To paraphrase an old Wall Street commercial, every time Jim Rogers talks people listen, and well they should. Rogers has made a huge fortune trading commodities, stocks, markets, and currencies. Although he often calls himself the world’s worst market timer, that’s clearly a huge exaggeration, as he didn’t earn bundles of money by being wrong repeatedly.
At 78, Rogers remains remarkably sharp, informed, and insightful. These days, he spends a great deal of his time writing business books and speaking out on many market-related issues and trends in the numerous interviews he grants to both well-known and small news outlets. He now lives in Singapore, where he moved at the onset of the financial crisis in 2008 along with his wife and two daughters, who are American by birth but fluent in Mandarin. By the way, he was a co-founder of the Quantum Fund, along with George Soros.
Following are some of the recent opinions he has voiced. Investors who have followed Rogers for a long time likely may recognize some of them, although others are new and some politically incorrect.
According to an interview with India’s Economic Times, Rogers likes stocks in Japan and Russia. “We do not have full-fledged bubbles yet except in bonds; bonds everywhere are a full-fledged bubble. At the moment, if I will buy countries I would buy Japan and Russia; both are still down from their highs, but lots of money is going to pour into both of them.” And while he sees opportunities in agriculture, he has not been buying American agricultural companies because they are near all-time highs. However, agriculture in Japan and Russia are in, his view, better options.
Rogers made clear that his pension for specific Japanese equities does not mean that he likes the Japanese economy. “Japan has a terrible future. I have written three bestsellers on Japan in the last couple of years, talking about the disaster ahead of it. But if the central bank is going to print all this money and buy ETFs [exchange-traded funds], I will do that too.” Unfortunately, he adds, America is now making the same mistakes (in stimulating its economy and stock market) as Japan has. He believes Russia will benefit from its exposure to both oil and agriculture.
Rogers used the interview as an opportunity to plug the Elements ETN-Rogers Agriculture ETF as a way to play this sector. “The number of farmers in America has dropped by 90% in the last 100 years. True, everybody has machines, now but people are still needed to make a farm function.” And with the number of farmers declining and aging, that could be bullish for the industry.
An Opportunity Missed?
In another interview, Rogers told Stansberry Research that he has never bought or sold any crypto currencies and acknowledges that was a mistake. “I wish I had,” he said, “but while we hear a great deal about the huge increases in the prices of Bitcoin and a few other cryptos, hundreds and probably thousands have gone to zero and disappeared.”
Some investors believe that Bitcoin is a better store of value than gold. “I know people who are doing extremely well with Bitcoin, making a lot of money and having a lot of fun, but I’m not one of them. Tesla has jumped aboard and is now accepting Bitcoin as payment for its vehicles.”
When asked if companies like Apple and Netflix might follow suit, he answered that was a possibility and that the more people who join in, the higher the price is going to be. “But Bitcoin has not withstood the test of hard times. In my view, if Bitcoin becomes as (accepted) as money then the government is going to outlaw it because they don’t want to lose their monopoly; they want to maintain control.”
In addition, Rogers also does not share the views of those who see the Reddit speculators as fighting a David vs. Goliath battle to expose Wall Street’s ugly underside and short sellers. “That view is absurd,” he asserted. “Selling short is not the ugly underside of Wall Street. It’s been around for hundreds of years, is respected and is a necessary part of the financial markets to have liquidity and credibility.”
Rogers owns both gold and silver and in early February said that if there is a correction in these he would buy more. In early April, gold was relatively close to its all-time high; however, silver is down more than 50% from its highs.
There has been speculation in the press about silver rising sharply, in part because of a squeeze on supplies and in part also because of initiatives like the Green New Deal, which would use more solar power and drive demand for silver, which is an important component of solar panels. The trend toward electric vehicles is another bullish factor for commodities, as they use five times as much copper as is used in conventional cars.
Back On The Farm
“Agriculture is still the cheapest asset class in the world. Bonds are in a bubble and so is real estate in many cities. And stocks are near all-time highs. So commodities are still the cheapest asset class I know. I don’t have an entry point for gold or silver at this time. I let the market tell me what to do.”
When asked about one analyst’s opinion that the stock market may crash, possibly even in April, Rogers commented, “that’s not a bad observation at all. I’m still buying shares in some countries, although not in the US. You could see the bubble forming. I’ve been to this movie before. This is not my first rodeo. New players come in and Bitcoin is another sign that massive numbers of new people are coming into the market.” As for the recent short squeeze, “it has happened before and it all plays out the same way - in the end the bubble pops and a lot of people lose a lot of money.”
In fact, Rogers has been concerned about a market crash for many years. In 2008, there was a serious financial crisis in the markets because of too much debt. It was so severe that Rogers feared the system would collapse, and he moved to Singapore. Fortunately, the Fed managed to keep the market together. However, since then, debt has gone up by huge amounts everywhere and is now the highest in recorded history.
“The next bear market is going to be the worst in my lifetime and in everyone’s life time. Some stocks will go down 80% or even 90% -- this is not a doomsday forecast. This is how these things work. A classic bubble is developing and they always end the same way. We’re making new history but we’re not inventing the wheel.”
Asked whether Bitcoin or gold would be a safe place to hide, Rogers said, “I never use the word ‘safe’ regarding investments. The only place to hide is selling short if you know what you’re doing. I would say US dollars might be a safe place for the next turmoil.
It should be noted that while Rogers has been incredibly successful in the market, he is not always right, and the opinions above should not be taken as investment advice or as Torah m’Sinai. Nevertheless, he is very savvy investor and his views warrant consideration.
Sources: www.marketwatch.com; YouTube: Jim Rogers: Stock Market Blowup in April Not Crazy Talk, Tips for Surviving Worst Bubble Ever