largest holder of both equities and bonds in Japan. They can’t allow this to get out of control. This is a surprise, surprise. It’s a manipulated and a controlled economic experiment. And it’s not just in Japan. They started it, they were the first to use quantitative easing. And then of course we, we really, we really poured it on starting in 2008, 2009. But point being, again, I think this is a fantastic looking market.

We see leadership where we want to see it and we are, you know, we’re definitely in buy the dip mode here. I also wanted to spend a minute here before we get to some of the internals. That kind of thing. You know, we talked yesterday about this article from the ECB of a coming short squeeze in gold. And we, we focused on that this morning in our letter. But the real leverage, folks, is in the miners. You know, in Muddy’s letter, we had a chart focus, a sector focus, and it was on gold and the miners. As we’ve talked about here.

[00:10:08]:
You know, obviously gold has gone parabolic. The miners have been the number one performing sector of the market this year. So the miners are starting to get legs. But that’s just a process that’s only getting started. You should hear me on this, okay? I know this group pretty damn well, right? In 2003, in our second ever VRA letter, I recommended gold and miners. A gold was like 353, 75. Silver was five bucks an ounce. And we, you know, GDX did not exist at the time, so we used individual miners.

Newmont was the first one that we recommended, and we absolutely crushed it. Yeah, we had the, we had the shakeout in 2008, 2009, the financial crisis, but we’d already sold by then. You know, we were actually short the market going into that, so we were positioned well for it. And then in, In December of 2009, we went back aggressively into the miners. We bought Ivanhoe mines, became Turquoise Hill. We bought ivanhoe Mines at 75 cents within 14 months. We sold it at $23 a share. So we, we, we absolutely crushed the market after the financial crisis.

[00:11:11]:
I know this group well, maybe not, I’m not the ultimate expert in this group, but I don’t know. There are many people that have made more money in this group than we have, and we have the evidence to, to prove it. And today we had another very good day. As I wrote this morning, I, I, there are at least five major reasons that gold’s going to take out $5,000 an ounce inside of the next couple of years. Right. Our target year end is $4,000. Now, it has been since the beginning of the year. But the real leverage is in the miners.

And I’ll make this, I’ve said this many times, I’ll say it again, this bull market in precious metals won’t really kick off until the miners start going crazy. They’re starting to. Right. We had one today. Vista, right today was up 16%. Hey, we’ll take that. We’re now up 278% in Vista Gold. But again, it’s just getting started.

[00:12:00]:
Of course, our others is Snowline Gold along with, of course, physical gold and Silver Physical only always. But again this is what happened. I watched this happen. It reminds me there reminds me of just after we recommended because gold started moving and then the miners started going like 2004 and then boom, look at the chart, you know. And then we had a, a parabolic, a vertical move. It lasted years. This is that bull market. We think this is the, this is the bull market for many reasons.

Again, at least five reasons that gold is going to continue higher de dollarization. Right. ECB warning of a short squeeze because of phys obviously nonstop money printing. There’s three biggies right there. And you know, then you go okay, who’s buying it? Well, it’s the ultimate smart money. Central banks and governments are the biggest buyers and had been. This will now be back to, back to back years that they had been buying at record levels. But the miners, even though they’re starting to go, have yet to really take off yet.

[00:13:00]:
But so when that happens folks, I feel we’re on the right on the cusp of that happening. Okay. And it’ll be the junior miners because they’re so deeply undervalued. Just again take this to the bank. Could I be wrong? Yeah, maybe I’m not. This is going to be an amazing run in physical gold, silver and the miners. But our focus really is on gold and the miners. Of course.

You know we love bitcoin as well. Bitcoin today closing, trading back over 106,000 right now that breakout past 109 is coming. So look, we’ve made our case very well. I don’t understand people that think they have to shit on bitcoin or gold. Why not own both? That’s what we do here and for completely different reasons that we talked about yesterday. But both should be a part of every portfolio. We use gold as our savings. So we don’t save in fiat.

We’ve recommended since 2003 we save in gold. You got to keep some liquidity on hand, of course but for your long term savings that you want to be conservative with, use gold. The data on this is just, it’s unbelievable, right? 100,000 in 2003 is worth 700,000 in gold right now. That same 100,000 in fiat is worth $67,000 both after inflation. So again we own gold for that reason. We own bitcoin. Again, it’s a risk on asset. It’s a new asset.

[00:14:23]:
The best supply demand story of all time. This is an incredible time here to be alive because of what’s happening with technology and with the just new Industries like space exploration, space tourism. The growth that’s going to come from this, I think people that are all worried about, well, AI is going to take all these jobs. No, it’s going to create far more job, it’s going to take. We’re going into an absolute boom time. This is what Cathie Wood has gotten right, even though, you know, we might have some, some differences with them on their stock picking abilities and their trading abilities. But what they’ve gotten right is the macro story. And you know, when I first read this and read and you know, did a deep dive into Cathie Wood’s work four or five years ago, it just hit me as being true.

And what they’re saying now, and they’re sticking by this, I’m glad they are, they should, is that we’re going into an era of extraordinary growth for the economy. They’re targeting economic growth, GDP wise of more than 10% a year for like 20 years now. We haven’t been that aggressive but we have said we expect it to have GDP growth of better than 5% by the end of this year. I think if the tariff thing had to happen, we’d be on our way right now. But again, I think that’s out of Trump’s system to a large degree. I think he’s made that, I think from listening to him, listening to Scott Bessant in recent interviews, I think their focus is back to growing their way out of this problem that might come with a bit higher rates. I still don’t think it will though. I think we have global disinflation, China’s exporting, deflation.

