Sunday, June 17, 2018

Jim Rogers Loads Up on Ruble Bonds on Bet Sanctions Don't Matter

After getting burned in the worst month for Russian bonds in more than a year, Jim Rogers says the toughest wave of U.S. sanctions yet doesn’t spook him.

The 75-year-old chairman of Rogers Holdings Inc. has been using the sell-off that followed the April 6 penalties to buy more short-term ruble debt. He recommends focusing on Russia’s fundamentals and the highest prices since 2014 for crude oil, the nation’s key export earner.

“Oil is up, things are getting better, sanctions aren’t going to be forever and they aren’t going to be that damaging,” said Rogers, who increased his holdings of the OFZs in May. “Lots of countries in the world don’t pay attention to the sanctions.”


Back in late March, the veteran investor told Bloomberg he was buying local debt to bet on a stable currency, high real rates, and the country’s recent return to investment-grade status. Two weeks later, and the sanctions announcement had sent the ruble into a tailspin. The currency is down 6.4 percent since then, while Brent has rallied almost 20 percent. Three-year local bond yields have jumped almost 40 basis points.

“The ruble is under pressure because of the sanctions,” Rogers said in a phone interview from Singapore. “That’s what people think about this week, it’s a short-term thing, but it won’t have too much of an effect in the long term.”

He’s not alone in that view.

Money managers at Goldman Sachs Asset Management and Aberdeen Standard Investments said in recent interviews they’re buying the ruble because it’s bound to benefit at some point from the rally in oil. And Pictet Asset Management’s Patrick Zweifel and Nikolay Markov predicted Russia will shrug off the penalties because the nation’s finances are “in excellent shape.”

The government’s current-account surplus “provides a sufficient cushion to absorb the impact of sanctions,” they wrote in an e-mailed note on Friday.

- Source, Bloomberg

Thursday, June 14, 2018

Jim Rogers explains why you shouldn't diversify your portfolio too much

Diversification is generally considered one of the basic tenets of investing and financial planning. Owning a mix of assets, ideally with a low correlation - including, stocks, bonds, real estate and gold, for example - is Investing 101.

That is… unless you're one of the world's most famous investors. Jim Rogers, who I've written about recently (see here, here and here), is not a fan of diversification…

Jim doesn't buy into the cult of asset allocation

"Well, I know that people are taught to diversify. But diversification is just that's something that brokers came up with, so they don't get sued," Jim told me recently when I sat down to chat with him here in Singapore. Then he added, "If you want to get rich… You have to concentrate and focus."

This obviously goes against conventional thinking. But this kind of thinking is what made Jim one of the world's most successful investors. He co-founded the Quantum Fund - one of the world's most successful hedge funds - which saw returns of 4,200 percent in ten years.

He quit full-time investing in 1980 and went on to travel the world a few times. He also wrote several books about what he saw and learned. Even if you're not a travel or money junkie and know little about finance, these are some of the most educational and entertaining books you'll ever read about investing.
Why (maybe) you should diversify

I've also written about the importance of diversification to reduce risk in your portfolio. As the saying goes, don't put all your eggs in one basket. But you also need to make sure they're not all on the same egg truck, either.

Diversification can limit the risks that are specific to a company or industry. For example, bad (or fraudulent) company management is a firm-specific risk. An airline employee strike, which has an industry-wide impact, is an industry risk. These are called "diversifiable risks" because they aren't directly related to the broad financial market system.


Market risk (also called "systematic risk" because it relates to the financial system as a whole) is unavoidable for anyone investing in financial markets. Market risk is affected by things like interest rates, exchange rates and recessions. Diversification can't touch market risk.

The graph below shows these two types of risk. Every investor is subject to systematic risk. Diversifiable risk is higher if a portfolio includes a small number of holdings. And diversifiable risk declines as the number of holdings in a portfolio increases - to a certain point. Having a portfolio with five securities definitely beats a portfolio of just one security. But diversifying beyond 30 securities doesn't bring any additional benefits in reducing overall portfolio risk.

