If it continues to go down, I hope I am smart enough to buy more.
Gold could go to USD 500/oz and could have a big correction.
All markets do that, they have big corrections and they scare everybody but a 50% correction is normal. If it goes down 50%, I hope I am smart enough to buy a lot more.
September 12, 2008
Latest Jim Rogers Interview on BLOOBERG TV
Joining us by phone from Singapore to talk more about Lehman, and, of course, Fannie and Freddie and the economy, is Jim Rogers, Chairman of Rogers Holdings. Jim, great to have you back on the program, as always.
JIM ROGERS, CHAIRMAN, ROGERS HOLDINGS: I am delighted to be here, Betty.
LIU: You know, Jim, got to get your reaction to the Lehman news. Of course, you've been short financials. You've called all the guys on Wall Street crooks. What do you think about the Lehman news today?
ROGERS: I'm not sure I called them all crooks, did I? Did I go that far? I called a lot of them incompetents. And it's certainly unfortunate that they took a lot of money out of these companies. And now these companies are suffering very badly, and they expect other people, taxpayers, to bail them out.
I find that outrageous, as a matter of fact. They're not turning in their - they all have Maseratis. They're not turning in their Maseratis to - when they're asking us to bail them out. I find that outrageous, yes.
But what do I think about it? I am still short all the investment banks, Betty. I covered many investment banks. I'm short them through the ETFs. And this chaos has further to go.
LIU: Now should the - do you think Dick Fuld should resign? Should the brokerage be taken over? Should it be sold?
ROGERS: Well something's got to happen because essentially that balance sheet is in terrible, terrible trouble. They sold all this garbage. They kept a lot of this garbage. And somebody has failed in Lehman Brothers.
Usually the buck stops at the top. But I am not a shareholder of Lehman Brothers, so I cannot tell them what to do. But normally in most companies, and in most societies, when people do things wrong and fail, they resign and turn it over to somebody else.
LIU: Jim, we were talking before, and I've read some reports that of all the financials, you'd be short Citigroup. Correct me if I'm wrong on that, but why Citigroup?
ROGERS: Well I've covered Citigroup, so I'm no longer short it. But why Citigroup? Because it's the same thing. The place was a mess. They've got gigantic problems on their balance sheets, huge problems on their balance sheet, many more to come.
If the stock should rally, I'll short some more. But I'm not sure that now - and I covered a week, two weeks ago now. This is September, and I covered it a few weeks ago.
LIU: Oh really? Why did you do that?
ROGERS: Because it was down a lot. I've learned many times that when something goes down a lot, you probably ought to short it. That something often comes along and causes a rally, and then you wish you had shorted it. So rather than wish I had covered, I covered it.
LIU: Jim, does any of what's happened so far with Lehman, and with Fannie and with Freddie, does any of that give you confidence that we are somewhat near the end of this crisis, we're midway through? Does it give you any confidence that we're getting a grapple on the situation?
ROGERS: Betty, we're further along than we were. We're 15 months along. But Hank Paulson told us 18 months ago that everything was all right. He told us 12 months ago, nine months ago, six months ago, three months ago. And I'm sure three months from now he will tell us everything is all right.
But everything is not all right, Betty. Bernanke swore, under oath, under oath in 2006, that there was no housing problem, everything was fine in housing. And in every instance since then, he's told us everything is fine. But it's not okay.
The balance sheets of many of these financial institutions are still terribly impaired, and there are more problems to come.
Betty, we had the worst credit bubble we've had in world history. You don't clean that out in a year or two or three. I wish you could, but it's not going to happen.
LIU: Now you called the Fannie and Freddie bailout a disaster. What would you have liked to have seen happen with those two companies?
ROGERS: I would like to have seen them go bankrupt and be turned over to the bankruptcy courts and work out their bankruptcy, and work out their bonds, work out their debits and their credits. That's normally what happens.
