In today's episode, Tyler brings an optimistic perspective to the turbulent last two days of trading. As the market grapples with volatility, Tyler shares valuable reminders about the importance of having a game plan, not panicking, and using pullbacks as potential buying opportunities. You’ll also hear insights into how global energy events are shaping financial markets, and why innovation and megatrends will continue to drive stocks higher. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Thursday afternoon, everyone. Tyler Herriage here with you for today’s VRA Investing Podcast. Hope you all had a fantastic day out there today. Well, it was a great start to our week this week with Monday and Tuesday Fantastic sessions. Uh, as you may expect, if you’re— if you’re followers here, if you have your listeners here of our daily podcast, um, you may know what I’m about to say. When Jay Powell, chairman of the Federal Reserve, gets in front of a microphone, he sends the market lower. Uh, he strikes again.

Uh, once again from Jay Powell, we’ll talk about all of that and much more And we have certainly some bright spots out there and highlights for you on the day-to-day. But if there’s one thing they want you to get out of this podcast is, you know, we’ll get to all of it and much more, but in times of war and in times of turbulence, volatility, people panic. And it’s understandable. You know, it’s Saying not— don’t panic is a lot easier said than done, especially when it comes to your hard-earned money. I completely understand that. So it’s more important than ever on days like today, uh, weeks like we’ve seen recently, to not be reactionary to the market. We talk about it all the time, you know, listening to the market, not telling the market what it’s going to do. It’s usually a fool’s errand in a lot of ways.

[00:01:53]:
But we’ll get into this a little bit more and what it means to not be reactionary in the market. A little hint: it involves— and really a requirement for investing, trading, whatever you’re going into as far as managing your money— you have to have a game plan, right? You can have all kinds of different parameters set up. You know, if you sold on a day like today because your system told you to, like we have the VRA Investing System— it didn’t do that for us here today at all, I’ll go ahead and say that as well. Nothing has changed in our view. But again, I’m just trying to give examples here. Gotta have a game plan. That’s the key point. At the end of the day.

Uh, so I’ve also got some great, uh, screen share, uh, charts and images, uh, you know, a couple that are, uh, unique here. I mean, AI, wow, what you can do is always incredible, right? Uh, so we’ve got our research parameters that we have for the VRA Investing System, and, uh, you know, using it to visualize some of those in some ways is very exciting. Ways we’ve used in the past as well, just kind of speeds up the process. Always, we do, you know, our work by hand to double-check everything, always. And every word that we speak, every word that we write, every word that you see from the VRA is never AI-generated in any way, right? We use it as a tool. It’s not a crutch at the end of the day. That applies to so much of technology, right? And yes, it is going to be incredible. We talk about how incredible it’s going to be every day here on the podcast, but You know, those are important things to remember that again, not, uh, they are tools, right? Not a crutch, uh, you know, that makes you lazy or, um, I think you get the analogy anyway.

[00:03:55]:
Uh, so we’ve got an exciting podcast here for you today. Of course, we’ll cover the market action where again, there might be a few surprises in there for you today for our internals. Sectors. And of course, as I’m sure you’re tuning in for, many of you— I know we’ve got a lot of gold bugs here on the podcast. And if you’re new, uh, or just not a gold bug in general, you know, tune in a little bit more. And one of these charts here will give you a good reason as to why you should be. Again, another thing that’s important to remember on a day like today, uh, where we did see a sell-off in commodities, in gold miners, uh, we look at that as an opportunity. Um, Again, if you’re a newer listener, I’m a gold bug.

I got it for sure from my dad at a young age, and really all-around investment bug. But really, when we were writing the, the Big Bribe in 2022, and you see the inflationary pressures of the time, right, maybe not inflation now but still the money printing, and it’s clear you must own assets at the end of the day. You have to. It’s the only way to keep up with with the money printing regardless of world reserve currency status, whatever it may be, right? That’s kind of one of the, um, and I’ll tie into really the— that’s, that’s about it for the intro here. I’ll tie this where I’m going from this into my next topic. Um, it’s really one of the key things about cryptocurrencies as well, um, that if you’re in a country where they just inflate their currency away, right, wages don’t keep up in the same way. So if your country says we’re adding 50% to our money supply tomorrow, well, your wages didn’t just go up 50% and now you have to pay for all of the inflation. Uh, you see it in, you know, bigger countries than you would think.

