Saturday, June 22, 2013

Jim Rogers will be interested in buying gold at $1300 - May 2013


Jim Rogers: The Gold Correction Is Not Over

Legendary commodity investor Jim Rogers has never been shy about vocalizing his opinions about the investing world. In particular, Rogers has an affinity for commodities like ags and precious metals. Gold has been one of the most talked about hard assets of the last two years, as the metal soared to all-time highs, only to watch its price take a tumble in the months that followed. All along the way, Rogers had been calling for a correction for gold, and it is a sentiment that he still holds today.

Since making highs in September 2011, the price of gold has dropped nearly 30%, as equities have rallied and investor interest in precious metals has waned. This has all happened despite the current $85 billion monthly printing from Ben Bernanke and the Fed, which many thought would spark inflation thereby sending gold higher. Thus far, inflation has stayed low and the appeal of gold has simply faded, as investors have increased their risk appetites and sought higher yielding securities.

With the threat of QE ending and markets maintaining a bullish momentum, the outlook for gold looks more bleak as the days go on, fueling Rogers’ comments that gold has yet to finish its current correction.

One of Rogers’ major sticking points was the fact that gold had 12 straight winning years, something that is unheard of for a commodity. In fact, the SPDR Gold Trust ETF (NYSEARCA:GLD) and iShares Gold Trust ETF (NYSEARCA:IAU) have never had a down year for as long as they have been around. 2013 is shaping up to be a poor yield for gold, and Rogers does not see it ending anytime soon.

“Until it scares a lot of people, the correction is not over. I would certainly like the correction to be over this afternoon and see gold go to $2,000 or to $3,000, but that’s not reality,” said Rogers. He did maintain that while he was not currently buying the asset, he also was not selling, as he firmly believes that gold will resume its bull market at some point over the current decade.

Thus far, Rogers has been right on the money with his predictions for gold over the last two years, granting more weight to his recent comments. If gold continues to fall over the coming months, it could be an enticing entry point for investors looking to time the bottom of this precious asset.

Friday, December 21, 2012

Jim Rogers: Short US Bonds, Likes Russia

Source: IndexUniverse

Ludwig: What commodity or commodities are flying under the radar that perhaps investors ought to be looking at more closely right now?
Rogers: I’d have to say agriculture, because agriculture is very depressed on any kind of long-term basis. Sugar prices, for instance, are down about 75 percent or so from their all-time high in 1974—38 years ago. We have been consuming more agricultural commodities than we have been producing in the world for the last decade or so. So inventories are near historic lows, which, of course, is a dangerous situation.
But worse still, we’re running out of farmers. The average age of farmers in America is 58; in Australia it’s 58; in Japan it’s 66. In America, more people study public relations than study agriculture. So the farmers are dying and retiring, and no young people are coming into agriculture. Agriculture is facing a serious, serious problem, so prices have to go much, much higher, or we’re not going to have any food at any price.
Ludwig: So a broad approach would serve investors well, say, in a multicommodity futures-based ETF, such as PowerShares’ DBC or United States Commodity Funds’ USCI?
Rogers: I prefer the Rogers indexes, because they are better constructed to outperform the others. But yes, a broad fund.
Ludwig: Let’s talk about your new securities that just went live here in the United States, the broad family of contango-mitigating RBS ETNs. Can you offer some observations about them—the broad one, and the ones focused on agriculture, energy, industrial metals and precious metals—first in relation to the pre-existing Merrill Lynch “Elements” ETNs that are already on the market and that don’t have a contango-mitigating feature?
Rogers: As you know, the markets do have contango and backwardation. It’s always been the case with commodities, and always will be. These products attempt to mitigate the problems of contango. And so far, the ETNs have been able to do a good job, better than the regular, original index. Will that be the case in the future? I don’t have a clue.
Ludwig: So, what’s to recommend this particular new suite of products relative to some of these other contango mitigation strategies that are on the market already?
Rogers: Well, these new indexes have outperformed the others so far. Will they in the future? I don’t know.
Ludwig: Looking ahead to gold in 2013, what is the biggest factor in gold’s continued success? What’s your near-term outlook and longer-term outlook in terms of whether this rally still has legs?

