In today's episode, Kip dives into the exciting intersection where the digital realm fuses with the physical. We'll unpack Nvidia CEO Jensen Wang's vision of an omniverse that could revolutionize industries, and the semiconductor sector's role in this transformation. Kip also covers the latest in the market internals, sectors, and for tech giants like Google, Tesla, and Apple.

It don’t look back because the market is closed. Good Tuesday afternoon, everyone. Kip Herridge here with the Daily VRA investing podcast. Hope you had a good day today. Fighting a little bit of a head cold today. So if I sound a little stuffy I apologize for that.

I feel great otherwise. Lots of talk about today. We got a big fed meeting tomorrow. A bank of Japan really got aggressive, didn’t they? For the first time in 17 years, they hiked rates s from negative zero point to 0%. This actually has people freaking out a little bit, which is a little bizarre to me. Speaking of people freaking out, and I have to talk about this a little bit. Good day. By the way, the markets strong across the board, sectors, internals.

Tyler talked to this yesterday. It really is remarkable. I think it’s remarkable. It tells you the strength of this market that the generals, some of the generals, like Google, Tesla, Apple, these were like, as Tyler explained, we’ve all heard this, right? The Magnus seven, they’re the only ones making the stocks go up. Well, guess what? These stocks have all been hit hard. Tesla, Apple, below the 200 day moving average, okay? Tesla down 30%. Google, of course, moved lower on their Gemini, their racist Gemini AI program, and again, just what a criminal company helping rig elections, et cetera. But anyway, the point being, the generals aren’t leading anymore.

[00:01:23]:
They haven’t been leading for a while. They’ve been going down. Yet the market still going up, and this apparently is not good enough for some bears. They have to still find a reason to be bearish even as this market continues to broaden. This is textbook bull market action. It really is. And the other thing that’s happening, of course, is with rates going up, are they really, though? I mean, are they really? The ten year is four point just. It closed down today just below 4.3%.

We’re over 5% in November of last year. Right? So now rates have started declining. They’re going to continue to decline, but it’s just the fact that rates have jumped back to 4.3% of the ten year has a lot of short term traders. Very myopic. I think, that don’t understand what’s happening here with this innovation revolution, which is extraordinary. Listen, okay, I’ve done this long time. I wake up, everyone, feel like I’m 21, okay? But I’ve done this a long time. When I tell people I’ve done this, 38, 39 years, it doesn’t even feel possible, okay? Like, where did the time go? And why do I still feel so immature on most days, right? I feel young on most days.

[00:02:34]:
But back in the day of the.com melt up, which is the most similar time that we’re in now, there’s no doubt about it. This is not just similar. This is more powerful, this is better than, it’s more important than what’s happening here. But I think that there just maybe aren’t enough people that were stockbrokers, as we used to call ourselves back in the day, or investment bankers back in the day, venture capitalists back in the day, around today, they at least do what we. And because I think if there were, they would have a better understanding of what is happening here. It’s extraordinary. And this is why we’ve been saying, folks for a long time, this is the time to stay locked in. This is only beginning.

Nvidia yesterday had, of course, had their conference, and it’s mind blowing what’s coming. The innovation, the inventions that are coming that we can’t fathom now. They’re getting close, though, because the power of generative AI. Nvidia yesterday. I’m going to read a couple of things. Let me get back first to rates, before I forget, people that are so freaked out right now that rates are headed a little higher. Okay. Again, they’re myopic.

[00:03:49]:
Here’s the proof of it. And here’s how I know, I know with almost certainty that rates are going lower. It’s gravity. It’s simple gravity. It’s supply and demand gravity. The 1995 to 2000 melt up, I shared this with our folks this morning. The average on the ten year yield from that 19 five year melt up was more than 6%. Again, we’re 4.3% today.

So how did it happen then? And it can’t happen now, right? Why is it this stocks can’t go up because the ten year is 4.3% now? They would immediately probably interrupt me, I know this because it’s happened, and say, but hold on, Kev, we didn’t have $34 trillion in debt then, right? Our interest payments are so massive now that that’s the difference maker. Oh, is that really the problem? Let’s dig a little bit there. The US debt to GDP is 123%. That’s high. That’s like World War II high. It’s high, no question about it. But it’s all relative. Japan is 270% debt.

