Wednesday, July 30, 2014
Jim Rogers : Wars always affect all Markets
What are the chances of the developing geopolitical situation creating a flutter in the world equity and commodity markets? Could it take investors away from allocating money to riskier assets?
Jim Rogers : Wars always affect all markets. When there is turmoil or fear, people are less likely to take risk. War is not good for anything except commodities. In such a scenario, people prefer to put their money into commodities like into lead, copper and wheat because they know those are necessary for war. Likewise for gold. Thus war is not good for anything except commodities. It is less bad for the people who win the war but then it the meantime when there is uncertainty, people are afraid of investing and taking risk.
Given the geopolitical situation, which geographies or economies would you still consider safe from an investment perspective given the road ahead for the next 6 - 12 months and why?
Jim Rogers : Well, there is no such thing as safe if you ask me. In the investment world, there is always risk of everything even if one holds cash. You need to put your money in the right asset. I certainly would think that anything in Africa, South America or even parts of Asia might be safe and considered less dangerous than parts of West Asia. I don't expect geopolitical problems in Asia; but who knows as the future remains uncertain. Politicians, as history suggest, have done very foolish things and probably will continue to do foolish things. So, some parts of Africa and South America appear less dangerous - but no place is absolutely safe.
What about the Asian region?
Jim Rogers : As I think about it, I don't really think that there are any Asian countries that are absolute safe bets should Asia breakout into some kind of conflict with the Japanese or the Chinese or the Koreans or the Philippines. In that case, no place in Asia would be less dangerous.
How do emerging markets appear as an investment destination now as compared to the developed markets? Which amongst the two is relatively better insulated, why and on what counts?
Jim Rogers : America, Germany and many other developed markets are near all-time highs and most undeveloped markets are not. I would prefer to invest in places like Japan that is still nearly 65% below its all-time high. I would rather invest in Japan rather than in New York. China, too, is around 65% below its high levels. I would much prefer to judge each situation based on its own merit and invest in China or Japan given that they are depressed rather than Germany or America.
Do you think the central banks across the globe, especially the US, could continue with the stimulus for a longer duration than as envisaged earlier in this backdrop? What are the implications for the global markets then?
Jim Rogers : Anything can happen. What I suspect will happen is that America will continue to cutback a little bit but eventually, it is going to have an effect on the market and then America will start printing money again. But in the meantime when America continues to cutback, Europe is coming into the market and printing more. On the other hand, Japan and UK (United Kingdom) are not cutting back. So if the US cuts back for a while before it returns, Europe, it seems, will increase its money print. In that context, it is better to buy US dollars (USD) rather than Euros at this point. I don't think any of these banks will stop printing permanently because when things start going wrong, they're going to panic and print more.
In terms of commodities, could oil prices be on fire again? What are the best and worst levels we can see?
Jim Rogers : If war breaks out, there is no top for oil prices. Who knows how high it would eventually go. I don't expect war anytime soon. But if it does happen, then one should definitely own all commodities, especially oil. Even without war, oil prices can move up since oil reserves in most of the world are on a decline. The world is facing serious longer - term oil energy problems down the road.
Is there any broad price level that you would like to indicate where oil can be over the next 6 - 12 months?
Jim Rogers : If there is war, oil prices can climb to $200 a barrel. If there is no war, it can, for a while, stay between $90 - 120 a barrel.
What about gold prices? Is it a good time to buy the yellow metal?
Jim Rogers : I own gold and I am not buying it now. But if there is war, then yes! I would be buying gold if it goes higher. But I don't expect so. I am looking to buy gold on a decline. I do not know how low. Gold has not had a 50% correction in 13 years and that's very unusual. If gold prices corrected 50% (and that's not a prediction) and slip below $1,000 per ounce, I would buy more. But I am not buying gold at the moment.
Read More @ http://www.business-standard.com/article/markets/q-a-jim-rogers-chairman-of-rogers-holdings-and-author-of-street-smarts-114073000476_1.html
Jim Rogers started trading the stock market with $600 in 1968.In 1973 he formed the Quantum Fund with the legendary investor George Soros before retiring, a multi millionaire at the age of 37. Rogers and Soros helped steer the fund to a miraculous 4,200% return over the 10 year span of the fund while the S&P 500 returned just 47%.
Who is Jim Rogers ?
James "Jim" Rogers was born in Oct. 19, 1942 and grew up in Demopolis, Alabama .Jim Rogers started trading the stock market with $600 in 1968.In 1973 he formed the Quantum Fund with the legendry investor George Soros before retiring, a multi millionaire at the age of 37. Rogers and Soros helped steer the fund to a miraculous 4,200% return over the 10 year span of the fund while the S&P 500 returned just 47%. They ran what is considered to be one of the first truly global macro hedge funds. . In 1964 he got his first job on Wall Street at Dominick & Dominick in the summer between high school and Yale University, that's how he got his first experience with stocks and bonds. He immediately fell in love with the job. After Oxford, he returned to the U.S. and joined the army in 1970 he returned to Wall Street, working again with Dominick & Dominick. That same year he joined Arnold S. Bleichroeder, where he met George Soros, and together founded the Quantum Fund. This has opened a new era of global macrotrading and inspired numerous imitations and spin-offs. In the book "Money Masters of Our Time," Jim Rogers writes about that time "the most important thing in my life was work. I did not do anything until I had completed my work." To emphasize this professional ethic , it is good to remember that he did not made any holiday for ten years. In 1980, Jim Rogers has decided to "retire" at 37 years. Since then he has spent much of his time traveling and supporting the causes of philanthropic and taking on many high profile roles in the media. However, he continues to be an active investor and media commentator