But you know, these two companies have run up, apparently, $6 trillion in debt. And the people who ran up the debt, Betty, were not elected by anybody. They were incompetents and crooks. And yes, they were crooks. There's no question about that, some of them.
I don't know why Franklin Raines is not in jail. You see a lot of people in jail these days. What Franklin Raines and his cohorts did were worse than what anybody else has done. And they now have saddled the American taxpayers with $6 trillion, with a T, of debt.
LIU: Yes, but Jim, what about those who say that this is actually - this is going to help lower mortgage rates and help the housing market recover?
ROGERS: Well that's fine, Betty. Why do I have to pay for it? Why do you have to pay for it? Why do my children have to pay for it? You could do that too by letting the thing go bankrupt and starting over.
I don't - I'm happy that some people are going to get lower mortgages. But I don't think I should pay for it.
LIU: Jim, before we start talking about commodities, which, of course, is the favorite subjects to talk to you about, where do you think, Jim, the next big financial shock is going to come from?
ROGERS: Oh, probably more from some of the American banks, the American financial system. But, Betty, for all I know, it could come out of a European bank or an Asian bank. I don't know who has all this garbage. I know a lot of people do.
Some of the Europeans haven't written it off yet, and the Japanese, I would suspect it's going to come from a bank we haven't thought about yet. But there are more problems to come.
LIU: All right. Are you seeing - being in Singapore, are you seeing any of that start to creep up at all?
ROGERS: Well not in Singapore so much, just because the government here has been very disciplined and very harsh on these guys.
LIU: But I mean in Asia. In Asia, Jim.
ROGERS: Oh, well, you're certainly starting to see it in the Chinese banks. Some of the Chinese banks bought a lot of this stuff. The Taiwan banks bought a lot of this stuff. And you're going to see some of those problems come out.
One of the reasons that the Chinese government has been trying to tighten up is because they do know that there are some problems in their banking system.
So you may see more slowdown in China. The government's trying to slow things down. Hope they do, they need to. That, of course, is having an effect on the commodities market now, as you will point out, I'm sure.
But that's just a correction. There are corrections in any market. We always have corrections.
LIU: Well, that leads me, of course, to talk about commodities with you, and particularly oil, Jim. You've been a bull on commodities. We've seen oil come down about 30 percent from the peak. You're still a bull on oil. Why? Where do you see it going?
ROGERS: Betty, the oil bull market started in 1999. Three times since then oil prices have gone down 40 percent or 50 percent. And every time it happened, the skeptics always said, well see, we told you so. There's no bull market.
Well oil could go down 50 percent again. This is not a prediction, I'm just saying it could go down 50 percent. But it's not the end of the bull market. Betty, the bull market will not end until somebody finds a lot of oil, or unless we have worldwide economic collapse, perpetual economic collapse.
The bull market is not over. If oil goes to $75, which is down 50 percent, it's not the end of the bull market. That's the way markets work. They always have and they always will.
LIU: Well, Charlie -
ROGERS: I'm not predicting it's going to $75. I don't want you to start writing that. I'm just suggesting that it could. And it's not the end of the bull market.
LIU: Right. Well on the other side, though, we had a guest on, Charlie Maxwell, saying it could go to 300 in seven years. What do you think?
ROGERS: Well it certainly can. Now wait a minute. I'm suggesting to you the bull market is not over, even if it corrects and goes to 75.
The bull market is not over, Betty, until somebody discovers a lot of oil. Whether it's 150 or 250 or 300, I don't know. I'm not as smart as Charlie Maxwell. But I do know it's going to go a lot higher during the course of this bull market over the next decade.
LIU: Now, of course our viewers, Jim, know - they want to know where oil is going, let's say, by the end of this year. Where do you think? Do you think it's going to stay around this level for a while though?
ROGERS: Betty, you know I'm not smart enough to answer that question. I'm the world's worst market timer, the world's worst short-term trader. I wish I knew. I don't know if it's going to 75 or 175.
I will tell you I've not sold any oil. Even if it goes to 75, I don't plan to sell any oil. I plan to continue to invest in things that I think are cheap, including commodities and hopefully selling short things that I think are too expensive.
