Bloomberg interviewed emerging markets veteran Mark Mobius, who shared his belief that Vietnamese stocks have tremendous investment potential. Bloomberg’s Van Nguyen wrote this morning:

Vietnam’s stock market offers investment opportunities after a 45 percent slump this year, said Mark Mobius, executive chairman of Templeton Asset Management Ltd.

“Vietnam’s stock market now is down, so there are more opportunities,” Mobius said in an interview in Ho Chi Minh City, where Templeton opened its Vietnam representative office today. “The market will go up and will be much more valuable in about three years.”

Mobius, who oversees about $40 billion in emerging-market equities, is increasing Templeton’s investments in Vietnam after it bought a 49 percent stake in the fund management unit of Joint-Stock Commercial Bank for Foreign Trade of Vietnam, known as Vietcombank Fund Management, earlier this year.

Ho Chi Minh City (Saigon), Vietnam

Nguyen noted the sectors Templeton’s Mobius is targeting. From the Bloomberg piece:

In Vietnam, Templeton will invest in retail banking, manufacturing and agriculture companies on Ho Chi Minh City’s stock exchange, Mobuis said. He expects the country’s economy to expand about 6 percent this year.

Source:

“Vietnam’s Stock Market Attractive for Investors, Mobius Says”
Van Nguyen
Bloomberg, August 22, 2008

Legendary emerging markets investor Mark Mobius, who oversees about $40 billion in emerging-market equities as executive chairman of Templeton Asset Management Ltd. in Singapore, spoke to Bloomberg yesterday from Ho Chi Minh City. From the interview:

BLOOMBERG: Why the slide in emerging markets? Is it overdone?
MOBIUS: I think it is. The market has come down a lot. In fact, in China, in the Asia market, it’s come down far more than that. So, we’ve seen a very, very big correction in many places around the world in emerging markets. And it seems to be overdone, but not necessarily over, because, you know, the sentiment is bad globally so that there’s a tendency for people to sell out, and stay out, until they see an about-face in the market.

Some notable excerpts from the interview included:

Commodities

I think that the demand for these commodities is going to continue at a pretty high level. Of course, much higher than there has been in the past, simply because of the demands from China, India, and these other countries that are growing at the paces I just mentioned. So I think it’s more of a correction, rather than a significant secular downturn in these markets and the commodity markets.

U.S. Dollar

BLOOMBERG: Would you not be particularly bullish on the dollar as well?
MOBIUS: No, I wouldn’t, given the propensity of the U.S. government to spend the way they’re spending and to have new ventures against Russia in Eastern Europe, and so forth and so on. I think, unless these policies change in a new administration, I don’t see how the U.S. dollar can keep at a strong level.

Russia

We’ve been, and have been increasingly comfortable, with our investments in Russia. We’ve made an awful lot of money in Russia, both on the private equity side as well as the public side. And, things are getting better in Russia. I think the situation that we’re seeing with Georgia is an anomaly… I think that this will blow over and Russia will continue to be a very important place for us to be putting our money.

Brazil

Brazil, of course, is at the top of the list in terms of weighting in our funds at this time… But generally speaking, the banks are doing very well, very profitable. Petrobras, Vale do Rio Doce, extremely profitable companies.

India

The Indian market, finally for us value investors, has become more interesting, because of the downturn you just mentioned. So some of these companies are beginning to look quite attractive— some of the pharma companies, some of the software companies, and even some of the commodity companies, because you know India, has iron ore and produces a lot of steel. So, we’re looking at that more carefully, and we think they are good opportunities at this stage of the game. We were quite underweight in India for a long time because of the valuations.

Vietnam

The economy is thriving, and things are moving ahead… and we’re pretty optimistic about the longer-term future of the country.

You can listen to the 14 minute 26 second interview here.

Source:

Mark Mobius Interview
Bloomberg, August 20, 2008

Emerging markets veteran Mark Mobius doesn’t think the recent selloff in commodities is the end of a boom which started back in 1999. Pratima Desai for Reuters UK wrote last week:

“When you have a long-term uptrend, excesses build up along the way. We are witnessing a correction,” said Mark Mobius, executive chairman at Templeton Asset Management.

