Thursday, April 23, 2009

Jim Rogers: interesting ideas.

Jim Rogers appeared on Bloomberg a few weeks back. I found this video through Part I, Part II and Part III can be found here. Made some notes and thought of sharing his thoughts:

Part I

  • We’ve been due a rally. When you’ve had that kind of a collapse you do have rallies. This is similar to 1929-1932. We’ve seen A bottom. Is it THE bottom? I don’t think so. I think we’re going to see more bottoms in the next few years.

  • I would expect to see more problems probably this fall or next year. We’re going to see currency problems. Crisis in the currency markets. More bankruptcies as a result. More problems in the financial markets. I’m not participating in the stock market rally.

  • If the world economy is going to be better, commodities is going to be the place to be. If not, the commodities would be the least bad place to be.

  • We’ve been in a period of forced liquidation.

Part II
  • How long can this rally in the US last? This rally has been very powerful, and based on my experience of the last 40-50 years, when you get a rally like this off the bottom, it lasts longer than anyone expects it to last. There’s a lot of pent up demand.

  • I’m not selling this rally short at all. Maybe in May or June, I’ll let you know. We’ll just have to see how this unfolds.

  • Best way to short US bond markets and good time to short? I’m not short the US bond market. I was earlier. I covered when Bernanke said he will buy the bonds. US bond market is the last bubble left. You don’t short bubbles when they are going up. I fully expect to short the US bond market in the considerable future.

  • Bonds could possibly spike up in the future. Something will happen in the future which will cause the bonds to go up a lot. In Japan bonds were yielding 0.5% when they topped. These go a long way.

  • Bought some baby stocks in Japan because the birth rate has been a disaster, and the govt. is encouraging people to have kids.

  • Biggest litmus test would be a currency crisis in the west and this is something not factored in yet. I would suspect these are coming next. There are many currency imbalances. US largest debtor nation in the world. Swiss Franc etc.

Part III
  • If you can buy real estate in natural resource rich areas of China and Brazil you are going to make a fortune over the next decade or two. I wouldn’t buy real estate in Shanghai or Beijing where the bubble developed.