LIU: Now Jim, very quickly, we've only got about 10 seconds. Speaking of oil, you've bought into airlines. Are you still heavily in them? Have you bought more?
ROGERS: I have not sold a single airline. I would hope to be able to buy more airlines if I can find some more that are cheap enough, or if they go down for some reason.
LIU: And you're still short Treasuries, right?
ROGERS: I'm still short Treasuries. You asked right. Long term US Treasuries, you're right.
LIU: Okay, Jim.
ROGERS: You know more about - Betty, you know more about me than I do.
LIU: Well you know what? We keep tabs on you, Jim. All right, thanks so much for joining us, as always. Jim Rogers, Chairman of Rogers Holdings in Singapore.
JIM ROGERS, CHAIRMAN, ROGERS HOLDINGS: I am delighted to be here, Betty.
LIU: You know, Jim, got to get your reaction to the Lehman news. Of course, you've been short financials. You've called all the guys on Wall Street crooks. What do you think about the Lehman news today?
ROGERS: I'm not sure I called them all crooks, did I? Did I go that far? I called a lot of them incompetents. And it's certainly unfortunate that they took a lot of money out of these companies. And now these companies are suffering very badly, and they expect other people, taxpayers, to bail them out.
I find that outrageous, as a matter of fact. They're not turning in their - they all have Maseratis. They're not turning in their Maseratis to - when they're asking us to bail them out. I find that outrageous, yes.
But what do I think about it? I am still short all the investment banks, Betty. I covered many investment banks. I'm short them through the ETFs. And this chaos has further to go.
LIU: Now should the - do you think Dick Fuld should resign? Should the brokerage be taken over? Should it be sold?
ROGERS: Well something's got to happen because essentially that balance sheet is in terrible, terrible trouble. They sold all this garbage. They kept a lot of this garbage. And somebody has failed in Lehman Brothers.
Usually the buck stops at the top. But I am not a shareholder of Lehman Brothers, so I cannot tell them what to do. But normally in most companies, and in most societies, when people do things wrong and fail, they resign and turn it over to somebody else.
LIU: Jim, we were talking before, and I've read some reports that of all the financials, you'd be short Citigroup. Correct me if I'm wrong on that, but why Citigroup?
ROGERS: Well I've covered Citigroup, so I'm no longer short it. But why Citigroup? Because it's the same thing. The place was a mess. They've got gigantic problems on their balance sheets, huge problems on their balance sheet, many more to come.
If the stock should rally, I'll short some more. But I'm not sure that now - and I covered a week, two weeks ago now. This is September, and I covered it a few weeks ago.
LIU: Oh really? Why did you do that?
ROGERS: Because it was down a lot. I've learned many times that when something goes down a lot, you probably ought to short it. That something often comes along and causes a rally, and then you wish you had shorted it. So rather than wish I had covered, I covered it.
LIU: Jim, does any of what's happened so far with Lehman, and with Fannie and with Freddie, does any of that give you confidence that we are somewhat near the end of this crisis, we're midway through? Does it give you any confidence that we're getting a grapple on the situation?
ROGERS: Betty, we're further along than we were. We're 15 months along. But Hank Paulson told us 18 months ago that everything was all right. He told us 12 months ago, nine months ago, six months ago, three months ago. And I'm sure three months from now he will tell us everything is all right.
But everything is not all right, Betty. Bernanke swore, under oath, under oath in 2006, that there was no housing problem, everything was fine in housing. And in every instance since then, he's told us everything is fine. But it's not okay.
The balance sheets of many of these financial institutions are still terribly impaired, and there are more problems to come.
Betty, we had the worst credit bubble we've had in world history. You don't clean that out in a year or two or three. I wish you could, but it's not going to happen.
LIU: Now you called the Fannie and Freddie bailout a disaster. What would you have liked to have seen happen with those two companies?
