In today’s episode, Kip breaks down the market’s impressive comeback amid global turmoil, reminding us of an old investing adage: “When bullets fly, stocks are a buy.” Drawing on decades of insight from his mentors and his own experience, Kip walks us through why markets often rally during peak geopolitical tension and why technical factors and interventions like the President’s Working Group and Federal Reserve liquidity injections often help drive recoveries.

Don’t look back because the market is closed. Good Monday after everyone. Kip Herriage here with the daily VRA Investing podcast. Hope you had a good day today. When bullets fly stocks are a buy. I must have heard this for the first time, I don’t know, four, four decades ago. I’m sure I learned as I did most things, learned it from either my first mentor, Ted Parsons, or my second mentor Michael Metz at Oppenheimer. But it took a long time to really learn that lesson because it just never seemed like, okay, that’s always held up in the past.

But this time it’s different. You know, the news seems so bad. There’s no way stocks can go up when the news is this bad. Right? What are the markets thinking? Don’t they know we’re about to have a World War three? But every, I mean literally every time when, when you get this kind of military drama, you see it’s happened after, in the Iraq war. We see it time after time after time. At the heat of the moment, stock bottom and then rally. And it is, there are actually some technical reasons for that. By the way, there is a, the President’s working group, right.

[00:01:04]:
That, that is, that is a real thing. The, the Fed is known for flooding the markets with liquidity when, when we might have something like this occur. So who knows what really happened here. But I think enough people now, you know, see if can read the analytics and go, okay, this has held up for forever. So let’s go ahead and give it a shot. Let’s buy some calls. Let’s go long. Stocks at the bottom and the market opens and let’s see what happens.

This is exactly what happened today when both supply stocks are buy and good. We finished at the highest today today. Dow Jones today up nine tenths of 1%. S 500 up almost 1%. Roast 2000 up 1.1%. Looking much better. Small caps are NASDAQ today up 910 1%. And finally, let’s take a look at our market leader.

Take a look at the semis here. Not textbook day Semi is only up 710 of a percent. But you know, they don’t lead every day. Right. But they had been leading. We, we, we share this chart all the time of the semis, the SP 500. And as long as you are on the right side of the market with the semis and they again, they’ve been leading from exactly the April 7 lows. Exactly.

[00:02:16]:
They’ve been going parabolic versus the market. When that’s the case, you only have to do one thing belong stocks. That’s just how this works. At least it’s worked this way from the birth of quantitative easing in 2008, 2009. And so it makes, you know, if you’re a trend follower and you know, some basic things like this and you know, when stocks, when, when, when bullets fly, stocks are buy, it makes our job a little bit easier. It gives you more confidence you to take actions you otherwise wouldn’t take. Right. So again, very good, very good recovery day to day.

And more importantly, it’s good to see that this, this situation with Iran is, looks to be over. It looks, looks clearly to be over here. We took out all their air defense along with, of course, Israel. There, there are questions about, you know, exactly how successful Trump’s bombing, America’s bombing of these Israeli nuclear, excuse me, Iranian nuc. No, we can’t talk about Israeli nuclear sites. Okay. But it’s hard to say how successful these, these, these bombings were because it’s a lot of people saying they, they really weren’t that successful. So who knows? I’m not a military strategist.

But the bottom line is, look, Trump is now a wartime president. I think that even if this is over, we just bombed a country, right, that had done nothing to us. And when you see the war going on between Iran and Israel and then we jump in and pick a side, yeah, we’re enemy combat. This is a war. This is a war. And again, we have to hope and pray this is over with. We have 40,000 troops stationed in that region. So for a lot of reasons, we want this to be over with.

[00:03:58]:
Iran is very unpredictable, but I think they also believe in self preservation. And look, it probably wouldn’t take a whole lot of convincing from Trump to pull a Gaza on big parts of Iran. And again, his base, by the way, with this kind of talk, talking about regime change, taking it further, his base is, as you see, no doubt, extremely split on this. A lot of big Trump supporters have completely flipped and turned against him. I think that’s a mistake. We said this in the beginning. Our position has been we voted for Trump for situations just like this. This is what we said on day one of this potentiality for something really bad to happen here.

We said on day one we voted for Trump for situations just like this. There’s no politics, whether you like the way you handle this or not. There is no politician of my lifetime that I would have trusted more to handle this situation correctly. And again, let’s hope and pray that this is over. It looks like it is. The markets seem to be confirming it. Oil today down almost 9% as Tyler reminded me from the open, oil’s down like 12, 13% of the day. It’s a huge move lower.

