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Archive for the ‘Jim Rogers’ Category

Talking markets: Jim Rogers

Global investor Jim Rogers thinks that the world is heading for an economic depression unless political leaders finally grasp the nettle of the debt burden they have accumulated over the past decade. He is not optimistic about the outcome. Bankrupt countries such as Greece need to default – and soooner rather than later. The longer they leave it, the worse the eventual outcome will be. Hear more of this – and how Jim is seeking to protect his own wealth in these difficult times – in my latest podcast, a 30-minute interview with one of the smartest investors I know. It is available to download from the Independent Investor website now. An edited transcript will be available in the New Year.

Written by Jonathan Davis

January 3, 2012 at 5:56 PM

Mark Mobius on the Eurozone crisis

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How does Mark Mobius see the outlook for investors in the light of the ongoing crisis in the Eurozone? You can find out by listening in to my latest podcast interview, which can now be downloaded from the Independent Investor website (link). Dr Mobius, who next year celebrates 25 years running the Templeton emerging markets funds business, with $40 billion of assets under management, discusses the threats and opportunities which the crisis has created.  This is the first of a series of podcast interviews with leading professional investors and advisers. Other to be interviewed in the series include the global investor Jim Rogers, author and economist John Kay and Guy Monson, the Chief Investment Officer of the Swiss private bank Sarasin.

Written by Jonathan Davis

December 11, 2011 at 6:58 PM

The worries of an old hand

The most thought-provoking presentation I have heard at the CFA Institute was from Felix Zulauf, a Swiss investor well known for his regular contributions to the annual Barron’s Round Table. His views are slightly darker, shall we say, than those of many others here. He remains bullish on gold and the Swiss franc and had many interesting insights on Europe. I plan a provide a more detailed analysis of the various high level contributions at this year’s event, including those of Gavyn DaviesRussell Napier, Jim Rogers and Willem Buiter,  in the next issue of Independent Investor.

Written by Jonathan Davis

May 11, 2011 at 10:39 AM

Q and A with Jim Rogers

Jim Rogers, who co-founded the Quantum Fund, regularly speaks his mind on the outlook for global markets from his new home in Singapore. I have been talking markets with him for more than 10 years. In a Q and A session with Independent Investor, he offers his latest views on China and Korea, on the dollar and the euro, and on gold, silver and other commodities. Here is a short extract from the 20-minute conversation.

I’d like to start by asking you to explain what you think has been happening in the markets in the last month or so. They’ve been very jittery – we’ve had the Eurozone crisis, we’ve had the Israeli situation, we’ve got worries about Korea and so on. Are these worries you share, or is this just normal market action that we’re seeing here?

I hope you and everybody is worried too because, you know, we have great imbalances in the world that have to be sorted out. I mean, we’ve got gigantic debtors in the West, and gigantic creditors in the East, and we’re going to have more problems: more currency turmoil; we’re going to have more financial problems – this is not over yet.

Some people are saying that there is a serious risk of returning to a re-run of 2008 and the banking crisis – is that something you share?

Well, of course I do. There’s no question about that. It may not be the same actors, it may not be the same format, but, again, the United States essentially is bankrupt, the UK essentially is bankrupt. There are a lot of companies and countries in Europe which are getting a lot of press right now, but nobody can pay off these debts.

If you would like a transcript of the full 3000-word interview, please email me at editor@independent-investor.com. The full interview, and others in the series, will be available free of charge for subscribers to read or listen to on the new Independent Investor website. This is currently in beta format and will go live shortly.

Written by Jonathan Davis

June 15, 2010 at 5:48 PM

Posted in Jim Rogers, Q and A

Too Early To Panic (Though Some Are)

After another turbulent week in the markets, it seems a good point at which to stop and take stock of where we are. Equity markets are now oversold and will certainly have a bounce soon, for sure. Readers of Independent Investor will know that Jim Rogers thinks this is just a normal market correction, after the strong run from February to April.

Crispin Odey thinks the trend is still upwards. Ken Fisher does so likewise. Sanjeev Shah, Anthony Bolton’s successor at Fidelity, also thinks the market is oversold and has bought some more units in his own Special Situations fund – always an encouraging sign.

In a short Q and A last week, Richard Oldfield, the founder of Oldfield Partners, a specialist equity fund manager which has no public profile but is much admired by those who know it, is keeping his pro-equity bias in place, though he also said that he has learnt to ignore at this peril technical indicators such as Investors Intelligence’s bullish/bearish sentiment indicator, which has been flashing a clear warning sign.

So, at the very least, even if you don’t dare to be bullish, don’t be fooled by dramatic media headlines into thinking that the equity market rally is necessarily yet over. The crisis in the eurozone is real enough, and has been confounded by the unimpressive response of Europe’s political leadership to date. There is no doubt that there is an element of investor panic out there in the response to the unfolding eurozone crisis.

You can see this in a number of different indicators. The VIX index, which is often used as an indicator of fear in the market, has risen sharply in the last two weeks.

More worryingly, so too has the Libor rate, the key interbank lending rate which can also be interpreted as an indication of how willing banks are to lend money to each other.

This underlines the fact that behind the worries over the eurozone is the fear of further banking collapses. The rescue of the Spanish bank this weekend underlines how weak many lenders in the eurozone still are.

