VRA Investment Letter: A Golden Age for America. Melt-up Bull Market Ahead.
/Good Thursday morning. Heads up: I’ll be on Fox Business “Making Money” with Charles Payne today in the 2PM EST hour. Hope you can join us!
Trump’s inauguration on Monday makes it official; our 4-year nightmare with a fraudulently installed, constitution-destroying president is finally over. It’s morning in America again, or as 47 reminded us throughout his inaugural address, “We’ve entered a golden age for America”.
After delivering the greatest comeback in American history (political or otherwise) we can turn our focus to fully taking back our country. With the 100’s of calls/emails/texts/DM’s we’ve received this week, it’s clear that the shock of Trump actually making it back to the Oval Office is beginning to sink in. God just blessed us, again. America’s best days lie directly ahead.
Investing legend Stanley Druckenmiller said this week (on CNBC) that Trump’s re-election has “renewed a jolt of speculative enthusiasm within the markets and surging optimism within businesses”. He said that he is a “believer in animal spirits.” VRA Members will remember that the return of animal spirits has been a recurring theme of ours since the election. When true animal spirits return, economic magic happens. I’ll repeat; this is the most bullish that I’ve been in my 40 years in the markets.
America is back!
In addition to Trump's love of free market capitalism, his cabinet selections and top advisors comprise the most pro-business administration in history. The government will soon be our friend (or at least friendly)…rather than our “in your face” enemy. We’re entering the wild west of free market capitalism.
We continue to look for GDP growth of more than 5% inside of 18 months (and it’ll likely happen in year 1). If we’re right, there’s essentially no chance the S&P 500 doesn’t hit our target of >20% gains in 2025 (with 30% in Nasdaq and 40% in semis).
In addition, Q4 earnings reports are beginning to pick up speed. Big banks kicked us off in style last week and we’re already seeing analysts (across the board) ramping up earnings estimates for the quarter and full year. Wall Street is looking for S&P 500 earnings to rise 9.1% y/y for the quarter, up from their previous estimate of 8.2%. We’ll be surprised if Q4 earnings growth doesn’t come in better than 12% y/y. Going forward, we continue to think those who are underestimating Trump 2.0 and the return of animal spirits are missing out on the big picture that matters most.
The VRA Investing System still sits at 10/12 screens bullish, AKA “back up the truck” territory.
As Tyler covered on his podcast, it’s likely that even we aren’t bullish enough. Our targets for Dow Jones 100k and Nasdaq 40k (in place from ‘The Big Bribe”, August 2022) will almost certainly prove to be too low.
Why? Because this is not a normal bull market. We have several powerful megatrends converging at the same time. At the end of the day, the combination of the “Innovation Revolution” plus the power of the “Trump Economic Miracle 2.0” will drive the US economy and equity/housing markets well into the 2030’s. The fact that this is the most pro-business Administration in history should have investors salivating.
And now, America First is coming to the world of AI. In one of his earliest actions, Trump just revoked the “Safe, Secure, and Trustworthy Development and Use of AI” executive order by the Biden administration. Trump proving once again that he is also committed to being the “deregulation president”.
Trump also unveiled an AI-focused joint venture called “Stargate”…more than $500 billion in size…that will invest an initial $100 billion of private capital (and ultimately up to $500 billion) over the next four years to fund AI infrastructure. The project aims to “re-industrialize the United States,” including adding 100,000 jobs and protecting strategic capabilities to “protect the national security of America and its allies.”
“We want to keep it in this country,” Trump proclaimed. The first “colossal data centers” are already under construction in Abilene, Texas.
VRA Bottom Line: over these next 4 years (and hopefully 8–12 +) we intend to stay fully locked in. We each have the opportunity for a level of prosperity, wealth creation (and happiness) like we’ve not experienced in this country, for decades. We look very forward to sharing this bright future with you.
Until next time, thanks again for reading…
Kip
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