Jim Rogers Talks with Bloomberg
April 13, 2009 - Jim Rogers, a favorite of ours at the Small Cap Pulse, told Bloomberg, with respect to the increase in government spending, that whenever you have huge amounts of currency created it always leads to higher prices and inflation. He expects that to happen in this case too. He said the best skill children can learn today is to learn Mandarin. He said in his view, Asia will lead in the twenty-first century.
In terms of investment advice, though acknowledging he is a ‘bad market timer’, he likes agriculture commodities in the near term. He is buying indexes. When asked about his take on the markets, and whether we are out of the woods, he said that we were overdue for a rally and that it is not unusual in times like this, but he also sees more lows and bottoms ahead of us. He expects to see currency problems, and more bankruptcies as a result. He said he is buying commodities. He said the fundamentals for commodities are getting better.
Farmers can’t get loans for fertilizer. No one can get a loan to open a mine. Inventories are getting lower. If you look back over the three-five months, commodities have outperformed. He said there has to be higher prices of food or we won’t have any food at any price. He said the only way is to get more production and more supplies, is for prices to go higher. He is buying the commodity products themselves, rather than stocks, but if you buy the right stocks you will make a lot of money.
When asked how long he thinks the rally in the US can last, he said this when you see a rally like this coming off the bottom it lasts longer than anyone expects. He isn’t selling short this rally yet. When asked the best way to short the bond market, he said he isn’t short the bond market at this moment – it is the last bubble yet. He said the TBT ETF is a leveraged way to short the bond market. He said he fully expects to short the bond market at some point in the future.
When asked whether he sees any profitable situations in Japan, he said he owns some baby stocks in Japan, “Hello Kitty” and ‘stuff like that’. Other than that he hasn’t done much in Japan. He said he would rather own Japanese shares than American shares right now, but doesn’t really own either. With respect to Thailand, he said isn’t doing anything there right now, but he would wait for a collapse before getting in. He said if it is going to survive, low prices are a time to buy. If you get the right price, then buy.
When asked about the potential of a currency crisis in the west, he said he suspects it is coming next. The US is the largest debtor nation in the history. He thinks investing in China and buying the yuan is probably a good idea.
When asked whether he would hold gold or oil, he said oil, because the IMF is trying to sell its gold, and expectations that it is selling gold will pressure prices in the near term. The IMF is going to potentially sell huge reserves of gold.