[00:05:47]:
Absolutely. If you look, you know, whether it’s Egypt or, you know, again, other much larger countries than you would think. That’s why cryptocurrency and it a different format has become so popular, right? Because if you can save, then you can hedge against your government doing that against you. So I say I make, you know, just because I’m here in the US, $100 here today, and I’ll immediately convert that to big, you know, whatever I can to Bitcoin in order to save. I’ll use the rest of my groceries and stuff like that. But that effectively becomes hiding money under the mattress. Again, if you’re— they’re printing 50% more, that money in the mattress is worth 50% less tomorrow than it is right now. Um, you can’t do that with cryptocurrency, specifically Bitcoin.

You can with some, right? Some have an unlimited cap on them. Bitcoin, uh, you know, it’s 21 million. You can do decimal points, it only goes out to 8. That was always a kind of early question of mine, you know. I could see, uh, someone could get hung up on that one. At least I did for a little bit there. But, um, you know, whether it’s not Bitcoin or another one, uh, sometimes it’s the only option to depending on where you are in the world. So we’re very lucky for those of you here in the US.

[00:06:58]:
You know, I think we take that for granted a lot. And the security aspect not only applies to our money but to our energy infrastructure as well. You know, I’ve talked about this here for the Strait of Hormuz, what’s happening. You know, a lot of that oil supply never sees the US. So in some ways, we may not financially be unaffected by it because of the global oil markets, but security-wise, hopefully— we’ll see, we’ll see where we go from here. I won’t spend a ton of time on it today because it is, it’s always such an ever-evolving situation, but I will comment on the financial side of things. So, you know, overnight in the last 24 hours or so, there was an Iranian gas pipeline that was targeted, I believe, by Israel. Then Iran retaliated, striking Qatar, or Qatar, at the largest LNG hub, I believe, you know, if not the one of the world’s largest LNG hubs.

20% of the world’s LNG travels through here, um, you know. So this is energy infrastructure, critical stuff. Will send, you know, commodity prices— me, in this case, not gold, silver, unfortunately, um, in this case, um, We’ll get to the topics of gold and silver in a minute. Um, again, in this case, infrastructure being taken off of line, whether it’s for oil or for gas, which, you know, one factor here that is really interesting, uh, Iran has one of the largest supplies of natural gas in the entire world, okay? That has nothing to do with the, the Qatar LNG hub, okay? They produce zero As far as I understand, if it’s not zero, I, you know, correct me if I’m wrong here, but I think that it’s pretty close to zero on how much natural gas they produce. Like, they’re an exporter of in their country. They may use it locally, I don’t know, but as far as exporting goes, so I think it might only be Russia who has more natural gas than, than, uh, Iran. So Again, another reason the current regime really wasn’t cutting it, I guess. I’m not gonna, again, go too deep into all of that, uh, today because I don’t want to— you know, the politics side of it, I love to pay attention and I will always.

[00:09:25]:
And the military side of it as well, always, uh, paying attention. But I, I— this is what we do here. This is why you’re here at the end of the day, is for the financial side of the topic. So we’ll get to more of oil and gas, um, in the future of this podcast for sure. But I had, uh, I had another topic there. But, um, so of course that news is still affecting the market. And of course, fundamentally, that does affect the energy market. You know, our view here is that the short-term market is overreacting.

I’m not trying to tell the market what to do. I mean individuals, investors, on the overreaction side because we’re seeing it from the massive backwardation still in oil prices later out in the year. Now those are continuously ticking up as this looks like it’s going to go on for longer and longer. But the world was dealing with it on Monday and Tuesday. So what changed really? And I think you can kind of tell, you know, I just explained a little bit of market action that we saw because of, uh, Iran. I think the other parts of it can be explained to another other than what we talked about a second ago. Jay Powell striking once again. We mentioned this here often, but of any modern Federal Reserve chairman, Jay Powell has the worst track record of sending the market lower during FOMC press conferences.

