Jim Rogers views were put forward in a series of recent interviews.
Jim Rogers co-founded the Quantum Fund with George Soros, and he has been red-flagging over the years the worst bear market of his lifetime.
The first half of 2022 has been the worst period for investors in more than four decades, with war in eastern Europe and central bank tightening wiping trillions of dollars off risk assets.
Jim Rogers views summed up in a few words; “Get prepared for what is happening,” he said
But Jim Rogers views are not one sided bearish.
“If we had peace in the Ukraine, the markets would go through the roof for a while. I hope that is when I will start shorting it in a much bigger way,” he said.
So Jim Rogers is planning to short the coming blow-off rally.
“The first half of 2022 has been the worst period for investors in more than four decades, with war in eastern Europe and central bank tightening wiping trillions of dollars off risk assets”
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Jim Rogers views why this is not like the 70s period of high inflation and escalating interest rates
“In the 70s the US was a creditor nation. Now we are the largest debtor in the world,” said Jim Rogers.
So the world’s largest economy today is leveraged on debt and hyper-sensitive to central bank tightening.
For this reason, the Fed fund rate hikes near the core inflation rate of 8% are unlikely to happen in our lifetime.
US National Debt now stands at 30.1 Trillion USD, and the fourth significant item is the cost of servicing the debt. Interest on the Debt (net) stands at 433 billion USD. That is more than the federal government spends on education and public infrastructure.
But the 433 billion USD interest payment on the 30.1 trillion USD National Debt is based on the Fed fund rate of 2.5%.
If the Fed hiked rates on par with the US inflation rate of 8.5%, they would bankrupt their best client, the US Federal Government.
So Fed chair Powell will not be allowed to kill the golden goose, despite the hawkish jawboning about fighting inflation.
“Look out the window. The debt is staggering the world, not just the US,” said Jim Rogers.
Indeed central banks have been ultra-successful in selling their product, debt, which is being used as an instrument of controlling governments and soon the citizens through CBDC. The next century will belong to central banks.
“In the 70s the US was a creditor nation. Now we are the largest debtor in the world”
JIM ROGERS
Jim Rogers views on the bear market were put in the context of Japan’s bear market
He recommends people prepare.
“It is going to be bad, we are going to have bear markets whether we like it or not,” he said.
For investors nearing retirement, here is the warning.
“The Japanese market is down 40% from its all-time high 32 years ago. These things can happen and do happen. Serious bear markets can last a long time. Amazon didn’t stay down for 15 years when it collapsed long ago,” he said.
The 1929 stock market crash recovery was relatively quicker than Japan’s bear market.
Jim Rogers cites the post-WW2 period of high household savings rate due to the depression and excess capacity from the war provided tailwinds into the booming 50s.
“There are going to be many investment opportunities for people in their mid 20 s and early 50s, be patient,” he said.
“You want to be successful, rich, be boring, and stay with what you know”
– Jim Rogers
Jim Rogers view on successful investing is to stick with what you like and know
“Don’t listen to hot tips. Ignore hot tips,” he said.
“The stuff you know more about than other people are the topics that interest you. It is the magazines you read on the table in doctor’s dentist waiting rooms. The website you visit,” he said.
It could be about cars, fashion, medicine, technology, gardening, whatever.
“Stay there, and when you see something happening in the field, you know a lot about, something that you know is going to be successful, then do some research and find the companies, are they smart people, do they have too much debt,” he said.
If you decide it is going to be a success, invest. That is how you are going to be successful and rich,” he added.
“You want to be successful, rich, be boring, and stay with what you know,” he said.
Jim Rogers views on how to invest in the then-current climate are that despite uncertainties he is not selling or selling short yet.
Peace in Ukraine means food and energy prices will fall and markets will rally, believes Jim Rogers.
Peace in Ukraine will mean inflation falls, Fed hikes are done which could fuel a rally.
“It could be a big rally. In 1999 the Nasdaq tripled in value in six months.
when you have a blow-off in any market it is crazy,” he said.
“When you invest in countries near the end of the war, you are probably going to be successful” – Jim Roger
He sees the best success on the short side following the pending blowoff top rally
He believes the US dollar will strengthen because everyone looks for haven in times of turmoil. He said he hopes he is smart enough to sell it at the top because it is a flawed currency.
Jim Rogers views civil war least likely in the US than in other countries
Other countries are less stable than the US.
But he thinks there is a virtual certainty that the US will be at war within the next decade.
Believes Colombia is a good place because it is too mountainous for war and has plenty of agriculture. He has also invested in Uzbekistan, former Soviet republic tourism. “They have some of the greatest tourist sights I have ever seen, tourism, agriculture, commodities,” he said.
He thinks Chinese communists are better capitalists than the US. We won’t let the company go bankrupt. He does not see anyone else rivaling China in the next few decades. Changes taking place in Asia are dramatic.
He would like to invest in Russia and Ukraine. “When you invest in countries near the end of the war, you are probably going to be successful,” he said.