[00:16:01]:
I think AI is going to bring nothing more than deflation. It’s going to bring costs down for everything that we do. And again, I think it’s a, I think this is, this is the most bullish that I’ve ever been in my career. I remember saying this just before the tariff stuff started. I kind of regretted it a couple weeks later. But again, that was a short term phenomenon and I believe that’s over with. I really think we have evidence of that. And now the administration, again, the most pro growth administration US history, they’re focused on what they should be focused on growing our way out of the problem and then handling things like tariff policy and non tariff trade barriers.

Handle that stuff behind the scenes, do those in negotiations. Right. The public doesn’t need to know about a lot of this because it’s scary. Right. And, but again, I think that’s behind us. We’re extraordinarily bullish here. I think I’ve made that point pretty clear by now. All right, let’s take a look under the hood today again, you know, after the Moody’s news.

[00:17:02]:
You know, the markets have had a little bit of a shake. That’s what we expected, but we don’t think it’s last long. Actually. We’re looking forward to it because we had a couple of positions we need to add some leverage ETFs. We want to add on this pullback should we get much of one. But remember, this is also happening at a time where the markets on the very system have hit extreme overbought. You know, it’s not extreme overbought on stairways. Like we don’t touch anything here.

We’re not there. We are still buying some positions but across the board as far as the indexes go, we are extremely overbought. Again, I think in this kind of a bull market run, these, these, these pauses just are not going to last long. It’s just too much money that’s got to get back in this market. So we’ll likely be taking additional for our very members here. We’re likely taking additional action. You know, I say, I say by the end of the week, you know, we have a, we have a good three day weekend coming up from Memorial Day. I think we’ll be looking to, I hope the market cooperates, gives us that pause, wears off some of the overbought conditions and gives us another great setup because I think this is going to be an extraordinary second half of the year.

[00:18:11]:
I really, this, this feels like, this feels like a very special second half of the year. As, as reality returns to the market about the reasons that we should be optimistic about our future and they’re, they’re almost limitless. That’s, that’s how good things are. Okay, let’s take a look under the hood today. Again, almost like yesterday, almost a mirror image. Very quiet today. The VS decline today, slightly negative for both the nasdaq, nyse. Nothing to write home about.

Advanced decline, slightly positive for NASDAQ, slightly negative for NYSE. And we had about 200 more stocks in 50 week high today than a 52 week low. Those numbers should really start to expand now. Again, good readings today. They are even on a down day for the markets. I guess to tell in our sector watch Today we had eight sectors lower, three higher, but nothing really on any direction. Energy was down 1%. Nothing else happened there to the upside.

[00:19:10]:
You know, nothing again happening. Very, very quiet day, frankly in the market. It’s kind of an inside day in our commodity watch today. Again, this is where the action is right now. Gold and the miners, as I said a minute ago, really pulling back after being the most overbought based on the percent that gold had been above the 200 day going back many years. Right? That’s what happens in a parabolic bull market. You get these kind of runs. But we needed a shakeout.

Well, guess what, we got it. We got pullbacks to the 50 day. They also hit extreme oversold levels on the very system set up a great buying opportunity, a great time to add to positions or you know, put new ones on a goal. Today though, finishing up 1.8% pretty much at the highs of the day. Just kept piling higher at 32.92 an ounce. Silver also up well 2.3%. Even more at 3326. Copper today also had a very good day.

[00:20:04]:
I’m sorry, I was looking at palladium. My bad. Copper today was actually kind of flat on the day at 467A pound. Palladium today by up 5%. Platinum 5.5%. Okay, again this is inflation driven theme. All these AI data centers are going to take a whole lot of all of these metals, base metals, precious metals in them. And so again, this is going to be a melt environment for a lot of different inflation related asset classes.

That’s the key. Crude oil today, West Texas intermediate flat on the day, 6226 an ounce. And then bitcoin. One more point about the miners again, GDX today up 2.7%. So GDX outperform gold today. GDXJ again, this is where the action is going to be. Even more so than the senior miners. Junior miners outperforming again today, up 3%.

[00:21:00]:
Again, this is that textbook feel with the miners are outperforming gold and then the junior miners are outperforming the senior miners. This is, this is the pattern that’s been playing out before the shakeout. And it’s the pattern we want to continue to see. Shakeout. We fully expect that to be the case. Love this group. Love this group here. Following the day.

Bitcoin again, as I said a minute ago, 106,400 last trade. Now we are now just under $3,000 from an all time high. We expect that to happen in fairly short order. It would not surprise me. Matter of fact, I expect to see 150,000 on Bitcoin in a hurry. I think this could be, this could be another melt up kind of move higher in bitcoin. I think we’ll probably see a move to 140 and 150 in fairly short order. And then I think we’ll base there.

And then by year, year end again, our. Our target price target for year end is 200, 000. We we nailed our price target last year and we’ve had a very good run with bitcoin. We’re back in fully long and strong and, and very, very happy to be so, by the way. All right, folks, that’s it for the day. Hope you had a great day and even better night. We’ll see you back again tomorrow after the close.