VRA Investment Letter: Fox Business Today. The Bull Market's Wall of Worry, And Let's Talk About Bubbles.

Good Friday morning. Heads up: I’m scheduled to be on ‘Making Money with Charles Payne’ in the 2PM EST hour. Hope you can join us.

Market Update

As long-term VRA Readers know, as the most bullish market strategists in America, we have been aggressively long this bull market from the 10/13/22 bear market lows. 

In early 2022 we correctly called this “The Roaring 2020’s” and for 3 years…from writing “The Big Bribe:…we’ve forecast that this will be a generational bull market that will take us into the 2030’s. In 2023 the VRA Portfolio put up gains of 50.3%, followed by gains of 27.1% last year. Through Q3 2025 we had gains of 41.8%. The last few weeks have been rocky but these overbought shakeouts lead to dependable market bottoms. 

VRA Bottom Line; based on our “Big 3”; The Trump Economic Miracle, the Innovation Revolution and the fact that there is an ocean of liquidity in the US economy, we continue to forecast that we are in the early innings of this bull market. Dips remain buying opportunities. 

Importantly, the bull markets wall of worry is getting taller. In addition to recent weakness from the government shutdown/overbought market, yesterday we learned from the White House that we can expect as much as a 1.5% to 2% hit to Q4 GDP due to the shutdown. We also heard from Treasury Secretary Scott Bessent that the housing market could already be in a recession, saying that “further rate cuts are needed to end this housing recession.” 

As a reminder, bull markets love climbing a wall of worry. Shakeouts like this, just as investor sentiment indicators are flashing “extreme fear”, lead to dependable market lows. As Tyler covered on his podcast yesterday, the post below from Bespoke Research is timely; embrace market declines…this is where the biggest gains start from (851% gains following down days vs just 44% on up days).

Then there’s this; Q3 S&P 500 operating profit margins have expanded to 13.4%, the second highest level on record. This is not how bull markets and economic recoveries die.

We learned this week that the AAII Investor Sentiment Survey came in with a massive 49.1% bears and just 31.6% bulls. Combined with the Fear & Greed Index reading of 22 (Extreme fear), these are the sentiment readings we’re more likely to find neat market bottoms than tops.

VRA Bottom Line: with investor sentiment in the toilet (along with consumer sentiment), this bull market continues to climb a wall of worry. With the markets in the most seasonally bullish period of the year, as the Fed continues to cut rates (don’t fight the tape, don’t fight the Fed) and with Q3 earnings coming in rock solid, we want to remain long and strong this “structural” bull market.

Now, Let’s Talk About Bubbles

We’re hearing it everywhere; “this market is a bubble, just waiting to pop”. Tyler talks about this often on his podcasts. From the bear market lows of 10/13/22 (which we proudly called to the day), Nasdaq…where the market leading tech stocks reside…has gained 133%. Not bad….but it’s not a bubble. Not even close. Want to see a bubble? During the 1995–2000 dotcom melt-up, nasdaq jumped an astonishing 575%. Today, we’re nowhere near those kinds of nosebleed returns.

As we’ve made the case early and often, from the writing of “The Big Bribe” in Q3 2022, this bull market will be much broader and longer lasting than dotcom, we believe lasting well into the 2030’s. And the Innovation Revolution is about much more than an AI boom. We’re living through an age of stunning technological development and economic growth that will continue to power the markets higher. It’s the combination of our big 3; the Trump Economic Miracle, the Innovation Revolution along with an ocean of liquidity that will combine to turbocharge the US (and global) economy. In our view, there’s rarely been a better time to be an investor. This generational bull market will create dramatic levels of wealth creation, a process well underway today.

Here’s the key; we want to remain long and strong our holdings in the VRA Portfolio. We have a high level of diversification in the Portfolio that currently has us invested in semis/tech, growth, small caps, precious metals, miners, energy, housing, and, of course, Crypto. This diversification will continue to serve us well, as inflationary assets must be owned in the fiat based system we live in. (For full access join us at VRAletter.com)

This is “that” bull market, and we want to remain locked in, focused, and intelligent about how and what we’re invested in. Buy winners….hold winners. This was a key to my success during dotcom and it will remain a key to success in this generational bull market.

There are many bubble lessons we can learn from that dotcom bull market. During that melt-up I managed more than $100 million and helped take 3 companies public, while participating in 100’s of IPO’s (my buddy ran the syndicate desk). When the IPO market got hot (beginning in1997) we saw more than 300 companies jump 100% on their first day of trading with more than 100 soaring more than 300% on day one. Does this time frame feel like that to you?

Below we see that new IPO issuance, while beginning to pick up a bit, is a world away from the froth of dotcom. We are worlds away from a true bubble.

For our new VRA Readers, we believe in building a diversified portfolio, and if you’re new here, yes, it is an excellent time to begin building your portfolio. 

Until next time, thanks again for reading, and have a good weekend all.

Kip

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