In today’s episode, Kip returns and dives right into the latest action on Wall Street, recapping a big day for the markets and some headline grabbing earnings. Kip spotlights Tesla’s latest earnings report, breaking down the n ...
Don’t look back because the market is closed. Good Wednesday after every one. Kip Herriage here with the daily VR investing podcast. Hope you had a good day today. Been away for a few days. Great to be back with you here. Hope you’ve had a good start to your week so far.
Let’s get right to it today I was on Charles Payne show today. We’ll talk about that a little bit in a moment. Also, a slew of earnings reports today, including from a favorite of ours, Tesla. Their earnings call is coming up here in about 30 minutes. So I’m gonna keep this podcast fairly short so we can jump on that and hear what Elon Musk got to say. So it was a highlight, these earnings call earnings reports from Tesla, of course. Just real quick before I forget, from the first quarter report, which was poor, right? Remember the first quarter stock got slammed. From the first quarter report, Tesla Stock is up 55% from the first quarter report of last year.
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The stock is up 137%. So while everyone’s complaining about how poor Tesla’s doing and granted, Elon may have gone off the rails a little bit, I will give him that. But again, it’s Elon Musk. And you know what, he has his own way of working his magic. So it’s kind of hard to question that as far as I’m concerned. We’re big fans of Elon Musk here, but we are glad, very glad that he’s back at Tesla headquarters working full time, apparently sleeping on the floor again and working 24 7. And that’s what he really gets things done here. So look, politically, hey, it’s his life.
You can do what he wants to. Hardly tell him what to do. But look, the stock has done very well. After these poor earnings, I’ll just, let me just mention it now, most importantly, I believe from the earnings today were their gross margins. Gross margins came in for Tesla at 17.2%. Estimates were 16.5%. Adjusted earnings were $0.40 versus estimate of 42. So it missed a bit on that free cash flow miss.
I’m going to dig into this because I don’t know that this is accurate. But early reports are free cash flow missed by $600 million. That’s a big miss. Free cash flow. And they have certain areas like energy generation, storage, $2.79 billion in revenue from a division that no one talks about. And Charles Schenerdeg, he put up a list of all the. Tesla is a holding company of all the billion and multi billion dollar divisions. I think it was 14 divisions that Tesla has that are each making a billion dollars in revenue.
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That’s called vertical integration of the highest order. And look, as we’ve talked with you a lot about here, we’re obviously big fans of Tesla and Musk. Owning Tesla here is about the future, it’s not about the past. Owning Tesla and Musk has made this clear in the last two earnings calls. It’s not about buying an EV company anymore. If you’re still making that case as a reason why you don’t like Tesla, you are missing the boat. Owning Tesla is all about the future. And whether it’s a one year or two year, I do not care.
Every chance we’ve had to buy this stock on dips is what we’ve done. All it’s done is make us wealthier. All it’s done is bring down our cost basis. But you have to act quickly because once the stock gets hit, it doesn’t stay down long. That’s really the key to what we’ve seen with these recent trading patterns of Tesla. So as long as you look at this and go, okay, Elon did something goofy, Stock is down 20% from its highs, or 30% or 50% or whatever it’s been. That’s all taken place in the last two years. Every one of those has been a buying opportunity.
That’s the approach we’re taking here. The future is about AI, the future is about robotics. Future is obviously about autonomous vehicles and name another 10 divisions. Tesla’s got again, vertical integration in all these key areas. That will make a lot more sense to people when Elon’s on Mars or when his company’s on Mars. Because that’s what all these are designed to do, is to work on Mars together, vertically integrated. So we’ll report back tomorrow in our letter tomorrow morning about the earnings call and what Elon had to say. Looking for some real color on how are the robo taxi trials going? The pilot program in Austin got word today that that’s going to be extended.
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It’s like Nevada is next. Las Vegas, how are you doing? And it’ll just continue to roll out from there. Remember, Musk told us in the first quarter of this year that by the end of this year he expected. Excuse me, by the end of next year he expected Tesla Robotaxi to be nationwide as well as fully autonomous driving, fsd unsupervised. That’s all happening, folks, in the next year and a half. Now if again, if they can meet that schedule and if they get regulatory approval, he Also said on last earnings call that by the end of, by the middle of this year now, they expected to have Robotax, it’s going to be Optimus robots on their manufacturing floor of all Teslas. And by year end they’d have 7 to 10,000 Optimus robots working. We’re getting some reports back now, but they’ve been very tight lipped about this, about how that’s going.
