Monday, June 27, 2016

Jim Rogers reacts to Brexit vote and other questions

James West: Quite the historical event. Brexit surprised everybody and delivered a “Leave” outcome. What do you see that doing for global markets in the near and medium term?

Jim Rogers: Well James we already have some countries and sections sliding into recession. This is just another straw that’s going to make it worse. Whenever bear markets happen, you always start having bad news, and makes them worse. We’re going to have a very serious problem in the next couple of years. You should be worried.

James West: I am worried. So how do investors play this right now? I mean is it a time to buy gold? Is it a time to buy treasuries? Should people be getting out of equities? Bonds? What should they be doing?

Jim Rogers: Well I can tell you what I’m doing but nobody should listen to me. They should only invest in what they themselves know a lot about. I’m short stocks in the United States, I’m long the United States dollar, I’m long agricultural commodities, I own some shares in China and a few other places. But basically I’m short the U.S. stock market and long the U.S. currency.

James West: I see. So Brexit really hasn’t changed anything for you?

Jim Rogers: No. You know, it just made it…I’m having a good day!

James West: Sure! Actually I was just looking over the last time we spoke a few months ago, and you very sagely said that markets were going to experience a higher degree of volatility, and I mean nobody could have forseen the Brexit vote which I guess was kind of an idea that David Cameron came up with. But certainly you were right in your prediction that volatility was going to be the dominant theme in 2016.

Jim Rogers: Well yes…you think 2016 is bad. Wait ‘til 2017. Its going to be worse.

James West: So you see this all moving in a general trend and bias toward more volatility, less stability.

Jim Rogers: Oh absolutely. You’re going to have Scotland leave the U.K., which is going to cause the U.K. to lose its oil income. You’re going to have Europe doing all it can to take business away from the City of London…The U.K. only has Scottish oil and the City of London. So when they lose both, you’re going to have a small country…England and Wales perhaps. But that’s going to have ramifications for financial markets everywhere, and when financial markets are having problems, it often leads to economic problems. This is not going to be fun James.

James West: Well it’s already not that fun…unless you’re a gold and silver investor. Gold’s up almost $80 at this point. The other interesting development that we’re noticing is that China markets are responding very favourably to the Brexit situation. Why would you think that is?

Jim Rogers: Well China – I’m not sure its responding favourably to Brexit. The China market has been down, and I think it’s probably just having a rally. Nothing else but a “dead cat bounce”. I don’t think it’s going up cause of Brexit.

James West. Hmmm. So you don’t think those two events are really related then?

Jim Rogers: If they are, I have no idea why. I’m not smart enough to know.

James West: I see. So in the face of volatility, you’re in agricultural commodities, you’re short U.S. stocks, how about precious metals?

Jim Rogers: Well I own some gold and silver. I haven’t bought them in a long time, but yeah, I certainly own plenty of gold and silver.

James West: I see, so you’re not adding to that position in the face of the Brexit outcome?

Jim Rogers: Not when something goes up six or seven per cent in a day, no.

James West: How does this affect your choice of primary residence? You spend most of your time as a resident of Singapore, is that correct?

Jim Rogers: Yes, yes yes.

James West: And is the reason for that because you see Singapore as a more stable or safer jurisdiction for protecting your wealth in the long term?

Jim Rogers: No James I wish I were that sophisticated. No I want my children to speak Mandarin, and Singapore is a Chinese country, so we moved here so my children would know Asia and grow up speaking Mandarin. And that part has worked in spades.

James West: Wow that’s great. So finally, what do you think the central bank response is going to be to this? I mean the Fed has obviously delayed again raising rates. But do you think there’s going to be a central bank response that seeks to ameliorate the volatility that Brexit has created?

Jim Rogers: Probably..they might go negative, but they certainly won’t go negative until after the election, if and when they do. The central banks all over the world – all they know how to do is print money, and drive interest rates artificially lower and lower. This is not good for the world James. This is not good for anybody. But they don’t know any better, but that’s what they’re going to do. You should be really worried.

James West: So is it safe to say that the central banks tools, which consist almost exclusively of zero or near zero interest rate policy, and stimulus, have exhausted their efficacy and there’s really nothing that anyone can do now?

Jim Rogers: They’re going to do it. It’s not going to work. It hasn’t worked so far. That’s one reason we have Brexit. Because when people are unhappy, they blame the foreigners. And so Brexit is the perfect example of that, and it’s happened throughout history. The British are unhappy because their economy’s not great, they’ve blamed the foreigners, they’ve come out of the E.U. It’s not going to help them – it’s going to make things worse. But people throughout history have often voted badly, and here’s another example of it.

James West: So would you say the success of the Brexit campaign is likely to have a positive effect on Donald Trump’s efforts to become president?

Jim Rogers: Ah well yeah although Donald Trump is more just the unhappiness of the American electorate, and by November, American’s are going to be even more unhappy. And I doubt it anybody will be even talking about Brexit in the U.S. in October and November. But they always look for a man on a white horse, or a woman on a white horse, when things go bad. And that has happened throughout history, and its going to happen again.

