Thursday, January 29, 2015

Gold will bottom when the faithful give up

I’m the world’s worst market trader and timer. Well, yeah, when there’s panic. I – we haven’t seen panic – I haven’t seen panic yet in gold. When it happens, and when you see some of the faithful throwing in the towel and say, “Gold has mistreated me. She cheated me. She lied to me. I’m never gonna touch gold again,” then that’s gonna be a – some kind of a bottom. 

But I haven’t seen that yet, and I don’t even know how visible that will be. If you watch television, you’ll probably see a lot of people giving up on gold. But I haven’t seen that happen yet.

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.

Tuesday, January 27, 2015

Jim Rogers on Buying low Selling high

The U.S. stock market is making an all-time high. As you know, it’s up more highs this year than any year since 1929. That’s not a bottom. 

I’d rather buy – I’m buying shares in other markets around the world. I mentioned Russia… China, I bought more Chinese shares[…] Japan, I want to buy some more if I get time off the phone to buy more Japanese shares. You know the Chinese and Japanese markets are down 60% from their all-time highs. America’s making all-time highs as it did in 1929. I don’t know if these other markets are better, but I know buying low and selling high often turns out to be right.

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, January 21, 2015

Jim Rogers praises Reserve Bank of India

The Reserve Bank of India is one of the better-manned central banks in the world. They seem to understand what needs to be done. And they are doing a better job than most. I wish the Reserve Bank of India were running the U.S. Federal Reserve.

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, January 19, 2015

Jim Rogers predicted Swiss currency move

I explained carefully and at length that it [Swiss currency move] was coming and why [in my book - Street Smarts]. I am still astonished they would ever have done something so foolish, but politicians throughout history have always done some amazingly foolish things.

Text from the book

Switzerland has been an international center of finance since the end of the Renaissance. Known since then for its stability, sound economy, sound currency, and privacy in financial matters, it has long provided monetary refuge from the wealthy evading the consequences of political turmoil in Europe, from French nobility fleeing the guillotine to the Jews escaping Germany a century and a half later. It has, for the same reasons, in modern times, attracted the money of numerous despots, criminal organizations, and scoundrels.

Switzerland, traditionally, has been unconditional in its offer of bank secrecy. Of course, all banks are supposed to keep your affairs quiet. If you put your money in a bank in Chicago fifty years ago, you would have done so with the assumption that it was confidential. In America, as we have seen, that is no longer the case. The government can look into your bank account, your bedroom, your mail … anywhere it wants. And in much the way that our privacy has been taken away from us, the Swiss have recently surrendered some of theirs, succumbing to pressure from the United States. Bank secrecy in Switzerland is not as sacrosanct as it once was.

Nonetheless, the first thing people look for when seeking monetary refuge is safety. They want stability. They want the security of knowing they will get their money back, and that they will get back at least as much as they put there in the first place. That depends entirely on a sound currency. And that is something the Swiss franc has always offered. The question, now, is whether that is going to last.

I had opened my first Swiss bank account in 1970 in the face of coming turmoil in the currency markets. By the end of the decade, as the markets grew more volatile, people all over the world were trying to open Swiss accounts. And the same thing is happening today. The dollar is suspect, the euro is suspect, and again people are rushing to the franc. In 2011, the CHF (the Swiss franc) escalated to record highs against both the euro and the dollar, rising 43 percent against the euro in a year and a half as of August 2011.

It was a "massive overvaluation," according to the country's central bank, the Swiss National Bank (SNB). Under pressure from the country's exporters, the SNB announced that "the value of the franc is a threat to the economy" and said it was "prepared to purchase foreign exchange in unlimited quantities" in order to drive the price down.

A threat to the economy? It was the exporters who were doing the screaming, but everybody else in Switzerland was better-off. When the Franc rises, everything the Swiss import goes down in price, whether it is cotton shirts, TVs, or cars. The standard of living for everybody goes up. Every citizen of Switzerland benefits from a stronger currency. Our dental technician down in Geneva is not calling up and moaning. She is happy. Everything she buys is cheaper. But the big exporters get on the phone and the government takes their call.

The franc went down 7 or 8 percent the day of the SNB announcement. Nobody, at least in the beginning, wanted to take on the central bank. But the bank's currency manipulation will turn out to be disastrous. One of two things is going to happen.

In the first scenario, the market will continue to buy Swiss francs, which means that the Swiss National Bank will just have to keep printing and printing and printing, and that will of course debase the currency. Now, there are major exporters in Switzerland who might benefit, but the largest industry in Switzerland, the single largest business, is finance. The economy rises or falls on the nation's ability to attract capital. And the reason people put their money there is their trust in the soundness of the currency- they not that their money will be there when they want it, and that it will not be worth significantly less than when they put it there in the first place.

But people will stop rushing to put their money into a country where the value of the currency is deliberately being driven down. After the Second World War and for the next thirty years, people took their money out of the United Kingdom because the currency plummeted. (Politicians blamed it on the gnomes of Zurich.) London ceased to be the world's reserve financial center because Britain's money was no good. 

Similarly, if you debase the franc, eventually nobody will want it. You will have eroded its value, not simply as a medium of exchange, but also a monetary refuge. The money will move to Singapore or Hong Kong, and the Swiss finance industry will wither up and disappear.