[00:04:57]:
GDP, right? More than double ours. China is 300% plus. Of course, you can’t trust their numbers. And so our financial situation is far better than theirs. Right? And we also have the world’s reserve currency, which is kind of a big thing. And I always get a chuckle out of people that say the dollar is going to crash and it’s going to be replaced. No, it’s that. Not in our lifetimes.

Not mine, at least. I plan to live in another 100 years or so. So I don’t think it’s going to happen and I don’t think is going to happen then if I can kick this head cold, at least. But from the rate point of view of that, rates are going lower. And this is why tech stocks have been rallying so hard. This is one of the reasons. It’s not just the innovation revolution. They know what’s coming with rates as well.

Of course, tech stocks, small caps as well, very rate sensitive, and both have been rallying. If you’re an investor of size, you’re an institution. Global institution, global company. Even central banks, they park their money places, right? Where would you rather. Sovereign wealth funds? Where would you rather, big governments? Where would you rather invest your money? In the safety and security of Us ten year debt yielding 4.3%? Or how about the largest and most important government in Europe? Germany. Right. Their ten year debt is 2.4%. You almost get double.

[00:06:23]:
Almost get double in the US what you’re getting in Germany. What would you rather buy? What about this? Would you rather get our 4.3% or Japan’s 0%? What would you rather get there? So it’s this flood of money that’s going to continue to come into US government debt that’s going to act as gravity and force rates lower. The markets know this. That’s why, again, I get a chuckle out of people that are so obsessed with rates and they just are convinced know, again, I’ve heard this. The entirety of my had. We had perma bears, my first firm, Underwood new house here in Houston, old muni bond firm. We had perma bears there that were just. And that’s why they bought muni bonds.

They’re very conservative, but they were convinced that our government debt levels then right back in 85, were going to crash the system. So we hear the same thing now, but it’s amplified 100 times. And again, it’s not that. I don’t get it. I get it. I wrote two books where that was kind of my focus is this can’t go on. Well, I was wrong, okay? I was wrong then and am I wrong now? I don’t think so. We’ll see.

[00:07:35]:
But I think that’s why we dig so much. The evidence shows that the markets know what’s happening. Here as the best discounting mechanism on the planet. This is why they’re going up. So, yeah, rates are going lower and the innovation revolution again. Nvidia, now we can transition to something more fun to talk about. My goodness, their conference yesterday. Look, I am not a tech guy necessarily, but I can read the tea leaves.

And Nvidia has become the most important company in the world. We follow a guy named Brian Rich, and another longtime vra VIPs pointed Brian out to me about a year ago, and I just love his stuff. I got to know him a little bit on Twitter from direct messages, and I think we’ll have him on the podcast pretty soon. He’s just a genius guy, and he really gets the macro and the micro. It’s a rare combination. He can see the top and the bottom that bottom up and top down that he can see, but he does. And we feature him a lot in our daily VR letters. A year ago, Brian said this is the most important company in the world.

[00:08:39]:
And he was right. And yesterday, Jensen Wang, of course, the CEO of Nvidia, just has some great quotes. And he knows he is a bit like Steve Jobs. He knows how to move markets, he knows how to move people. And he said, this is the rebirth of computing. This is the rebirth of computing. And it’s where the digital world meets the physical world. They have something called their omniverse technology that’s going to power all of this.

And he says it’s going to reshape $100 trillion worth of the global industry. What’s interesting about what he’s saying is this fits so well with what Kathy Wood’s been saying for years. We’re big fans of hers. Not so much of her stock picking prowess, because that’s not that great, but the macro they’ve gotten right. You combine what Wang is saying in Nvidia, along with what Kathy Wood and her team have been talking about with this disruptive innovation cycle we’re in now, and they’re really coming at this from different points, but they’re really meeting in the middle. And you hear the same kind of things from Elon Musk as well. So this is a new industrial revolution. And the key is it’s still early.

[00:09:54]:
And that’s what takes me back to 95, to 2000, because Tyler and I talk about this all the time. I lived through that not knowing what was happening. It was in the bubble of the moment, right? And most of those companies, they were air. Frankly, they were air. These companies today are straight up legitimate behemoths. Right? Straight up trillion, $2 trillion companies, massive earnings, right. That are all moving in the same direction using AI. We’re going to have adventures we can’t fathom.