[00:10:52]:
I think it’s speeches more broadly speaking, right? It doesn’t matter where— if Jackson Hole or a non-Federal Reserve affiliated event, he just sends the market lower. Uh, so Kip talked about this yesterday. Uh, you know, I got, I got to step touch on it here for a second. Um, because it was, it was so typical Jay Powell. I guess we really shouldn’t have expected anything less. Um, we can get into the changes of the minutes and all of that, and obviously we knew they were going to leave rates unchanged. Okay, they’re still doing not QE, QE. They are, you know, printing money in some buying, I believe, more mortgage-backed securities.

But anyway, okay, so the market yesterday, as Kip described, was actually trading a little bit off of its lows of the day when Jay Powell got in front of the microphone. And then as soon as he had his two points, you know, he got the first question about would he leave after May, and then that was it. He was off to the races, right? You know, hey, I will leave as soon as, you know, another Fed chairman gets confirmed by Congress. Um, I guess that’s fair in some regards, but you know, it’s really having to even— you should have just stopped there, probably. It was, you know, I won’t do it until, uh, the investigations against myself are completed, or I won’t step down from the board even if someone is confirmed until the investigations are completed. Um, I believe Lisa Cook investigation there as well. Um, And Kip talked about this too. He looked so joyful to be able to say that, you know, to be staying on at his current job, and there’s nothing that anybody could do about it because no one of Trump’s nominees is going to get through Congress anytime soon, right? That’s how he looked like he felt.

[00:12:44]:
I’m not saying that I feel that way. I’m saying that’s how it looked like Jay Powell, you know, smug. I mean, you know, he’s not— I bet he’s not a good poker player, I would imagine. Um, Just a guess, just a hunch there. But again, as soon as those words left his mouth, markets move lower, yields move higher. And beyond kind of the losses of these two sessions, it’s the market coming to terms with the fact, again, Jay Powell is not leaving. And that means, right, it’s not just that he’s not leaving, that now means, one, we have to deal with him for longer. Second, you know, rates likely are not coming down anytime soon, right? He’ll push that off as far as he possibly can, as we can tell from yesterday, right? Usually this is an environment when you’re— when you’re having warlike scenarios playing out, the Federal Reserve is pretty easy to cut rates.

We know what would be happening if Kamala were in office right now. If Joe Biden were in office right now, rates would be would have been probably a full percentage point lower by now. And then something like this would happen, it’d be another percentage point lower from there, right? And that’s a high confidence call. The Federal Reserve is made up about 90% Dems. And, you know, hey, I have no problem with, with, with Dem representation in the government, but that is a lot, a lot for one institution who also has been caught, you know, staffers of his on hot mics saying that he does not like Donald Trump, right? So again, I don’t have to get into all of the facts here about Jay Powell, but, uh, you know, I was just talking with the, the, uh, our VRA team here. Uh, we all love what we do, even when it comes to having to watch the Federal Reserve. We’re very grateful for the opportunity, uh, to do this every day and to be here for you every single day, you know. In the financial world’s terms, I guess, rain or shine, right? We’re here.

[00:14:43]:
Um, so I knew that during the press conferences, even as boring as they could be, we watch them so you don’t have to, right? Uh, but I sent this text to the team during it because I was watching the market go lower. He just said those comments, you know. And again, so he went from the, you know, I won’t step down until someone’s confirmed. And let me go ahead and address your next question about the lawsuits. He, you know, he was ready. He was ready for it. Kip said it yesterday, I believe he practiced that one in the mirror a couple of times. Uh, so I sent this text to our team because we were all watching it.

Market’s heading lower, market’s lows of the day, market’s lows of the day. And just to kind of set the stage, you know, Jay Powell speaking. Imagine for a second you’re in Jay Powell’s shoes, right? Maybe even at your current job, whatever it is. You know, you’re at a job and no one likes you very much, right? Do you take it personally or not? Who knows, right? But imagine, okay, you’re in Jay Powell’s shoes. And gosh, imagine telling someone you’re going to stay at your job. Okay, I’m actually, you know what, I’m going to stay here a few months longer. I know you’re expecting me to be out by May, but I’m going to stay on just a, just a little while longer. You know, we’re going through a transition right now.