So again, there are these certain tells, you know that, that we learn to follow. We call these our war tells. They’re gold oil, the Vix and the semis and they’ve all, they’ve been messaging really from the very beginning. This conflict was going to be short lived and then it would be have, it would have, it would have a near term resolution and that would be a positive resolution. So look, I think that we’re now at a point where the bears are in the shorts, are in real trouble and they have to know this now, okay, this was their shot. They missed. They had their shot with tariffs because that, that did work for like four or five weeks. That’s over with now.

[00:05:51]:
The markets no longer care about it. What’s the big other big bug, bugaboo? What’s the other big risk? The Federal Reserve? Well, I think one thing’s certain, they’re not going to hike rates. All right, we can’t believe Jay Powell is that stupid as Trump would call him. But you see now today we’ve had multiple Fed governors that have come out, presidents have come out and sided with Trump. Now they didn’t say that but they said, yeah, they think, they think that Powell is on the wrong side. Bill Pulte a Pulte homes today said they need to investigate Powell because something, something fish is going on here. Is this clearly political? Bill Pulsey’s also called for him to resign as we have. I said that I first said Jay Powell should resign two years ago on Charles Payne show and I think I’ve said it about every other time I’ve been on the show because he’s the worst fetch here of our time.

History backs it up, fully made five major policy errors. The biggie, which of course everyone remembers is we don’t have inflation. Oh, then the next meeting, okay, yeah, we have inflation but it’s under control. And the next thing you know, 41 year highs in inflation. Okay, that was Jay Powell 2018 was, was not as well known but if you live through it, that fourth quarter from hell, the Christmas Eve from hell, they had to halt the markets because it was crashing. That also was indefensible from Jay Powell. So yeah, this guy should not be Fed chair. But as we also have told you in many cases the Federal Reserve is part of the most powerful of cartels on the planet.

There are seven cartels on the planet. G. Griffin taught me this many times over the years. Gio Griffin spoke it. I, I have to say at least 15 events that I did. We used to have private dinner. It was so. I love doing these events because we get all our keynote speakers and we’d have a private meal before the event started.

[00:07:48]:
I made sure they flew in early so we could all get together and just spend an entire evening together over a, you know, just a, just a really good meal and just talk, just to go around the table. What are you working on? What’s important to you? What are you seeing? What was it? You know, what do you, what’s your, what your crystal ball tell you? And, and Ed Griffin, Jeff Griffin was at every one of those dinners, just a phenomenal human being still going strong, still running his red pill camps. We intend to go to one later this year, by the way. Uh, we’ll, we’ll make sure to announce that if you want to come and join us because again, the creature, Jekyll island, he’s a legend. And you know, he, he, he, he taught me a lot of things like this over the years that have just really held up. So look, this looks to be over. That’s good news for all of us. The markets want to go higher.

Jay Powell clearly isn’t on the, in losing support among, among his own people. Right. Uh, but again, it’s the most powerful cartridge on the planet as cartel answers to no one. They’re number one. Military cartels number two for a reason. So Trump’s trying to get rid of the guy for a long time, hadn’t been able to do it. But now all this talk of a shadow Fed chair and then Trump announcing early who his Fed chair is going to be. There’s a lot of power behind that.

Again, Jay Powell says he’s not political. No one that I know believes that. Not a single person I know believes. We laugh out loud when he says it. It is a laughable comment to say the Fed’s not political. We’ve had multiple presidents tell stories about their situations, their run ins, right, with, with the Fed chair at the time, Lyndon Baines Johnson put the guy, put it, put the Fed chair, I can’t remember his name now. Put his Fed chair up against the wall, pin him to the wall, yelling at him, grabbing him by the collar. I mean, putting the fear of God into him to, to do the right thing here.

[00:09:41]:
And the right thing for Powell, what would it be? Well, look at the 10 year, 10 year yields now down to 4.32%. Okay, remember all the people saying, oh, we’re going to 5% and the markets start to crash and then we’re going to go higher. Rates are going. No, they’re not going higher. We are the innovation revolution, folks. Because what that means for interest rates is that we’ve got disinflation coming on top of disinflation. China, Tyler is one of Tyler’s favorite topics. China is exporting deflation.

Deflation, Pure deflation all over the world. Europe’s now doing it as well. And if Powell and his buddies aren’t careful, they will foster in an era of deflation. By the way, that’s the worst thing possible for banks. It’s the word that scares bankers more than any other word, deflation. Because in a deflate, pure deflationary environment, guess what happens? Debt loses ground. Debt begins to feed on itself in the wrong direction. And next thing you know, people aren’t borrowing.

