Monday, October 22, 2012

Russia and commodities are good

Having been negative on Russia his entire career, Jim Rogers said, “I’m convinced things are changing in Russia for the first time.”  Rogers is looking into investing in Russia and is still bullish on agriculture. He says “with all commodities, the most important factor is supply and demand”. Inventories are near historic lows and farmers are few.

Friday, October 19, 2012

US Lost decade

Jim Rogers has said "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," Rogers says both gold and silver should be good investments and if he had to pick one he favors silver over its precious metal counterpart.

Tuesday, October 16, 2012

I Rather Invest in Russia Than the US: Jim Rogers - CNBC.com

Jim Rogers would rather invest in Russia than the U.S. stock market. “In 2013 and 2014 we’re going to have economic problems,”  the noted investor told CNBC’s “Closing Bell” on Monday. “Either (politicians are) going to raise taxes or they’re going to bungle something.”

He added, “Raising taxes has never made the economy grow." Jim Rogers is shorting U.S. stocks, particularly technology. “Technology has been one of the few places that is very exploited,” he said. He is short Microsoft calls and an ETF with Apple in it, he told CNBC.
Rogers is looking at Russia instead. Having been negative on Russia his entire career, Rogers said, “I’m convinced things are changing in Russia for the first time.”  But he’s still looking for a way to invest, it might be in the stock market it might be in the currency, he said. In September, Rogers joined Russian investment bank VTB as an advisor to their agricultural division. Rogers is also short India and isn’t investing in China just yet. India is a “complete disaster,” with high inflation and balance of trade problems, according to Rogers.

He also only buys China when it collapses. "And it hasn’t collapsed yet,” he said.


Tuesday, October 2, 2012

Jim Rogers: Newfound Love For Russia And The Gradual Improvement InIts ... - Forbes

I wanted to highlight a story I saw the other day because I think that it nicely encapsulates the (slow!) improvement in Western perceptions of Russia’s economy.

Jim Rogers is the co-creator of the Quantum fund, a best-selling author, a regular guest at Ivy-League business schools, and generally one of the world’s most successful, famous, and high-profile investors. He was in the news recently because he has just taken a job as an adviser to the agricultural fund run by Russian state-owned banking group VTB. In a press release announcing the move, Rogers was quotes as saying that “Russia and the CIS region have all the ingredients needed to become the world’s agriculture powerhouse. It seems that everything may now be coming together under VTB Capital to make this happen, so I am keen to participate.”

Rogers, as the FT and other outlets have noted, was famous as a Russia “bear.” But simply calling him a “bear” doesn’t really do justice to the strength of his former views. As the FT astutely noted, Rogers was so ostentatiously negative in his views on Russia that a back-and-forth e-mail exchange he had with Dmitri Alimov, a Russian MBA student at Harvard Business School, made it all the way to the New Yorker.

I think it’s worth digging a little deeper into that New Yorker story, and into the e-mail exchange between Alimov and Rogers, because the positions that Rogers espoused back then are basically identical to those still made by many Russia bears today. Rogers essentially based his negativity towards Russia on four main factors: 1) that people were abandoning Russia 2) that Russian oil production was declining 3) that investors were abandoning Russia and 4) that figures showing improvement in Russia’s economic figures were unreliable and probably doctored.

Alimov countered by noting that 1) Russia was, in fact, experiencing net immigration 2) that Russian oil production was increasing and was likely to continue doing so 3) that investors were, if not flocking to Russia, then certainly not abandoning it and 4) that Russian economic statistics weren’t doctored and that other organizations, such as the US government and the World Bank, also thought the situation was improving.

Ben Aris, in his original FT post, dug up a genuine re-production of the entire e-mail exchange, and, with the benefit of 20-20 hindsight, Rogers’ position does not come off in the best light. In his response to Alimov, Rogers tended to eschew any actual data and instead went with “common sense” observations such as:


This is not from “Reuters”. It is from the Russian government – the same group which claims to have had a balance of trade surplus for the last 9 years. The same group of bureaucrats and charlatans who became a laughing stock with their “facts” under  the USSR.