But if you’ve seen the videos like we have, you know, it is pretty fascinating. What, look, it’s all fascinating, is it not? And that’s the point being here, we’re, we’re not buying this stock for yesterday, we’re not buying this stock for today, we’re buying the stock for the future. As I speak right now, even with what I will call a mixed to negative earnings report today, the stock right now is trading up a half percent of two bucks a share at $334 a share. And again the earnings, the, the earnings call today should be very, very interesting. Also earnings report today from stocks that we don’t own, but important to keep an eye on. Google trading up 2% after hours after getting hit immediately on the report dropped 10 bucks a share. Now it’s up 4 bucks a share. Pretty common these tech earnings reports.
IBM on the other hand, last trade now is down 5%, down 14 bucks a share on that report. Again, we don’t own the stock, but again these are important companies. These stocks have been hot. These stocks have been very hot. You have to remember Google just had 10 straight updates by the way, after really not, not, not trading particularly well at all with the issues that they’ve had. So look, these are ginormous companies that have like Tesla integration throughout their companies, vertical integration maybe not as well as Tesla does it, but look, we’re in the innovation revolution. We’re in the AI boom. It’s only going to pick up speed from here.
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This is early innings. This may be first. We may look back on this and say this is first inning. This isn’t first inning. That’s how big this mega trend is of the innovation revolution. Also last night we got word from President Trump that he announced in his words, a massive deal with Japan and it was, it is reciprocal tariffs of 15% with Japan. And some really interesting headlines in here that Japan is going to invest $550 billion in the US and according to Trump, the US would receive 90% of the profits. All right, we’ll see how that plays out.
But it’s good to get another behind us now. Again, we got major countries now that are signing deals and that leads. And there’s rumor today that the EU is getting close to doing a similar deal to what Japan just did, a 15% reciprocal tariffs that’ll be huge. And also opening up automotive industry both for, you know, both. We’re open. You can sell here. But it’s very difficult to sell US Cars in other countries, especially throughout the EU and China. So we get these two last deals locked down of China and the EU that it’s essentially over, folks.
And now here comes the tariff. Revenue just soaring in already expected to be 300 to $350 billion this year. And I have a feeling that Trump’s not done here. He’s got a master plan. It’s been a little reckless the way he’s rolled out to begin. But folks, again, look back on it. What is it? What was it? Yeah, it was a buying opportunity. Look, as we’ve been telling you for the last, what, week or so, the market’s overbought, the market’s extended and it’s still going to head higher.
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We got that again today, did we not, Dow Jones? On the heels of the news about Japan and rumors about the EU being done as well, Dow Jones today finishing up 507 points. That was only 1.14% but it’s still pretty good day today. The leader today was Russ 2000. Small caps getting hot here. We had about a third of our portfolio in small caps. And as Charles talked about today, when this group gets going, it gets going and it’s dramatically underperformed. Small caps are trading 20% below historical valuations to large caps right now. Today, small caps rose 2000, finished up 1.5%.
That was our leader on the day. SPF 100 up 7. 10 of a percent. NASDAQ up 6. 10. And of course our market leader, the semis up 1.2% led by Nvidia, up another 3, which we own up another 3.3% today. Looking, looking like a champ here. Rich Ross, our favorite technician is a reminder.
His price target on Nvidia is 250. He’ll be on the low side, but it’s okay. He’ll just keep raising his estimate. That’s what we’ve been forced to do as well. Nvidia, Tesla, these are great stocks to own. Even as large as they are, these are stocks that really must be owned. And I’ll remind everyone of my experience through 1995 to 2000. The.com melt up, don’t sell your winners, don’t sell your winners because you think they’re just ridiculously cheap.
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And what do they do? They keep going up, folks. That’s what we believe is going to happen here. Again, the innovation revolution is going to be far more powerful than dot com, going to be far longer lasting than dot com and can make us all a lot more money than.com instead of a five year move higher. If Cathie Wood’s team is right, you’re looking at a couple decades. Right. And we’ve said this, this, this bull market was going to run through at least 20, 30 and then likely beyond because we think this is that bull market is a generational bull market and we’re going to stay very long and strong. But we’re not at extreme overbought on stairways right now. Okay, here’s one of the indicators of that.
As of yesterday’s close. I’ll run the numbers again tonight. We have right now 74% of the SP 500 is above its 50 day moving average. That’s high, but it’s not extremely high. When we get to 85%, 11% higher from here, that might be a concern. That’s when you start seeing topping signals. But more impressive and more interesting, it’s just 65.6% of the SP 500 is above the 200 day. Again, 85% is also kind of a beacon there where it says, okay, you know what, might not be a bad idea to take some profits and some things may not be a bad idea to put a hedge on even.
But right now, again, we have a Runway there before we even have to have that conversation. But we like to keep you in the loop. And that’s what we keep doing. It’s a very important marker. Percent above the SB 500 both in 50 and the 200 day. And again, we got room to run there. Cover this last week. I’m just going to mention one more time today.