- Source, Business Insider

Monday, June 11, 2018

Jim Rogers: Very Keen to Invest in North Korea

The world will be closely watching as a historic summit between US President Donald Trump and North Korean leader Kim Jong-un takes place on Tuesday 12 June in Singapore, to discuss nuclear disarmament. North Korea has already taken steps to denuclearize by ending nuclear and long-range missile tests, and the question is whether the meeting will lead to further dismantling. Jim Rogers, legendary investor and chairman of Rogers Holdings, spoke to IG ahead of the summit and said he is ‘very, very keen to invest in North Korea,’ adding that ‘there will be great fortunes made in North Korea once this opens up’. Rogers clarifies that he is unable to invest in North Korea at the moment but said he thinks North Korea today is where China was in 1981.
Recession could be ‘in the next year or so’

Roger’s view on the economy is that the next recession could potentially start in ‘the next year or so’, and argues that ‘it may have already started’, citing woes in Argentina and the Indian banking sector. On the equity market, Rogers said he is the ‘world’s worst’ at short-term predictions. However, he said he is optimistic on certain stocks, including shares in China, Russia and Japan. When it comes to the US market, Rogers said he doesn’t ‘particularly like buying things at all-time highs’ adding that he prefers to ‘buy low and sell high’.
Rogers is bullish on Russia

Jim Rogers has reportedly bought rouble bonds following the imposition of Russian sanctions this year, betting that they won’t weigh on the country. Rogers tells IGTV that he does not believe in the effectiveness of sanctions, particularly in the long term. He said ‘Russia is hated, the markets are down, the Russians have very little debt, huge natural resources, they are opening up more and more’.

- Source, IG Group

Saturday, June 2, 2018

Jim Rogers Worries About Exploding Debt With Rising Interest Rates

Exploding debt around the world

Kim: You’ve often talked about the explosion of debt in markets. Can you tell me some more of your thoughts on that?

Jim: Well, Kim, as you know, debt worldwide has boomed in the past 30 years, but especially in the past 10 years. In 2008, the world had a big problem because of too much debt. Since 2008, the debt has skyrocketed everywhere. And so the next time we have a problem, it’s going to be a doozy. I mean, the Federal Reserve alone in Washington, its balance sheet is up by 500 percent in 10 years. It’s staggering what’s been going on in the world. No matter where you look.

In 2008, China had a lot of money stored for a rainy day. It started raining, China started spending the money and helped rescue the world. But even China has a lot of debt now. You’re going to see bankruptcies in China the next time the world comes to an end. And that’s going to surprise a lot of people… it’s going to surprise me, and I know it’s coming. I’m telling you, it’s coming. But it’s going to surprise a lot of us, and that’s just going to make the bear market even worse.

The looming trade war

Kim: What are your thoughts about the U.S.-China trade war?

Jim: Mr. Trump for many years has been keen on trade wars, so it seems to be in his soul, in his psyche. He said that trade wars are easy and are good. That’s totally inaccurate. But it doesn’t matter, he’s the president and even if he has wrong information, which most politicians do, he will do what he can get away with. And so he wants trade wars, the people around him that he keeps bringing in, they’re all keen on trade wars. Nobody has ever won a trade war, but they don’t know that. And if they know that, Mr. Trump thinks he’s smarter than history, he can control history. I don’t think he is, but we’ll find out.

If it happens, then when the problems start coming, it’s going to be worse than any of us can imagine. It’s not going to be good.

You’ve seen previous trade wars, nobody has ever won. They’ve never helped anybody. Maybe some in the short term. But even when trade wars help some people, they hurt other people even in the same country. So they may happen. If they happen, you’re going to have a lot of readers because everybody’s got to know what to do. You have job security because somebody has to report it and somebody has to tell us what to do.

- Source, Value Walk

Monday, May 28, 2018

Jim Rogers: Everything is Going to be a Disaster


You should only invest in things that you, yourself, know about. The worst mistake is being invested in something you don't really know about, because when things start going wrong, you really get whipsawed and get hurt.

If you know a lot about investing, you might sell short, you might buy agriculture, or you might buy some countries that will not suffer so badly. There are ways to get through this.