Today. I’m going to read you one more thing. I apologize for the voice. It’s kind of felling on my today. This is something else that Nvidia CEO said yesterday, talking about their blackwell platform. I guess that’s all of their products underneath that are the blackwell platform, he said. This one paragraph is not that long, says the Blackwell GPU architecture features six transformative technologies for accelerated computing, which will unlock breakthroughs in data processing, engineering simulation, electronic design, automation, computer aided drug design, quantum computing and generative AI. All emerging industry opportunities for Nvidia, which means for the entire sector, for the entire tech space.

[00:11:13]:
We’re going to write this up tomorrow. We happen to have a great tech guru here that’s a longtime VRA member, and he shared some really good stuff with me that I’m going to write in tomorrow’s Vra letter. So come and join us if you’re not a member@vrainsider.com. Vrainsider.com two free weeks, but it’s incredibly exciting. And again, the best thing I can tell you is stay locked in. This is just beginning. And so when you see the bears and you hear the bears out there, we get like a weird, folks, check this out. The Dow Jones is 170 points from all time highs.

And people are saying we’re in trouble. You’ve seen it, right? You’re seeing the folks SVF hundred is, what is this, nine points? Eleven points away from an all time high. So we’re right there. Nasdaq, not much farther away. But what’s interesting is all this topsy turvy last Thursday and Friday were kind of shakeout days. And of course the Fed tomorrow, a lot of trepidation about that. You never know with JPOW. But what’s happened is we had really big, extreme overbought situations in the market here just over a month ago.

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Those are gone now. Those are gone, right. And so now we’re looking at doing some things that we hadn’t done in a long time in the semi space for both VRA and parabolic. And now we’re looking, look at the queues. Know, all these things have come off extreme overbought and now they’re approaching oversold levels. So tomorrow we’ll have to wait and see what Jay Powell says. I seriously doubt that he’s going to say anything. That’s market moving.

And I think what’s going to happen instead is he’s going to start hinting that it’s either June or shortly thereafter rates are going to be cut. But again, does it matter? Does it really matter? It didn’t matter 95 to 2000, and I don’t think it matters now that rates are 4.3% or just below that. So again, I think what we do is we continue to use these little pauses as buying opportunities and take advantage of people that are just too myopic and don’t understand what’s really happening here. This is early, early, and it’s going to be bigger than, it’s going to be much bigger than the.com melt up. Much bigger and longer lasting. In our book, the Big Bribe, we said this bull market would carry us through 2030 and take the Dow Jones to about 100,000. All right, I think that’s too low. Not the 100,000 part.

[00:13:44]:
That’s a short period runaway to get there. But still, whether it’s 2030, 2032, look, this thing has got a long way to go, and it’s never straight up. We’ll have pauses. We’ll have corrections. But again, I think the smart thing to do is just make sure you use discipline. Don’t get over leveraged when everybody’s bullish. That’s a time to pull back a little bit. Nothing wrong with taking some profits, taking some money off the table, and then wait for these little pullbacks and then reengage.

That’s what I wished I had done from 95 to 2000. I really do. But again, now I feel like we’re getting a second chance at it. And so that’s why we’re so passionate about this, if you will. And, yeah, emotionally, I had somebody on Twitter say, man, kip, you seem very emotionally connected here. This is really going to hurt you. I’m like, you bet I’m emotionally connected to this. We have people that depend on us to get this stuff right.

[00:14:37]:
If you’re not emotional and you do what we do, I think you got to be some kind of a sociopath. Number one, I like being right, okay? First and foremost, I like winning. I like crushing Mr. Market because he’s a little son of a bitch. All he wants to do is beat us, right? So, yeah, I’m emotional about that. I like to win. I don’t like to lose. And the other thing is, again, we have a lot of people depending on us to get these things right because everybody’s got, look, I’m not an engineer.

I’m not a doctor. We have those clients here, they depend on us to get our job right so they can do their job right. So that’s why we are emotional about this. And that’s why I’m telling you straight up, this is a great time to be an investor, and it’s extraordinary time. It’s going to be extraordinary time for the economy, too, with what’s happening with these innovations and inventions. I think some really cool stuff is on the way, and I cannot wait to see what’s going to happen here. I’m a big optimist, by the way, as well. Okay.