Every now and then when I publish something about Russian demographics someone will show up in the comment section making that exact same argument, saying something to the effect of “but Mark, everyone knows that Rosstat manipulates their statistics and that Putin tells them to lie to make things look better.” That certainly seems reasonable enough, the Russian government really is quite corrupt and ineffective, but it’s not intuitively obvious and its certainly
not something that anyone should believe purely on the basis of vague allusions to the Soviet Union. Handwaving of this sort is both incredibly common and incredibly dangerous.
With the benefit of hindsight, we can see pretty clearly that Alimov was right and that Rogers was wrong. If, back in the fall of 2003, you were an investor with a lot of money to throw around and you thought that Alimov was a Kremlin-manipulated dullard and that Rogers was saying harsh and uncomfortable truths (and therefore went short on the ruble and the Russian stock market) you would have gotten absolutely wiped out over the next 5 years. Russia, in 2003, really was in the midst of a long-term boom and its economic fundamentals really were increasing as a rapid clip: it wasn’t an illusion or the result of simple manipulation by the dread Kremlin.

As should be seen from the e-mail exchange (which people ought to read in full) Rogers was not simply a “bear” he was the capo de tutti capi
of people who thought that Russia was a doomed and collapsing nightmare of a place. That he has now not only agreed to invest  in the country but to work on behalf of a state-owned Russian bank is dramatic in a way that’s hard to overstate. A rough equivalent, I think, would be if Richard Dawkins got religion, quit Oxford, joined a monastery on Mount Athos, and penned an updated version of Mere Christianity.
While it would be a mistake to read too much into a single individual action, Jim Rogers is, I think it’s safe to say,  incredibly well respected in the finance and investing community. There are an awful lot of people in the West who (quite understandably) follow his lead and trust his judgement. That Rogers’ views on Russia and its economy have undergone such a complete reinvention in less than a decade shows just how quickly history moves. It also shows, I think, that Russia’s economic image is finally starting to turn a corner and that informed investors understand that there is a lot of money to be made under the right conditions.

Rogers’ move is essentially a long position on commodities, food, and the basic continuity of Russia’s current institutions: all things considered, I think it’s a perfectly reasonable bet.

Jim Rogers: QE3 Will Make the Fed “Look Like Fools Again” - Yahoo!Finance (blog)

Early Wednesday morning Germany's Federal Constitutional Court ruled that plowing taxpayer money into the the ECB's latest plan to prop up the euro zone economy was not unconstitutional (double negative theirs), freeing the way for the implementation of the European Stability Mechanism to start buying sovereign bonds of member nations. In English, Europe is now free to start their own slightly muted version of quantitative easing.

Jim Rogers, the legendary investor and chairman of Rogers Holdings isn't impressed. The latest ruling and the Draghi plan (announced last week, which catalyzed a significant rally) make everyone feel a little better but does nothing to cure what really ails the world. "We're all going to pay a horrible price for this in a year or two or three," Rogers tells me in the attached video. The fact that Europe seems to be intent on performing a euro version of QE only gives the Western world "unanimity towards mutual destruction."

The upside of the U.S. having the ECB joining it in printing money to artificially suppress yields is that it take some pressure off the Federal Reserve to keep doing the same thing. In a global financial world, yields are a relative game. If the U.S. fake risk-free yields are slightly more reality-based than those in Europe, the laws of supply and demand would suggest increased organic buying of American debt as opposed to the synthetic buying created by quantitative easing. The existence of Europe's OMT plan gives the Fed a decent chance to ignore cries for QE3 without crushing the market. Such thinking forms the lynchpin of the argument being made by those who don't think the Fed acts tomorrow.

