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VRA Investing Podcast: Unveiling Bull Market Signs, Hot Sectors, and the Roaring 2020s with Kip Herriage – January 04, 2024

Tune into today's VRA Investing Podcast as Kip Herriage breaks down the market performance in 2023, highlighting the top-performing sectors, and shares the VRA outlook for 2024. Despite recent market fluctuations, Kip remains stro ...

Posted On January 04, 2024Episode 1303
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About This Episode

Tune into today's VRA Investing Podcast as Kip Herriage breaks down the market performance in 2023, highlighting the top-performing sectors, and shares the VRA outlook for 2024. Despite recent market fluctuations, Kip remains strong in the VRA's call for a roaring 2020s bull market.

Transcript

Don’t look back because the market is closed. Good Thursday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. And again, happy New Year. As well as Tyler’s said yesterday. We took a few days off. Great to be back.

We reported this morning in our daily VRA letter that we came in with a pretty good year this year. Not our best year, but a strong year. Markets came in with, for example, Nasdaq was up 43.7% for 2023. We came in with gains of 50.26% last year. It was a good year for us. Our comp each year is a Russell 2000. It’s the one index with the most similar risk profile. We’re an aggressive investment newsletter and we do in a lot of small caps, leveraged etfs.

[00:00:50]:
So our comp is Russ 2000, which finished with gains of 15.1%. So we did better than three times the returns, our nearest index. And we’re looking forward to seeing if we can’t do the same thing this year. We think it’s going to be a good year. As you know, I view has been for some time now close to a year and a half, that we are in the roaring two thousand and twenty s and that this bull market is only in its infancy. And I think it’s important to remember on days like this, maybe starts of the year like this, we’ve had, what, four straight down days? Respond. I love what all the news services are reporting. Nasdaq just had its worst stretch since 2022.

[00:01:33]:
Five straight down days. Right. But anyway, the Nasdaq was down today. Let’s start there. Nasdaq was our loser on the day today, down right at one half of 1%. Also, by the way, SVF, excuse me, the semis were also down six tenths to 1%. They have been leading lower. Yes, we’re paying attention to it.

No, we don’t think it’s something we have to be concerned about. Our winner of the day was the Dow Jones, up ten points today at one point. We were up over 220 points today. Gave those gains back into the close. SVF 100 today down three tenths to 1%. Rust 2000 down one 10th of 1%. But again, yeah, last year was a great year. We have hit extreme overbought levels, at least we did at the end of the last year.

[00:02:17]:
Those are now working themselves off. That’s good to see. And we’ve also hit extreme greed levels on a couple of the investor sentiment surveys that we follow, such as the fear and greed index, which hit extreme greed yesterday and this morning. And also the AI investor sentiment survey also flashing some fairly extreme greed readings as well. So shakeouts like this are both healthy and needed in bull markets. And this gives us an opportunity to either establish new positions or add two positions. But certainly what we want to do, at bare minimum, is continue to hold those positions. We do that on a regular basis.

[00:03:01]:
We focus on this monthly dollar cost averaging in our growth stocks. We call our VRA ten baggers. We buy those every month. We allocate the same amount of money every month to add to positions, keep portfolio equally weighted per position. And that’s how we’ve done it for a very long time, and it works for us. A couple of our biggest performers for the year nail the three time housing ETF. We had the gains of 262% soxel, the three time semi ETF with gains of 225%. Palantir gains of 167% galaxy digital 174%.

And then we had multiple positions with gains of 40% to 50% Tesla, bitcoin, just to name a couple. Again, it remains our view we’re in the roaring two thousand and twenty s. And as Tyler covered yesterday, this is powered by our big bribe megatrends from our book, the Big Bribe out in the fall of 2022. And that we believe this bull market, and we think the evidence is pretty clear now, has the opportunity to either rival or maybe even surpass the.com melt up of 1995 to 2000. But again, we are working off extreme overbought situation based on VR investing system readings. And of course, again, investor sentiment got very, very bullish last year. But there’s a good reason for it. And boy, are we ever seeing it in the inflows for equity funds, ETf inflows, exchange traded fund inflows came in at 135,000,000,000 during the month of December.

[00:04:42]:
That’s an all time high. And frankly, it’s not really even close. But again, that just tells us, yeah, are people coming back on the market? Yes, they are. But this is just the beginning of the process. The public is only beginning to fall back in love with stocks. We think this continues again for many, many years. And we do have some sectors we like more than others. As good as the banks have been doing of late, we have very little interest.

