In today's episode, Tyler Herriage breaks down another volatile day on Wall Street, offering his signature optimism even as markets face downward pressure. From big moves in oil and energy to the seasonal dynamics of this traditionally bullish period, you'll get a behind-the-scenes look at how headlines, and not fundamentals, are shaping investor sentiment. 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. It was another volatile day here. I won’t sugarcoat it. In any way for the podcast today, uh, but I will lead with some optimism. You know, if you’re a longtime listener, you know, uh, that is true year in and year out about Kip and I, is that we are optimists about what is coming, not only for the market but for the economy, for America, for, for much more than just stocks.

And I’ll get to, uh, some points on that here today. For the podcast. But of course, we’ll break down today’s market action, the movements that we did see, uh, to the downside in our major indexes today, and the moves to the upside that we’ve continued to see this week from the oil market and the energy sector as a whole. We’ll talk a little bit about that and where we’re headed seasonally speaking as well. You know, If you’re again a long-time listener, you know that seasonally speaking, we are in the most bullish time frame of the year. February can be a little weaker. It’s the weakest of that 6-month stretch. Let’s see where we’re headed from here though.

[00:01:40]:
So stay tuned, I’ll get to that on the podcast here today and much, much more. Um, of course we’ll cover the market internals as well, our sectors where we did get an all-time high. Maybe not a huge surprise if you’re watching closely today, uh, and our commodity watch too. We’ll have some oil commentary sprinkled in and out, uh, throughout today’s podcast, I’m sure, because it really is all the headlines in the financial mainstream media are about. It’s either oil markets or an Iran update. That’s about all you’re getting. I’m not sure about some of the other outlets, uh, as far as mainstream media goes. But for the financial mainstream media, absolutely.

So we’ll take a look under the hood beyond some of those headlines, but of course we’ll look again at those sprinkled in and out. But it is amazing that just not too long ago, the oil markets weren’t an afterthought, right? You know, if we go back even a few months, okay, a few months ago Before the start of the new year, it was, it’s an AI bubble, the bubble’s gonna pop, right? That was, uh, the fear headline of the day, and it got a lot of people afraid. It got a lot of people out of this market, or people who aren’t in this market stayed out as well. Um, then at the beginning of the year, it wasn’t just that the AI bubble had popped for stocks, is that AI was coming for your job, and we’re gonna see massive layoffs. These jobs are never going to come back. They’re not going to become anything else. You know, it’s coming for white-collar jobs, coming for blue-collar jobs, coming for everybody, right? But even people at the highest paid level, it’s coming for you first. And then college students will never have an entry-level job to get into.

[00:03:32]:
We hear all the arguments, and I understand, uh, the, the fear topics do so well because they are based in fact. In a lot of ways. We won’t, uh, try and beat around the bush from any point of view. But what I think that they do time and time again, um, is they overweight the downside potential of some of these things and underweight the optimistic way of looking at it. What are the good things that’s going to come out of these innovations, right? Uh, that’s how we choose to look at it. Here at the VRA. You know, there’s never been an innovation that didn’t create more jobs than it destroyed. That is true time and time again throughout human history.

We expect exactly the same here from the innovation revolution we’re going through now, meets the roaring 2020s. I’ve got a couple of topics today I’m looking forward to getting into on that note as well. Um, But I will continue and kind of start with the, the optimism side of things, because as you know, we are extreme optimists here. Doesn’t mean that we’re perma bulls on the market, right? We don’t like to be perma anything when it comes to the market, because you can’t tell the market what to do at the end of the day. So, so much of this is also about listening to the market and where we’re going from here, and we’re seeing the signs over and over again. You know, really, if you’re willing to look for them, they’re, they’re, they’re glaring right now about what an opportunity. So on a down day like today, it’s good to put it into some perspective for the market, right? Even for the NASDAQ, we’re still up 120% from the October 2022 lows. That doesn’t help you if you just got into the market, I understand that.

[00:05:29]:
But if you did just get into the market, it’s time to start thinking in a longer-term approach. That’s why we have the VRA Investing System here. If you’re not already with us, come and join us. We’ve got a 14-day free trial going on right now. We break it down for you exactly what we do. You know, we have the VRA Investing System again to remove emotion from it, but also to time the market to some extent when things are in our favor. Absolutely. But we’re not day traders, is the point I’m trying to make here.