[00:16:02]:
Just make sure that the ship smooth, you know, has smooth sailing. And globally that decision causes equities to sell off, right? Not just here in the US, right? Not just your company. The entire world sells off because major indexes from across the globe hit the lows of the day after, as he was saying that. Right? Of course, I hate to rationalize all of one move to any one thing, um, but certainly a big part of it was Jay Powell. Uh, again, you know, we all know what he would be doing if a dim president was in office. So while the rest of the world booed, you know, this is what Jay Powell felt like yesterday. I don’t know if I’ve ever shared a GIF on the podcast before, but that’s it. Yeah, if you’re not familiar with Wolf of Wall Street, Jordan Belfort supposed to leave.

I’m not leaving. And all of the— those being his Federal Reserve, you know, fellow economists with him cheering him on, you know, he’s not leaving. This is our guy. This is our fearless leader here. He’s gonna take on Trump for, you know, no lack of a better term. That’s exactly what he’s doing here, you know, saying that he’s not gonna leave until some or all of these things are completed, and he knows that he has him here, right? Um, if, if Trump can’t get somebody through, we really are stuck with Jay Powell. That does— it doesn’t completely hamstring and hogtie this economy, but it didn’t— it doesn’t help Trump’s economic agenda. Okay, uh, now as you know, we’re full We’re the biggest bulls you probably met out there.

[00:17:45]:
We’re not, we’re not perma bulls though. We’re not perma bears, we’re not perma anything. So, you know, we’ll take this as it comes, uh, especially during a downturn like this. We still think we’re looking at phenomenal economic growth in the coming years. I was just talking to somebody in the industry. I’m in here in Austin, Texas, um, and I might have mentioned this on Tuesday even, but if I didn’t, I’ll mention it again. Samsung is putting in a new semiconductor facility, uh, just north of Austin in Taylor, Texas. They’ve already got one here where they do very close to, if not the highest, you know, bleeding-edge, um, version of semiconductors here in the US, right? Yes, a few years ago under Biden we had the CHIPS Act, right? But so many people just before Trump got into office, I mean really 3 years ago, had so many reasons, whether it was manufacturing, semiconductor production.

Yeah, we can do this kind, but we can’t do that here in the US anymore. The, the best facilities in the world right now are in the process of opening up by the dozens here in the US, right? Most people didn’t hear about— we’ve been talking about it here. I just kind of, you know, also it’s tough to pay attention to Samsung. They’re not a public company here in the US. So, uh, anyway, this is besides the point. Point is just like under Obama when he said, Trump, how are you going to create these jobs? You’re going to wave a magic wand? You know, Trump took that challenge and was like, very clearly, no, it’s, you know, hey, deregulation, tax cuts, unleash the American worker, right? Unleash the American consumer. Uh, deregulation being such a massive point of it, jobs get created, right? Over time it happens. Like, if you look at job creation now, you know, people talking about how negative it is, we’ve been talking about a weaker jobs environment.

[00:19:35]:
But the job creation is where you want to see it. It’s not under Obama. Under Biden, the job creation was government and hospitality, service sector, government only, really. Not top-tier jobs, you know, uh, that you really want to see. Now it’s manufacturing, industrials, tech, uh, you know, different areas of tech than you might think as well. Anyway, uh, I don’t want to get too far, um, Off topic here, yes, it’s not great for the Trump economic miracle. I think it’ll continue to power ahead, and the main reason why is the innovation revolution. This is how these megatrends build on one another.

The pace of innovation is only accelerating from here, so we’re gonna have phenomenal— I mean, the, the— again, it’s going to be so incredible that it’s going to blow everybody away. It’s going to create jobs, not destroy jobs. It’s going to create GDP by so many metrics that we don’t even measure yet, right? Quality of life metrics on a scale never before seen. Um, it really truly is. Uh, and I had one other point on that too. Um, well, again, it’s not just AI. It’s a wide variety. Of innovations taking place right now, from the energy space to the tech space.

[00:21:00]:
Space exploration, right, that’s one that could not be any more exciting. We talk about it so much here on the podcast. Um, but fundamentally, from those factors, we’ll get into some of this today. I’ll dive into one of them now. Fundamentally, for this market, really nothing has changed, okay? I know we got household— house— housing starts today, lowest level since 2022. I know that is, you know, we’ll keep an eye on this, absolutely. But when we talk about the housing market, okay, because this is a great example since this economic data that just came out today on the housing starts, we talk about this with the housing market all the time. This is not 2008, okay? Homeowners are well equipped right now.