If banks start to stop lending to each other again, and liquidity dries up again because of fears over bank solvency, we will heading back towards a new crisis.

The technical condition of the stock market has deteriorated in the last few weeks. Richard Russell, the doyen of all technical analysts, now in his ‘80s, reports from his San Diego home in dramatic tones that the stock market has entered a primary downtrend.

All this may help to explain why Philip Gibbs, the financial expert at Jupiter, moved a lot of his funds out of equities and into cash earlier this year, fearful of the impact that the new crisis over sovereign debt might have. Against is the fact that Jupiter has announced last week its intention to float on the stock market, not something the firm would presumably try if the hugely influential Mr Gibbs was as bearish as he was in the run up to the 2008-09 banking crisis.

The risk of a new financial crisis, as has been noted here before, has never gone away, but the odds against it happening have been lengthening. Now the odds have taken a hit back in the opposite direction. A new crisis can still be avoided, but investors need to be aware that the possibility remains, even if it is still more likely that the equity market will start to pick up, as it was clearly beginning to do on Friday before news of the Spanish bank rescue.

While I remain confident that the case for equities remains robust, therefore, it is clearly sensible to remain alert to the danger of a new crisis, and be prepared to act accordingly if the market fails to bounce back. The next couple of weeks will give us more clues as to whether another dramatic stock market crisis is imminent.

Written by Jonathan Davis

May 24, 2010 at 8:33 AM

Jim Rogers Tackles Dr Doom

There has been an entertaining but important public spat between Jim Rogers, the global investor, and Nouriel Roubini, the ultra-bearish New York economist who wrote an article in the Financial Times last week arguing that we are facing a monster bear market and “the mother of all bubbles” as a result of policymakers’ cheap interest rate policy. Here are some extracts from an interview between Jim and Damien Hoffman. The full text can be found here.

You said on Bloomberg that Nouriel Roubini did not do his homework regarding the asset bubbles about which he is now warning. Can you explain what homework he did not do?

All of it. How can you talk about a bubble when assets such as silver are 70% below their all-time high? Same for coffee, sugar, cotton, natural gas, and many more. I have a problem talking about a bubble when assets are this depressed from their all-time highs.

A bubble is when assets are screaming to new highs everyday, everyone is talking about them, and everyone owns them. Right now, virtually no one owns commodities. So for Mr. Roubini to talk about a bubble in commodities defies comprehension. It proves he does not understand markets.

I am flabbergasted at Mr. Roubini’s comment about bubbles because there is not a single market in the world making all-time highs except gold, US government bonds, cocoa, and the Sri Lankan stock market. That’s hardly reason to call for a bubble. So, I am most perplexed about this alleged bubble which is out there.

If an asset rises 100% in one year, that’s a great year, but not necessarily a bubble. Look at oil. It’s up huge(ly) off the bottom, but nowhere near its old highs. Look at Citigroup. The stock is up 3 or so times off the bottom …And since Mr. Roubini thought oil would stay below $40 a barrel for all of 2009, I would love for him to tell me and the rest of the world exactly where are all the oil supplies because the International Energy Agency (IEA) — which has the best global data set on energy supplies — has no idea where is the oil. Mr. Roubini should tell us where this price suppressing oil supply is hidden. All the oil possessing countries in the world have declining reserves. All the oil companies have declining reserves. So Mr. Roubini must know something the rest of us don’t.

Gold

I hope you will keep Mr. Roubini’s statement where he said gold going to $2,000 an ounce by 2019 is “utter nonsense.” I think you’re going to get a chance to call him before 2019 to ask him what he thinks of gold at $2,000 and why he thought it was “utter nonsense.” Regarding variables, it’s very clear there is huge suspicion about paper money around the world. This suspicion is gathering steam. Governments are printing huge amounts of money. This has always led to higher prices. Maybe I am wrong and it’s different this time. But I doubt it.

Additionally, no new large gold mines have been opened in decades. Some of those mines are over 100-years old. They are all depleting. On the other hand, central banks have huge gold reserves above ground — and they are less interested in selling than in the past. If you adjust gold for inflation and go back to its former all-time high in 1980, gold should be over $2,000 an ounce right now if you want to say its reaching new inflation adjusted all-time highs.

That does not mean gold has to get back to a true all-time high. Nothing has to. However, I suspect that given all the money printing in the world, we will see much higher prices for hard assets. Despite gold’s potential, I think I will make more money in other commodities such as silver, cotton, or coffee — all of which are terribly depressed.

On US equities

This is one of the few times in my life I have not had shorts anywhere in the world. I have also not had a lot of longs in the stock market because I’ve chosen longs in commodities and currencies. I have kept away from shorts because there is a gigantic amount of money being printed and it has to go somewhere. I thought some of it would end up in the stock market, and it has.

How much higher can the equity markets go? I don’t know. There are a lot of problems in the economy, but I don’t know when those problems will cause a downdraft in the stock market. All we’ve done is paper over the problem, so I expect we’ll have to deal with those issues in the future. Printing and spending money we don’t have simply prolongs the problems and makes them worse in the long run.

If the world economy improves, commodities will lead the way due to demand and shortages. If the world economy does not get better, commodities are still a great place to be because governments are printing so much money. And, if the world economy doesn’t get better, they will print even more money!

Written by Jonathan Davis

November 10, 2009 at 10:57 PM