We will trade some positions for months at a time. That’s what we do with our ETF strategy here. And we use the profits from that strategy to put into what we call our VRA 10-baggers, which are companies that have the opportunity for massive outperformance. Um, so we’ve got a lot of those. And again, come and join us for 2 free weeks. You get full access to exactly what those are and our commentary on them as well. So, uh, we’ve got a lot of exciting names in the portfolio right now, so we’d love to have you, have you here with us to experience this with us, uh, what we see as a generational bull market that we’re still in the early innings of. Um, it seems like we’ve said that for a long time, but we began saying in 2022 that this is going to be a decades-long bull market.

[00:06:54]:
So we’re not even to the halfway mark here. So early innings still applies, absolutely. Again, the NASDAQ rallied 585% in the dot-com melt-up. Again, to date, to date, from the bear market lows, we’re up 124%. I was going to save one stat for later, but let’s go ahead and jump into it now as well, because what we’re seeing is absolutely textbook bull market action right now. And I hope that comforts some of you out there who are seeing this action, seeing the headlines, and are very worried about your positions here. I certainly wouldn’t fault you for it. But let’s take a quick look at some of the analytics behind this.

Okay, so at this point, um, I ran these numbers a little bit before the close today, uh, so In most cases, we finished off the lows of the day. The small caps actually finished, uh, at roughly at their highs of the day. Down, yes, but hey, we’ll take it as a small victory on a day like today. Um, but for all of our major indexes here, from the NASDAQ, Dow, and the S&P, we’re anywhere from 4.4% to 6.8% or so away from an all-time high. Okay, even at the lows, the NASDAQ, which you don’t want to see move, you know, leading the way lower, but it all, you know, leads to the upside so much as well. The outperformance from the NASDAQ compared to the other two, um, it’s, uh, has a larger, larger trading range anyway. Uh, 8.1% from the all-time highs down from the all-time highs to the lows in the NASDAQ. The S&P Only 5.2%, right? Right now, 4.4% away from an all-time high.

[00:08:46]:
When you look at that and you think about the last few weeks of trading and what we’ve seen from the oil market, you would think that it— you might think it’s a lot worse than that, right? And the major indexes don’t always, uh, show the full results of the market as you would if you’re opening your 401k account. Uh, by the way, I’ll be on Grant Sinchfield’s fantastic podcast, uh, tomorrow. So hope you can come, come and join us. We’ll talk a little bit about this, I’m sure. Um, but when you look at your 401k account over the weekend, it’s easy if you’re, if you’re not expecting it, right? You know, the market’s down 5%, that means under the hood most stocks have taken a hit harder, right? Some have done phenomenally better. Some of our FIFO names like software, uh, you know, from its lows now is up 10% off of its lows, uh, even with, you know, the pullback over the last few sessions has really shown some relative strength compared to the rest of the market. But back to the major indexes, again, doesn’t feel great, a pullback of this size. But we’ll put it into perspective.

We have a 5%, a mild correction, roughly 3.4 times a year. So every, you know, 3, 4 months or so, there’s, you know, or sorry, not roughly every 3, but a few times a year, right, will we see something like this happen. Um, Then every 12 to 13 months, you’ll see a correction of 10% or more in the markets. Now it goes down to about once every year and a half, or 18 months or so, to get to 15%. Um, so again, but this 10% range, which we’re not even to yet, is— it happens every 13 months. Uh, so not like clockwork, right? Sometimes they happen more frequently, sometimes they happen less frequently. Kip and I have talked about this from, uh, you know, 2018 onward and the mistakes that the Fed has made. There’s been a rough go for the markets where we’ve had a lot of bear markets, technical bear markets of 20% pullback or more in the major indexes, where the average stock fell 30 to 40% during that time frame.

[00:10:57]:
Um, that’s why we’ve been so optimistic about the future. We just went through all of that. It’s time for some, some really good years. Uh, and we still see that as the case. Absolutely. So when you put it in perspective though, and you think, all right, this does happen roughly anywhere between, you know, every 6 months to every year and a half for a minor pullback like this, okay, you start to look at it as a buying opportunity. So it’s much more fun to be optimistic on a day like today when you look at it from that point of view. You’re getting some of your favorite names on a discount right now, and that’s really the only way that you can look at it.