Rogers: I own gold and I own silver. I own all the precious metals, especially gold and silver. I'm not sure I would buy right now. Gold has gone up 12 years in a row, which is extremely unusual for any asset, at least in my experience. I don’t know any asset that’s gone up 12 years without a down year except gold. Gold has had only one decline over 30 percent in those 12 years. That, too, is extremely unusual.
Plus, if you look at the open interest from the CFTC, the speculators have been piling into gold. The number of call options is more than twice the put options. All the signs are that there's too much speculation in gold right now.
I’m not selling, by any stretch. I own it. If it goes down, I’ll buy more. If America bombs Iran, I’ll probably buy more going up. But I own it and, over the longer term, gold is going to go much higher because the world is doing nothing but printing money. And when the world economies get bad again, they're going to print even more money. But I'm not buying now.
Ludwig: As far as gold and silver right now, which do you see as the more prospective of the two precious metals?
Rogers: On a historic basis, silver is cheaper than gold. Gold is down 10 or 15 percent from its all-time high. Silver is down 30 or 40 percent. So I guess I’d rather buy silver than gold. I’m buying neither at the moment. But if I had to, I’d probably buy silver today rather than gold. But again, I’m not buying or selling either.
Ludwig: Now, on the natural gas front, how much thought have you given to this ramping up of production in the States? There's talk about exports. Do you see that as a realistic prospect that the United States will become a gas exporter?
Rogers: I read the same things you do. But what I don’t read much about is the fact that the number of drilling rigs for shale gas has gone down 75 percent in the last 18 months or so. Because it turns out that these wells are very short-lived. They're great for the first 30 days. But by year three or four, they're very expensive to maintain.
Two things come to mind. One is that I presume human ingenuity will solve that problem somehow. But if it’s a geological problem and it cannot be solved, then the gas boom is not quite what we all thought it might be. And I’m told the same applies to the shale oil wells.
Rogers: Again, I don’t know if it’s a gap in my knowledge, and I need to do something about it to find out. If mankind can solve the problem, then sure, that’s going to be a great boon for the world. There's a lot of shale gas and shale oil in the world. A lot of countries have it, it turns out. In all, bull markets and commodities will end some day. And this may be the thing that ends this bull market. But “some day” is still a long way away, as far as I can see.
I'm not rushing out to buy natural gas just because I don’t really know the answer yet. If I find it is a serious geological problem that we cannot solve any time soon, then I’ll probably buy more natural gas. But at the moment, I'm just watching.
Ludwig: Looking at China and its agricultural imports from the United States, do you see any particular products that are going to benefit more than others, say, corn or soybeans or something else?
Rogers: As you know, they already import soybeans. And consumption of wheat continues to rise in China, with Chinese prosperity, and so does sugar consumption. So anything that China consumes and is in short supply there will benefit from Chinese prosperity. But again, someday the bull market will end, at least they always have.
Ludwig: When might this commodity boom that you first wrote about in your book, “Hot Commodities,” run its course? How far is this along? Is there some kind of an end in sight?
Rogers: Well, I don’t see the end in sight—yet. Conceivably, the world economy is going to collapse sometime in the next decade. And if that happens, needless to say, then central banks are going to print even more money. It’s the wrong thing to do, but commodities will benefit and be a better place to invest than stocks, or certainly better than bonds if that happens.
On a historic basis, we’re maybe two-thirds of the way through the commodity bull market. Normally, eight, nine, 10 years into any bull market in anything, you start to see more supply come in. But what happened in 2008 and 2009 means there is a lot of potential capacity or supply that’s been deferred or delayed. So we don’t have as much supply coming as we normally would in this stage of the bull market.
So this bull market might last longer than most. But again, there's no reason for me to determine that yet. The bull market is still intact. I hope I’ll be smart enough to recognize that a lot of capacity and a lot of supply is coming in, because that will be the end of the bull market. But that’s still years away.
Ludwig: You’ve spoken very pointedly about the U.S. and where it finds itself in the arc of its history, with all of the debt and the money printing. I'm wondering if you might comment specifically on what you're witnessing now with the budget talks that are going on, this whole “fiscal cliff”—the possibility of greater taxation coming into focus. Is there anything in all of this that seems to be relatively good news? Or do you continue to see the whole U.S. picture with a great deal of skepticism?
Rogers: None of these talks are going to lead to reduction of the debt. Whether it’s the president or the Congress, none of their plans show any debt reduction for a year, if not a decade. So they may just be slowing down the march over the cliff. But they're not solving the problem.
Ludwig: And is there anything in Europe any different? Or is it much the same story line, in your view?
Rogers: Well, in Europe they had, what, 20 summits in the last three or four years? And each time they came out, they solved the debt. Ah, they solved the problem in Europe. And everybody breathes a sigh of relief for a day or a week or a month. And the next thing you know, we’re right back where we started. So, no.
Ludwig: Any shorts you have currently that you're willing to talk about?
Rogers: I’m short technology in the U.S. because technology isn't so over-exploited. I’m short emerging markets. I’ve shorted the bond market. I hasten to tell you I've shorted the bond market two or three times in three years—unsuccessfully. I don’t know if I got my timing right this time or not.
Ludwig: And what about unlikely long positions that might be a surprise? I'm thinking about how you were sort of joking you would be long places like North Korea if you could.
Rogers: Mainly long currencies and commodities such as the agricultures, as we’ve discussed. I would like to find a way to invest in North Korea. The only way I know to invest in North Korea is to buy stamps or their gold and silver coins from North Korea.
And Russia, I'm looking for ways to invest. I've been skeptical about Russia for 46 years, since I first visited there in 1966. I’m changing my view on Russia. I have not made any investments there yet, just because I haven't found any.
Ludwig: What is it about Russia that suddenly looks a little bit more palatable to you at this point?
Rogers: Actually, since 1917, the Russians have said, “When it’s your money, then invest here, and we’ll all get rich.” And as soon as you did that, they took it away from you, or shot you, or put you in jail, or whatever. But I have the view that Putin, for whatever reason—I'm not going to speculate about his reasons—that the government has changed now in Russia, and realizes they have to play by the same rules that everybody else does if they're going to prosper.
And so, if that’s the case, Russia has gigantic potential. They’ve got everything in the world there: huge natural resources. They're trying to develop the transportation network so that they can transport goods from Asia through Siberia. And they're spending huge amounts of money doing it. If it works, it would save a lot of time and money to get goods to Asia instead of going by ship. It would ruin Singapore, of course, because Singapore would be wrecked by the new transportation route. Anyway, there are various things that I see happening that give me encouragement for the first time in my life about Russia.