I would look at the ones that are the most depressed; something like sugar is probably going to come through OK just because it's so beaten up. It's down dramatically, more than 70% from its highs, so something like is probably going to do OK.

Russia will probably be fine, compared to most of the world, in the next bear market. Venezuela will probably do OK, only because it's been a total disaster. Same thing with Colombia.

The Treasury market bottomed in 1981 and has been going up ever since, until the last year or two. In other words, we had a 36-year bull market in Treasuries that’s coming to an end or may have already ended.

I wouldn't want to put money in U.S. Treasuries, because in the past America has had multidecade bull markets and multidecade bear markets. I suspect we're now in a multidecade bear market for Treasuries.

- Source, ETF.com

Thursday, May 24, 2018

Jim Rogers: Extreme Bear Market Coming


These things always start small and with nobody noticing.

For instance, in 2007, Iceland went bankrupt when most people didn't know there was an Iceland, much less that it could go bankrupt. And then the next thing you knew, Bear Stearns collapsed; and then Lehman Brothers collapsed. Finally, everybody said, “Oh, there's a problem.”

That happened slowly over a year. That's probably what's going to happen this time. It may have already started. There are companies going bankrupt in China. The whole banking system in Latvia collapsed recently.

Who knows what will cause it? I don't. Rising interest rates, trade wars, real wars— many things could cause it. But it will be gradual. The worst collapse in my lifetime doesn't happen in a day. It will evolve over a year or two.

Historically, we’ve always had economic setbacks and bear markets. In 2008, we had a problem because of too much debt worldwide. Since then, the amount of debt has skyrocketed everywhere in the world. Why would people think the next collapse—whenever it comes—won’t be worse than the last one?

I have enormous confidence. When the bear market comes, it has to be the worst in my lifetime, because the debt is much, much higher than it's ever been in history.

Plus, there are dramatic changes taking place. Retail shops are liquidating all over the U.S. Somebody is going to be left holding a very big bag eventually as those stores go out of business. Many pension plans are under water. 

The state of Illinois, Connecticut and several others are essentially bankrupt now. There are many things that are going to be very, very serious going forward.

- Source, ETF.com

Monday, May 21, 2018

Jim Rogers: The biggest threats to global markets and how to protect yourself


Jim Rogers is an investing legend, a world record holder and a best-selling author. He co-founded the legendary Quantum Fund with George Soros, which generated returns of more than 4,200 percent over ten years. Jim retired at 37, and later drove around the world… twice.

He’s one of the founding fathers of the boots-on-the-ground approach to investing in emerging and frontier markets around the world.

I recently sat down with Jim – a fellow resident of Singapore – to talk about markets. Below is an extract of that conversation, about biggest threats investors should be worried about today… and how they should protect themselves.

Washington and the central bank
Kim: Jim, what do you view as the biggest threats to markets?

Jim: Washington, D.C. is the major threat to all of us because they want to do things like [start a] trade war. And they want to get in a war with somebody, whether it’s Iran, North Korea, whoever. But North Korea’s calmed down. Mr. Moon in South Korea has done a very good job. There’re lots of people that are bashing Russia. I have no idea why they’re bashing Russia. …

And the central bank in America, they’ve brought up gigantic debts on their balance sheet, they’ve push interest rates to the lowest in recorded history. Interest rates have never been this low anywhere in the world. With the result that debt has skyrocketed everywhere in the world. Interest rates are going to go higher again, they’ve already started.

So what I’m afraid is going to happen is as interest rates rise, you’re going to see problems in the markets. Everybody’s going to call the central bank and say, “Oh, you must rescue us.”

Now, the central bank is made of bureaucrats and academics, they don’t know what they’re doing. They will panic, they will try to rescue us. I don’t know what they’ll do, print more money, buy assets, whatever they’re going to do is not going to be the right thing. And so we’re going to have worse problems.

I hope I can survive the next bear market because it’s going to be horrendous and it’s going to be a big mess. It’s going to be the worst in my lifetime.

When I say that, some people say, “Well, you’re gloom and doom.” No, we’ve always had bear markets since the beginning of time. Janet Yellen, who was the head of the central bank in America until recently, said, “No, we’re not going to have bear markets ever again. We solved the problem.”