ROGERS: I would like to have seen them go bankrupt and be turned over to the bankruptcy courts and work out their bankruptcy, and work out their bonds, work out their debits and their credits. That's normally what happens.
But you know, these two companies have run up, apparently, $6 trillion in debt. And the people who ran up the debt, Betty, were not elected by anybody. They were incompetents and crooks. And yes, they were crooks. There's no question about that, some of them.
I don't know why Franklin Raines is not in jail. You see a lot of people in jail these days. What Franklin Raines and his cohorts did were worse than what anybody else has done. And they now have saddled the American taxpayers with $6 trillion, with a T, of debt.
LIU: Yes, but Jim, what about those who say that this is actually - this is going to help lower mortgage rates and help the housing market recover?
ROGERS: Well that's fine, Betty. Why do I have to pay for it? Why do you have to pay for it? Why do my children have to pay for it? You could do that too by letting the thing go bankrupt and starting over.
I don't - I'm happy that some people are going to get lower mortgages. But I don't think I should pay for it.
LIU: Jim, before we start talking about commodities, which, of course, is the favorite subjects to talk to you about, where do you think, Jim, the next big financial shock is going to come from?
ROGERS: Oh, probably more from some of the American banks, the American financial system. But, Betty, for all I know, it could come out of a European bank or an Asian bank. I don't know who has all this garbage. I know a lot of people do.
Some of the Europeans haven't written it off yet, and the Japanese, I would suspect it's going to come from a bank we haven't thought about yet. But there are more problems to come.
LIU: All right. Are you seeing - being in Singapore, are you seeing any of that start to creep up at all?
ROGERS: Well not in Singapore so much, just because the government here has been very disciplined and very harsh on these guys.
LIU: But I mean in Asia. In Asia, Jim.
ROGERS: Oh, well, you're certainly starting to see it in the Chinese banks. Some of the Chinese banks bought a lot of this stuff. The Taiwan banks bought a lot of this stuff. And you're going to see some of those problems come out.
One of the reasons that the Chinese government has been trying to tighten up is because they do know that there are some problems in their banking system.
So you may see more slowdown in China. The government's trying to slow things down. Hope they do, they need to. That, of course, is having an effect on the commodities market now, as you will point out, I'm sure.
But that's just a correction. There are corrections in any market. We always have corrections.
LIU: Well, that leads me, of course, to talk about commodities with you, and particularly oil, Jim. You've been a bull on commodities. We've seen oil come down about 30 percent from the peak. You're still a bull on oil. Why? Where do you see it going?
ROGERS: Betty, the oil bull market started in 1999. Three times since then oil prices have gone down 40 percent or 50 percent. And every time it happened, the skeptics always said, well see, we told you so. There's no bull market.
Well oil could go down 50 percent again. This is not a prediction, I'm just saying it could go down 50 percent. But it's not the end of the bull market. Betty, the bull market will not end until somebody finds a lot of oil, or unless we have worldwide economic collapse, perpetual economic collapse.
The bull market is not over. If oil goes to $75, which is down 50 percent, it's not the end of the bull market. That's the way markets work. They always have and they always will.
LIU: Well, Charlie -
ROGERS: I'm not predicting it's going to $75. I don't want you to start writing that. I'm just suggesting that it could. And it's not the end of the bull market.
LIU: Right. Well on the other side, though, we had a guest on, Charlie Maxwell, saying it could go to 300 in seven years. What do you think?
ROGERS: Well it certainly can. Now wait a minute. I'm suggesting to you the bull market is not over, even if it corrects and goes to 75.
The bull market is not over, Betty, until somebody discovers a lot of oil. Whether it's 150 or 250 or 300, I don't know. I'm not as smart as Charlie Maxwell. But I do know it's going to go a lot higher during the course of this bull market over the next decade.
LIU: Now, of course our viewers, Jim, know - they want to know where oil is going, let's say, by the end of this year. Where do you think? Do you think it's going to stay around this level for a while though?
