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VRA Investing Podcast – Kip Herriage – December 18, 2023

Understanding "The Big Bribe" Megatrends. Tune into today's VRA Investing Podcast to learn about the 5 megatrends and insights into various sectors such as small caps, precious metals, and cryptocurrencies.

Posted On December 18, 2023Episode 1299
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About This Episode

Understanding "The Big Bribe" Megatrends. Tune into today's VRA Investing Podcast to learn about the 5 megatrends and insights into various sectors such as small caps, precious metals, and cryptocurrencies.

Transcript

Don’t look back because the market is closed. Good Monday afternoon, everyone. Kip Herriage here with the Daily VRA investing podcast. Hope everybody had a good day. Hope your weekend was great as well. Thanks for joining us today. Going to get to… a lot of days happen and go by where I don’t really watch the news flow, but very much. And there are times where I do that because there’s either not a lot of big economic news that we’re expecting, or because I’m already watching the markets.

If something happens, I’m going to see a trend change real quick. I can find that news, or in this case again, there’s not a lot of news coming out. But more importantly, this market is just going to go higher. And I feel very confident about that. I’m not saying we’re not going to have a little blip here and there, but a very short term bazaar is a short term shakeout, maybe of a day, day and a half. I really think these dips are going to get bought. We’ll talk about that some today. Our big bribe megatrends.

[00:01:02]:

I was going through the book today. I’m going to write this up tomorrow morning. And I just have to say this now, before I forget. Tyler and I just talked about this because we got a lot of flak for the stuff we said in the big bribe. Again, just a year and a couple months ago when it came out, we spent pretty much a year working on it and doing a lot of research and working with folks to make sure the content was accurate. All that. We had a good team and a lot of good ideas going back and forth. And so when we came out, felt pretty confident.

But of all the stuff that we put in there, there was a lot of controversial things, frankly, things that nobody else were saying. I was saying about financial engineering and the various things we were saying. I mean, in the big bribe, these are all happening. They all are happening, and I’m going to cover those in just a moment real quickly. But it’s the part I put, I wrote about Joe Biden having his Bill Clinton moment, and I wrote up like a page and a half of it. Remember, Bill Clinton was the most successful president in the US country, in us history. From a stock market return point of view, SVf 100 averaged right at 26% a year over his eight years. No president’s done better.

[00:02:30]:

I don’t know that anyone ever will. Although we’ll see. Maybe Biden’s got it in him. Doubtful, because the SPF hundred is only up 30% in the three years he’s been in office. So that’s only called it 10% a year. That’s really not a lot to write home about, but all it takes is a good run of four to six years. This last year is very good for him. Anyway, I wrote it up and said that he could have a Bill Clinton moment, and I gave the reasons why, because, again, it fits with the setup we see coming.

Right? This fits in. I’m like, wow, okay. All these signs we’re looking at to say the market’s going to scream higher. That means Joe Biden’s going to have a successful presidency from the economic point of view. And so the wheels just start spinning. Anyway, I’ve been included in tomorrow’s your letter. Of course, it’s in the book. But I think this is happening.

[00:03:25]:

And I think, again, I’ve said it before, I’ll say it again. I think if Republicans think they can win next year talking about how bad the economy is, I think that’s a losing message. And unfortunately, I think they’re going down that path. A know that’s Trump’s big message. Everything’s horrible. Country’s going hell in a handsbasket. No, it’s not. It’s just not, not economically.

Certainly Trump can even take credit for that. I’ve talked about the Trump economic miracle often in the past. He could be taking advantage of this and bragging. I’ve always said I’m surprised he’s know. But all of his stuff, the Trump economic miracle, it was powerful, and it’s helping to drive this bull market. But again, the parabolic move higher. We expect to continue here is going to happen for five reasons. Okay, real quick, big, bright megatrends in the book, financial engineering, corporate earnings expansion driven by innovation, AI revolution, long term housing boom.

[00:04:33]:

Housing drives everything. The millennial generation, vastly misunderstood, really successful. And they got a lot of money in their back pocket, a lot more coming. With $70 trillion. They’re in the process of inheriting largest segment of the population now. Millennials, 72 million people strong. And they’re entrepreneurs. They love housing, they love equities, they love cryptos, they understand technology at their level of the DNA.

[00:05:04]:

Again, we spent a lot of time looking into this. This blew us away, if I’m being honest. And then the retelling of America, again, very few people talking about if anybody else in the country talk about these things, and it’s so big. Animal spirits are back. Animal spirits are back, folks. Right? They just are. We just had a 5% GDP quarter. Stock markets booming, going higher, right? Feds dunk, raising rates, all that stuff, right? They’re cutting now, and animal spirits are back.

