NVIDIA – How is This Possible – History Repeats?

First off, Happy post-Thanksgiving and Black Friday Shopping Day. Hopefully you had a great Thanksgiving, have benefitted from the on-going bull market, and are in the economic position to get out there and splurge a little for yourself and others over the upcoming holiday weeks. IF not, my thoughts and prayers go out to you and your family during the holidays.

I’m keeping this one short, but I hope you pass it on to others and help me get my subscriber base above 1000 before 2025 begins.  Investors, we are in a bull market for equities.  We have been since at least 2011 secularly and cyclically since the October 2022 low as well as the Oct 2023 pivot higher from 4150 on the S&P500.

If you were watching and following doomers like Robert Prechter, Harry Dent, Robert Kiyosaki, Jeremy Grantham, and the long list of retired hedge fund billionaires, you’ve likely missed most if not all of the move higher in US stocks the last 2 to 15 years in the case of chronically wrong Harry Dent and Robert Prechter. Hopefully, it hasn’t permanently damaged your final plan. Give us a call before year end and one of our financial advisors can help you decide if another path is better for you and your money.

So quickly. As I said, it’s a bull market.  And the funny thing is in 2024, particularly since late summer its been following a script we’ve seen relatively recently to a T.  What year? Yeap 2016.  The same year that then long-shot Donald Trump shocked the world and won his first term as our President.

Pretty much ever since DJT was re-elected, many economists and commentators on the financial news networks like Bloomberg and CNBC have spent countless hours trying to convince their viewers how Trump 2.0 won’t be like Trump 1.0 for the economy and your wealth.  Well, so far it appears as they were pretty much wrong in 2016 and 2017, they have been wrong year to date in 2024.

My question to investors is why do so many people continue to put so much faith and energy into listening to or following people who have been wrong on their views for years on the economy and markets if not decades? Particularly when it come to their finances and investments?

In my world, for now and until otherwise proven wrong, Trump 2.0 will be much if not close to the same as Trump 1.0. Investors, history does repeat In financial markets time and time again.  Humans are creatures of habit.  Patterns do repeat. As I like to say, it’s the same people, managing the same money, doing the same things time and time again, why would you expect a different outcome.

I’m going to give you a few quick examples that I recently stumbled upon.  The first and foremost being NVDA, currently the most valuable company in the world.  Turn on the TV and you will hear many tell you that NVDA stock performance is unprecedented in 2024.  Yes, this is true for a company this size.  Here’s a chart of NVDA YTD.  YTD the stock is up about +186% into this writing, Thanksgiving week, post Trump 2.0 win…  That’s a hell of a move.

Now’s here’s a chart of NVDA back in 2016.  Back through Thanksgiving week, post Trump 1.0 win.

Yes, investors, your eyes don’t deceive you. Year to date in 2016, NVDA’s stock was up a little over 184% in 2016 into the same timing post Trump 1.0 election into Thanksgiving weekend.  How is that possible?  Almost the exact same massive return to the day?  Over 184%? Ask yourself that this weekend.

Here’s the 2 charts overlaid on top of each other for 2016 and 2024 and then an extension of NVDA stock chart in 2017.  Investors, this is not a projection for what’s to come for NVDA in 2025 but given what Jensen has said historically versus how their business has performed, it would certainly be something to keep in the back of your mind in 2025.  Will all those AI bubble calls prove prescient? Or have they been 1 year and counting to early?

Time and time again when I do this overlay, particularly of 2h16 versus 2h24, I get the near same results at least in trend if not in both trend and level for so many different asset classes and financial instruments.  Bitcoin, the dollar, interest rates, both nominal, real interest rates, and yes, the inflation component.  Many commodities look the same.

Stocks and sectors that were working and leading in 4q16?  Working and leading again in 4q24.  Stocks that were weak and missing earnings and as we say on the trading desks, “Blowing up”, blowing up again the last few weeks.

Even outside of technology, patterns and history continue to seem to be repeating almost to the day.  Just last week, industrial and agricultural giant Deere reported their 3^rd calendar quarter and took down their outlook for sales for 2025 which was largely expected.  However, the financial press was out in mass with negative comments and tone, but what happened to John deeres stock?  It gapped higher, closing the week up almost 10.5% in 2 days, at new all-time high.  Overlay the chart of Deere from 2016 onto 2024 and what do you see?  Here’s that overlay along with the extension of John Deere in 2017.

Yes, investors, almost to the day in 2016, Jogn Deere’s stock did the exact same thing on their 3q26 earnings report.  Gapped to a new all-time high on the back of investors looking out beyond the valley to the hopeful turn in their business in 2h17.  Is history repeating?  Are you bearish and fighting the tide?  Are you listening to doomers still just hoping they will one day be right so you can tell the world, I told you so?  If so, you are likely investing based on emotion, which is rarely a good thing.  I know, I do it at times too and it almost never works out for me!

Investors against the nearing decade long doomer calls from Jeremy Grantham, Harry Dent, Robert Prechter Jim Grant, and a myriad of retired billionaire hedge fund managers that come on CNBC almost monthly to scare viewers.  We are in a bull market for equities in the US.

The group of doomers that I have called out for my time at OHFG has been wrong for years if not decades now.  Exactly why is now the tipping point that they will be right? And if they are suddenly right now? Given how wrong they have been for years, isn’t it just luck?  Calling tops is hard.  You must be right on both price and time not just once, but twice.  Calling for a top or a crash in October of 2022 or saying your managing risk below lines in the sand 4160 in October 2023 isn’t considered “early” in the real world of managing money.  It’s being wrong.  Being wrong is part of this business that we all deal with. Not Admitting it is the bigger mistake, unless you are just selling fear and subscriptions and newsletters.

Until proven otherwise, my suggestion to you, trade or invest similarly to Trump1.0 for at least the early stages of Trump 2.0.  Why? Because it’s the same people doing the same things, and therefore the outcomes tend to be very similar. Look no further than the performance of NVDA year to date in 2016 versus 2024 YTD.  I mean, how is that possible?  Less than a 1% variance in total return over 2 11-month periods, up over 184%. Think about that one over the weekend.

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