, Jim Rogers Blog: 2018

Saturday, July 14, 2018

Jim Rogers: I'll invest in North Korea as soon as it's legal

Rogers Holdings Chairman Jim Rogers on plans to invest in North Korea once it is legal.

- Source, Fox Business

Tuesday, July 10, 2018

Jim Rogers: Great fortunes can be made in North Korea

Legendary investor Jim Rogers tells IGTV’s Victoria Scholar that great fortunes will be made in North Korea once it opens up. He also talks about why he’s bullish on equities in China, Russia and Japan and on agricultural commodities.

- Source, IG UK

Friday, July 6, 2018

Gold Is Going Through The Roof, Rest Assured

Legendary investor Jim Rogers said enjoy the market rally while it lasts, issuing a dire warning that “the worst correction of his lifetime,” is coming for stocks.

- Source, Kitco News

Thursday, June 28, 2018

Jim Rogers: These are the most interesting markets today

High-potential markets today

Jim has told me before that he’s interested in disaster… and he still is.

Kim: Jim, where do you see opportunity and good value today?

Jim: I have been shouting that North Korea and South Korea would soon merge for a few years now, and it looks like it’s finally going to happen. [Jim told us that he was bullish on North Korea in 2016.]

Not tomorrow. But unless Mr. Trump messes it up, and he might, that problem is being solved as we speak for many reasons. [North Korea’s leader and Trump are due to meet in a few weeks.] But that would certainly prevent American taxpayers from spending a lot of money… Korean taxpayers… it’d prevent everybody from spending a lot of money. So let’s hope it happens. I would be terrific. It would be a great opportunity for investors. In the North they need everything, they have nothing. Virtually nothing. So it would be a great opportunity for all of us.

You’re probably going to say to me, “What would you buy?” And there’s nothing to buy in North Korea, there’s nothing public I own. North Korean coins. I own Korean Air Lines (Korea Exchange; ticker: 003490) because I assume there’ll be a lot more air traffic. I own a South Korean ETF. [The iShares MSCI South Korea ETF (NYSE; ticker: EWY) is one ETF you can own.] But other than that, I don’t really know a way to invest.

Also, Russia is still hated by most investors, which is terrific, it means it’s still cheap. I am looking for Russian investments. I’ve bought more Russian government bonds recently in rubles because they have a very high yield and I’m optimistic about the ruble – certainly that the ruble is making a bottom, if it has not made its bottom already.

Vietnam is doing very well right now. I prefer the bad things that are hated. But there are big changes in the country, and it’s right on the Chinese border. It’s a country of 90 million people, educated, disciplined, hardworking. They call themselves communist, but take that with a grain of salt.

I’ve mentioned Nigeria and Kazakhstan before.

China. I’m looking for investments in China. China is 40 percent below its all-time high. Japan is 50 percent below its all-time high. I’d much prefer China and Japan to, say, America and Germany. You know, these are markets that are near all-time highs. And I know that watching you guys, you know to buy low and sell high.

Jim mentioned Japan. So I asked him… when we look at debt profiles and countries most likely to blow up from debt, wouldn’t Japan be at the top of that list?

Jim: Absolutely. Japan has staggering internal debts. They have a lot of external reserves, foreign-currency reserves, but they have huge debt and they keep running up debt after debt after debt. I can give you scenarios where there isn’t a Japan in 50 years. I mean, they have a declining population. Their debt is going through the roof. It’s a fantastic country, but it’s in serious, serious decline.

But that doesn’t mean that the stock market cannot go up for a few months, or a year, or two. So I’d rather buy Japan than many other countries.

Kim: It sounds like you’re talking about the disconnect between the fundamentals of a market or an economy, and the direction or trajectory of its stock market.

Jim: There’s a difference in a short term and a long term. I know Japan is going to disappear, but there’s still time to make some money if the world doesn’t fall apart in the next three or 10 months.

Monday, June 25, 2018

US Is Pushing China, Iran, Russia Together

Last week's St. Petersburg International Economic Forum (SPIEF), held annually in Russia's second largest city, saw a record number of 550 agreements signed worth more than $38 billion, according to a Russian presidential adviser.

Sputnik spoke to veteran US investor and financial commentator Jim Rogers who was at the forum.

