Jim Rogers On Currencies, Precious Metals
Legendary investor Jim Rogers often makes the financial headlines for his take on currencies, and more recently, precious metals. Here’s what the former partner of George Soros is now saying about the two. Alix Steel wrote on TheStreet.com last Friday:
I recently asked Jim Rogers, normally a contrarian investor, what he thought of the steadily weakening dollar.
Will the dollar ever see a bottom?
Jim Rogers: The dollar is a terribly flawed currency. It’s not good news. Now if it rallies I will sell more and if it collapses I will get out in a panic just like everyone else.
Will oil producing countries stop pricing oil in dollars as previously rumored?
Jim Rogers: It’s no question that this will happen down the road. I mean whether this particular rumor has any basis in fact I don’t have a clue. I mean I do know, they’ve all said repeatedly, you have to do something about the dollar. I mean China, Brazil, Russia….everybody is looking for some way to solve this problem of such a flawed currency…. down the road oil and everything else is going to be traded in something else.
What currency do you like right now?
Jim Rogers: Yen is my best right now. It’s acting the best. I wouldn’t buy it at the moment because it is going so up so much, maybe the Swiss franc, Canadian dollar, if I were looking for new currencies today, maybe the Singapore dollar. If you’re really clever, you might buy something like the Sri-Lankan currency or some emerging markets currency.
The Singapore-based investor talked about his outlook for precious metals as well. Ms. Steel wrote on TheStreet.com yesterday:
Rogers’ love of gold is nothing new, but with gold in a strong bull market, I wanted to know if the trade was too crowded.
Jim Rogers: I don’t ever like to buy something making all time highs however I’m not selling my gold. Gold is going to go much higher in the course of the bull market. Doesn’t mean it can’t go down 20 per cent next year but during the course of the bull market it is going to go much higher it is certainly not a bubble yet.
Jim you are typically a contrarian investor. If everyone is buying, shouldn’t you be selling?
Jim Rogers: Yes, I should be selling at the top, but I don’t think this is the top. Gold, if you adjust it for its old highs, adjust it for inflation back in 1980, gold should be over $2000 an ounce right now. In my view, in this bull market in commodities gold will make all new highs adjust for inflation.
What about mining stocks as a way to play rising silver and gold prices?
Jim Rogers: Not with my money. The studies show that you would make more investing in commodities themselves rather than commodity stocks unless you are a very good stock picker. If you are a good stock picker, unless you find a company that is going to discover silver in Berlin you buy all you can and then you call me and I’m going to buy it too…. short of something like that and there are a hundred gold stocks and most of them don’t pan out. But if you own gold, gold is making all time highs.
Aside from gold, what other precious metals do you own?
Jim Rogers: I own silver as well. I would suspect that if you were buying [gold or silver right] now silver would be a better buy. I mean gold is making all time highs, [but] silver is 70 per cent below its all time high. Now, if my thesis is right about commodities that they’re going to make new all time highs, obviously you would make that much more [money] in silver than in gold.
What about palladium and platinum?
Jim Rogers: I own them all. I think probably now the better plays would be palladium and silver but again let me hit you over the head and say I am world worst market timer and trader. I think you would make more money with silver and palladium at this point but I own all four [gold, silver, palladium, platinum].
Sources:
“Jim Rogers to Bernanke: Hike Rates and Resign”
Alix Steel
TheStreet.com, November 13, 2009
“Buy gold, not miners: Jim Rogers”
Alix Steel
TheStreet.com, November 16, 2009