Wednesday, December 5, 2012

Jim Rogers: Western world needs additional crisis to get out from under all its indebtedness

Jim Rogers admited in an inteview for, that it will be required an additional crisis for the Western world to get out from under all its indebtedness. The author of "Hot Commodities" is so bullish—particularly on agriculture these days — that hearing what he has to say can leave you a bit unsettled. When managing editor Olly Ludwig caught up with Rogers recently, he said new RBS' lineup of commodity ETNs that have his name on them are so far superior to the competition.

Surveying the world of agriculture, Rogers talked about the growing shortage of farmers around the world at a time of tight food supplies. He also reaffirmed his bullishness on gold—and his bearishness on bonds—both of which are closely tied to his skepticism that the US and the rest of the industrialized world will ever get out from under all its indebtedness without some additional crisis.

His most surprising revelation? After dismissing Russia for years as a dangerous investment destination, where losing money was almost guaranteed, he said Russian President Vladimir Putin has changed his approach to foreign investment. That means Rogers is poking around the commodities-rich country looking for ways to profit.

Friday, November 30, 2012

Jim Rogers warns technology is heading for a big drop

Billionaire investor Jim Rogers issued another warning to the investors and made the aware that there is a sector they should avoid in order to save their investments. The co-founder of the Quantum Funds with George Soros might made some wrong moves in his career but he has gained fame for some of his warnings. In a 2007 interview with Reuters, Rogers predicted a 40-50% drop inreal estate prices in some areas of the United States and a massive recession across the country. The United States still can not find a way out of this downfall.

Investors all over the world take note when the legendary Jim Rogers makes any market prediction. And the billionaire is now warning that one sector of the market is "priced in lunacy," so he is betting heavily against the group. The sector has seen earnings fall by 4.3% in the third quarter compared with the same period last year, almost double the decline of 2.2% for the overall market. Rogers is talking about technology.