[00:15:36]:
Dow Jones Today, I think we finished right at the highs of today. Dow Jones up 320, 39,110. Back over 39,000, up eight tenths to 1%. Dow Jones was our winner on the day. Again, that’s a rotation taking place right now. You got more value. Industrial material. Stocks are doing well.

This is perfect. China is recovering. Copper is past one year highs. Dr. Copper. Right. This is exactly what happens here. S and 500 up half percent.

[00:16:03]:
Same thing. Rough 2000, half percent. Nasdaq up four tenths. 1%. The only losers day here that we cared about was the semis. You know what? They were down over 2% at the open. Finished down just two tenths of 1%. So again, just taking your breather.

We kind of have rotational moves here. It is textbook. It really is textbook. I’m going to talk about bitcoin because bitcoin has been weak. Of course. Last trade here now after hitting 70, was it 70? I’m losing track of my pricing here. Last trade here for bitcoin is 64,000. Hit a low overnight of like 62 and a half and a high of 73.

Seven, I think, was the high from. I think that was Friday. But we’ve had basically a 14.8% correction in bitcoin from the highs of just a few days ago. And I know that some people are, they’re not used to this volatility because it is volatile and it’s not for everyone, but it will be, I think, when bitcoin passes 100,000, which I still think is going to happen, coming just probably just out of the having. Maybe not before, but just out of the having, I think it could go from 100,000 to 200,000 in a week. And I know that sounds hyperbolic, probably. It’s not an exaggeration. It’s also not a prediction, but it’s not an exaggeration.

[00:17:24]:
That’s the speed with which I think we’re going to have escape velocity here. When people realize and start to wake up that this is real, that they got to learn about it. And you got to remember, there’s so many firms that cannot buy it. 80% of financial advisors, brokers in the country cannot buy it from themselves or firms or their clients. Right. Of course, Vanguard, we’ve gone over the names a number of times here, but it’s not just the US. European firms. They can’t buy it.

Their clients can’t buy it. I just saw a note today that european investment firms now are approving it, but only the ETs, but only for professional investors. Right. The little guys can’t buy it. So the little guys are still buying the. Right. The original gangster, which is the bitcoin, but they can’t buy the ETFs. And of course, the ETFs are absolutely the preferred way to do it.

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If you’re a regular person, because you can open a coinbase account or something else, you got to worry about losing your password. You got to worry about somebody ripping you off. Right. Some of these wallets aren’t secure as others. So a lot of things you got to worry about that people just don’t want to have to investigate or lose leap over, because it does happen. So, again, that’s why these ETFs are so powerful. But it still is an avalanche of buying coming from this. We are in a period now where in the past two havings, bitcoin did fall about 20% or more.

In 2020, it fell right at 20% into the having. A couple of weeks before kind of the cycle we’re in now, we’ve already fallen 14%. And again in 2020, when it fell 20% before the having, it hadn’t been approved by the SEC. There weren’t all these massive ETFs like blackrock buying it. Okay, so I kind of think that we’re done here. Who knows? But I kind of think 14% is probably going to be enough. If it falls to 59,000, that will be a 20% correction. Right.

[00:19:24]:
Bear market. And maybe that’s what’s going to have to happen. Maybe it happens overnight. We wake up, it’s back to 65 or 70, and no one even knows what happened. But bitcoin is one of the few investments that I’ve made where I say I hope it goes lower. I hope it goes lower. And I do. I hope it goes lower.

I bought more today, and I’ve got to go see my guy tomorrow. I’m selling some gold coins. I haven’t done this. I’ve never done this. I’ve never sold any gold to buy another investment. But that will be happening this week, tomorrow, and I’m going to sell some gold coins and I’m going to move it. And the goal for me and for our purposes here is to have equal ownership of gold and bitcoin at 10% each. Right.

[00:20:09]:
But I don’t keep much money in the bank because that’s. Why would you. It’s depreciating, it’s appreciating liability. So I don’t keep that. My savings has always been in gold or in the stock market or things that are considered true assets. Right. Housing, real estate, et. But, yeah, it’s not that I hate gold.