The alternative scenario is what happened in July 2010, the last time the Swiss tried to weaken their currency. They did so by buying up foreign currencies to hold against the franc-selling the franc to keep the price down. But the market just kept buying the francs, and the Swiss central bank, after quadrupling its foreign currency holdings, abandoned the effort. At that point, when the bank stopped selling it, the Swiss franc rose in value, all the currencies the Swiss had bought (and were now holding) declined in value, and the country lost $21 billion. In the end, the market had more money than the bank, and market forces inevitably prevailed.

In the late 1970's when everyone was rushing to the franc, the Swiss National Bank, to stem the tide, imposed negative interest rates on foreign depositors. The government levied a tax on anybody who bought the currency. It was their form of exchange controls back then. If you bought 100 Swiss francs, you wound up with 70 in your pocket. Today, with the rush on again, The Economist has described the Swiss currency as "an innocent bystander in a world where the eurozone's politicians have failed to sort out their sovereign-debt crisis, America's economic policy seems intent on spooking investors and the Japanese have intervened to hold down the value of the yen."

All of which is true, but I think the problem runs deeper than that. The Swiss for decades had a semi monopoly on finance. And as a result they have become less and less competent. The entire economy has been overprotected. The reason Swiss Air went bankrupt is because it never really had to compete. Any monopoly eventually destroys itself, and Switzerland, in predictable fashion, is corroding from within. As a result, other financial centers have been rising: London, Lichtenstein, Vienna, Singapore, Dubai, Hong Kong.

I still have those original Swiss francs that I bought in 1970, and since then the franc is up about 400 percent. Granted, it has been over forty years, but 400 percent is nothing to sneeze at. Plus I have been collecting interest. Had I kept the money in an American savings account, it would have gone down 80 percent against the franc.


Wednesday, January 14, 2015

Jim Rogers says Gold could still go lower

I, one reason I’m not buying gold at the moment or silver or gold, specifically, is that gold has not had a 50 percent correction in many years. Now, you know, Bob, as well as I do that most things correct 50 percent every few years. It’s just the way markets work. It’s normal. They may correct 50 percent – within the context of a bull market even.

Gold has not done that for several years, which is why I’m waiting. I don’t know that it’s going to correct 50%. But if it does, I’ll certainly be buying a lot more. But that’s a very good point. Gold back in the ’70s went up 100 percent in a year or two, and then it turned around and went down 50 percent. It scared the socks off a lot of people before it turned around and went up 850 percent.

So, in my view, the same sort of thing is happening with gold now. A difference is we have a lot more bulls on gold now than we did in the ’70s. In the ’70s, gold hadn’t traded in most markets, or certainly not in the U.S. in the big Western market for decades. So you didn’t have many people who even knew gold could trade.

Now, you have a lot of people who think that gold is holy, who are very faithful to gold. In my view, we gotta shake out a lot more of those people before gold can really have its ultimate bull market top. But gold will end in a bubble someday, in my view. But we cannot really hit that solid bottom until we shake out some of the faithful.

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, January 12, 2015

Base metals buyer rather than precious metals

I am not buying precious metals at the moment. I’d rather buy base metals, actually, at the moment than precious metals. 

But it’s – if you can find ones[precious metal companies] that have good management with good reserves, good assets, and aren’t over-leveraged, I’m sure there are gonna be great opportunities there. I’m not buying precious metals yet. But, sure, anything like that that’s down 80% – it’s not going to go away. You know there are gonna be great pickings there if you can figure out which ones.

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.

Thursday, January 8, 2015

Jim Rogers on PHOR and being director

Jim Rogers opinion on PhosAgro (MCX:PHOR) 

It’s one of the largest fertilizer and phosphorus companies in the world. It’s run by a bunch of young guys now. And, I mean, it’s a big, big company, even though it’s run by young guys. And I became a director in September, I guess, it was – and partly because I’m bullish on agriculture and partly because I’m bullish on Russia. The Ruble of course, has been a disaster since then, but this stock is still up.

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, January 7, 2015

Oil and Russia will rebound higher and Russia is a resource rich country

The oil market drop is not good for Russia – no question about that – and it’s making the ruble go down. But, no, I see this as an opportunity. Unfortunately, I’m not very good at timing, so I don’t know when the opportunity will be.

Oil prices are not gonna stay down forever, I suspect. And Russia will rebound with oil or when they get their own act together. I mean, they’ll have to – if oil stays down at $60, they’ll have to get their act together and reorganize. But they’ve got enough resources. It’s a vastly, vastly rich country as far as resources are concerned. And it’s a very, very cheap market. I think it’s selling at half of book value right now. That’s not an expensive market.

It’s perhaps the most hated market in the world except for Argentina, I guess. And – well, not even that. Argentina’s not as hated, ’cause people are trying to raise money to invest in Argentina. So I guess Russia must be the most hated market in the world, which normally is an opportunity, Bob – normally. I mean, I emphasize normally. Who knows where the bottom is? I don’t.

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, January 5, 2015

Jim Rogers owns US Dollar even though he doesnt have confidence in it

I don’t have any confidence in the U.S. dollar, it’s just that I see more turmoil coming – and in times of turmoil, rightly or wrongly, many people race to seek the safe haven of the U.S. dollar. It’s not a safe haven, but it’s perceived that way.

So as this turmoil develops, and you see it happening now, the dollar will go higher. At some point, I’m going to have to sell my dollars and turn around and buy something else. What? I don’t know – maybe then it’ll be the Swiss franc, although that’s very unlikely . . .  or maybe gold or maybe silver at that point. 

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.