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To investors,
Retail investors have been “buying the dip” for years and it has proven to be a great investment strategy. But this idea is not new. Decades ago, Jesse Livermore spoke often about buying weakness within positive trends. Benjamin Graham started, and Warren Buffett popularized, the idea of value investing (or buying things for less than they are worth).
Those timeless investing principles wrapped in clinical language were unlikely to resonate with young people in a social media generation. But you know what would spread like wildfire? Four letters regurgitated over and over again across the internet…BTFD.
Buy The F***ing Dip.
I can’t tell you how many times I have seen those four letters posted online. They are the rallying cry for a generation of investors who realize they are playing a game of chicken with the Federal Reserve, but America’s central bank will always blink first.
Wall Street Journal reporter Gunjan Banerji highlights recent Bank of America data showing that “the buy-the-dip trade is having one of its strongest years of the past century.”
This graphic perfectly encapsulates what retail investors inherently know: the Fed has no choice but to prop up the market.
They can’t allow the stock market to fail, nor can they standby while the market hits a free fall. This is why I have continuously said for years that prolonged bear markets have been outlawed.
We can get sharp market drops, such as during COVID or the tariff panic earlier this year, but the government/Fed/Treasury will always step in and ensure asset prices go right back to all-time high prices.
This is an important backdrop because it puts immense pressure on the mainstream narrative that consumers are pessimistic about the economy. For example, Adam Kobeissi shows “the US consumer sentiment assessment of current economic conditions has declined to 50.4 points, the lowest level on record.”
Adam is just sharing the data that is being published by the University of Michigan. But this data is obviously wrong. There is no way that consumers collectively are the most pessimistic they have ever been on the economy.
Do you know how I know that? Because half of the country believes the exact opposite of what the University of Michigan is telling you. Take Fox Business host Larry Kudlow as a recent example. He tweeted “get ready for Trump's 5% economy. We haven’t done it for over 40 years, but I believe it well could happen next year, and or the year after that. Everybody is underestimating President Trump's re-imagination and rejuvenation of a new capitalist path to prosperity.”
The White House’s David Sacks reposted Kudlow’s comments with additional color:
“Kudlow is right: inflation is coming down, interest rates are coming down, and tax cuts are coming in 2026. These are the conditions for a Reagan-like economic boom. Just as important, we have an AI investment super-cycle driving an extra 2% of GDP growth. Democrats like Bernie Sanders have figured this out, so they are doing everything they can to sabotage the infrastructure build-out. Republicans should not be gaslit about this. As with Climate Change, most of the concerns have been amplified to hoax level.”
This tweet echos thoughts that David Sacks shared on the recent episode of the All-In podcast. Take a listen:
Again, you may believe the economy is doing well or you may believe it is doing poorly. Regardless of which side of the debate you are on, there is about half the country that believes the exact opposite. And the data suggests investors are very bullish.
Kobeissi explains “Investors are piling into equity ETFs at a record pace. The Vanguard S&P 500 ETF, $VOO, posted +$40 billion in inflows last week, the largest intake this year. Year-to-date, $VOO net inflows are now up to +$163 billion, the largest on record for a single ETF.”
The enthusiasm in markets is not just from retail investors either. The Financial Times recently reported “macro hedge funds are enjoying their best year since at least 2008…an index from data provider HFR tracking the returns of such funds — which aim to profit from economic trends by trading equities, bonds and commodities — was up 16% at the end of November.”
This brings me back to buying the dip. Retail investors figured out the Fed’s put and they have been aggressive buyers whenever there is weakness in the market. Institutional investors are starting to catch on to the game too. Think about it…where else are you going to put your capital? Are you going to sell stocks to sit in US dollars or Treasuries that are guaranteed to lose value over time?
No, of course not. As long as the government will print money and debase the dollar, stocks will go up forever. Maybe you have to ride out a little volatility, but holding public equity indexes is most likely one of the simplest strategies that works in finance.
And if the S&P or similar index wants to dip for a few days? There will be a line out the door of people ready to buy more.
Hope everyone has a great start to their week. I will talk to you tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
Bitcoin, AI, and the Next Macro Shift Investors Aren’t Ready For
Jordi Visser is a macro investor with over 30 years of Wall Street experience and the writer behind the VisserLabs Substack.
In this conversation, we break down the latest CPI data, what it means for the Fed’s next moves, artificial intelligence — how it’s changing the way people work, learn, and create an edge in their careers.
We also cover bitcoin, macro positioning, and specific companies and organizations investors should be paying attention to right now.
Enjoy!
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