“Demand for commodities will remain at a high level in countries like China and India. If we see a serious worldwide recession, then we will see the end of the commodities boom.”

In fact, Dr. Mobius believes commodities may just be the global economy’s “saving grace.” Reuters Kevin Plumberg said on August 15:

Mark Mobius, executive chairman of Templeton Asset Management Ltd, said he believes consumer demand in emerging markets will ultimately be one of the factors keeping the global economy out of recession. Mobius is a value investor who has long touted the inherent strength of emerging markets.

“What we like are the consumer plays. As much as possible we are trying to get exposure to consumer-oriented sectors, whether that is consumer banking or retail,” he said in a phone interview from Turkey.

In addition to China, Mobius, who oversees some $40 billion in assets, likes the technology sectors in Taiwan, India and Korea. His firm has also cut down on its exposure to the commodities sector while increasing holdings in consumer-oriented sectors in South Africa and Turkey, where he said interest rate rises have brought share prices down to attractive levels.

Levent Financial District
Istanbul, Turkey

Sources:

“Commodity rout a blip”
Pratima Desai
Reuters (UK), August 15, 2008

“RPT-ANALYSIS China and co stand between world and ‘recession’”
Kevin Plumberg
Reuters, August 15, 2008

MarketWatch’s Sam Mamundi wrote this morning:

The investment vehicle of legendary investor Warren Buffett increased its stake in transport outfit Union Pacific Corp. by almost double in the second quarter.

Berkshire Hathaway also added stakes in Bank of America Corp. (BAC), Lowe’s Cos. (LOW), and NRG Energy Inc. (NRG), according to filings released this morning.

Berkshire Hathaway (BRK.A) grew its Union Pacific (UNP ) stake from 4.453 million shares at the end of the first quarter to 8.906 million at the end of the second quarter. Union Pacific stock is up 23.6% this year…

Berkshire addition of NRG Energy Inc (NRG ) totaled 3.24 million shares in the second quarter, worth $139 million. While NRG’s stock is down 18.7% this year, the energy sector is considered a good investment by money managers right now.

The two sell-offs in Berkshire’s portfolio in the recent quarter were both related to acquisition deals. Trane Inc. was sold off in an acquisition by Ingersoll-Rand Company Ltd (IR). Similarly, Berkshire eased its stake in Anheuser Busch Cos. from more than 35 million shares to less than 14 million shares in the wake of Anheuser’s merger with InBev which had yet to be consummated as of the second quarter.

MarketWatch’s Greg Morcroft also reported this morning:

Shares of Lehman Bros. Holdings Inc. rose more than 6% at one point Friday as news that famed investor George Soros’ hedge fund boosted its stake in the company brought out buyers.

An analyst report from David Trone at Fox-Pitt Kelton also lent support to the shares. He said that Lehman’s upcoming losses should be smaller than the second quarter’s as hedges in place at the firm appear to be working.

Soros Fund Management has raised its stake in Lehman Brothers (LEH) to 9.47 million common shares at the end of June 30, up from 10,000 shares at the end of March 31.

The fair market value of the stake is estimated at $187.7 million, according to a regulatory filing by the fund Thursday.

Reuters’ Karen Wutkowski noted yesterday:

Billionaire investor Eddie Lampert cut his stake in Home Depot Inc (HD.N) by 13 percent to 19.7 million shares as of June 30, according to a disclosure document for his fund RBS Partners.

The fund also increased its stake in AutoZone Inc (AZO.N) to 22.9 million shares from 22 million shares the prior quarter, according to a filing with the U.S. Securities and Exchange Commission. It cut its stake in KB Home (KBH.N) to 358,000 shares from 605,000 shares.