And that’s why, uh, you know, Kip’s Old adage from his mentors of never sell on a Monday helps so much on an opening to a week like we just saw. Helps again remove some of the emotion from that investing so you don’t make a mistake out of emotion. Bottoms can be messy and they never feel good, but this isn’t anything that isn’t outside of textbook bull market action. Here’s what’s really textbook about this is that sentiment has absolutely swung to the extreme fearful side. Uh, so let’s go ahead and start. I’ve got a couple of screen shares here for you today. Fear and Greed, as you might have expected, now finally into extreme fear mode on a closing basis. We hit it now.

Uh, you know, again, when we get to the point where the market is this distance from an all-time high and the Fear and Greed remains— it didn’t have to be in extreme greed, but we’re in this range, right? In in the greed mode, maybe teetering on neutral but still leaning greed, everyone’s saying buy the dip, buy the dip, um, that’s when we’ll be wanting to look for an exit. There might be plenty of rallies still left to come. Don’t want to jump the gun on that for sure. You know, bull markets can always go longer than you think, and the inverse is true as well. Um, But again, this is a telltale sign, right? AAII, the investor sentiment survey that comes out weekly, came out this morning. We saw a 10% jump in bears week over week. That’s a big swing. Over 45% or so of investors are bearish.

[00:13:16]:
Here, I’ll go ahead and pull that up really quick here. I won’t— I’m not going to share it, but I do want to quote it real quick. So 46% of all investors are bearish who vote in this poll. That means— and neutral is still at 21%, okay? So 67 is, you know, the— add the decimal points in there, 68% or so of all investors are neutral to bearish right now. We put it in perspective like that. Again, contrarian investing when it comes to the market presents some of the best buying opportunities, and we’re looking at that this way. Uh, for those of you fearful about oil, I’ll get to that more more in a little bit. But what we’re seeing in the oil’s future market is telling us that this isn’t a long-term issue, it’s a short-term issue.

Um, and even with— I mean, we were just in the low 60s to upper 50s not long ago, right? We can definitely handle higher oil prices. You don’t want to see them above 100, absolutely not. But, uh, when you look at who this affects the most as far as oil prices go, It’s not the US. We’re the largest producer in the world and growing, right? Um, disruption, sure, but when you look at the futures market in oil and you’re seeing quickly down the line in the coming months into the low 80s, upper 70s, back to low 70s, um, that’s called backwardation. Kip’s talked about this a lot as well. Um, this is extreme levels of it here as well that tell you that the experts in the field in those— in the financial markets aren’t seeing this as a long-term structural issue. Um, all right, here, before I get to our major indexes on the day-to-day, um, I want to show one more factor here of the fundamental action in this market. Okay, I’ll lay out a few of them here.

[00:15:14]:
First and foremost, we just wrapped up a fantastic quarter of earnings for Q4. Okay, soon coming up we have the end of, end of quarter fund flows and headed into front running of Q4 earnings, uh, sorry, Q1 earnings, which will come, uh, you know, starting in April. Uh, but we just had double-digit earnings growth on average for the S&P, for all of the S&P 500. Some companies growing at 15, 20, 25% year-over-year, quarter-over-quarter growth for revenue, for earnings per share, smashing estimates. It was a phenomenal quarter. Okay, markets don’t top when earnings, uh, are growing at a pace like that. Typically when markets peak is long after earnings have already peaked. So even if that was the peak for earnings, is my point, which we’re nowhere near that, in our view.

[00:16:09]:
Even if it was, though, the market typically tops far after that. Um, you know, Kip and I lay out these points very often about how flush with cash the consumer is here. You know, debt, uh, to household income, multi-decade lows. Okay, so the consumer in many ways is strong. You know, roughly 40% of Americans own their home. Own outright. With record— for, for the ones who don’t own their home outright, we have record levels of equity sitting in homes right now. If they don’t own their home outright, they’re close to it, and they have the ability to tap that for cash when it is necessary.