She said we’re not going to have bear market. I know we are. 2008 we had a bear market, it was horrible because of too much debt.

Well, Kim, debt all over the world is much, much, much higher now. People have talked about austerity, nobody’s practicing austerity. It’s going to be a horrible nightmare. And I hope I survive it, I hope we all survive. But I know just having read enough history that a lot of people are not going to survive it.

- Source, Standberry

Friday, May 18, 2018

Global Investor Jim Rogers Eyes N. Korea's Potential


Jim Rogers is an investment legend. His Quantum Fund, co-founded with George Soros, generated returns of more than four-thousand 200 percent between the 1970s and 1980s. He is also the developer of the Rogers International Commodity Index. Rogers is now eyeing the Korean Peninsula.

In an interview with KBS World Radio, the famed investor said he believes North and South Korea will merge soon, and when that happens, a united Korea will be the most exciting country in the world.

“You'll have a country of 80 million people, right on the Chinese border, huge dedicated, cheap, educated, disciplined labor in the North with lots of natural resources. In the South you have massive amounts of capital, expertise, knowledge. Right on the Chinese border, it's going to be extremely exciting. Teach your kids Korean! It will be for twenty years or so, the most exciting country in the world.”

Rogers' comment comes on the heels of remarks by U.S. Secretary of State Mike Pompeo last week that the U.S. is prepared to work with the North to achieve prosperity on par with South Korea.

In relation to the frenzy which swept South Korea after the explosion of Bitcoin, Rogers was skeptical of the lasting power of cryptocurrencies, predicting that most, if not all of them, will disappear. However, he was much more optimistic about blockchain, the technology devised for digital currencies.

- Source, World KBS

Tuesday, May 8, 2018

Enjoy This Market Hoorah Before the Worst Correction of Your Lifetime

Legendary investor Jim Rogers says market participants should enjoy the rally in stocks while it lasts, issuing a dire warning that "the worst correction of his lifetime" is coming.

U.S. stocks opened higher on Monday as the corporate earnings season continued, with Bank of America reporting better-than-expected quarterly results.

The Dow Jones Industrial Average rose 182 points, or 0.75%, to 24,542, the S&P 500 was up 0.6% and the Nasdaq rose 0.35%. Leading the Dow higher were Merck & Co. (MRK) and UnitedHealth Group Inc. (UNH) .

"Soon something's going to happen that will make everyone happy again and the market will go up one more time, and that will probably be the last hoorah. Next year will be not a lot of fun," Rogers said in an interview with Kitco News on Monday.

He added, "It's been 10 years since we have had a bear market. That is very, very unusual, so the next bear market is going to be the worst in my lifetime."

When promoted to quantify the correction, Rogers said it would easily be over 50%.

Turning to gold, last Wednesday the metal reached its highest level last since August 2016 as jitters grew over Syria and Russia.

Many analysts expected the metal to start the week strong given the geopolitical tensions, yet gold prices were trading near unchanged in early U.S. dealings Monday. June Comex gold futures were last down 10 cents an ounce to $1,347.80.

"When there is a lot of bad news and something like gold doesn't go up, it means it's not going to go up - the correction is not over for gold," Rogers explained.

"If gold goes to $1,000, I hope I am smart enough to buy a lot of it. Because, before this is over, gold is going to go through the roof - when people lose confidence in governments and paper money, they always buy gold and silver, whether they should, is irrelevant, they always have," Rogers, the 75-year-old chairman of Rogers Holdings Inc., said.

- Source, The Street

Friday, May 4, 2018

Jim Rogers: Biggest market crash in my lifetime coming


Rogers Holdings Chairman Jim Rogers on the state of the markets and the future of blockchain.


Tuesday, May 1, 2018

Jim Rogers: Brace for your biggest bear market and invest in agriculture


Legendary investor and financial market expert, Jim Rogers says the next bear market could start in 2019 and is going to be the worst in our lifetime. Jim also talks about the shine of investing in agriculture, Russia, China and Japan.