And the red pilling of America is a big reason for it, real big reason. This country’s woken up to what we don’t want. We don’t want communism. We don’t want far left ideology taught to our children. There are some lines. Mama bears have talked about them often. Well, you piss off mama bears, and hell hath no fury like that woman scorned, okay? We all know that to be true. And they are pissed off as a lot.

[00:06:06]:

They really are pissed off. And so the country’s waking up. That’s really bullish for us long term, as the last great democracy republic that is still standing. And so a lot rides on the success of America. And I think the red pilling, I actually have a theory on that. I think it’s pretty intentional, what’s happened here to wake us up, to take our country back. I think it’s working again. I think it’s working.

Those are the five big bride megatrends, and we think to take the Dow past 100,000, 2030 ish, so call it six more years. I know that’s a big move once these things get rolling. If this is 95 to 2000, wrote that up this morning, too. NaSdaq up 575% over that time frame. Everybody seems to remember the dot bomb, the crash. And I’m like, I don’t remember that. I remember the good times, that five year period. We did very well then for our clients, of course, as financial advisors, venture capital business also.

[00:07:15]:

It was a very good time to be in the business. And again, this reeks of that, I feel like, in my DNA. Right. But we’ve been talking about, look, our themes are coming true. If you read our journaling work, you can only come to one conclusion. What we’ve written about is happening. We have successfully forecast what’s happening here from the birth of this bull market, which turns out to be October 13 of last year. We called it that day.

And from there, we have been locked in, and we need some things to go right. We’ve had a very good year. We beat the markets again this year. I’m almost certain of that, had some big returns. But I like perfect. I like all my stocks going up, and some of our VRA ten baggers haven’t yet. But again, this is that bull market rising time. That’s all boats.

[00:08:05]:

These companies are still building, building. So that gives you, again, a lot of confidence in what’s about to happen here. I think the next few years we’re going to make a lot of money, folks. We’re going to make a lot of money. Okay. If you’re bullish and you’re smart about it, we got to stay locked in and you discipline. But this is that bull market. This is that bull market.

But, so the question is then I’ll cover the markets. Can this move higher, continue? It’s already gone parabolic. Right. What happens? Well, I’ve looked at everything, Tyler and I have looked at it, talked about it, thought about it a long time. And here’s our message. As overbought as we are and wrote this up this morning, the ods favor this move higher, continuing. The Fed is done. Five reasons the Fed is done.

[00:08:51]:

Number one, fed front running is happening. Now. This is all hugely bullish for equities. Rates are going to keep going lower, not every day, but watch the trend. Okay, it’s in place. We had 41 years of lower rates, right? 41 years. Then we had this 119 month period that blew everything up. And now people can only focus on higher rates.

Well, we’ve had a great reset. That’s what we believe here. Number two, seasonality is also positive. Santa Claus front running is underway. Santa Claus rally front running is underway. Number three, markets clearly broadening out. Rising tides, lifting all boats. Look at what’s happening in small caps.

[00:09:30]:

Look at everywhere. Everything’s broadening out, getting stronger. And we love small caps. Still 23% below all time highs. When you have all time highs happening in the Dow and the Nasdaq 100 SP 500 is what, a half percent or three quarters percent away? It’s right there. Of course, these are now repeating patterns. So it’s just going to keep snowballing. Small caps are going to hit new highs in this bull market.

I think they’re a great play here longer term, frankly. Still want to own Nasdaq and tech and some derivatives of those that we like, impressions, metals miners, because I think we’re going to have a bull market very similar to 2003 2007, great stock pickers environment. And it was a market where precious metals and miners and the markets all moved in the same direction with only blips here and there that separated them. And this is a very similar set up here. Again, everybody remembers what happened since 2007, 2008. I’m talking about what happened before that. I’m talking about the four years before that were a great time to be an investor. And that’s what this feels again.

[00:10:35]:

This feels that to me. But even more like 95 to 2000 with two very bullish eras, but more like 95 to 2000, because, again, innovation and AI tech led with some really cool stuff coming. Right. It’s getting exciting, folks. If you’re reading the things that we are about changes that are coming, I think it’s a very exciting time to be alive and to be an american. We do love small caps right now, though. But the parabolic move higher continues. We’ve got still six to $7 trillion in money markets, right? And they were feeling oh, so smart when rates were at 5%, and now they see the market melting up and they’re like, oh, man, don’t feel quite so smart now.

