Jim Rogers Blog

Monday, October 5, 2015

When oil prices fail to drop on bad news its a bullish sign

Oil holding near $45 a barrel in the face of bearish news is a sign that prices are poised to recover. 

“When there’s bad news and something doesn’t decline, it usually means it’s at a bottom and will be turning. Whether we’re at a turning point or not, I don’t know yet, and I’m watching this very closely."

"Some companies are stopping drilling and production is actually going down in the U.S. now. Shell is canceling some drilling. All of these mean supplies will be going down in the future.”

Opportunities arising in Agriculture 

“Agriculture is probably where the best opportunities are. I’m not buying rice and sugar at the moment but some of these things are down a lot from their all time highs. There’s potential opportunities out there.

Wednesday, September 23, 2015

Jim Rogers Interview on Star Online - Malaysia

Q: What is the outlook of the financial markets next year?

The troubles in the financial markets have started. There will be a lot of turmoil in the financial markets next year, eventually leading to some sort of crisis, perhaps even a full blown crisis.

Some emerging-market currencies are already having problems this year, and this is spreading to bigger things since this is the first time in history that all the major central banks are printing huge amounts of money.

My main concern is that the US Federal Reserve doesn’t know what it’s doing. It does not know what it is going to do next as interest rates are going to go higher so it has to start withdrawing huge artificial oceans of liquidity. When that takes place, 2016 and 2017 are not going to be fun years because these guys have made mistakes and they have to correct it.

To what extent will Asean economies be affected by the volatile financial markets?

The region will fortunately be in better shape than most as they’re oil-producing countries as well as agriculture-based economies. It is the US and Europe that will be impacted the most as they are in worse shape than most.

Asean has savings, no big debts and convertible currencies. However, when Asean’s main markets have problems, there will be problems too for Asean companies. We’re going to know something is wrong although we may not suffer as much as Italy did but the effects will be there as Europe, the United States and Japan are major customers of Asean exporters.

What can Asean expect in the wake of the economic turmoil?

Unemployment, declining corporate profits and some bankruptcies. More bankruptcies will be seen in the developed economies than in Asean as companies in the region do not have debt weighing them down nor do countries in the region suffer a declining population. So, you’re in the right place, don’t leave. Oil-producing and agriculture-based economies such as Indonesia and Malaysia are less likely to be affected although commodity prices have fallen. But companies doing a lot of business with the United States and Europe will be impacted.

The region will have to worry about how decisions made in Washington DC, Tokyo or Europe will impact it, that’s the worry. These are the people causing the problems and we have to pay for it. I would rather be here than in a Western country as these countries will have more problems.

What measures should Asean take to mitigate the effects of the volatility?

Asean governments should pay down their debts, don’t close off their economies and have more open societies. Stay open because history shows that economies that try to take protectionist measures in the end wind up being worst off.

Countries in the region are fairly open, so the worry is that the governments will take protectionist measures when things start to get wrong. They should stay open and pay debts. Asean governments should balance their budgets and when the Asean Economic Community comes about, there’s a sizable market of 600 million people. Companies can now expand into a bigger regional market and build capacity for a global market too. If they do that, we will all be better off.

via http://www.thestar.com.my/Business/Business-News/2015/09/19/Gearing-up-for-the-turmoil/?style=biz

Monday, September 21, 2015

Investing in what you know

You should invest in only what you know about. However, I have put some of my money in places that are depressed like Japan, Russia and agricultural commodities. I do own some real assets like silver and gold. However, I have not bought silver and gold for a while, but if prices fall further, I will buy more gold, and again the best is to stay with what you know.

ASEAN (Association of Southeast Asian Nations) has lots of agricultural produce, so this might be a relatively less dangerous place to be. While agricultural prices are depressed and we may see more problems, we’re not going to see disastrous problems. Stocks in the New York Stock Exchange can fall by 60% to 70% when things get bad but I don’t see sugar or rice prices falling by that amount. Agricultural prices have fallen and may start to turn around.


Avoid technology stocks, especially the mainly US-listed social media and biotechnology stocks as their valuations are extremely high. Salaries of employees are also very high. Even if there’s no tech bubble, the share prices certainly look expensive. I will not be putting my money there.

Jim Rogers is a smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.

Wednesday, September 16, 2015

Janet Yellen should not be at the Fed

Low interest rates are destroying the people that save and invest. Pension plans, trust companies, insurance companies -- we’re destroying all the people that save their money for a rainy day and now they are being ruined… to bail out people who get it wrong -- who ran up huge debts who didn’t have the money. We are ruining the country with this idea.

Jim Rogers is a smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.

Monday, September 14, 2015

Fed wont raise rates this month says Jim Rogers

What’s going to happen is, the rates are going to go higher, markets are going to go down, people are going to call up and say, ‘You must save civilization,’ They [Fed will ] panic and then come riding to the rescue... - Jim Rogers 

Thursday, September 10, 2015

Jim Rogers on China, Gold, US Federal Reserve, Commodities - INTERVIEW

Q. Governor Raghuram Rajan has been criticized for being stubborn on interest rates.

Jim: Central bankers are supposed to be criticized for things like that. Central bankers are supposed to maintain currencies and low inflation. If you want to do something about the economy, you should call out Modi or Parliament and not the central bank. Central banks that cut interest rates because of politicians—such countries usually have economic problems, currency problems, and all sorts of other problems. In my view your central banker is doing the right thing—he understands what banking is all about, he understands what currencies are all about and he understands the economy. The more criticism he gets, the better—that means he is doing what the central bank is supposed to do.