ROGERS: Betty, you know I'm not smart enough to answer that question. I'm the world's worst market timer, the world's worst short-term trader. I wish I knew. I don't know if it's going to 75 or 175.
I will tell you I've not sold any oil. Even if it goes to 75, I don't plan to sell any oil. I plan to continue to invest in things that I think are cheap, including commodities and hopefully selling short things that I think are too expensive.
LIU: Now Jim, very quickly, we've only got about 10 seconds. Speaking of oil, you've bought into airlines. Are you still heavily in them? Have you bought more?
ROGERS: I have not sold a single airline. I would hope to be able to buy more airlines if I can find some more that are cheap enough, or if they go down for some reason.
LIU: And you're still short Treasuries, right?
ROGERS: I'm still short Treasuries. You asked right. Long term US Treasuries, you're right.
LIU: Okay, Jim.
ROGERS: You know more about - Betty, you know more about me than I do.
LIU: Well you know what? We keep tabs on you, Jim. All right, thanks so much for joining us, as always. Jim Rogers, Chairman of Rogers Holdings in Singapore.
September 5, 2008
Jim Talks about Taiwan
Is it time to buy Taiwan? Jim Rogers thinks so.
Jim is very bullish on Taiwan. Taiwan has the world's third-largest stash of foreign exchange reserves... and holds some of the world's most competitive technology companies. Not to mention a 25% household savings rate. Taiwan is also perfectly placed to profit from China's rise to world superpower status.
The Taiwan stock market is the worst performing stock market in Asia over the last 20 years. It's down 40% from 1990 levels.
In the US you can buy Taiwan via an ETF with the ticker EWT. Its the easeast way into the taiwanese stock market.
Jim is very bullish on Taiwan. Taiwan has the world's third-largest stash of foreign exchange reserves... and holds some of the world's most competitive technology companies. Not to mention a 25% household savings rate. Taiwan is also perfectly placed to profit from China's rise to world superpower status.
The Taiwan stock market is the worst performing stock market in Asia over the last 20 years. It's down 40% from 1990 levels.
In the US you can buy Taiwan via an ETF with the ticker EWT. Its the easeast way into the taiwanese stock market.
September 2, 2008
Jim Rogers Talks in Malaysia
Jim ROgers spoke in a Wealth Management Conference in Malaysia:
World investor Jim Rogers maintained that the bull market in commodities was still in progress and from over, despite the recent pullback in commodity prices on recession fears.
He said : “While I am a terrible market timer and the single worst investor you ever met, the commodities market can frequently correct 40% to 50% even during a bull market.”
Citing the crude oil bull market in 1999, he said the commodity prices had gone down 40% to 50% during that period.
“Currently, there are still attractive opportunities as most commodities, based on their historic price levels and adjusted-for-inflation, are relatively cheap and below their all-time highs.
“I will continue to look at agriculture commodities like sugar, coffee and cotton as well as base metals like zinc, silver, tin, lead and copper.
“Even if the world economy is going to collapse with everything coming down, I will opt to own wheat and cotton rather than Google or IBM shares!” Rogers said.
“Investors should always buy low when things are correcting. It is too bad when most usually don’t take this advice.
“I personally prefer to buy when markets are declining rather than rising,” added.
Rogers’ inaugural visit to Malaysia was under the courtesy of Citibank Bhd, where he was the special speaker at the Citigold Wealth Management Leadership Series.
On suitable investments for retail investors, Rogers said: “Most studies have shown that index investing is the best in every asset class in every industry.
“Index investing has outperformed active investment managers by 80% most of the time year after year.”
On investment in emerging markets, especially China, Rogers admitted that he had been buying some shares and renminbi and planned to buy more.
On the perception that commodity investment is highly risky compared with stocks, he said: “Many people lost in the dotcom bubble and stocks too over the years. Commodities, in fact, has turned less risky over the past two decades.
“Stocks can go to zero. In the case of natural gas-based Enron, its shares went to zero, on the other hand, natural gas can never go to zero. It can go down, obviously, but it can never go to zero.”