[00:11:21]:

Felt real smart then. Not so much now, because the train is leaving the station again, animal spirits are returning, and it’s happening. So unless we have some kind of brutal surprise on the geopolitical stage, something like that. Unfortunate. Some kind of a black swan, again, you always have to be ready for that. That’s why we love gold and silver and other cryptos. Bitcoin, of course, that’s a good diversification. But other than that, the market wants to go higher.

And again, our focus right now is the small caps and on the miners, really like the miners here. They’ve been leading since November, leading gold higher. That’s kind of a classic buy signal for this group. Still haven’t got confirmation yet. We need a bit of more of a breakout to happen. And then I think this group is ready to go. But we need volume and GDX, the minor ETF just still barely trades until I see it trading 50 to 70 million shares a day. This is kind of, again, an old precious metals miners bull market thing.

[00:12:21]:

Any veteran that knows this group will confirm this for you. When the miners, they need to lead, number one, and they are. But until volume starts coming in of at least 50 to 70 million shares a day, that’s what I track it at. I’d like to see even a little more than that, but we get to at least to there, then you know the money’s returning, and that just hasn’t happened. People just do not like this group because it’s just given them so many headfakes. Over the years, it’s been brutal to buy and hold investors. But again, you look at these charts, and it sure looks to me like we’ve got big time breakouts taking place, certainly in gold, silver chart. These chart patterns look ideal, like cup and handle formations.

You got big rounded bowls. Again, things essentially moving sideways for elongated period. And you can measure that move. You can measure that move. The height of the move is going to be half the width of the move. And so you can just put a ruler to it and measure it that way. Old school. But if these breakouts are real, then these miners are going to get hot.

[00:13:29]:

I just keep waiting for it to happen. We’ve seen some flashes of it back above the 200 day. Again, we love this group. Combination of lower rates, again, fed front running so powerful. That’s another thing I’ve been talking about. And US dollar resuming its long term bear market. These are big buy signals for this group and I think it sets up from a trend point of view, like in a cycle point of view as well, again, as we cover with the broad markets. Okay, long podcast today, apologies for that.

[00:13:57]:

Dow Jones flat on the day. Sb of hundred up a half percent. Rust 2000 down one 10th, 1%. Nasdaq led the way. That’s what you want to see. Up six tenths, 1%. Semis finished flat on the day. Again, we’re extremely overbought, we all know this.

But again, as covered earlier, this move higher wants to continue ten year today, 3.95% inching up a little bit. Again, you get silver sold. You got to have a few days where some of the rubber band is able to stretch back the other way. Really confident. All these markets, we’re kind of there right now for everything. Let’s look at our sector watch. Eleven or 13 sectors finished higher on the day, I think Tyler told me communication services hit another maybe all time high up 1.9%. Consumer staples bouncing back up 1%.

[00:14:45]:

Not a lot happening today, frankly. To the downside, nothing really. The real estate down three tenths, 1%. That’s it. Again, things are looking good. The internals weren’t great today, though. I don’t know that I can really explain that. We also had a high put call ratio today, I think at a close of zero point 98, but the internals were flat to negative.

Flat mixed to negative today. Nothing big and no two to one or anything, but slightly negative on volume for both NYSE and Nasdaq. Advanced decline on volume. Volume was positive for NYSE slightly, and also slightly negative for Nasdaq. But we did have, what is this? 272 stocks hit a new 52 week high to just 139, hitting a new 52 week low. So those readings have continued to improve. Just remember, we’ve had a great move. Santa Claus rally, technically speaking, doesn’t start to the last five trading days of the year, but we are on the sweet spot and all signs point to higher prices still.

[00:15:55]:

All right, folks. Hey, final sorry about that. Commodities, very quick. Gold up five at 2041. I’ve already covered why we love it. Silver down four cents today at twenty four ten. Copper down four penny a pound at 384. Crude oil bouncing back up a dollar, ten a barrel at 72 80.

[00:16:18]:

As Tyler said earlier, it’s hard to predict this group, but it has been in the trading range, finally of the day. Bitcoin up 553 at 42,489 again, thanks, folks. Appreciate you listening. Hope you had a great day and even better night. We’ll see you back here again tomorrow after the close.

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Time Stamps

00:00 Financial Engineering, , Biden compared to Clinton.
03:38 Trump should take credit for strong economy and trends.
06:36 Five big bribe megatrends, Dow over 100,000.
12:21 Veterans confirm group's potential, waiting for volume.
15:06 Flat market with slight negative volume twists.
16:18 Bitcoin up 553 at 42,489, trading range.

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