I love gold just at all times. Highs recently. Right. Love the miners here especially. Again, I think the Fed, what we know about the miners for, I forget and I’ve said it a number of times, but I think it’s important to remind people the miners are due for a massive bull market. It’s a great setup. Reminds me so much of the setup in 2003 is when I first recommended gold and silver and the miners, it just started the very 2003, and we had a furious run. The economy was also doing really well then.

[00:20:52]:
Right? Another housing boom was starting. Well, it’s a different setup now. And of course, the Fed ruined that party with the 17 straight rate hikes from 2004, 2006. If you wonder why the economy crashed and the housing market crashed, look no further than the Fed. They did that 17 straight rate hikes in two years. So otherwise we would have kept going. But we have a different set up now, don’t we? People have gotten better with their money to reduce their debt. Don’t believe the nonsense you hear on TV.

Consumers have reduced debt by 15%, excuse me, 25% to disposable income. In the last 15 years. Corporations, their debt, corporate debt to market caps at 50 year lows. So the ability to lever up is so significant. That’s what’s coming. The balance sheet data that we see now, this is what you see at the beginning of economic expansions, not the end. And the fact that this is tying in at the same time with this new industrial revolution, innovation revolution. The fact that this is happening now when people are financially in good shape, tells me this is going to get crazy.

[00:22:04]:
This is going to get crazy. And so in this environment, I think you want to be heavy in tech, you want to pick your winners, stay with them, and then you want to sell your losers companies that just move that money in areas that are going to thrive. And that’s what we’re trying to do here. We’re going to continue to do that, by the way. And again, I got to say, I’m looking at one stock in front of you right now, Tesla. I think people have got this story so incredibly wrong. You don’t see so many people come out and cut their numbers. Cut the numbers, right? Reduce the share price targets, all that stuff people hating on it.

EVs, they’re a thing of the past now. They have no idea what Elon Musk is about to launch on the world with this new $25,000 car, the roaster, coming next year. Of course, they’ve got their own AI thing going on. And of course, autonomous vehicles, right, FSD, full self driving, that is coming. It’s already in many cities. And before you know, it’s going to be all over the country, and then they’re just going to dominate. They’re just going to dominate. And all these companies are not going out of business because they’re price cuts.

[00:23:07]:
They can’t compete with them. And so just tell you quickly, I watched Elon Musk. I’ve owned the stock since 18 split adjusted. I watched Elon Musk as he put together what I believe was the first gamma squeeze. Before it was called a gamma squeeze. He had so many bears piling. Remember, they had it Tslaq, right, for bankrupt, the symbol. And, I mean, I know a lot of these people, by the way, I don’t mean to laugh at them, but you don’t bet against Elon Musk.

He’s just one of the guys you don’t bet against. But he had people so bearish and short the stock. And Tesla right now is so heavily shorted, it’s the most shortest stock I believe there is in the country from a dollar point of view. They had PUTS right. So all of a sudden, here came all the good news for Tesla. STOCK started going up. That was the first gamma squeeze. That was the first gamma where stock options were used to propel a stock higher.

[00:24:06]:
I watched it happen right in front of me. And then all of a sudden, they started calling it a gamma squeeze. At least that’s the first I’D heard of it. So I think that’s what he’s setting up again. STOCKS 171. Now. It’s one of our vra ten baggers. I think the stock is going to skyrocket into next year and through next year and beyond.

So it’s a great time to fix them up here. Down about thirds from the highs. Final point on bitcoin, Bernstein and Associates. Bernstein is a pretty well known investment firm, they came out today with their targets. They believe that the cryptocurrency space in the next two years is going to hit a total market cap of $7.5 trillion. And that bitcoin is going to go to $150,000. It’s a great write up. Again, I’m going to share it tomorrow in tomorrow’s very letter.

[00:24:53]:
And again, the point is there’s just so much demand and it’s only going to continue to build. And then the having starts here inside of right at 30 days. And I’ll wrap with this. These numbers are stunning. There have been three havings. This will be the fourth. The first having 2012 bitcoin went up 7900%. You would have made 79 times your money in a year.