Sputnik: We're seeing new developments with US-North Korea relations, we see announcements from politicians, for you as a businessman, what kind of impact does it have? In one of your interviews you've mentioned that you want to do business with North Korea, just how possible is that?

Jim Rogers: I'd like to invest in North Korea but it's impossible for Americans or virtually impossible for Americans, this just means great opportunities are being seized by Russians, Chinese and other people who can do business in North Korea.

Sputnik: What kind of business is it?

Jim Rogers: Everything you can imagine. They need tablecloths, soap, electricity, they need everything, anything you can do you can make a fortune in North Korea.

Sputnik: There's a big US delegation at the St. Petersburg Economic Forum and the organizers are telling us that, unlike previous US administrations, this time US officials are actually encouraging US CEOs to take part in the event. Does that mean that we're going to see some changes in US-Russia relations, both business and political?

Jim Rogers: I hope so, I hope in every way relations get better with Russia and the US. This is madness, a madness that Russia and the US aren't friends, they should be, and should be working together.

Sputnik: What are the key global trends that we see in the markets right now? What are the big things to look out for?

Jim Rogers: Well, unfortunately, I'm an American citizen and I see that America is pushing China and Russia together, America's pushing China and Iran together, pushing China, Iran, Russia altogether and that's pushing America out of some very major countries in the world. I don't particularly like that because I'm an American and I want to travel, and invest, and play everywhere, and it is getting more and more difficult for Americans.

- Source, Sputnik News

Thursday, June 21, 2018

Jim Rogers: North Korea Making Very Dramatic Changes

Renowned investor Jim Rogers on Monday told FOX Business, the American government is stopping him from investing in North Korea.

“[Kim Jong Un] is making very dramatic changes,” he said of the youthful North Korean leader during an appearance on “Varney & Co.” “The kid has been trying to make a deal with America for three years. Obama cut it back -- the bureaucrats in Washington cut it back when he was trying to -- he wanted to sign peace treaty.”

Rogers said he’s been to North Korea twice, seeking investments but the U.S. government is holding him back.

“[Kim Jong Un] will let me in but the Americans won’t let me in,” he said. “The government gave me all kinds of promises … but I’m a citizen of the land of the free -- I cannot invest.”

When Varney asked Rogers if he would invest in North Korea once it’s legal, he replied: “They don’t have anything -- tablecloths, soap, electricity -- anything you know about they need.”

Rogers added President Trump puts denuclearization negotiations at risk.

- Source, Fox Business

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.

Friday, April 27, 2018

Jim Rogers: Before All This Is Over, Gold Is Going Through The Roof

Legendary investor Jim Rogers said enjoy the market rally while it lasts, issuing a dire warning that “the worst correction of his lifetime,” is coming for stocks. 

“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 ten 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%.

- Source, Kitco News

Wednesday, April 18, 2018

Jim Rogers: Sub $1000 Gold Coming

Jim Rogers sits down with the Silver Doctors and talks about a dire warning. He sees gold correcting lower, much lower. However ultimately, this will be a huge buying opportunity.

- Source

Sunday, April 15, 2018

Gold and the US Dollar Are Directly Opposed to Each Other

Gold is seen as a hedge against inflation. With inflation rearing its head, gold bugs are turning bullish on the precious metal.

Gold futures, at the time of writing, were trading at US$1,331.20 per ounce, 6% higher than a year ago, when it was US$1,258.1 per ounce.

IQI Global chief economist Shan Saeed says the outlook for gold is buoyant. “I can foresee gold prices heading north in the range of US$1,300 to US$1,700 per ounce… US$1,365 per ounce is an important level and the next point to touch is US$1,425 per ounce moving forward,” he tells The Edge.

Saeed says this is the third bull run for gold in financial markets.

“The first bull run was from 1971 to 1980, when gold appreciated by 2,000% and the second was from 1998 to 2011, when it appreciated by 655%. We are now in the third bull run, which began in December 2015.”

Spot gold prices have risen 24% from US1,069.29 per ounce on Dec 1, 2015, to US$1,329.19 per ounce on Feb 20.

Gold’s inverse relationship with the US dollar is one that is hard to disregard, says OCBC Bank economist Barnabas Gan.