At the same time, we have M2 money supply continuing to hit all-time high after all-time high. Here it is from, you know, the official data here. M2 hasn’t been updated since January, likely higher again, but it grew 4.6%, not by a huge pace, but to an all-time high in 2025. What that means for anyone out there with their money in a money market account, okay, if you didn’t earn at least 4.6% in that money market account, then you didn’t even break even. Last year if you didn’t hit at least that level, because they’re printing your dollars away. You know, while we’re not worried about inflation, uh, like we were in 2022— we think inflation is a rearview mirror issue— still, you want to own assets at this point because the dollar is going to continue moving lower. The move we’ve seen higher in the dollar has been a countertrend move in our view. And this is really the one that I want to show you.

Okay, so M2 money supply Fantastic. The second one here— oh, I’ll wait to get to it here because I do want to explain it a little bit. We don’t look at this one quite as often, but it’s the velocity of money, specifically the velocity of M2 money supply. So as I just said, homeowners have record levels of equity sitting in their homes. They have untapped credit to go into. Credit scores, all-time highs as well. Uh, people aren’t reaching into the penny bank as much as the financial mainstream media, as you might see in a lot of places in the news, like they would, okay? So the velocity of money is how quickly dollars change hands once they come in, right? How quickly after you make a dollar do you spend a dollar, okay, for most liquid assets out there, okay? Right now we are at multi-decade lows for velocity of money. And when you’re leaning towards the lows, the low side, again, that it tells you that people are holding on to that cash.

[00:19:02]:
They’re not spending it right away, right? They’re saving it for a rainy day. They’re using it for something. Take a look at this. It’s really pretty incredible because this data goes back pre-1960. All right, so velocity of M2 money. Okay, again, going back to 1960, the average, as you can see here, you’re just eyeballing it, is in the 1.7 range, above 1.8 for a long time here. Dot-com era got above a 2. You know, that’s, uh, you know, obviously the opposite of what we’re seeing today.

People couldn’t spend money fast enough. They couldn’t make it fast enough to spend it. Now, I mean, that again, not only is it multi-decade lows, you’re significantly below the average, right, from the financial crisis to today. Kip talks about this so much, that so many Americans learned their lesson from 2008, or for my generation, saw their parents go through 2008, uh, and have said we don’t want anything like that to potentially happen again, right? People are far more conservative with their money now than, than ever before. You know, obviously the cost of living has gone up, which has forced many people to spend more, uh, but outside of that, this tells the whole, the whole story that you need to know right here. Multi-decade lows. People are cautious, right? They’re not tapping that extra liquidity in the system right now. When we start getting back to this point, okay, when we start getting back to the average, this bull market will really start picking up speed, okay? That’s when you’re really getting into the fun times of this market.

[00:20:48]:
We’re getting IPOs that come out and are up 50% the day that they IPO, right? Uh, 100% in a week, uh, and that’s happening every single week. Those are the signs that we’re getting near market tops. So we’re not seeing it in sentiment, we’re certainly not seeing it from the consumer who remains strong and hoards cash right now is what this is telling us. So we might come back to this one over time. It’s not one necessary to go back to all the time, but it is, you know, we flatlined here. We want to see this continue to increase. All right, that being said, again, the factors under the hood of this market is what you want to pay attention to on days like today. So that being said, let’s take a quick look at our market action on the day today.

Day. Uh, we were actually led lower by small caps, but as I said, finished near their highs of the day. So hey, we’ll take it from that point of view. Uh, after that we had— excuse me— the NASDAQ down roughly 1.8% on the day today, down 400 points. Um, but I will point out here, we’ve seen Monday’s lows continue to hold here for the market. Uh, oil was higher, as I’ll get to excuse me, here in a little bit, um, but well below Monday’s highs for oil as well. Um, and again, for all of the volatility and big down days that we have seen, a day like today, 400 points is certainly not nothing, right? Dow down 740 points on the day today. We’ve had it down 1,000-point day.

[00:22:27]:
Those lows have held. Again, bottoms can be messy. Along the way. Um, but we want to continue to see those lows hold, uh, especially as the fear in investor sentiment continues to build. You know, then you start to see more short interest, which we got today. The put-call ratio got above a 1.1 today. Uh, you know, we haven’t gotten as many readings of like that as we would have liked to have seen at this point, but that’s how you get the explosive moves higher. Everyone piles into the short side of the market, the market starts to go up, now they’ve got to cover those shorts, leading to amplified moves higher.

