VRA Investment Letter: Happy New Year! 2024 VRA Portfolio Results. What Does 2025 Have in Store for Us, as The Big Bribe & Innovation Revolution Rolls On
/Good Friday morning and Happy New Year! 2024 was another strong year for stocks, marking back to back years with gains of more than 20% in the S&P 500. In the VRA Portfolio we finished the year with gains of 27.1%. While it didn’t match 2023’s gains of 50.26%, it did mark 18 of 21 years that we’ve beaten the market.
Here are our VRA Portfolio Results along with returns for each major US equity index.
VRA Portfolio Results 2024
VRA Portfolio: +27.1%
S&P 500: +23.31%
Dow Jones: +12.88%
Nasdaq: +28.67%
Russell 2000: +10.09%
Since founding the VRA in 2003 we’ve now outperformed the market in 18 of 21 years. Our bogey each year is the Russell 2000, as it has the most similar risk profile to the VRA Portfolio. As a reminder, we “triple time-stamp” each of our trades, in addition to posting all trades/results going back a full decade in our VRA Members Site.
You can check out our 14-day free trial today on VRAletter.com.
What Does 2025 Have in Store for Us?
Since publishing our August 2022 book “The Big Bribe” we’ve been laying out our 5 Megatrends that will drive “The Roaring 2020’s” and result in the most electric bull market since the 1995–2000 dotcom melt-up (with the power to take the Dow Jones past 100k and Nasdaq past 40k (by 2030-ish).
Our “Big Bribe” Megatrends are Fully Playing Out
1) Financial engineering; its occurring at all levels (powered in part by AI); institutional/govt, Corp America and consumers.
2) Corporate earnings expansion, driven by the “Innovation/AI Revolution”, which will eventually surpass the euphoria of the dotcom/tech boom cycle.
3) Long term housing boom, powered by consumers in our best financial shape in decades (regardless of the PSYOP of negativity in place designed to make us think otherwise)
4) The millennial generation. 72 million strong (now the largest segment of the population), in the process of inheriting >$70 trillion. Millennials love housing, stocks, cryptos with an understanding of technology that’s in their DNA…and they are born entrepreneurs.
5) The red-pilling of America and the return of animal spirits. We woke up to the dangers of communism and what we want, instead. Then, we re-elected Trump! Hugely bullish for our long term prosperity, even our survival as the last great democracy/republic standing.
Each of our Big Bribe megatrends are fully playing out. Now, with more than $2 trillion (ATH) in tech Capex on the way (over just the next 3 years), the setup for both tech stocks and the broad markets could hardly be more positive. In 2025 we look for this massive level of reinvestment from tech companies to begin aggressively broadening out, in effect “forcing” earnings and stock prices higher across multiple high-growth industries. Combined with the fact that we will soon have in place the most pro-business administration of our lifetimes…the return of true, free market capitalism in America…we remain aggressively long US equities.
VRA Bottom Line: Combined, these 5 Megatrends have the power to take the Dow Jones past 100,000 and Nasdaq past 40,000 with massive wealth creation occurring. When we first wrote these words in Q3 2022 we were the first to state that we had entered the Roaring 2020’s and a melt-up bull market. Our views have only become more cemented in place.
For the many (permabears are returning) that believe 2025 will be a bad year (following two great years), for some perspective here are the annual returns for Nasdaq during the dot com boom. What do you notice?
1995: 39.92%
1996: 22.71%
1997: 21.64%
1998: 39.63%
1999: 85.58%
Our call remains; today’s “Innovation Revolution” will prove to be (far) more powerful, broader and longer lasting than dot com. We are still in 1995.
Here’s What We Said About 2024
As a reminder, in last years forecasts we said our markets would have another banner year with gains of 25% (check; in both VRA Portfolio and broad market), that Bitcoin would top $100,000 (check), that Tesla would top $300 (check), that gold would top $2500 (check), that the Fed would cut rates 2–3 times (check) and that the US economy would not go into recession (check).
We had our misses as well but as forecasts go we feel pretty good about last years. I’ll also note that each of these 2024 forecasts were fairly deep contrarian calls.
Two years ago I began saying I was more bullish than at any point in my 39 year career (as spelled out in “The Big Bribe”). Not only is that still the case but with Trump 2.0 and the burgeoning “Innovation Revolution”…. featuring tech capex of more than $2 trillion inside of the next 3 years…we’re as bullish today as when Tyler and I called the bottom on 10/13/22. Once again, “buy the dip” will remain the smartest of smart money strategies.
Must Listen: either today or over the weekend I highly recommend that you listen to Tylers podcast from yesterday following the close. 15 minutes well spent. Tyler broke down our views on the market, our contrarian approach to succeeding in the markets (the power of using investor sentiment as a guide), the folly of Wall Streets economists and analysts and the many reasons that permabears continue to be so wrong about this bull market.
I think this was my favorite quote of Tylers; “the problem with these analysts and these permabears is that they always, always, always overweight the bad news and they underweight the good news”. Man oh man is that ever true. Coming out of the worst two decades in American history, maybe that helps to explain it. It’s not that we don’t understand it…but it’s still horribly offsides.
Tyler also covered Tesla’s miss on deliveries (more cheap disinformation) and 6% down day (TSLA is down 22% from the 12/18 highs). Just an excellent “buy the dip” opportunity. Regarding Teslas miss in deliverables, the thing is, we don’t really even own the stock these days purely for the EV story. For us, it’s all about the future in autonomous (Tesla licensing deals throughout the auto industry), the Robotaxi, the new “Q” ($30k car), energy/battery, AI and robotics (Optimus). Tesla has always been about the future and that’s more the case today than at anytime since I’ve owned it. BTW, I bought my first Tesla over the holidays and while I’m very late to the party I have to say this is the most remarkable piece of engineering and design work I’ve seen. I’ve spent the last 5 days driving about 80% of the time in FSD (full self driving), with very few disengagements. What these cars pick up autonomously is just incredible. Again, TSLA is a big buy here.
Enjoy Tylers Podcast:
Trading Note: Should We Worry About a Failed Santa Claus Rally?
Unless the S&P 500 ends today with a 1.77% gain, the Santa Claus Rally (SCR) will have failed (last 5 days of 2024 and first 2 days of 2025). Yes, statistically, the SCR rally occurs 74.55% of the time, and yes, as a barometer the SCR is accurate 66.67% of the time. However, last years SCR was also negative (-1%) yet the S&P 500 ended the year with a 23.31% gain. So no, we’re not worried about a failed SCR. Our VRA macro themes and Big Bribe megatrends will continue to be key for US markets.
Once again, Happy New Year and have a great weekend.
Kip
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