“The 30-day correlation between the said assets remain strong at -0.91 in early February, suggesting that gold’s climb has largely been attributed to the weaker greenback. While further dollar weakness into 2018 could still come to pass, gold’s trend with the dollar could potentially weaken as global economic conditions evolve into the year.

“In a nutshell, the rosy economic outlook, tame inflationary backdrop and potentially higher interest rates in both developed and Asian economies are persuasive factors to drag gold prices lower. As such, we keep our gold outlook unchanged at US$1,100/oz at year-end,” he says in a Feb 14 note.

- Source, The Edge Markets

Thursday, April 12, 2018

A Commodity Super Cycle in the Making?

INVESTMENT guru Jim Rogers implied that commodities and equities have an inverse relationship when he said “commodities tend to zig when the equity market zags”.

The simple logic to that — from the manufacturers’ perspective at least — would be that higher commodity prices translate into higher input costs and thus lower profitability for a company, which tends to result in a loss of investor confidence and interest to invest in such firms altogether.

However, when there is impetus for growth in the economy, then commodities and equities could end up moving in the same direction. And that is exactly what happened on Jan 26, when the Dow Jones Industrial Average hit an all-time high of 26,616.71 points and the Bloomberg Commodity Index (BCOM) touched 90.79 points — its highest level since August 2015.

The BCOM tracks 22 commodities, including gold, crude oil, copper, corn, soybean, aluminium, nickel, zinc and wheat. Gold holds the highest weightage in the index at 12%, followed by natural gas (7.58%) and Brent crude oil (7.23%).

With the BCOM hitting its highest level in 29 months in January, coupled with the International Monetary Fund revising its global growth forecast to 3.9% from an earlier 3.7%, a question to ask is whether an uptick for commodities is in store.

Furthermore, rising inflation and a weaker US dollar — two factors prevalent this year — are positive for investments in commodities. These, coupled with volatility in stocks and higher interest rates ahead, have commodity bulls calling for a “commodity super cycle”.

Goldman Sachs is also reported to be at its most bullish on commodities since the end of the super cycle in 2008. In a report this month, the bank’s head of global commodity research, Jeffrey Currie, says the 3Rs — reflation, reconvergence of global growth and releveraging — will drive commodity prices higher.

According to Currie, most commodity prices reflated last year, supported by a weaker US dollar, supply controls and global growth. This allowed debt-laden producers to repay loans, clean up their balance sheets and releverage.

This led to emerging economies catching up — or reconverging — with developed ones.

Goldman is not alone. JP Morgan is also bullish on commodities amid inflationary pressure, as evidenced by recent US wage data and core consumer price inflation.

Recall that commodities last had a good run in the early 2000s — its so-called “super cycle”, with the BCOM seeing a more than two-fold increase from 89.03 points on Dec 31, 2001, to 233.03 points on June 30, 2008 — before dropping 53% to 109.78 points on March 31, 2009.

OCBC Bank economist Barnabas Gan says a bullish view on commodity prices is not unfounded going into 2018.

“Global economic strength is expected to stay on track into the year, albeit some moderation in trade and manufacturing momentum given 2017’s high base print,” he writes in a Feb 14 note, adding that this suggests that demand for commodities will stay supported this year.

However, he says, views that a commodity super cycle is just around the corner can be a little too premature at this juncture.

“Historically, the super cycle seen in the 2000s was led by two key factors. One, it occurred immediately after the Great Commodities Depression of the 1980s and 1990s, in which there was a huge pent-up commodity demand,” he says.

“Two, with increased globalisation and the emergence of trade deals across trading countries, a commodity boom emerged in the two decades following the depression. On this, there was a sudden and arguably unprecedented rise in commodity demand, especially from emerging markets.

“Should history be of reference, the ingredients to a similar commodity super cycle remain obscure to date, while the state of the global economy is starkly different from what we are facing now.”

However, some experts say there are enough signs at present, such as rising government bond yields, to support an uptick in commodities.

Shelley Goldberg, founder and principal of US-based financial advisory firm Invest-With-Purpose, says in a recent piece on Bloomberg that the 10-year US Treasury yield is one of the best metrics for predicting the direction of commodity prices.