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I talked about today on Charles’s show. We’ve had four bear markets in seven years where the average stock lost 40 to 60% of its value. We’ve been talking with you about this now for a couple years, maybe three. That’s brutal. It’s unprecedented. This has never happened before. And what it’s done is it caused investors to be way too bearish, have allocations into equities that have been much too low. But what’s interesting about this is that it’s the retail investor, specifically millennial investors, one of our big bright megatrends that figured this out.
And they’ve Been buying the dip left and right. Whereas the institutional investor, the so called smart money, they’ve been sitting on the sidelines with a lot of cash. So that’s beginning to change. But again that’s a process as well. And the other point we’ll make again, because we don’t hear people making this point, I think it’s a very important point. Tyler does as well. The bear market ended on April 7. That was the bear market.
That was the bottom of the bear market folks. That’s just over three and a half months ago. We’re just now getting started with a new bull market. The point being this is when you see some of your biggest moves is early in a new bull market. But again, you’re not hearing people talk about this because they’re still in a shell shock from having four bear markets in seven years. I don’t know that that point can be made enough. Very important. Again, it comes down to investor psychology and being a contrarian because this is where the real money is made.
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When you get the call right, when you get direction right, you see the trend is in place now and you caught a bull market early. If you catch a bull market early, why would you possibly want to sell and take profits too soon? That’s again these are some of the major reasons we’re staying long and strong. Also, I want to mention this about Tesla. I just, just, just saw this, I covered this this morning a bit. They just released Tesla just released their Autopilot and full self driving supervised safety data. Check this out. In the second quarter of this year, Tesla had one crash for every 6.7 million miles driven. Where investors were, drivers were using AutoPilot technology or FSD.
All right, one crash for every 6.7 million miles. By comparison. This is official data from the National Highway, State Traffic and Safety Administration. People that weren’t using Tesla vehicles weren’t using autopilot or FSD, just driving themselves. They had a crash every 702,000 miles. Folks, that’s 10 times better, 10 times better safety data for Tesla than just human drivers. This is what Musk said was going to be the case to start the year. He said by, by mid year to end of year driving a Tesla on FSD will be 10 times safer.
We’re already there and it’s July, we’re already there in July. He said in a year from this we’d be, Tesla would be 100 times safer. So I know that look, I know this from personal experience. We tell people about, about our Tesla and how much we Love using fsd. And people look at me like, are you serious? You don’t really trust that car. And luckily my wife’s right there, who is very hesitant to do it. I will tell you, to begin with. And Sydney’s right there to go, no, I’m telling you the truth.
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We put it on, we entered the address and we let it go. And we’re not worried anymore about this. And my wife to make that statement, it’s a pretty big statement, I have to say. So, you know, we’re tag teaming our friends here and so they’ll, they’ll believe us because this is what’s going to happen. I would think, I would think within a year, the word will be out from every regulatory agency that Teslas are much not safer, much safer than a human driven vehicle. Again, this is very big. It’s going to be even bigger when you have Optimus and you have Groq, that’s installed in all the Teslas, that’s happening now. And then they have complete control of the vehicle to do things that you simply can’t do as a human being.
Right. It’s why AI is so incredibly powerful. We can’t, our brains can’t do what AI can do. The same argument, the same philosophy applies to Tesla vehicles. So again, we’re obviously buyers of stock if we get a dip. And again, last trade here, Tesla now up a buck 70 is here at 334. I think that’s basically where it was a minute ago. All right, what else today? You know what? I, I talked about housing this morning.
Look, we own housing stocks through it, through a leveraged ETF. I think yesterday was up 22%. Remember what the future is going to look like here. Jay Powell won’t be a fetch here forever. He’ll be out in what is eight months, guess what direction interest rates are going to go. And for people that say, how can you say that, Kip? How do you know that for social, how can you be so certain? We don’t know what Trump’s tariffs are going to do. Yeah, we kind of do. But the bigger issue is innovation.
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The innovation revolution. Innovation does one thing besides make our lives better, or in some cases maybe more complicated. But it brings costs down, it drives prices down. Combine that with the fact that China is exporting deflation, Europe is now exporting deflation. Right. Combined with the innovation revolution, you’re going to see prices continue to fall. There is just no way in that environment that, that we’re going to have inflation. This more than anything Else is what Jay Powell and his merry band of money printers have been getting wrong.
All right, let’s take a look on the hood today. We’ve got really good internals today by the way. Two to one advanced decline. We’ll round up here. Two to one advanced decline line for both NASDAQ and NYSE. Volume today. 74.6% of volume for NYSE. That’s very good.