"QE1 failed, QE2 failed, so I'm not so sure they would announce QE3, because they'll look like fools again," says Rogers. Reluctance to look silly aside, the "Investment Biker" doesn't think no QE means the same thing as less Fed stimulus. The Fed has the stated goal to keep rates between zero and 1/4% through 2014. How they go about doing it is largely semantics.How and why would the Fed throw good money after bad, particularly in an election year? "Because Mr. Bernanke wants to keep his job." Sometimes the truth is both ugly and simple.

Monday, October 1, 2012

Jim Rogers says invest in Russian market - NASDAQ

Famed investor Jim Rogers suggests the Russian market may be undervalued and could present significant opportunity for investors. Rogers stated that after a recent visit to Russia he came away impressed with progress influenced by the actions of President Vladmir Putin. Although referring to Putin as a criminal, he felt Putin realizes he must do things differently. Rogers cited a pool of billions of dollars the government has set aside for investments to be made alongside private investors. He cited his own assessment of the low valuation of the Russian market along with an unfortunate concentration in oil and gas.

Rogers is not yet invested in the Russian market, but is considering it after observing the country's ebb and flow for the better part of twenty years. He believes the country has learned its lessons from the past and should be a better investment in the future. Rogers says he is interested in buying the ruble.

CNBC also quoted Todd Berman, Head of Investment Banking at Troika Dialog, as having said that Russia's recent entry into the World Trade Organization is a major accomplishment which will help advance reforms that should propel the Russian economy forward.

Rogers commented on the United States in the context of the upcoming election. Making the claim that the biggest difference between the two candidates is "one comes from Chicago and the other comes from Boston" he sees no fundamental difference in how things will be in the States post-election. His outlook is fundamentally negative and his interest in the Russian market is evidence of the ongoing need for investors to look to emerging markets for future investment returns.

Given Rogers negativity toward the U.S. and his recent and increasing interest in Russia, if he is proven correct, then both RSX and RSXJ may be good candidates for investment. If Russia, which has been less affected by European woes, can continue with a proactive agenda of reform and investment, there is no reason the "undervalued" Russian market cannot flourish.


Jim Rogers, Peter Schiff Rip Bernanke And The Fed - Insider Monkey(blog)

After the official announcement of QE3, a number of hot-shot analysts and experts have come out with their opinions on how the policy will impact our future. The majority have warned about the coming fiscal cliff and how this may only make that worse, while others have been a bit more brash about their distaste for actionsfrom Bernanke and the Fed. Two men in particular, Peter Schiff and Jim Rogers, have been very vocal about their hatred for this policy but they have also both touted commodities as the best way to play another massive injection of money into the economy [for more economic news and analysis subscribe to our free newsletter].

Let’s start with Schiff. Watching interviews and or reading some of his work, it is quite clear that this is a heated subject for him. In his eyes, the Fed should have let the economy fail back in 2008 and all of the QE programs have just been delaying the inevitable. He feels that Bernanke’s bold policy will actually inhibit growth and job creation. He has also stated that the Fed will never be able to produce a vibrant economy through money printing, as QE is simply a drop in a much larger bucket of issues. With his prediction of the dollar index dipping to 40 or even 20, Schiff feels that real assets like silver and gold are the best place for investors to be in the coming months.

Jim Rogers is another who has publicly ripped the Fed for their actions in recent years. He feels that Bernanke and company do not know what they are doing and that printing more money will never solve our problems. “Maybe sometimes in the short term printing money has alleviated the situation, but anybody who has studied history or economics knows that printing money in the longer term doesn’t work”says Rogers. Rogers has long been warning of a deep recession in the next few years, putting him right in line with Schiff, as both feel that we are heading for a financial crisis [see also Protect Yourself From Debased Currencies, Jim Rogers Style].

Mr. Rogers has also gone on to take a few jabs at the current presidential candidates, calling the outcome of the election irrelevant. According to the legendary commodity investor, neither candidate properly understands the deep-seeded issues of our economy and neither will be able to fix it. Working off of his predictions, Rogers has touted investments like agriculture and precious metals, although he has been very clear about stating that he feels silver is a much better investment than gold for the time being.


Jim Rogers

Warren Buffett

Nouriel Roubini