“Treasury yields show how investors feel about the economy in the future, which influences spending habits today. Rising yields are generally a reflection of a stronger economy and heightened confidence. Manufacturers then build plants and grow inventories to respond to greater demand.

“Its [the yield’s] increase in recent months indicates that commodities have more room on the upside,” she says.

The 10-year US Treasury yield rose to its highest level this year on Feb 21 at 2.95%. It was also the highest yield achieved since Jan 9, 2014, at 2.9652%.

The BCOM at the time was understandably higher at 122.33 points given the higher crude oil prices then. Oil prices began their decline in mid-2014, bringing the BCOM down with them.

With oil prices showing some strength of late, is it finally commodities’ turn to do well, led by oil, after years of being in the doldrums? If so, where are the bright spots in commodities?

- Source, The Edge Markets

Monday, April 9, 2018

The Global Markets Aren't Prepared for this Trade War

Jim Rogers believes global markets will fall from these levels and may rally for a while if someone says something nice, but things will get much worse by end of this year and next year as interest rates will go higher and Trump administration will continue with trade war.

Rogers is of the view the US is not prepared for the trade war. "China is in better position than the US, at least financially, and China doesn't want a trade war. Only Washington wants a trade war," he said.

- Source, Zee Business

Friday, April 6, 2018

Jim Rogers: Trade War Will Hit India, Says Ace Investor

Nobody wins a trade war, said ace investor Jim Rogers, Chairman, Rogers Holdings in an exclusive chat with Zee Business when questioned about what kind of impact will US president Donald Trump's rhetoric on trade may have on India and the wider world. Rogers added that it is only Washington which wants a trade war. 

Jim Rogers also said that India may not have a direct impact of the same, but it cannot stand alone if giants like US, China, Japan, Europe and others have problems. "Washington very much wants a trade war. Donald Trump is in favour of trade war. There could be a time when they slow down, but they will fall back to trade war if things go bad," he warned. The expert also noted that India cannot stay decoupled from what is happening around the world. "India is a wonderful country, but it can't stand alone if giants around it, from Europe, America, China, to Japan will have problems," he said.

Expectedly, so, China retaliated to US action. To which Jim Rogers said: If somebody hits you on the face, either you run away or hit back. Most people hit back. This is what China did. Of course, this is not good for the world. Neither for America, China, India or any country. Unfortunately, if later in year or next year if we have more economic problems, Washington will hit back again. Nobody wins a trade war, but who cares! They will anyway do it.

Jim Rogers believes global markets will fall from these levels and may rally for a while if someone says something nice, but things will get much worse by end of this year and next year as interest rates will go higher and Trump administration will continue with trade war.

Rogers is of the view the US is not prepared for the trade war. "China is in better position than the US, at least financially, and China doesn't want a trade war. Only Washington wants a trade war," he said.

From the markets perspective, Jim Rogers is worried more about the next year. "I'm not worried as much about this year as 2019 and 2020, because by next year the ongoing problems will snowball. We will have Congress and Senate elections Fed will have hiked rates, trade war will have escalated and not to mention economic challenges," he said.

Rogers doesn't believe the new US Fed Chair Jerome Powell will introduce any fundamental changes in Fed policy. "Powell is one of them. He has been with Fed for long," he said.

Jim Rogers even feels the US Fed may again lower interest rates if it sees the markets are being affected by the ongoing situation.

- Source, Zee Business

Tuesday, March 27, 2018

Jim Rogers Says Trade War Is Making His Bearish View Even Darker

Veteran investor Jim Rogers is already predicting the worst bear market for stocks in his lifetime. And that’s before you figure in a trade war.

“The next bear market is going to be the worst in my lifetime -- just because of the debt -- but if we also have a trade war, it’s going to be worse than a disaster,” Rogers, the 75-year-old chairman of Rogers Holdings Inc., said in a Moscow interview. “I’m extremely concerned. I’ve read enough history and been through enough markets to know that trade wars are usually a disaster.”

Rogers spoke as the prospects for a full-blown trade spat looked to be increasing. President Donald Trump plans as much as $60 billion of tariffs on Chinese products as early as this week to swat Beijing for alleged intellectual-property theft, according to two people familiar with the matter. Meanwhile, China is preparing to hit back with levies aimed at industries and states where Trump’s supporters are found, the Wall Street Journal reported, citing unidentified people familiar with the matter.