Uh, looking at our internals here on the day-to-day, you know, certainly not what you want to see from the internals on any kind of a day. Um, but for the, the move lower that we saw, might be about in line with what you were expecting. Advanced decline negative on both the NYSE and the NASDAQ in the 3 to 4 to 1 range. 52-week highs to lows, not terrible here, you know, to the upside on 52-week highs to lows. We got days not long ago where it was 10 to 1 positive, you know, 2 to 1 negative here, uh, 3.5 to 1 negative on the NASDAQ, 2 to 1 NYSE, 3.5 to 1 NASDAQ. Not terrible. Um, obviously we want to see that improve. Um, but again, there— that gives us so much opportunity in this market to get into your favorite names here at a discount.

[00:24:09]:
Um, one little side note that we’ll get into here as well over time, and again, come and join us at the VRA, but you want to look for what is winning in this environment. As I mentioned, software led the way lower, has— is far higher off of its lows compared to the rest of the market. First in, first out. You want to buy leadership on weekdays. Um, finally here, volume also not what you want to see. Um, roughly 70 to 75% downside volume for both the NYSE and the NASDAQ on the day-to-day. Looking at our sectors here, not a baby throw the baby out with the bathwater kind of day, which is really what you don’t want to see. We talked about this on Tuesday.

That would give you more concerns of a liquidity event. Uh, I’ll talk about this, uh, some more over time as well, but this has been a headline-driven sell-off, not a fundamental sell-off for this market. For all of the fundamental reasons I’ve laid out on this podcast, you can start to see how it has been you know, the AI headlines, the job loss headlines, and then the oil and Iran fear headlines that have really driven the sell-off more than anything else. Uh, last point about the dot-com era too, for anybody worried still about an AI bubble popping: corporate debt on their balance sheet, 50-year lows. But even when you look at the Mag 7, the highest value names in the world, their PE ratios are light years better than what we saw in the dot-com era. You know, in the dot-com era, 50, 7,500 P/E’s. Yeah, we started to get higher on P/E ratios compared to, uh, you know, I think Cisco at one point would do 200 on their P/E ratio. We’re now back, uh, you know, into the 20s, 15s, low teens.

[00:26:04]:
Some single digits even. So we’re certainly not seeing that from the fundamental side. But again, to the— today we did not see the baby thrown out with the bathwater. And as a matter of fact, we got an all-time high from the energy sector today, as you might expect from— with this move from oil. Energy was already— before oil moved, before, uh, any of this began, energy names were near all-time highs. And it remains the case. We got an all-time high today. Next up there, we had utilities as we see this infrastructure build out for power generation from not only the utility providers themselves, from the largest companies in the world.

Remove, you know, so much deregulation that Trump has done. Let’s accelerate the timeline to get one of these live. Our laggards here on the day: industrials, consumer discretionary, and healthcare. Finally here for today, our VRA commodity watch, where we actually have some green on the screen now that we’re in futures trading. It was red on the day for gold, now still above $5,000 an ounce at $5,085 last trade here. You know, uh, for what a wild ride it’s been for gold, we were still up 17.5% on the year. We got to remember that as we’re only in early March here. Silver now, uh, down slightly on the day, was down more earlier Uh, $83.62 an ounce.

Copper now $5.82 a pound. And oil did head higher on the day-to-day, below $100 a barrel still. Would love, you know, looking forward to getting it back down. But again, the backwardation here, you know, looking a few months out and we’re back into the 70s. All things considered, that’s kind of business as usual, uh, to where we’ve been lately for the oil market. I know it had been around $60 a lot. We all knew it wasn’t going to last forever. Um, but with the midterms coming up, it’ll be interesting to see, uh, how Trump and Treasury Secretary Scott Bessant might be able to get the oil market to look a lot better between now and then.

[00:28:16]:
Um, last one here for today. Bitcoin was higher when I started this podcast. Let me get a quick refresh here. Um, slightly, uh, lower now on this screen, but above $70,000 of Bitcoin. Again, part of that first in, first out theme. Bitcoin well off the recent lows, bottomed about the same time as software. We want to see it, a rally in Bitcoin here. A lot of exciting things being talked about in the crypto space as a whole.

So folks, that is all we have time for here today. Please be sure to subscribe to receive our 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.