VRA Investment Letter: "The Big Bribe" Continues to Play Out. Phenomenal Smart Money Setups. "Making Money" Interview.
/Good Thursday morning. After spending more than a year writing “The Big Bribe” Tyler and I published it just prior to the 10/13/22 bear market lows. We forecast a boom time in America, with the Roaring 2020’s as the theme.
Laughter followed. We were among the only stock market bulls at the time…and no one was calling for a market melt-up, at least not that we could find.
In my now 38 year career I’d never seen a better set-up. We’d just had 3 bear markets in 5 year, where the average stock was down 40–60%…brutal and unprecedented. Combined with DC insanity, It wasn’t difficult to understand why investors hated…and feared…equities. It was hard to find a better contrarian setup.
But we saw a “structural” bull market on the horizon. Structural bull markets are the most powerful markets, as they’re based in the reality of strong fundamentals, technicals, sentiment and analytics. And we had all of those in Q4 2022.
And its all playing out…this bull market and economic boom time are only in their infancy.
The Roaring 2020’s
-Bitcoin/cryptos/blockchain/tokenization
-All time highs, stocks.
-All time highs, home prices
-All time highs, net equity in homes
-All time highs, consumer net worth
-1/3 homeowners have no mortgage (ATH)
-Over the last 15 years both consumers & American companies have cut debt by 25% (to disposable income & mkt cap)
-Corporate debt to mkt cap sits at 50 year lows.
-The ability to lever up is significant; powerful tailwinds for the US economy
With the “innovation revolution” in just the early innings we continue to see this as the best opportunity for significant wealth creation since the 1995–2000 melt-up. Stay locked in.
We’re Seeing Fresh Signs Each Day. Semis/tech, Small Caps, Bitcoin, Precious Metals and Miners
What we’re witnessing is clear broadening action in the market. Textbook (early) bull market action, in fact. Exactly as you’d expect in the Roaring 2020’s. This market is going a helluva lot higher.
Phenomenal Smart Money Setups
1) The Semis hit another ATH. In absolute beast mode with gains of 173% from the bear market lows of 10/13/22.
From the birth of QE the semis have been THE tell for broad market direction, as well as the direction of the economy.
Wonder what they’re telling us about the direction of the markets and economy from here….?
2) Precious Metals and Miners: If you’re a true contrarian it’s impossible not to be aggressively long gold, silver & miners. Reminder that the miners (GDX) have gained 170% on average during the last 3 rate cutting cycles. This group is absolutely hated. Bull market of bull markets underway here.
Lost in the BTC action was the fact that gold also hit an ATH this week. Yesterday Bloomberg shared a chart of gold that we’ve featured often over the last 2 years; a classic technical formation buy signal called a “cup and handle”, which points to a move in gold to more than $2500/oz (last: $2145/oz).
And like BTC, we have analytics on what happens once gold hits a fresh ATH.
In the 1970–74 move to ATH, gold rose 560% (from low to high). In the 1976–80 move to ATH, gold rose 820%. And in the 2000 to 2011 move to ATH’s, gold went up 750%. The low for the current move was $1,040/oz, meaning that if past results hold true we can expect a move of 710% (from the $1040/oz lows), which would take gold to approx $7384/oz.
3) Bitcoins multi-year move higher
Bitcoin is smaller than Microsoft, Apple, Nvidia, Amazon and Meta, but its not a company. Instead, Bitcoin is its own asset class; as a defacto global currency. BTC’s market cap…now just $1.3 trillion…will soon be a multiple larger of the largest companies on the planet.
Here’s some interesting data. In the past, once BTC has hit ATH’s, in 3/4 cases it has gone on to more than double in 18 days or less. With the halving in approx 43 days, I continue to expect BTC to break $100k, into and out of the halving.
Stunning levels of buying taking place from these SEC approved BTC ETF’s with total ETF trading volume surpassing $9.58 billion, a new record:
• BlackRock: $3,703,236,139
• Grayscale: $2,794,038,139
• Fidelity: $2,028,277,875
• ARK Invest: $483,929,681
• Bitwise: $294,442,475
• Invesco: $97,256,358
• WisdomTree: $85,305,179
• VanEck: $57,961,522
• Franklin: $19,476,749
• Valkyrie: $15,546,011
• Hashdex: $914,484
Net inflows Tuesday topped $660 million (106,000 BTC purchased)…remarkable figures in the face of Tuesday’s shakeout. And remember, each day just 900 new BTC are being mined.
And all of this buying is taking place without the likes of JP Morgan, Vanguard, Citi, BofA, Goldman Sachs, etc, which still refuse to allow their clients to purchase BTC ETF’s. Here’s the safest prediction ever; either these firms jump into the BTC revolution or their clients will begin taking their money elsewhere (it’s already happening, which is almost certainly why Vanguards CEO just resigned). Combined with SEC BTC approvals and upcoming halving, keep buying BTC.
4) Finally for today, below is my latest interview on “Making Money” with Charles Payne. Outside of watching early morning Bloomberg over green tea and agave, Charles Payne’s “Making Money” is the only financial MSM I watch. Smart money TV. Following “coronavirus insanity” and launch of the “plandemic”, CNBC’s propaganda became unwatchable. When the “great fade” Jim Cramer said “every American should be forcibly vaccinated, using the US military to give the jabs” I made the decision to tune-out CNBC. It’s been 3+ years and that decision has served me well.
Link: https://rumble.com/v4he243-kip-herriage-on-fox-business-with-charles-payne-march-05-2024.html
Until next time, thanks again for reading…
Kip
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