“You think the Chinese are just sitting around?” Rogers said. “China’s a huge buyer of American agriculture, so of course that’s the obvious place to hit back because that hurts Mr. Trump the worst. It’s not Americans, it’s Trump. Trump and his guys, those are the ones they have to hit.”

With U.S. and European stock markets near historical highs, Rogers is looking for investments in Russia, China, Japan or Vietnam, he said. He bought short-term local Russian government bonds on Wednesday, he said, citing the appeal of the stable ruble and high real rates. He’s also invested in the shares of Russian companies Qiwi Plc and Rosinter Restaurants Holding.

“I’d rather invest in Russia than in Germany, I’d rather invest in Japan or China than in America,” Rogers said. “America is at an all-time high, and no other nation in the history of the world has ever been this in debt.”

- Source, Bloomberg

Thursday, March 15, 2018

The Indian Stock Market is the Most Vulnerable in the World

Chairman of Rogers Holdings, Jim Rogers says that he will not invest in India for now.

The sell-off in the US equity markets – the biggest in two years – was triggered mainly by rising bond yields and spread across major global indices on Tuesday. Jim Rogers, chairman of Rogers Holdings tells Puneet Wadhwa that the US bond market that hit bottom in 1981 and has been in a bull-run since then, is coming to an end. There will be rallies along the way, he says, but we will enter a very long bear market. Edited excerpts:
What is your interpretation of the rout we saw in global equity markets today?

The Dow Jones Industrial Average (DJIA) index has gone up quite a lot in the past few years and has had not reactions to any major event. The correction seen in global markets was well overdue. However, I cannot say right now if this correction turns into something more than just a one-day fall and goes deeper. It is too early to predict. That said, we were very, very overdue for the markets to go down.
How do you see the bond markets play out over the next three – six months?

The US Federal Reserve (US Fed) is likely to raise interest rates in March 2018. I think they will. This will trigger a rally in bonds. The bond yields will go higher over the next few years, although the central banks will try to cause rallies every time things get really bad. The US bond market hit bottom in 1981. That long bull market is coming to an end. There will be rallies along the way, but we will enter a very long bear market.
What does all this mean for the Indian markets?

The good news for the Indian market is that there is a general election coming up in 2019. Narendra Modi will do everything he can to win it. This means giving out sops and adopting populist measures as well. On the other hand, the Indian stock market has been on a strong footing since quite some time, but you now have a capital gains tax on equities to deal with as well.

Historically, we have seen if you tax something, whether it is gold, cars or any other asset, the demand gets supressed for that item. So, the Indian stock market is more vulnerable than any other global stock market now due to the introduction of LTCG.
Are you looking to invest in the Indian markets on any correction?

No, I do not. The Indian markets, as I said, are more vulnerable than any other global market. Given the run up seen over the past few months and the introduction of LTCG has made it more vulnerable. I will not invest here for now.
Which regions and asset classes appear investment worthy to you right now?

I like Asian tourism stocks, agriculture stocks. That apart, I also like companies engaged in pollution clean-up. India and China are both filthy and need to be cleaned up. Some areas of the world economy will do well going ahead no matter what happens. But basically, this is not a good time to be buying shares.
What is your outlook for crude oil prices and gold?

Crude oil prices are in the process of making a bottom. Over the past few years, since 2015 to 2018, people will say the oil prices tried to make a bottom, but it has been a complicated bottom. I think oil prices will be a good buy over the next couple of years. I am not buying oil at the moment. Now that the equity markets are going down, oil prices will correct too.

I am not buying gold at all. I am waiting for the gold prices to go down a lot from here. If the overall markets go down, gold prices will also be impacted. Over the next one – two years, I hope to buy a lot of gold, especially if it goes down a lot. I do not hold any cryptocurrencies, like bitcoin etc.

- Source, The Print

Monday, March 12, 2018

This Will be One of the Worst Market Crashes Ever

Rogers has seen severe bear markets before. Even this century, the Dow plunged more than 50 per cent during the financial crisis, from a peak in October 2007 through a low in March 2009. It sank 38 per cent from its high during the IT bubble in 2000 through a low in 2002.