Why would they need to? There’s no inflation, economy’s doing well, and that’s where the Fed gets their power from. And that’s why we’ve said for forever they want rates to go lower, just not under Trump. They just can’t get it under Trump because lower rates in this economy with Trump as president, as much as he may have bungled and he has, the tariff thing was just, look, it was horrible execution, right? Poorly thought out. It was pure chaos. So people would say that’s what Trump wants to do. Bottom line, didn’t work. And, but again, he reads the room as well as anybody, doesn’t he? And he read the room here on the Suran thing. I think that’s part of the reason why this should be over, because Trump’s base has turned on so many of Trump’s base, some of his most vocal supporters are not there anymore, okay? At least on this issue.

[00:11:30]:
And so that, that makes for dangerous territory when he gets the midterms next year. Now, Trump may say he doesn’t care. He’s not up for election again, so why should he care? Because the midterms really matter to him. Because he won’t get anything done, right? Matter of fact, not only if the Republicans lose the House, not only will he not get anything done, he’ll be impeached. It’ll be their first act they take, and it might even be successful. It would pass in the House because every Democrat would vote for it. And it might even do damage to the Senate because Trump, you know, again, he’s, he has, he has Pissed off a lot of people. Okay.

But again, read the room. He’s made that, he’s made the pivot, as Trump does typically at the right time. And I think this is, this is the plan the entire time. It’s why, again, it’s why we’ve trusted Trump on this. And I think he has done the right thing. So the market, again, if this is over with geopolitical strife, good, high rates aren’t coming. The Fed’s not going to hike rates. They are going to be in cutting rates.

There won’t be two rate cuts this year. There’ll be three or four. They’re coming, okay, because there is no inflation. And you start thinking, what, what, what, what is the other downside risk people forgot? The fourth quarter earnings for 2024 came in at what, 16% first quarter earnings this year at better than 12% right now. Still a couple of companies to report, but again, the SB 500 companies, better than 12%. Those are, those are really strong back to back quarters. And now he can really get the ground, get, get the ground moving from these, his feet with this big beautiful bill, get the budget bill and the tax cut done, make that permanent. And now the markets are like, why aren’t we higher? What do we have to fear now? Now, some would say, but this has all been climbing a wall of worry.

[00:13:25]:
This has actually been bullish for the markets. I actually happen to think that we’re tired of that concept. We’ve had enough to worry about. We had the worst two decades in American history. We’re ready and we deserve good news. I think Trump’s kind of cleaning things out while he can really get things done in his first year in office. And you know what? Let’s make the second, third and fourth year a celebration of American greatness and featuring a stock market that rocks and rolls. We’re talking about a parabolic kind of move higher that just goes on and on because, folks, the money is there, the amount of money, not just mutual funds.

I mean, money market funds. $7.3 million. I’m talking about real money. I could tell you so many stories about how fearful people are and they just won’t commit to the markets because they. Again, we’ve been conditioned to think something bad’s about to happen, right? What if something bad doesn’t happen? And that’s, that’s. We’re optimists and we think that is the future. Again, that was all in our book. The big bribe is that we’re gonna, we’re in the roaring 2000s and into at least 20, 30, we’re gonna see a market that soars higher.

Our target still $100,000, $100,000, $100000. The Dow Jones right now it’s at 42,5. So more than doubling in the Dow Jones and 40,000 in NASDAQ, folks. We’re at 19,6 now. Okay, so I mean it wouldn’t take what, two, three years of 25, 30% gains and we’re there. So I think that that’s what’s coming. And so we are very optimistic. We have been aggressively positioned for this kind of an outcome.

[00:15:00]:
And when you combine again the innovation revolution, the fact that we’ve got pure clear disinflation, there’s very little. And earnings are fantastic. Earnings drive everything. I mean, everything, everything. The last thing to really get going again is housing. All right, you’ve read what we’ve read. The housing statistics are not good. Now I’m seeing, still seeing people saying this is, this is what we saw heading into 2007, 2008.

And they’re not wrong. Some of these stats do appear to be that bad. But they’re missing the big picture. 40% of Americans don’t have a mortgage on their home. Their mortgage is their home is paid off free and clear. 40% obviously an all time high. Also an all time high is equity in home also at all time highs. So with those kind, with that kind of data, credit scores all time high or just off of that, this kind of data, the kind of liquidity is out there, serious money on the sidelines.

If we get the housing market going with lower rates and again the 10 year to get a 30 year mortgage now you’re looking at about 7%, just under 7, 6, like 6.9%. Okay, that get that down, back into the fives, mid fives, low five, which is where it should be now. That’s where they should. It is criminal that the homeowners and people that want to be homeowners are being penalized like this from an arbitrary and capricious Federal Reserve that is 100% political. Jay Powell should have to answer to that. And who knows, maybe he’ll have to get a little more Cubs. You think he’s been embarrassed enough? They wouldn’t want to keep making these big mistakes. But again, who’s he answering to? Right? He’s answering to the state.