And indeed, there are several reasons the technology sector is due for a correction. The sector outperformed all others during the past four years with an annualized gain of 19%, while the S&P 500Index gained 12% in the same period. This outperform may already be working itself out with a drop of 10% so far this quarter compared with a decline of 6% in the rest of the market.

Of more concern, four years after the financial collapse, U.S. companies have yet to really ramp up hiring. While Europe and China are looking incrementally better, the United States is facing a huge fiscal gap in the coming quarters, with even the most optimistic forecasts only calling for about 1.5% gross domestic product growth. With labor already cut to the bone, companies are putting off improvements in tech spending ahead of the fiscal and economic uncertainty.

One big clue to the level of frothiness in the tech sector could be coming from the rebound in real estate prices in Silicon Valley . Real estate has soared in the tech capital and prices are off their peak by just 1.3% in some cities, while much of the rest of the state continues to struggle with foreclosures.

There may yet be hope for the sector. Tech companies in the United States earn more revenue outside U.S. borders than any other sector, making the tech industry more resistant to fiscal cliff worries and weakness here at home. Revenue should be marginally supported if Europe can stage a rebound or if emerging markets continue their economic march higher.

President Barack Obama will need to barter with Congress if he wants to let the Bush-era tax cuts expire for those making more than $250,000 a year. One possible deal could revolve around another tax repatriation holiday like we saw in 2004. Under a repatriation holiday, U.S. companies are lured to bring foreign profits back to the country by taxing them at a roughly 5%tax rate , rather than the current 35% corporate rate. Because the tech sector has the most overseas revenue, it also has the most cash held overseas, so it could win big with such atax holiday .

In addition, Microsoft launched Windows 8 in October and will stop supporting Windows XP in early-2014. This could reinvigorate the corporate spending cycle for information technology (IT) and services. Further, if demand in fact rebounds, then tech spending usually leads the business cycle because it is easier to buy IT and services than to add staff.

Even Rogers admits there will always be success stories, but the problem is when an entire sector is pushed up without any real difference between the good and the bad. This was evident in some of this year's catastrophic IPOs -- Facebook (Nasdaq: FB) and Groupon (Nasdaq: GRPN).

Investors seem to have forgotten the lessons of the 2000 tech bubble, and are now paying meteoric prices for very little in earnings. While Groupon and Facebook have seen their shares sink since their IPOs, shares of LinkedIn ( LNKD ) are up almost 10% since its offering in May 2011.

There are those risks to be considered: Half of investing is keeping your profits before the bottom drops out of the market. Companies with strong balance sheets and good value should do well during the next year, but may see a short-term drop as investors take the entire sector lower. Investors should be ready for a short decline on sentiment before stronger stocks head higher.

There are some actions one can take. After years of outperformance, the tech sector could be due for a correction, as Rogers expects. You may not want to neglect the entire sector, but be selective and know when to take your money off the table. Given the valuations in much of the sector, investors may want to avoid some of the more expensive stocks and the general sector funds. For those who do not want to completely avoid the sector, look for large-cap companies with strong balance sheets that pay healthy dividends such as Intel.

Tuesday, November 27, 2012

Jim Rogers Remains Bullish on Precious Metals

According to legendary investor and co-founder of the Quantum fund with George Soros - Jim Rogers, the precious metals crowd has nothing to worry about now that Obama has been reelected. The billionaire urged the market to expect more of what we've seen in the past four years. The loose monetary policy, further quantitative easing and weak dollar will support the upward trend in gold and silver, according to Rogers.

Previous four years were very generous for precious metals. President Barack Obama's first term saw silver up an eye-popping 236% while gold added an impressive 128% gain. Those both precious metals overwhelmed the S&P 500's 75% return. Such huge results raised concerns in more than a few investors about another asset bubble in a long list of bubbles that includes technology, finance and housing in the past 12 years.

"Investors should prepare for rising prices and more expansionary monetary policy now that President Barack Obama has won reelection. "If Obama wins, it's going to be more inflation , more money printing, more debt, more spending," Rogers recently told CNBC. The investor also said he plans to sell federal debt and purchase more gold and silver.

So if Jim Rogers is correct, then investors should expect big things and rising trends from precious metals in the next four years. But with all kinds of precious metals investments to choose from, the landscape can be confusing. There are some risks to be considered before deciding to invest in gold and silver.