We wrote the Big Bribe, 33% of people who were homeowners own their home outright. Now it’s 40%. Take a quick look here at home equity, okay, just barely off of all-time highs, explained a little bit by some of the pullback in housing, right? But again, these people— if you look at the chart of HELOCs, right, home equity line of credits, again, barely even on the upswing. Yeah, we have so much leverage from the consumer’s perspective here to ramp up. From the corporate perspective to ramp up earnings. On the same front here, um, let me take a look here. Uh, we’ve talked about this one here often though, that earnings growth for the S&P 500 as a whole, on average, double-digit growth on average as a whole. The Mag 7 names were even better.

[00:22:35]:
I mean, the earnings numbers were record-breaking earnings numbers by any means for any size company. And these are the largest companies in the world, you know, 25-30% increase in revenue, increase in earnings per share year over year while increasing CapEx. I mean, it’s incredible. Take a look here compared to even right now, our PE ratios are nowhere near the dot-com era. Okay, I’ll give you this chart first. For the Mag 7, many of them are lower than consumer staple names right now— Costco, Walmart. Would you believe that if I told you that last week or even yesterday? Um, you know, that’s how much room to the upside. During the dot-com era, we were seeing P/E ratios, uh, you know, in the 50s, 60s, hundreds, 150 for Cisco back then.

Uh, I guess it didn’t on this— in this chart, but Cisco back in the day, 150. And here’s the main thing, okay? At the end of the day, from that time period from 1995 to 2000, the Nasdaq rallied 580%. Okay, in the current bear market, take a look at this. Okay, we’ve had a good run from the October 13th, 2022 lows, but even at the all-time highs, okay, all-time highs that we saw last year, at the peak the Nasdaq was up 138%. From those bear market lows. Okay, so people call this a bubble, have them take a look at this chart, right? If this is a bubble, then this is the most boring and Monday bubble of all time. And I wanted to give you a, you know, real, uh, you know, physical representation of what that looks like here for the NASDAQ. 138% versus 580%.

[00:24:29]:
Okay, so if, you know, if we’re up 130%, you’re here, right? We’re here. You can have pullbacks, it’s okay. Then we get all-time highs again, right? They’re buying opportunities all along the way. And I’ll get to the market here in just a second. You know, we talked earlier on Tuesday about these pullbacks, right? We’re still, for the S&P 500, just 6% away from all-time highs. Okay, you get a 5% correction roughly, I mean, 3 to 4 times a year, every single year. Okay, you get a 10% correction every 13 to 14 months. They never feel good when they’re going on, and it always feels like this is the one, the market’s gonna tank, we’re gonna be down 40% at the end of this year, right? It always feels like that, it always does.

But we have to zoom out and give it some perspective. The average drawdown— so that’s the length of time, the— is, you know, 10% correction every 13 months. Okay, right now we’re at a 6% drawdown. Okay, the average drawdown for a market pullback is 13%. Okay, so we’re, you know, below a run-of-the-mill pullback at this point. That didn’t mean we get a 30% pullback that often, right? There’s plenty of stretches where we go without them. That is, again, just averages going back to 1950, actually. So, you know, just again puts in some perspective there of why, you know, you don’t want to do this.

[00:26:06]:
You don’t panic. One of my favorite sci-fi, you know, books, Hitchhiker’s Guide to the Galaxy. This was printed on The Hitchhiker’s Guide to the Galaxy. Two words: don’t panic. You know, again, have a game plan. You have to have a game plan. Because otherwise you get caught up in the headlines, in the mess. You know, even somebody who you like and trust telling you something, it’ll get to you.

It happens to us, it gets to you. But if it doesn’t go with my game plan, you know, hey, if I have to— whatever happens from there, I know what I can fix, right? If you’re just doing anything all the time and not sticking to any set of rules, how can you fix what’s broken? Right, how can you improve from there? And again, that’s why we have the VRA Investing System. So if you’re not already with us, come and join us at vraletter.com. Uh, we got 14-day free trial going on right now because you don’t want to end up in this group where we’re seeing sentiment right now. Fear and Greed Index hit a new low today, 17. Again, as contrarians, wow, those are getting extremely fearful. AII, over 50% bears. For the first time in 6 months, right? Things are leaning increasingly and increasingly towards the bearish side.