“Jim has been talking about severe corrections since I started in business over 30 years ago,” said Alibaba Group Holding Ltd. President Mike Evans, a former Goldman Sachs Group Inc. banker. “So I’m sure he’ll be right at some point.”

Rogers predicts the stock market will experience jitters until the Federal Reserve increases borrowing costs. That, he says, will be the point when stocks go up again. He said he’ll buy an agriculture index today, reiterating his view that prices of such commodities have been depressed for some time.

“I’m very bad in market timing,” Rogers said. “But maybe there will be continued sloppiness until March when they raise interest rates, and it looks like the market will rally.”

Friday, March 9, 2018

Veteran investor Jim Rogers says next bear market will be 'the worst in our lifetime'

Jim Rogers, 75, says the next bear market in stocks will be more catastrophic than any other market downturn that he's lived through.

The veteran investor says that's because even more debt has accumulated in the global economy since the financial crisis, especially in the US.

While Rogers isn't saying that stocks are poised to enter bear territory now - or making any claim to know when they will - he says he's not surprised that US equities resumed their sell-off on Thursdayand he expects the rout to continue.

"When we have a bear market again, and we are going to have a bear market again, it will be the worst in our lifetime," Rogers, the chairman of Rogers Holdings, said in a phone interview.

Tuesday, March 6, 2018

Fiat Money is Out of Control, This Will End Us

Jim Rogers and Michael Pento discuss how reckless and out of control central bankers have become. The endless money printing is going to bring the entire system down.

- Video Source

Tuesday, February 20, 2018

Jim Rogers: Rising Inflation Will Push Commodities Higher

Rogers expects to see rising inflationary pressure when prices of agricultural commodities start climbing. In fact, he has noticed that inflationary pressure has been mounting but the meltdown of crude oil prices have, to a large extent, helped cushion the impact so far.

“We are already seeing inflation in many places and many products, [but] most governments lie about it. They have a reason to lie about it. Prices are going up and it is going to get worse. In the past three or four years, inflation has been covered up by the [fall in] crude oil prices, which have come down so much. It is the single most important thing in the cost of living.

“When agricultural [commodity] prices [start] going higher and oil is also going higher… yes, we are going to suffer [from high inflation],” Rogers commented.

- Source, The Edge Markets

Friday, February 16, 2018

Jim Rogers: An Agriculture Boom is Now in the Making

An agriculture boom is forming, said Jim Rogers, who intends to invest in agriculture more than in Amazon.com Inc.

The billionaire commodity guru believes agricultural product prices are hitting bottom now, and that they will rebound soon as supply would not be able to keep pace with demand growth.

Against such a backdrop, he anticipates rising inflation would be the by-product that would come along with the climb in crop prices.

Rogers observed that the supply of agricultural products, be it foodstuff, or crops like cotton or silk, would be in shortage in coming years, simply because there are fewer people who will want to farm.

“No one wants to be a farmer anymore, as compared to the past, when farmers were like masters of the universe for a long period of time.

“The agriculture sector has been a disaster for 35 years. Things are so bad. The average age of an American farmer is 58, the average age in Japan is 68. And do you know that the highest suicide rate in the UK is in the agricultural sector … thousands of Indians commit suicide every year …,” Rogers told selected Malaysian media at the sidelines of the three-day 2018 Investment & International Trade Forum in Hangzhou, central east China, over the weekend.

As such, there will be shortage of supply as a result of lower production in the coming years, he said. On the other hand, rising affluence in developing economies, such as China, India, Russia and Asean countries, will continue to fuel demand growth.

“There will be an imbalance in the future between demand and supply in agricultural commodities … and that will drive prices higher. I am not talking [about] all commodities … I am referring to agricultural commodities, for example sugar, or palm oil as you mentioned,” said Rogers.

To ride on anticipated high agricultural commodity prices, the veteran investor’s advice is to invest in futures contracts of, for instance, sugar. Or one may consider investing directly in plantation, like sugar cane plantations.

Although he foresees a climb in prices of agricultural commodities, he isn’t bullish on other commodities, like base and precious metal. “I own some gold but I am not buying gold now… I expect gold prices to go down in the next two to three years. I am waiting for the opportunity to buy gold, silver at cheaper prices later,” said Rogers.