A study by Yale University indicated that investors could gain 300% more by investing in commodities than in commodity companies, with less volatility and a better inflation hedge.
Asked whether the bull run in agriculture-based commodities will be much shorter than metal-based commodities, Rogers said: “With agri commodities, the world is facing a new problem – the inventory of agri-based food products is currently the lowest seen in over 50 to 60 years.
“The world has never experienced such a situation. Even in the 1970 when we had a big bull market in agriculture products, the world still had a high food inventory. This time around, we don’t.”
Furthermore, in the advent of poor weather, the bull market in agriculture products and food could last much longer, he added.
He blamed the current low inventory levels in most agriculture-based commodities to the biofuel hype: “We are burning a lot of agriculture-based food products into our fuel tank. This is something which the world has never done before.”
Rogers said production of biofuel, especially from corn, was a horrible waste of time, money and energy.
“Global food prices have risen due to the biofuel drive,” he said.
But, does that mean biofuel production will stop?
“Unfortunately, no. Biofuel is here to stay at least in the foreseeable future. Politicans simply love it,” Rogers added.
World investor Jim Rogers maintained that the bull market in commodities was still in progress and from over, despite the recent pullback in commodity prices on recession fears.
He said : “While I am a terrible market timer and the single worst investor you ever met, the commodities market can frequently correct 40% to 50% even during a bull market.”
Citing the crude oil bull market in 1999, he said the commodity prices had gone down 40% to 50% during that period.
“Currently, there are still attractive opportunities as most commodities, based on their historic price levels and adjusted-for-inflation, are relatively cheap and below their all-time highs.
“I will continue to look at agriculture commodities like sugar, coffee and cotton as well as base metals like zinc, silver, tin, lead and copper.
“Even if the world economy is going to collapse with everything coming down, I will opt to own wheat and cotton rather than Google or IBM shares!” Rogers said.
“Investors should always buy low when things are correcting. It is too bad when most usually don’t take this advice.
“I personally prefer to buy when markets are declining rather than rising,” added.
Rogers’ inaugural visit to Malaysia was under the courtesy of Citibank Bhd, where he was the special speaker at the Citigold Wealth Management Leadership Series.
On suitable investments for retail investors, Rogers said: “Most studies have shown that index investing is the best in every asset class in every industry.
“Index investing has outperformed active investment managers by 80% most of the time year after year.”
On investment in emerging markets, especially China, Rogers admitted that he had been buying some shares and renminbi and planned to buy more.
On the perception that commodity investment is highly risky compared with stocks, he said: “Many people lost in the dotcom bubble and stocks too over the years. Commodities, in fact, has turned less risky over the past two decades.
“Stocks can go to zero. In the case of natural gas-based Enron, its shares went to zero, on the other hand, natural gas can never go to zero. It can go down, obviously, but it can never go to zero.”
A study by Yale University indicated that investors could gain 300% more by investing in commodities than in commodity companies, with less volatility and a better inflation hedge.
Asked whether the bull run in agriculture-based commodities will be much shorter than metal-based commodities, Rogers said: “With agri commodities, the world is facing a new problem – the inventory of agri-based food products is currently the lowest seen in over 50 to 60 years.
“The world has never experienced such a situation. Even in the 1970 when we had a big bull market in agriculture products, the world still had a high food inventory. This time around, we don’t.”
Furthermore, in the advent of poor weather, the bull market in agriculture products and food could last much longer, he added.
He blamed the current low inventory levels in most agriculture-based commodities to the biofuel hype: “We are burning a lot of agriculture-based food products into our fuel tank. This is something which the world has never done before.”
Rogers said production of biofuel, especially from corn, was a horrible waste of time, money and energy.
“Global food prices have risen due to the biofuel drive,” he said.
But, does that mean biofuel production will stop?
“Unfortunately, no. Biofuel is here to stay at least in the foreseeable future. Politicans simply love it,” Rogers added.
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