The biggest risk to gold is a liquidity crunch like the one we saw in the financial crisis of 2008. The trigger for an event like that could be Europe, which continues to struggle with too much debt and shortages of tax revenue.

Although the region continues to combat its financial problems, margins calls for big investment banks and intuitive traders would weigh on gold and silver. Jim Rogers is bullish on gold and silver, projecting that the next four years will look much like the last four years for precious metals.

Monday, November 12, 2012

Jim Rogers: Beware of Wild Money Printing

The election results in the United States of America set analysts on fire as they started to spread all kinds of predictions on how they think the next four years will go. Barack Obama securing a second term made some optimistic, while others are quite fearful. Among the second group is Jim Rogers, as his recent comments show little confidence in the USA economy and in the future. The world famous investor Jim Rogers was quoted as saying that he feels money printing is going to run amok now. He added that he had to invest based on what’s happening and not what he would like. An Obama victory has many worried that rampant money printing will continue, as the open-ended QE3 from the Fed has been met with much opposition. Still, monetary policy is at the will of the Fed, not Obama. Bernanke’s term does not end for another two years, so a Romney victory would likely have had little sway over the current policy.

Monday, November 5, 2012

JIM ROGERS for Businessinsider: I See A Dangerous Sign In The Gold Market, And Prices Are Going Down

Commodities guru Jim Rogers explains why he is bullish on agricultural commodities. He also tells us why gold and silver prices are headed down in the near-term:

Friday, October 19, 2012

Jim Rogers: America will have a few lost decades

legendary investor Jim Rogers used another opportunity to attack the U.S. economy, after some remarks he made earlier about that 2013 and 2014 will see markets slip into a deep recession. Now, Mr Rogers, reffering to the period between 2000 and 2009 who is often referred to as the "Lost Decade" for U.S. investing, said that there will be more lost decades for the States. During that time markets were barely able to scrape up any gains over the ten year period

Jim Rogers drew the comparison between United States of America's economy and that of Japan. The Asian one that has been well documented for years and years of poor market performance and a sputtering economy. "The idea that you prop up people who are bankrupt is what Japan did. Japan had two lost decades, America will have a few lost decades" said Rogers.

He suggests to invest in agriculture and farmland in order to protect yourself from these "Lost Years". Rogers has also stated that he likes both gold and silver, but for the time being he favors silver over its precious metal counterpart.

Saturday, October 13, 2012

Jim Rogers doubts US government jobs data

Top investor Jim Rogers has some doubts about the data that the US government is feeding to the public about the US unemployment. According to the authorities in the United States of America there is decline in the unemployment in the States, but Rogers thinks that the administration is misleading the public. The US jobless rate dropped to 7.8 percent last month, the lowest since US President Barack Obama took office in January 2009, according to a report released on Friday by the US Department of Labor. The labor agency also revised previous numbers to show the US economy created 86,000 more jobs in July and August than first estimated.

Jim Rogers, co-founder of the Quantum hedge fund, Expressed his skepticism about the reported improvement in the US job market. According to the investor, the latest round of quantitative easing will not fix the US economy. "I have learned not to take advice from the government, especially the US government, which frequently misleads its citizens," Rogers said in a media briefing in Taipei.

"There is an election coming in the US and the administration wants to win", he also said. Rogers added that most other institutes believe US unemployment remains worse than the official statistics suggest. "Even if the reported drop in the US’ unemployment rate is true, it has nothing to do with the US Federal Reserve’s third round of quantitative easing that was initiated last month", believes Rogers.

"Printing money has never worked throughout history," he said. "Sometimes it worked in the short term, but it’s never worked in the medium or long term." He gave as an example Zimbabwe, saying that if printing money could ameliorate debt, the cash-strapped African country would be a wild economic success. By early 2009, the Zimbabwean dollar was rendered effectively worthless as the government issued bills in denominations of up to 100 trillion dollars in a bid to rein in debt problems, which instead heightened inflation and poverty.

According to Rogers, it is better to admit one’s mistakes and accept the reality of the situation so things could be improved once the worst part is over. Rogers, who is currently based in Shanghai, also said China is right in trying to slow its economy down for the past three years because of its inflation and property problems. "It is the right thing to do for China as economic conditions in Japan and the West slow down," he said.