James West: So this event sort of underscores the rise of a nationalist sentiment in G7 countries, and do you think that then favors Donald Trump over Hillary Clinton in the election race?

Jim Rogers: Well not just G7, I mean Belgium may split up. This is now giving a lot of impetus to people in Spain who want to separate….Italy…there are many countries where people want to separate, and this will give them a lot of clout. Some of them will lead to elections. Even if they don’t separate, it’s going to lead to more turmoil and confusion, and unhappiness, and when there’s unhappiness and confusion and a lack of certainty, markets don’t like it. They never have. And neither do voters like it, and they’ll vote for the man or the woman on the white horse.

via midasletter

Wednesday, June 22, 2016

Buying when prices are low worked well for me says Jim Rogers

I was a confused university student and once I found out about the investment world, I did not go to a law, business or medical school. I went to Wall Street as soon as I could.

It didn't take me too long to figure out that many people didn't have a clue what they were doing in the investment world. I saw other people making mistakes, and I saw that following other people usually wound up being a mistake. It was hit and miss, so I stopped listening to other people and started doing my own research and investments.

So I tried to find things that I knew or thought I knew would be successful - usually something that was cheap or had a low valuation, based on however you want to value a stock. I realized if you find something that's cheap, even if you make a mistake, you're probably not going to lose a lot of money. If you're right, it could go up a lot.

Monday, June 20, 2016

Opportunities for agriculture exists all around the world

There are many ways to invest, the best being to buy land and be a farmer. Or buy land and lease it out or get a tractor dealership some place.

Vietnam would be a great place to be a farmer! Most nations with good land, good weather, and good soil would be great to be a farmer.

Go to the Congo, go to Ethiopia, go to Angola. There are plenty of places where you can buy land and do things. Even in China you can have a 60-year lease, which isn’t great, but it is better than a 2-year lease or no lease. There are opportunities, but the best is to buy land and become a farmer. You can also open a restaurant or tractor dealership in agricultural areas that will start to do better.

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, June 16, 2016

Oil reserves going lower and production is declining

There will continue to be political and other disagreements within OPEC but basically they want prices to go back up though I do not think they will want to increase production. 

And remember that oil reserves everywhere in the world are going down except for the frackers and the frackers cannot make money at these prices. So you have a situation where reserves are already in decline and production is declining.

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, June 15, 2016

Most of the Fracking in USA, Oil Sands in Canada not profitable at current oil prices

The frackers in America are going out of business and production is coming down. It will be coming down much more dramatically over the course of this year.

Deep drilling cannot be profitable at these levels. Most frackers in United States cannot be frackle at these levels. The oil stands in Canada are not profitable at these levels. Venezuela is not able to produce much at these levels. So if nothing happened, production will continue to go down and that will cause prices to continue to go up. 

They[OPEC] are ruining the people in the us who are in the fracking business. So they are doing what they said they wanted to do.

Monday, June 13, 2016

Long US dollar, long agriculture and short US stocks is a play on economic crisis

I expect very serious economic turmoil and financial market turmoil in the next five to ten years. I would expect in the next two or three years, you are going to see markets around the world being weak and maybe even collapse in some countries. 

In such a situation, I would bet on the US dollar mainly, because that is where people will go for a while, maybe some more agricultural products because agriculture is getting better and better. I would short US stocks. 

What I would do is go long in the dollar, and short the US stock market especially the Nifty-50 stocks and long agriculture.

Wednesday, June 8, 2016

Expecting Gold to go lower still

Gold went down in the last 10 days. I think people started to realize there is nothing behind it to keep it going and as I said before, central banks are going to slow down and may well raise interest rates in the next month or two. When that happens, they will take the fire out of gold.

I own gold. I have not been buying gold for some time but I own it. I still expect gold to go lower. It is not such a surprise because that is how markets work. Gold has been beaten down for four-and-a-half years now and so it is not surprising to have a rally. We have had three or four rallies like this during the past since 2011 when gold peaked. All of them petered out. I suspect that this will peter out too, but that is normal. All markets collapse, have big rallies along the way. Gold has had three or four since 2011.

Monday, June 6, 2016

Jim Rogers latest views on the markets

All markets are up because the central banks are printing more and more money, so it is astonishing for me to see this keep on happening. The Europeans, the Japanese keep on pumping more money. Even the US money supply is going up. Interest rates have been going up or down, but all the central banks continue to pump money into the system.

It is going to end some day. The markets went down, not by very much and all the central banks printed money again. I said to you before too, what happens is that markets go down a good deal, and then the central banks panic and print more money. I mean this is absurd what is happening to the world . We are going to pay a horrible price someday.

Wednesday, June 1, 2016

Jim Rogers on investing in Russia

I was bearish on Russia for 46 years. I went to Russia in 1966 and came away with the idea that this will not work; this cannot work. And only in the last couple of years have I realized that something was going on and changing at the Kremlin. If I suddenly find this is wrong, that this is the same old KGB and the same old Kremlin, then of course I would change my view.

I would certainly lose faith if it turns out that Putin is deranged, or other people in the Kremlin are deranged.

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.