[00:16:38]:
Right, the deep state, the Federal Reserve. We are talking about one entity that is the same. And so the last thing they can do and that they want to do is start Cutting rates so the economy really rocks and rolls. Housing market gets, really, gets juiced again. Right, because that’s coming. They can delay it, but they can’t stop it. That’s been our view. And the markets I believe are discounting that now.

There is no better discounting feature that exists except the stock market and of course the, the, the, the, the debt market as well. And that’s all pointing to an easing of rates and a much stronger housing market. We think that’s coming. We don’t share any of those concerns that the housing market’s in trouble. We’ve as in none of those concerns. And we share that with you often over the years. You know, I, I wrote this up this morning. What else today? Oil again, down almost 9% today.

Gold. Gold. I’m writing this up tomorrow for tomorrow’s letter. Seasonality for gold is about to kick in. We’re talking about the most bullish. I believe I have to double check my, my work on this. The most bullish six months of the year for gold are starting like this week. Okay.

[00:17:54]:
And so, you know, you may go. Well, Kip, why would gold go up? You know, we’re not going to have geopolitical risk. Why would you want to own gold? Because I never wanted to own gold for that reason to begin with. Right. Gold was flat today. Why oil got smoked. There’s a tail right there. But gold right now at 3384 is sitting what 100 was this? 130 bucks basically from an all time high.

Gold was never going up really because of geopolitical risk. Gold is going up because the financial monetary risk because of our debt, not us, but globally. And because again, the money printing machine just can’t turn off it. It won’t turn off this, this won’t stop in my opinion, until there is a World War iii. When is that? No time soon. I know. I think no time soon. I think you’re looking at something where again the loser winds up paying all.

Look at history will tell you that Whoever loses in 30 years or whatever will wind up taking care of the debt for us. I just don’t see the debt as being a problem. I know I’m in the minority. I know people laugh at me when I say it. But folks, I’ve been hearing that our debt’s going to crash our markets and our economy since I got in the business in 1985. I’m not kidding you. The perma bearers were there then saying that our. Oh, look at how big our debt is.

[00:19:08]:
We’re at 47% debt to GDP or whatever it was in 1985 and just never, it’s never really been a problem and I just don’t think it is now. So you can call me a Pollyanna if you want to, but I’ve been right over 40 years. A lot of people have been wrong and they just keep saying, Peter Schiff just keeps saying the same thing. How can you be wrong every year and get any sleep? I mean, I, I, I, I, that’s why we’re trend followers. As you, as you’ve heard us say often, we want to be on the right side of the market. I don’t really, I’d much rather be a bull than a bear, but if the market’s in a bear market, I can deal with that. I just have to change my outlook. But we’re trend followers, so we’re on the right side of the market at all times, as much as possible.

And again, I think that this, we’re, we’re, we’re getting ready for a second half of the year. This could be electric to the upside. 2026 could be, could be a, just a bonanza for investors, right? Especially how rates coming down, housing market getting its juice back. So much money sitting in housing, so much money sitting there in home equity not being tapped into. We start getting all this liquidity on the sideline, starts coming into equities. What do you think is going to happen? This market is going to melt up, right? We are so close to that happening. And so I just encourage everybody to, you have to pay attention to the downside and you have to know about, listen to the risk and you have to listen to both sides and make your, you know, make the best decision you can. But in this book, in 2022, the Big Bribe, we, we, we, we, we explained what we thought was going to happen.

Every single thing we wrote in that book is happening. Every single thing we wrote in that book in the 5 megatrends are all playing out. And if rates could just come down, everything else falls into place and that’s what we believe is going to happen. And I think, I think in the very near future the 10 year is going to be below 4% is 4.3% now. I think it happened quickly. We just got to get one person to act along with his buddies at central banks around the world. Trump’s right about this. You know, our interest rates, we should be number one in the world, not 38.

[00:21:19]:
And that’s what number he’s used. I’ve not Seen that list. But I wouldn’t doubt it. I wouldn’t doubt it. Chinese interest rates are all time lows. Their debt to GDP is 320 to 1. 320 debt, GDP. What is going on here? It doesn’t make sense, does it? And that I think tells us it’s political, it’s by design and it’s part of get Trump.