With the belief of a strong rebound in prices of agricultural commodities, Rogers concurs with the investment strategy of taking an overweight position in such commodities over equities and bonds. “US equities and the European stock markets are at their all-time high … I won’t put my money there,” he quipped.

That said, he highlighted that while equities in the West are hitting record highs, some markets in Asia, for example China, are 40% below their all-time high, while the Japanese market is almost 50% below their record high. “I am still looking for shares to buy in China and in Japan,” he added.

- Source, The Edge Markets

Sunday, February 4, 2018

Jim Rogers on The Future of Money

Jim Rogers shares his thoughts on cryptocurrency, the world economy and the upcoming financial crisis; as well as what you can do to prepare for it.

Wednesday, January 31, 2018

Jim Rogers Honest Opinion About Cryptocurrencies

Famous investor, Jim Rogers gives his honest opinions about both Bitcoin and other Cryptocurrencies. Is he a supporter of them? Does he see them re-surging higher?

- Video Source

Sunday, January 14, 2018

Jim Rogers: I Have Never Seen Anything Like Bitcoin

Famed investor and best-selling author Jim Rogers says that he has seen a lot of bubbles in his career, but that Bitcoin is in a league of its own. 

"There have been plenty of bubbles I have seen in my life but this one is a little strange, because at least when the dot-com bubble was around, those were companies that said they had a business," Rogers explained.

- Source, Kitco News

Tuesday, January 9, 2018

Jim Rogers: Catastrophe and Opportunity in 2018

BullionStar is proud to present our exclusive interview with the legendary American investor, Mr. Jim Rogers. In this exclusive interview, Mr. Jim Rogers shares his perspectives on the global economy and on gold. 

The interview touches on the potential catastrophe in the global economy and the opportunities it brings, the importance of acquiring physical gold and silver for insurance, Singapore being one of the best countries to acquire bullion and much more.

- Source, Bullion Star

Friday, January 5, 2018

Jim Rogers: Stocks Will Be Down A Year From Now

At the same the digital currency hit new records, the U.S. stock market also touched new highs.

The main indexes touched record intra-day highs earlier after retailers, including Amazon.com, rose on an expected surge in online sales on Cyber Monday, adding to strong sales on Black Friday.

Adobe Analytics said Cyber Monday is expected to drive $6.6 billion in internet sales this year, which would make it the largest U.S. online shopping day in history, Reuters reported.

“Investors are looking at retail stocks as Black Friday and Cyber Monday have been a good start to the holiday season, and much stronger data on new home sales has lifted the market higher,” said Kim Forrest, research analyst at Fort Pitt Capital Group in Pittsburgh.

For his part, Rogers expected the market to continue to climb in the short term before eventually coming back down to earth.

“Oh I suspect we will hit more new highs, which will surprise everybody, including me, but next year at this time, stocks will be down,” said Rogers, who co-founded the Quantum Fund with George Soros in 1973.

As for the future, Rogers advised caution on buying stocks if the Trump tax reform deal passes.

“Well, it looks like there’s a blowout in place, and you know, it often happens in markets every 10, 20, 30 years we have them. We may be having one now, but Stuart, I would buy Japan if this happens. Japanese markets are down 50 percent from their all-time high. Chinese stocks are down 40 percent. I’d rather buy low instead of buying high.”

- Source, News Max

Tuesday, January 2, 2018

Jim Rogers Smells a Bitcoin Bubble

Jim Rogers, the famous investor guru and founder of the Rogers International Commodity Index (RICI) has expressed his opinion that Bitcoin “looks and smells” like a bubble. His investment advice includes bullish outlooks on any number of investment fields but is bearish on Swiss Francs and Bitcoin.

Rogers, now 75, does say that he’s missed Bitcoin. In fact, he isn’t actually aware of what Bitcoin is, saying “Whatever it is, I missed it.” Nevertheless, via a technically sound ‘smell test’ Rogers has suggested that Bitcoin is a bubble. In fact, the investment guru said:

“It looks and smells like all the bubbles I have seen throughout history.”

- Source, Coin Telegraph