[00:27:25]:
Uh, the one chart I mentioned earlier, you know, I’m going to kind of wrap it up here in a second. Uh, this currency debasement chart I meant to show with the Fed of what the purchasing power of the dollar since the Federal Reserve was created. Um, I’ll come back to this one if I get some requests for it here. Um, hey, I’ll send it your way, let me know. Um, But again, back to sentiment. You know, when you have a moment like this where the dollar is— it’s going to continue doing this, right? Uh, it’s so massive how much out— like, it’s been devalued. 2020, when COVID hit, right, they inflated our money supply by 40%. You can barely even see that.

I’m sorry, I’m— you can barely— right here, you can— in 2020, when they inflated our money supply by 40%, the damage already been done. Right, you can barely even see that. It’s, it’s crazy. Um, so anyway, again, you must own inflationary assets, and that’s even with what gold is doing today. Let’s dive in quickly here, um, to our markets. I’ve been bouncing around, but again, sentiment there, we like to take the other side of that one. For our markets on the day, we actually had the small caps positive. They were up over 1% earlier in the day, finished up 0.6%.

[00:28:35]:
Good day today. Our other major indexes did finish down off the lows of the day though. And I got to point this out, you know, uh, the semis were able, you know, to hold on to their gains today and manage to finish positive. So again, exactly what you want to see. Uh, tech leading the way, the tech sector as a whole, which we’ll get to in a second, was also higher on the day today. So again, Textbook bull market action. Um, semis leading tech and tech leading the market. The Dow was our laggard on the day today, but also here, transports finished positive.

So another positive there on the day. The internals, again, let’s get to the bright spots here. I’ve talked a lot about them, but, uh, quickly, the internals, much better than you would have expected for a day where you spent so much time in the red. Almost even advanced decline, 52-week highs and lows, as you would expect, was negative, but volume actually came in positive on the NASDAQ today. Pretty impressive from the NASDAQ on a day we again spent so much of the day in the red. Yields did finish up again today here, as again, Jay Powell for longer, we’ll see. Uh, for our sectors today, energy did hit another all-time high. You may have, you may have guessed that one here.

[00:29:55]:
Uh, the financials also finish higher on the day, and the tech sector just barely higher. Our laggards were materials, consumer discretionary, and consumer staples— staples, excuse me. Finally here for today, our VRA commodity watch. I’m not gonna be able to spend as much time as I would have liked. You know, gold not too long ago was just above $5,000 an ounce. Big drop here. Now last trade, $4,600. $1,053 an ounce.

We remain extremely bullish on this group. We have for a long time. You know, we break it down here again every day at the VRA, but part of the VRA investing system is our— excuse me— our momentum oscillators. Right now, extreme oversold levels from gold. It’s had an incredible run even to get to where it is today at $4,600. It was just a couple years ago we’re at $2,000 an ounce. So I think this is an incredible buying opportunity for this group, not only for gold but for the gold miners as well. Uh, we’ve got our two favorite positions here at the VRA, uh, that we’ve been in for a long time.

[00:31:04]:
We have phenomenal gains in them as a whole. Um, but even on a day like today, this is when we average up into positions. That’s how much we like these. Uh, you always love to average into your winners in monthly dollar cost averaging. We’re big believers about that here at the VRA. Same with silver. Um, you know, similar pullback here still. I mean, what an incredible move.

If you’d said probably just a few months ago that silver was going to be over $70 an ounce, right? I mean, just October, November of last year. You know, that would have been a new all-time high and beyond. A year ago, people were like, okay, sure, you know, that’s an incredible move it’s been on already. And that’s after this pullback has taken place. So again, we remain incredibly bullish. Copper now at $5.52 a pound. Oil, uh, now at $95 a barrel. Again, stay tuned, we’ll continue to report on the latest in the energy markets.

[00:32:04]:
But folks, that’s all we have time for here today. Please be sure to subscribe to receive our VRA podcast every day at the market close. You can sign up at vraletter.com, click the podcast link at the top, and we’d love to have you with us. Thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close.