Let’s get that resolved and we are off to the races. Multi years of hyper growth again. Second year, an electric second year, a phenomenal 2026. And we’re going to be positioned exactly that, that way for all of this. Hey, if things change, you know what, we’ll, we’ll change too. But we are extraordinarily bullish and we’re not about to back away from that call. Also the put call again. Tyler always picks up in this stuff.

Book call ratio today. Check this out. Look. All ratio today from midday on was 0.96 or better. Closed at a 0.98. That is elevated means a lot of people are buying puts thinking something bad is going to happen again. The bears are out there even with this action today. Big recovery like Iran’s situation may be over with again.

[00:22:31]:
That’s our hope and prayer. But a lot of people buying puts as your contrarian does, extraordinarily bullish. Now check out these internals again. Remember, we opened lower futures sharply low overnight. We opened a little bit lower, you know, low midday. Excuse me, just after the open, I think we were down 100 points on NASDAQ. What was it? I was actually out of the office first thing this morning. But Dow Jones was down big.

Nasdaq down big. And then here came the rally. So a lot of times the eternals just never play catch up, right? Because they, they, they, they, they’re cumulative right throughout the day. Not today. NASDAQ very 800 more issues advancing than declining NYC 2 to 1 positive volume today. Let me give a quick refresh here. A lot of volume on NASDAQ today. Again.

A lot of, lot of, a lot of pity stock and a lot of love. 63% upside volume day today for a NASDAQ NYC 61% upside volume day. We also had what about 75 more stocks hitting a 52 week high than a 52 week low again. Very good internals today on a day that could have gone the other way. Sector watch today, 10 of 11 sectors finished high on the day. This is again, this is extraordinarily good energy with oil getting smoked down. The only laggard Today, the only one negative down two and a half percent. Consumer discretionary, what you want to see, up 1.7%.

[00:24:04]:
Real estate again. Lower rates, up 1.5% again. This is a leaderboard that you’d want to see that tells you if you understand what’s happening in the markets. This is the kind of sector watch that you’d see. Sector watch and internals today and a commodity watch today. Again, oil that smoked right on. On peace. The bears hate it, but.

But of course we love it. Oil down, as I said earlier, down almost 5% of the day. Down 657 a barrel at 6727. Gold today, down 2 bucks an ounce at 3412. Silver today up. Is this right? I didn’t see this trade. It shows up 1.7%. Don’t know that that’s right.

But $37 an ounce is where it is right now. Copper on the day, flat at 482 a pound. Crude oil again, just covered down big on the day. And finally, the day bitcoin, Bitcoin fell over the place, it dropped below 100,000 overnight again. On, on, on. Concerns of the war really growing and ran doing something really stupid. They didn’t. So a good recovery now bitcoin back up to almost 104,000 now.

[00:25:18]:
It’s up 4.6% from the lows now. Last trade 103. 103,730. All right, I got a lot for Tesla. I wrote this up this morning. I got to cover it because we just, of course had the news, right? We just had the news over the weekend. Tesla launched the, Their, their cyber taxi. Right? Their robo taxi.

Okay. It was limited, of course. It was still supervised. There was someone sitting in the other state. They want to, they want to do this very, very slowly, carefully, as they should. But you know, we spent the weekend with friends in Galveston Sea IO actually and drove the Tesla down there. It drove us right, it drove us there, drove us back. No interventions.

It’s just we just. My wife and get to sit and talk, have a conversation. Every now and then we look back at the road. Now it does remind you to look at the road. It beeps at you if you’re not. If you’re not looking at the road. But again, Robotax is the future. Fully autonomous driving is the future.

[00:26:15]:
Tesla’s the only plane for this Waymo. It’s almost, it’s almost a joke. It’s almost a joke that people think Waymo with, with their LIDAR system is going to be Tesla’s vision system. People that understand, really understand this story pick Tesla every time. So now it’s game on, right? The future is arriving. It’s not just autonomous driving. By the end of next year it’ll be everywhere all it’ll be legal in every 50 in all 50 states. Maybe not some of the blue states again, get Trump or get, get, get musk in.

We’re also talking about of course the Optimus robots. So they’re coming. This is as we just tell people. Look, it’s our favorite stock for the innovation revolution. If you have to own one stock, make it Tesla. And just don’t even worry about the short term, only think long term with this stock. Just keep buying it. We use monthly dollar cost averaging today Tesla up 8% it actually figured finished down a couple from the highs of the day.

But last trade dow up better than 8% at 348 a share it’s a steal. Our year end price target is 500 and our 2,028 price target remains $2,000 for Tesla. One of those days folks. All right. Hey, always appreciate you listen, hope you had a great day and even better night. We’ll see back here again tomorrow after the close.