We’ve talked about this ad nauseam over the years. They are value traps to a large degree, but we’re starting to see value stocks begin to pick up steam here, which is a good thing. As the market continues to broaden out our favorite sectors continue to be really the same that we focused on throughout last year with a couple of tweaks. We still believe the semis and tech sectors will continue to lead higher. This is what happens in the biggest of bull market. Certainly that’s been the case since the invention of quantitative easing here in the US, which kicked off after the financial crisis of 2007 2008. And again, if you follow the semis, they are the ultimate tell. They lead in both directions.

[00:05:51]:
They have been leading lower. But again, we think this is a short term pullback only, a short term shakeout only. And Tyler and I just had our meeting before this podcast, and I wouldn’t be surprised to see the markets up big tomorrow. I’ll tell you a couple of reasons for that in just a moment. Also this morning in our VRA letter, we focused on Rich Ross. Rich Ross is the technical savant, as we like to call him at Evercore. Just had a red hot hand last year and remains incredibly bullish. He also loves semis tech, and he’s very aggressively long or recommending anyway bitcoin and gold, to name a few other groups.

[00:06:36]:
He thinks the semis really are the place to be, and that he believes a 40% up year this year, we believe it’s going to be small caps. They’re going to have that kind of year. We love the small caps here. We also love, by the way, precious metals and miners, specifically the miners, which lead very much like the semis. If the miners are leading higher, you want to own this group. They’ve been leading higher since late, I believe it’s late October. Yeah, third week October. The miners have been leading higher.

That’s a classic buy signal for this group. We believe the gold is going to have a significant up year this year, anywhere from finishing the year out at $2,400 an ounce to maybe more than $3,000 an ounce, depending on some other factors, specifically being us dollar and let’s face it, manipulation. Gold and silver have been manipulated lower now for decades. That’s what’s really kept this group down. So that’s the battle. That’s the ultimate battle we’re fighting. And of course, the other battle with gold now is a new battle, isn’t it? It’s bitcoin, it’s cryptocurrencies. How much money has been taken away from what would have been invested in precious metals and miners were not for cryptocurrencies.

[00:07:55]:
You know what, the game changes and you got to adapt with the game, right? And that’s what we’ve done here. We’ve been in bitcoin for a very long time. We traded out of it at the end of getting my years confused. Now, we traded out of it after taking some pretty spectacular gains, being long from $2,000 an ounce, selling at 58,000. And now we are now aggressively long, once again, bitcoin from 28,800. If you’ve been following the news like we have now, the rumor mill is starting to pick up. Leaks are beginning to happen that the SEC, in the very near future, is going to approve bitcoin as a. They’re going to give it their blessing.

[00:08:42]:
They’re going to say it’s actually a legal investment. And I saw a report today, 88% of fund managers are waiting for the SEC to give bitcoin their blessing before they buy. That gives you an idea of the kind of pent up demand that’s sitting there ready to come into cryptocurrencies. But again, bitcoin is the one that we’re focused on. And of course, the miners as well. The bitcoin miners as well. But you have to wonder, where would gold, where would silver be today if it weren’t for cryptocurrencies? As a long term gold bug, long term silver bug, I have to tell you, it’s something that I think about on a daily basis, but again, it is what it is. We change with the times, and the times are certainly changing, aren’t they? But again, we love the miners here.

I focused on a chart this morning in a very letter, GDX, the minor ETF, is putting in what looks to be a near perfect ascending, which is a bullish channel. And if that’s the case, we’re going to see the next move will take GDX, the minor ETF, well through $32 a share. That’ll be a significant breakout. And we are buying this dip. That was the focus, is we’re buying this dip. We just had a golden cross with a 50 day cross, the 100 day in GDX, and the next golden cross, which looks to me, based on the chart, to be maybe a week away. It’s hard to tell exactly, but roughly one week away from now, we’ll have a golden cross in GDX where the 50 day crosses, the 200 day. Combine that with what we believe will be continued lower rates, continued long term bearish trend in the US dollar.

[00:10:26]:
It is a great setup for this group and maybe the strongest reason to own this group. Gold just hit all time highs. The miners are trading at better than 50% below their all time highs, and they’re trading at 30 year low valuations compared to gold. So this group, some would say it’s a value trap. I don’t think it is. I think this group is cheap. As the market continues to broaden out, we will look to continue to add to position. So we are aggressively long this group right now, along with small caps, semis, tech, we have energy and of course, some of our vra ten baggers.