Q. What is your take on what is happening in China right now? The reality is that foreigners hold very few China shares.

Jim: China is pure noise and hype and it is exciting to talk about the Chinese market that has moved a lot. Virtually no foreigners own shares in China. The press is talking about short-selling, but there is hardly any short-selling in China. The Chinese market has done better this year than the American stock market. So you in the press should be talking about the American stock market—but for you that may not be exciting enough as compared with China. I bought Chinese shares during the two-three days when its market collapsed—on the really serious down days, I bought more. I like to buy low, and I found that in history, usually when you buy during panic, things will turn out to be okay two-three years down the road.

I would rather be in China than in most parts of the world, because its stock market is still somewhat depressed. The Chinese stock market is still below 50% of its all-time high. The American stock market is near its all-time high. The situation is that for the first time ever, we have had six years of huge money print across the world. The world is floating on a huge artificial ocean of liquidity and that is going to end sooner or later—it is looking to be sooner. Many markets are going to suffer in the future as this happens. I would expect that this year or next year, we will begin to see a lot of problems worldwide. In 2008, China had a lot of money saved for a rainy day, and when it started raining, they began spending their money. This time around, China is facing debt—historically China has not had much debt—so China, is not going to be so insulated the next time around. I bought Chinese shares in the panic, and some of them are more down now because the Chinese markets went down again after I had bought. I feel that I should own something and China and Russia are the couple of markets that are depressed, where they are changes, and that is why I own these shares.

Q. Is this the best time to buy gold?

Jim: Not for me. I own gold and I expect another opportunity to buy gold within the next year or two. I suspect this will happen. Interest rates are going to go higher, which will make the US dollar go higher. When there is turmoil, many people seek a safe haven, and the first thing they go to is the US dollar. Nearly everyone thinks the US dollar is safe—it is not! But people are not going to buy the yen or euro and you can’t buy the Renminbi, so a lot of money will go into the US dollar, and the dollar will go higher. When the dollar goes higher, commodities will not do so well. So gold will suffer. What I suspect will happen is that the dollar will turn into a bubble in the next year or two as everyone is buying into it. Gold will be down and if I get it right, and if the dollar turns into a bubble, I will sell the dollar and put it into gold.

Q. What do you think the Fed will do?

Jim: I would expect the Fed to raise interest rates. The Fed always follows the market. People think the Fed sets the market, but if you go back historically, you will see interest rates usually move ahead of the Fed, and the Fed follows along. Interest rates will go higher, and when that happens, at some point it will affect markets around the world, including the US. At this point, everyone is going to call the Fed, asking them to save us. The Fed is run by bureaucrats and academics, and they will then come riding to the rescue—markets will heave a sigh of relief, go higher, and that will probably be the last big move upwards for stock markets around the world. After that, we all come to the realization that central banks are not as powerful as we thought, and there is only so much they can do. That is how we see the world developing over the next couple of years.

Q. Is the bull run in the commodities market over for good?

Jim: It is certainly down. In the scenario that I outlined, it is hard for anything to go up, if we are having financial turmoil around the world. If what I had mentioned takes place—where I sell my US dollar and buy gold—then gold will have its comeback. Then gold could turn into a bubble three-five years from now. I don’t know if this will happen or not. I hope it does not. Other commodity prices may also go up in the future, because supply has not kept pace with demand. Things like iron ore, oil—there are no new supply streams coming. The reserves of all major oil companies are down, and we are not really finding new oil except for fracking. But frackers cannot make money at current crude prices. So fracking is being slowed or curtailed. In the meantime, oil reserves everywhere are doing down. The supplies for most commodities are not strong enough or large enough to keep prices down for ever.

Q. Why don’t you invest in start-ups? Be it India, China or Southeast Asia, the start-up ecosystem is booming.

Jim: I do not invest in private companies. I feel more comfortable investing in companies where I think I can sell, if and when I want to. I don’t have the interest or the time these days to get deep into and understand these start-up companies. I do not understand technology well enough to get into such start-ups. Today, there are 100's of unicorns with billion-dollar valuations—this sounds like 1999 in the US. In 1999, the bubble was in a couple of small pockets in the US. Now, this bubble is all over the world–China, India… Now there are hundreds of entrepreneurs in their garages who think they are worth millions and billions of dollars. They are worth that right now, but will they be worth so much when the next turmoil comes? Probably not. There are spectacular opportunities for start-ups—there are hundreds of them, but most of them will fail. Most of the companies that were on everybody’s lips in 1999 don’t exist today—most have fallen apart and disappeared. Some of today’s start-ups will make it—they will become huge. Alibaba and Tencent look like they will make it big. Write down the list of companies today, put it away, and look at it 10 years later. Then you will say, ‘wow that was a bubble’! 

via LiveMint

Jim Rogers is a smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.