Second, having 2016, you would have made 29 times your money in 18 months. And the last having 2000 and 2700 percent in 18 months, seven times your money. And that’s what the Bernstein piece is about, is like, we’ll have some volatility between now and then, but post having, look out, just look out. Because that’s when I think he gets crazy. I think we can see a true parabolic move that will be stunning. And it’s happening at the same time that this new industrial revolution is taking place, the innovation revolution, as we call it here, what Nvidia is doing and so many other companies. Again, I’ve never been more optimistic, and I know it means I got to block out the Biden administration, the stuff that’s happening across, and I understand all that from a financial point of view and what’s happening in this country for the average person that is paying attention and wants to build wealth, be it as an entrepreneur or as an investor, folks, this is it. This is the most exciting time of my life from that point of view.

[00:26:28]:
And I like to think that I can see both sides of the coin, right? But I just see things happening and I feel like the universe is telling me, almost like a minister. My mom wanted me to be a baptist minister, by the way. Maybe I should have been. But I feel like know, I feel like something is telling me to share this message with people. And thank God I’ve got my son Tyler here. He has unfortunately put up me every day. But to write our book together and to compare notes and we talk 20 times and he’s an Austin, I’m here in sugar land to talk all day long and compare notes, and he’s so much smarter than I am. So it’s just a blast.

I’m having a good time and the objective here is to help people make as much money as possible. We want to make fu money. That’s what we want. If the country’s going to shit, if the country’s going to hell in a handbasket, we want to have fu money, do we not? Yes, we do. And that’s why we stay locked in. And that’s why I think this is going to be a magical period for us here. And listen, let’s close up here. Got a few more things to cover.

[00:27:31]:
Sector watch today. Oh, internals. Internals have been kind of covered yesterday. The great thing about the internals is they’ve been good on bad days. That is a pattern change. Both Thursday and Friday. Last week, when the market tanked a little bit, the internals were good positive on both those days. So I don’t really care what the internals are when the market goes up.

I want to see what the internals are when the market goes down. And that was the pattern change we saw starting Thursday and Friday. We saw it again this week. Even when the market was down, like today earlier, semi is down 2%. Nasdaq down big if you open. Right. Of course, everything flipped around. Still, Nasdaq in terms were positive across the board.

[00:28:09]:
Vance decline, volume positive, not two to one. NYSE was two to one on volume, advanced decline, and 1.5 to one on volume. But Nasdaq 1.5 to one on advanced decline, 1.3 to one on volume. And again, Nasdaq was down most of the day. Also had a positive read and 52 highest low. So again, another positive day across the board. Sector watch even better. Ten of eleven sectors finished high on the day.

Kip Herriage [00:28:37]:
Really nothing to the downside, frankly. Basically too unchanged. Energy up 1%. Oil because of China is coming back. Global economy is coming back. Dr. Copper is showing us the roadmap. Energy, oil going higher, going to continue to rethink.

Up 1% today. Utilities of nine tenths 1%. They’re telling you rates are coming down. Consumer discretionary up eight tenths 1%. Again, everything pretty much half percent better or up a half percent or better across the board. All right, let’s get to our commodity watch. So, look, the miners during the last three rate cutting cycles have gone up on average of 180%. I think that we’re about to have that happen.

[00:29:19]:
I meant to mention it earlier. Gold’s already hit all time highs, right? We’re just off it now by a few bucks. And I think miners are 30 year lows to gold. They’re hated, under owned, certainly not loved by the Eastrett. It’s just so ripe to go. And they have been leading higher. The miners have been leading gold higher. That’s a classic buy signal.

But they also got overbought. Gold is overbought. Miners were overbought. Now they’re starting to come off a little bit. I think all we need is for JPAL to basically say we’re on the right path. Guess what? We’re not going to raise rates. That’s not going to happen. So, yeah, rates are going to come down.

[00:29:56]:
Who cares if they cut 1234 times this year? As long as the economy is doing well, who cares? We don’t care. I think the miners are going to really rally into this news. I look for that rally tomorrow. Gold. Gold as well. Gold today finished down $3 now at the 21 60. Silver, which has been trading really well, down $0.60 now to 25. Ten Dr.

Copper down just a bit today, down just over 1%. But again, it’s been on a tear at $4.07 a pound. Crude oil. Thirty five cents a barrel, 82 51. And again, last quote on cryptos, bitcoin, 63,900 as I speak. All right, folks. 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.