65.1% of volume for Nasdaq also strong. And check this out. This is the number we think will continue to expand as the market continues to broaden and rotate out to other groups which is obviously happening now. Again look at small caps leading. We had 444 stocks. I hit a new 52 Kai today to just 45. Hitting a new 52 week low. This is the, this is what you look for in a broadening market and now we’re getting exactly that in our sector watch today we had nine sectors get very good here.
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Nine sectors finish higher, two finished lower. Led the upside by healthcare, industrials, energy and technology all are better than 1%. Almost nothing to the downside, almost nothing at all. Utilities down 8, 10 of a percent folks. That’s really it. And a commodity watch today. Didn’t have a podcast yesterday. If we had we were telling you about gold and the miners being up so picked yesterday gave some back today.
Gold today giving back 1.3% at 33.97. That puts it at what, 120 bucks below all time highs. The miners to yesterday were up almost 3%. GDX gave back 1% today. But we’ve been focused on this group for a long time. You know that we have. We’ve been right to do so. This is the beginning of the bull market of bull markets in this group.
Gold is going a lot higher and the miners are going to be a rocket ship from here. That’s our call. Has been our call from the beginning of the year and it remains our call today. What else in the commodities market today? Silver today giving up just 1/10 of 1%. A lot of good looking charts on silver, folks. 39.51. Very quietly kind of sneaking up here is a cup and handle formation. So silver looks ready to go.
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The old all time high is what, just right at 50 bucks an ounce. We’re really at the second highest prices ever for silver and we think this move continues as well. Again, silver goes into everything and the global economy is doing quite well. How do we know that Dr. Copper. Copper up another 2% today. 583 a pound on it. Just again, that’s the top copper and silver going everything.
And the demand for them and the innovation revolution is only going to increase else today. Crude oil today, West Texas Intermediate today was flat up 10 cents a barrel at 65, 42. And finally today, bitcoin. You know, just looking so ready to go past 120, 123, the old high, of course, what, a couple weeks ago. And now, since consolidating, I don’t expect this will last very long. Right now, last trade exactly 118,000. That’s down 1.2% over the last 24 hours. Okay, folks, that’s it for today.
Hope you had a great day and even better night. We’ll see you back here again tomorrow after the close.
In today's episode, Kip breaks down the day’s market moves and zeroes in on what’s driving investor sentiment right now. In this episode, Kip explores why oil and the situation in the Strait of Hormuz remain at the heart of market volatility, sharing his thoughts on media narratives, the potential for lower oil prices, and the international power plays influencing the global economy. Kip also digs deep into the power of seasonality, noting that while the last few weeks have been muted, historical patterns point to a strong melt-up in March and April. He highlights the ongoing tech leadership especially from semiconductors and walks listeners through the crucial “first in, first out” indicator, which signals that a new rotation into tech, software, and Bitcoin is underway. Tune into today's podcast to learn more.
In today's episode, Tyler breaks down a wildly eventful start to the week in the markets, picking up where Kip left off with yesterday’s big reversal day. From the latest on the ongoing conflict in Iran and the impact of geopolitical headlines, to lessons learned about market psychology (including why you should never sell on a Monday), Tyler Herriage navigates through the market’s volatility and shares key themes like liquidity and optimism in the face of fear-driven narratives. Tune into today's podcast to learn more
Welcome to the VRA Investing Podcast! In today's episode, host Kip Herriage dives into a whirlwind Monday in the markets, sharing insights and lessons from historic trading days, including the infamous crash of 1987. He reflects on the wisdom of his mentors—especially Ted Parsons and his adage "never sell on a Monday"—and examines how those lessons hold true even amid today’s high volatility.
In today's episode, Kip breaks down a rocky week in the markets, spotlighting the surprising fact that in spite of heightened volatility and the backdrop of war the S&P 500 closed down just 2%. Kip digs into the main forces driving investor sentiment: the impact of surging oil prices, geopolitical tensions centered on Iran, and what he calls the “4D chess” of Trump’s strategies on energy and the Middle East. You’ll get his take on why negativity dominated the headlines, the role of the Strait of Hormuz in global energy markets, and how all eyes are on oil as the primary driver of this market pullback. Kip also examines the unusual behavior of interest rates in times of conflict, analyzes the technicals and market internals, and shares his high-confidence outlook for what could spark the next major move higher. Tune into today's podcast to learn more.
Welcome back to the VRA Investing Podcast! In today’s episode, Kip Herriage is here to break down a whirlwind Thursday on Wall Street and share his unique perspective on what’s really driving the markets right now. After a quick shoutout to his son Tyler and a nod to his recent appearance with Grant Stinchfield on Real America’s Voice, Kip dives into some of the hottest topics affecting investors—from the surprising rise in interest rates during a time of war, to the rotational action in software and tech stocks, and the persistent strength of gold and silver despite today’s dip.
