VRA Investment Letter: Fox Business with Charles Payne. Keys to Success in this “Generational Bull Market". Why the Move in Gold is Just Getting Started; Honest Price Discovery.
/Good Thursday morning. Heads up; I’m scheduled to be on Fox Business “Making Money with Charles Payne” in the 2PM EST hour. Hope you can join in (I’ll post the exact time on X).
Personal note: I wanted to take a second to say thank you for being here with us. There’s never been more competition for your eyeballs and wallets and the fact that you are here with us is greatly appreciated. Beginning in a couple of weeks we’ll be adding a new Members Zoom each month to talk about whats happening in the markets, the economy, the VRA Portfolio, along with answering your questions. We’ve also added a new Member, as our youngest son Sam has joined Tyler, Josh and Danielle to the VRA team. Yes, everything is right in my world. Finally, the last few weeks have been a bit crazy and I know there are emails I missed replying to. If I have not replied to an email from you please don’t hesitate to resend.
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VRA Market Update: Keys to Success in this “Generational Bull Market"
Like you, we’re seeing a number of articles about this “AI bubble compared to the dotcom bubble", peppered with questions like “are we nearing the end”? As Tyler covered in his podcast yesterday, from the bear market lows of 10/13/22, Nasdaq has jumped 122%. Big move for sure, but if this is like 1995-2000, Nasdaq still has another 400% or so to run before a final top is in place (Nasdaq gained 575% during dotcom).
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, lasting well into the 2030’s. Sure, the similarities to dotcom are present, but the Innovation Revolution is about much more than just an AI boom. We’re living through an age of stunning technological development and economic growth that’s frankly hard to put into words. It’s the combination of our big 3; the Trump Economic Miracle, the Innovation Revolution along with an ocean of liquidity in place that will combine to turbocharge the US (and global) economy, likely for decades to come. In our view, there’s never been a better time to be an investor. This generational bull market will create dramatic levels of wealth creation, a process already underway.
But yes, even during dotcom we had overbought pauses and corrections, featuring 5 drawdowns of 10-20%, along with a 32% 3-month bear market in Nasdaq, just before the final melt-up into 2000. Here’s the key; we must remain long and strong in our top holdings (VRA Portfolio) while avoiding using a level of leverage that could do serious damage to your portfolio during these drawdowns. Because folks, just as we saw in April during tariff mania, we WILL have additional drawdowns. And they tend to kick in when we least expect it. We have a high level of diversification into the VRA Portfolio (thanks to the VRA Investing System) that currently has us invested in semis/tech, growth, small caps, precious metals, miners, energy, housing, and, of course, Bitcoin. This diversification will continue to serve us well, in both good times and during the drawdowns.
VRA Bottom Line: this is “that” bull market and we must remain locked in, focused and intelligent about how and what we’re invested in. We want to ride the winners, and we’re long term position builders in these winners. If you find yourself investing in those “next level down super high potential growth stocks” you’ll likely find out during the drawdowns that they’ll be hit the hardest. While day trading is something many investors simply have to experience…it is a rush…this trail typically leads to a busted portfolio. The horror stories I’ve witnessed over my 40 year career are the evidence. Buy winners….hold winners. This was a big key to success during dotcom and it will be a big key to success in this generational bull market.
Why the Move in Gold is Just Getting Started; Honest Price Discovery
Yes, gold (and silver) are rising as faith in fiat currencies is collapsing and yes, gold is rising because the laws of supply and demand, due to ATH’s in purchases by central banks and governments, deem it must. We also believe that for the first time in decades, we have direct evidence that honest price discovery is finally talking place in precious metals. Truth is, gold should have been >$4000 10 years ago. Should be >$10,000 today. If you know your history of the manipulation of gold and silver by central and major money center banks (JPM, others) you know what I'm talking about. In 1999, Alan Greenspan openly admitted that central banks suppress gold. Then, in 2020…following a closely watched Federal trial...JP Morgan paid a record $920 million for "years" of dirty tricks that manipulated gold and silver lower. There are MANY cases like this, thanks to the remarkable legal work from the OG's at GATA.
GATA stands for Gold Anti-Trust Action Committee, founded in 1999 by the legendary Bill Murphy and Chris Powell. Its primary mission is to investigate, expose, and challenge collusion by central banks and major money center banks (like JPMorgan Chase, HSBC, and Barclays), and other financial institutions to manipulate the price of gold lower through practices such as short-selling, gold leasing, spoofing and derivatives trading. GATA’s work has contributed to much broader regulatory scrutiny, including Department of Justice probes into precious metals manipulation that resulted in billions in fines against these banks since 2014.
VRA Bottom line; if, as I believe, we’re at the beginning of honest price discovery in gold and silver, this move higher is just getting started. I find it very interesting that since the JP Morgan guilty verdict and $920 million fine, gold put in its floor at $1400 and has since jumped 185% to its $4050 price today. They call that a clue. This is also a major reason that we raised our PT on gold from $10k to $15k. Frankly we're likely on the low side. This could be a bitcoin-like move higher. Next up: should the Trump admin move forward with rumored "massive" t-bond offerings backed in part by gold/silver/btc, the top may not be in place for decades (or likely, ever). And remember, Trump has called this The Golden Age for America.
Final note on gold; EOBOS
Gold is trading at the very definition of our most OB designation, “extreme OB on steroids”. By some measures (RSI), gold has never been this OB. Our advice remains; continue to invest in gold over fiat currency money market and/or savings accounts. This has served us incredibly well over the last 22 years (since recommending it in our first buy rec on gold, silver and miners in 2003). But no, piling a ton of fiat into gold at these OB levels is not recommended. Dollar cost averaging, monthly, continues to be the smart money move.
The Best Junior Miners to Own
As much as we love gold and silver (physical only), the leverage is always in the miners…and prior to this year, the junior miners had essentially been on life support. Underowned and underloved...talk about a group that was due for some honest price discovery. Right now, we have two must-own junior miners; to find out more, join us for our 14-day free trial at VRAletter.com
Until next time, thanks again for reading.
Kip
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