VRA Investment Letter: The Incredible Rolling Bull Market. Tyler's TV/radio Interview. Gold Tops $2300 as the Melt-up in Miners Begins.
/Good Thursday morning. To start the week we barely had a day of (some) selling pressure in US equities and the same people that rarely (if ever) beat the markets are already warning of a severe market correction.
Absolutely textbook early bull market action. Exactly the sentiment you want to see, if you’re bullish (we are).
It’s our sincere hope that this negative investor sentiment lives on for as long as possible, because when the biggest of the permabears start flipping from bearish to bullish, the VRA will look to begin taking profits.
Pauses and shakeouts happen all the time. They are normal and part of a healthy bull market. However, from the birth of this generational bull market there’s been one theme that’s worked better than all others; “buy the dip” has continued to be the smartest of smart money strategies. And yes, the dips are getting shorter and shorter…might this have something to do with Q1 earnings reports, which kick off in a couple of weeks? We fully expect corporate earnings to surpass analyst estimates, across multiple sectors and industries…led of course by semis/tech.
Someone tweeted this to me yesterday. I think it’s spot on; “This generation is programmed from movies like the big short. When the opposite is getting ready to happen.” If I had a dime for everyone that told me “the next 2008 is right around the corner” I’d be a very wealthy man. But this era could hardly be more different than the financial crisis era;
- Home prices are at all time highs…and going higher.
- Consumer net worth is at all time highs…and going higher.
- 1/3 of Americans own their home outright…this too is going higher.
- Since the financial crisis, consumers have cut their debt (to disposable income) by a massive 25%.
- Corporate debt to market cap is at 50-year lows.
I’ll repeat what I’ve been saying in this Letter and on our podcasts for 19 months; when you hear someone say “this is the next 2008”, know that the person saying this is detached from the reality of our times. We’ve entered an economic boom time, in the US and globally…and its just getting started.
Our longstanding view (from the day we published “The Big Bribe” in September 2022) is unchanged; we are at the beginning of a structural bull market of size and scope, driven by an “innovation revolution” and our “5 Big Bribe Megatrends” that will power both the economy and markets higher for “years”.
The Incredible Rolling Bull Market
This is a new theme from us but it’s one that looks to be building and significant. Each time one sector gets overheated, another sector starts to get hot. In effect, we’re early witness to a rolling bull market, from one group, then to another. This market action prevents our broad markets from getting overheated.
- First it was the semis/tech that got hot, from the 10/13/22 bear market lows. They gave birth to this bull market.
- Then came the broadening action in multiple growth areas.
- Then it spread to value stocks and global markets.
- Of late, small caps, precious metals/miners and energy stocks have gotten hot.
Textbook (early) bull market action.
VRA Bottom Line: this rolling bull market action validates our approach, using sector diversification, in the VRA Portfolio. We encourage VRA Members to own each of our buy recommended stocks/ETF’s. We rarely recommend more than 15 different holdings at one time, which gives us the diversification required to both beat the markets and to weather broad market shakeout.
Tyler’s Appearance on the Wayne Root Show
Last night Tyler was interviewed by the conservative rock star himself, Wayne Root. Tyler covered a VRA theme that we haven’t spoken about in a while, but it remains intact; namely that “The Trump Economic Miracle” has played an incredibly important role in the ongoing strength of the US economy and stock markets. As Tyler covered in detail, Trumps tax cuts, China tariffs and massive deregulation…most all still in place…have served as a bedrock for the economy. Tyler also covered the most important elements of “The Big Bribe”, our 5 Megatrends and the innovation revolution that will take US markets “sharply” higher from here.
Link:
https://rumble.com/v4nf49b-wayne-allyn-root-raw-and-unfiltered-joined-by-tyler-herriage.html
Golds surge to ATH’s continues
Lastly for today, Gold broke $2300 for the first time ever this week; last trade $2311/oz. Gold has just put in its best two-quarter stretch in more than 8 years, with gains in 5 straight months. Since early 2022, gold has put up gains of 20% compared to a 14% rise in the S&P 500. Yes, gold is outperforming the S&P 500. As a reminder, central banks have just had back to back years of ATH in gold purchases…we expect 2024 to make it 3 straight. The really smart money loves gold.
As gold surges higher….our minimum target for the year is $2400 with upside to $3000+…it’s the miners that continue to lead the yellow metal higher.
I first recommended gold & silver in our second-ever VRA Letter in 2003. Gold was $375/oz. Silver was $5/oz. We made a combined ~3600% in net profits in precious metals & miners over the next 8 years.
Our top trading signal is flashing bright green for this space, again. When the miners are leading gold higher, as they have been over the last month, we want to be aggressively long the miners (relative strength chart below). As a reminder, over the last 3 rate cutting cycles the miners (GDX) have put up average gains of 180%.
VRA Bottom Line: Combined with a myriad of additional fundamental & technical buy signals in place, we are aggressively long the miners (plus physical gold & silver). Bull market of bull markets is underway.
Until next time, thanks again for reading…
Kip
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