Jim Rogers: Why Investors Should Be Worried
The most repeated line within our 30 minutes of interviewing Jim Rogers, known as the King of Commodities and global media darling, was, ‘You should be worried”.
Don't blame the 82-year-old Rogers. He has seen a lot in his 60 years of investing, but what he hasn't encountered is the faith to President-elect Donald Trump can make America great again when he returns to the White House next year.
Living happily in Singapore for now 17 years, Rogers does worry about his home country.
“There is no serious problem in the market since 2009, so we are overdue for problems. I suspect by next year, we will have problems in the financial markets, and if America does, everybody else will too,” said Rogers.
“I think the US has the longest (bull market) in history. I am sure the next bear market is going to be very serious because the debt is so very, very high in the US now.
US equities surged to record high after the election. Despite the rate cut, the US dollar has risen to new highs this year against major currencies. In contrast, global stock markets were generally down, and Hong Kong and China stocks were particularly weak and fell back to the level seen in September.
Rogers said, “For some political reasons, I think he needs to be bad to China to get more support in the US. Yes. He is probably going to take actions on foreign trade with farmers, especially China.
“I repeat, it is not good for the US. It is not good for China. But Mr Trump doesn't know that. He does not care.”
Rogers believes that Trump will continue his strategy of attacking China, which is a lose-lose situation. But the Russian-Ukrainian war could end sooner, as Trump wants to end the war as soon as possible to build up the credibility of his administration.
“These guys don't understand any more than any other administrations in the world and we will have a bear market soon and it will be terrible because the debt is so terrible,” said Rogers.
“But I promise you. Washington is going to say, don't worry. Everything is okay. They always say, don't worry, everything is okay. You should worry, too!”
He reckons that if the US stock market enters a bear market with a drop of at least 30 per centr, the global stock market will definitely be dragged down.
Thus, he has almost liquidated most of his stock positions and is holding US dollar cash, which is a very stable position.
Rogers has always been bullish on gold and silver because they are friends of the bears. He is also bullish on oil as there is still a lot of demand in the US, but both gold and oil prices are at high levels and he will wait for a correction to enter the market.
He maintains his long-term bullishness on China, as Beijing is getting its hands on its economy and things are looking up.
“I bought my first Chinese shares many years ago I hope that my children someday wake up and say, oh my gosh, look at all these shares and we are rich,” he said.
Asked his advice on investing a new one million dollars, he replied, “go to the beach”.
“You should invest in what you yourself know a lot about, but even in bad times when people can’t make money.
“We should not listen to hot tips. Hot tips would ruin you. We all want to be rich in a week, I want to be rich in a week but hot tips would ruin you. Be careful!”
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