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Trader Mark
Trader Mark
Articles (5983)  | Author's Website |

Jim Rogers on Inflation, Currency, Stock Markets, Bond, Natural Resources

June 08, 2009

The latest from Jim Rogers; he continues to avoid shorting as the amount of paper printing "prosperity" is overwhelming.

"Very few times in my life had I not had shorts." In fact he believes its the first time since 1987 he has abandoned his hedges. This type of thinking makes me really give pause - he is not bullish on the US economy, he simply is in abject fear of the level of paper printing going on that will drive up all assets regardless of the intrinsic value. [May 20: Jim Rogers Agrees with Marc Faber] [May 15, 2009: This was a Central Bank Printing Press Rally]

As we've been writing for the better part of the past year, the US has decided to kick the can the final time - this time moving risks and obligations from the private sector to the public sector (taxpayers). And this is how one eventually gets a currency crisis. When? Who knows... it could be years. But there is no place left to kick the can once you've used your government entities to suck up the bad decisions from the private sector.

He does talk about what the bond yields rising indicates in his mind... very similar to what we've been writing.

p.s. Oh Dennis Kneale, would it bother you THAT much to do some research on your guests? I know it's just a well paid TV gig that you can say whatever you want as long as it includes "buy stocks" and "I'm bullish" but can you at least give the appearance of doing homework. I mean, if you are not going to do "research" on Jim Rogers background ("I don't know how you were invested in the past" "So how long have you been living in China?") - who happens to be one of the most successful long term investors of a few generations... I can only imagine the 'research' done to trying to form questions to any other guest. But really I suppose it does not matter when every day ends with "I'm bullish" and "I love stocks".

Video 1...

A currency crisis is imminent, so investors should avoid shorting the market, said Jim Rogers, chairman of Rogers Holdings.

" I’m afraid they're printing so much money that stocks could go to 20,000 or 30,000 ," Rogers said. " Of course it would be in worthless money, but it could happen and you could lose a lot of money being short ."

Rogers typically holds both long and short positions, but his perception of global currencies' instability has led him to pull out all his shorts, he said. The last time he can remember doing so was before the market fiasco in 1987.

Rogers called the US dollar a "terribly flawed currency," adding that it could be the starting point for the next currency crisis.

"I would suspect that somewhere along the line...someone's going to say, 'I'm going to start selling mine before everybody else does,'" Rogers said. "That's when you have a currency crisis."

But instead of pouring money into stocks, Rogers said investors should turn toward commodities. This sector will lead the recovery if the global economy improves, and if it doesn't, they'll still be the best place because of inflation, he said.


Video 1 is 7 minutes of mostly Rogers with host interruptions... below is a 14 minute video with an engaging roundtable discussion about the situation in bonds - both the CEO of Cantor Fitzgerald, Howard Lutnick, and Jim Rogers agree on our ultimate destination - it's just a matter of timing (as is everything in the markets). I thought I misheard at first but since it was repeated later in the interview Lutnick says the US won't return to "real growth" until 2014/2015. Somehow that doesn't just jive with green shoot city...

Well worth a listen, just skip all the CNBC hosts and you're good.

Trader Mark


About the author:

Trader Mark
Mark's equity focus is identifying secular growth trends, and the companies most likely to benefit from these macro trends. Stocks are identified through fundamental analysis, although basic technical analysis is used in determining entry and exit points. With a degree in Economics from the University of Michigan, a broader understanding of the economy as a whole, along with interpreting investor psychology is also a major interest for Mark. His career background has focused on financial analysis in corporate America. Visit Mark's website at http://www.fundmymutualfund.com/

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