That’s where our focus is. Along with bitcoin for 2024. I think it’s going to be a very good year where being a good stock picker and being a market timer is really going to come back to you in spades. Because we also know this year is an election year. And as we’ve shared with you throughout the last year, boy, the state really seems to have set this up perfectly if they want to bring in another Biden or whoever his replacement might be. If that’s the case, they’ve got this market set up perfectly along with the economy. Because if the economy does anything like anything close to what it did last year, and if the markets do anything close to what they did last year, this year it’s going to be very difficult, especially if Donald Trump is the nominee to beat Joe Biden. Maybe a different story with Ron DeSantis.

[00:11:55]:
But again, the key point here is that the state, which is, of course, we’ll call it the deep state, it’s the planners, they look to set this up perfectly. It’s another reason we think you’re going to have a very good year in equities, in bonds as rates continue to fall, as a dollar goes lower. That’s very bullish for our largest large companies, of course, which again, they do 50, 60% of their business outside the US, but also very bullish for small caps, which, of course, do most of their business, 70% or so of their business in the United States. Bottom line is we think it’s going to be a very good year. And the one group that we’re not sure of, that we own, is chinese Internet stocks. Watch it very closely. I happen to think China is going to come roaring back, specifically their tech stocks. They’re trading it unbelievably cheap.

[00:12:54]:
They’re trading at the lowest valuations on record, at least in the last 30 years. Tracking it, going back and looking at it, there’s a lot of value there. But of course, people hate China. It’s maybe another reason to own it. Everybody hates China. If you’re a contrarian, I think this play has a lot of potential. We are long, by the way, Kweb Kweb, which is the China Internet ETF, and it’s been going sideways for a long time. If you’re a technician, you know what that means.

The break is going to be either up or down is going to be a significant one, likely. It’s probably a measured move. We could see chinese Internet stocks go up 50, 75, maybe 100% this year if they break higher. If not, we will say ideos to it. But we do think the chinese tech stocks are going to rally throughout this year. All right, let’s take a look under the hood today. Tyler, in his podcast yesterday, got into this, and the internals were pretty ugly yesterday. Three to one negative or so on.

[00:14:00]:
Volume, much better today. Again, even though the market was broadly lower. Not by a lot, but still the internals came in pretty good today. Nasdaq, first of all, with the advanced decline barely just slightly negative. NYSE also slightly negative on Nasdaq. We’ll call that flat. Volume was actually exactly flat on NYSE. And volume for Nasdaq also slightly negative.

So even though we’ve had, again, four to five straight down days in the markets, the internals today would not really send a signal of any kind of concern whatsoever. And we had more 52 week highs today than 52 week lows. Those readings have gotten much better again. As the market broadens out, a rising tide is lifting all boats. We think that is going to continue. And our sector wise today, not quite as good looking here we had, of our eleven s 300 sectors, eight finished lower, three finished higher, led to the downside by energy down 1.6%, consumer discretionary down 1%. Communication services down seven tenths 1% to the upside. Healthcare up four tenths 1%, financials up two tenths 1%.

[00:15:11]:
And that’s really it. Not much in between there. And our commodity watch. We had gold today up $8, announced at 2050, announced again. We love this group. Silver today up $0.05, announced at 23 20. Copper down one penny a pound at 385 a pound. Copper looks very good.

Dr. Copper is a great signaling asset for the global economy, and copper has been acting much better. Again, 385 a pound. Now, crude oil today down twenty nine cents a barrel at 72 41. And again, finally, bitcoin up 1585 today up 3.7% at 44,299. Again, our target this year is 100,000 on bitcoin. And a lot of buying is about to come into this group. We think the SEC is going to give it its blessing and much upside.

[00:16:07]:
Again, it’s a great supply demand story, as we said for a long time. It’s a very simple story to us, really, assuming it gets sec blessing ultimately only having 21 million bitcoin outstanding, and most people now, like 80% of people have no interest in selling. What does that tell you? Right. It’s getting more and more difficult to mine it, more expensive to mine it. The halving is going to take place in April, May of this year, and that makes it, again, more expensive, more difficult to mine new bitcoin. They do that every three, four years. And so that tells us that this, again, as a supply demand story, I don’t know that there’s a better supply demand story out there because, again, because of the limiting factor of the number of bitcoin that will be in existence. All right, folks.

Hey, again, I hope you have an amazing 2024. We always appreciate you listening. Come and join us@vrainsider.com. Vrainsider.com have a great night. We’ll see you back here again tomorrow after the close.

Podcast Newsletter

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Time Stamps

00:00 Russ 2000 gains 15.1%, optimistic about future.
03:41 Bullish market with strong gains and inflows.
09:26 Bullish channel, buying dip in GDX ETF.
11:55 State planners bullish on equities and bonds.
16:07 Bitcoin's supply and demand story is strong.

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