Sources:

“Buffett’s Berkshire doubles Union Pacific stake”
Sam Mamudi
MarketWatch, August 15, 2008

“Soros buy puts shine on Lehman shares”
Greg Morcroft
MarketWatch, August 15, 2008

“Lampert cuts Home Depot stake, ups AutoZone holdings”
Karey Wutkowski
Reuters, August 14, 2008

Emerging markets veteran Mark Mobius said in a Bloomberg Television interview yesterday that the Federal Reserve should lower the federal funds rate to jump-start the U.S. economy. Bloomberg’s Matthew Miller and Michael Patterson wrote yesterday:

The Federal Reserve should cut its benchmark interest rate to 1 percent to boost the economy as falling oil prices reduce the threat of inflation, investor Mark Mobius said.

“With oil prices beginning to soften, there may be a chance for them to give a boost to the economy by lowering rates again,” Mobius, 71, who oversees about $40 billion in emerging-market stocks as executive chairman at Templeton Asset Management Ltd. in Singapore, said in an interview on Bloomberg Television. “That’s still in the cards, but no one really knows.”

Cape Town, South Africa

The man who is known as “The Pied Piper of Emerging Markets” also shared his thoughts about where to invest. Miller and Patterson wrote:

Mobius also said valuations for equities in Turkey and South Africa are “very attractive,” and added that he’s “very bullish” on shares of Brazilian banks…

“More and more people are beginning to see that these markets are very cheap,” Mobius said. “The companies are well managed and well run.”

Mobius was especially excited about the prospects for Brazil. He told Bloomberg:

The economy is very vibrant there, and the banks are very well run.

Source:

“Mobius Says Fed Should Cut Rates to 1% to Spur Growth (Update3)”
Matthew Miller, Michael Patterson
Bloomberg, August 5, 2008

Last week, Greg Brown of the Internet news site NewsMax.com interviewed legendary investor Jim Rogers. During the conversation, which appeared on the NewsMax site on Friday, Brown pointed out that Rogers “correctly called the horrendous decline in financial stocks, including the Fannie and Freddie mess.” The CEO of Rogers Holdings talked about this issue, and more, saying:

Well, we’ve had a wave of failures, yes. And we’re going to have more, I assure you, they’re going to be more coming over the next few years…

Washington is making mistake after mistake after mistake…

We’re going to have one of the worst decades we’ve had in a long time.

Investment Strategy

I think the stock market is going to be a bad place to be for some time…

These days, I’m more or less watching. I have bought some airline stocks recently. I have bought some agricultural products recently. I have bought some Swiss francs, and some Japanese yen recently. Some Chinese renminbi recently. That’s about all I’ve done to buy in the last few, in the recent past.

U.S. Dollar

The United States dollar is now a terribly flawed currency…

They’re on official record of saying they’re going to debase the U.S. dollar. That’s never been good for any country in history. But our central bank is doing their best to drive the value down.

Inflation & Interest Rates

In my view, there’s more inflation coming. They are debasing the dollar, and that’s going to make the long-term interest rates, and medium-term interest rates, go higher. The central bank might be able to control short-term interest rates for a while, but in my view, all interest rates will be going higher over the next few years, because of inflation, and debasing the currency, and several reasons.

Economic Outlook

Well, these are perilous times, in the economy, in the world economy, quite largely because of mistakes that we’ve made in the United States, unfortunately. Ten years ago we had the Asian crisis which affected the world markets. This time, I’m afraid, it’s going to be the American crisis, which is affecting world markets. So be very, very careful about anything you buy anywhere. Certainly in the U.S. including the currency. I think everybody should learn about international diversification, because, I’m afraid, things are going to be better outside of America than inside America. I don’t particularly like saying that, but one has to accept facts, and face facts, if one’s going to survive.

You can listen to the 7 minute 28 second video here.

Source:

“Jim Rogers Interview: Washington is Making ‘Mistake After Mistake.’”
NewsMax.com, July 18, 2008

Bloomberg caught up with Marc Faber, aka “Dr. Doom,” at an investment forum in Sydney earlier today. Reporter Shani Raja wrote:

Marc Faber, who told investors to bail out of U.S. stocks before 1987’s so-called Black Monday crash, said oil prices may fall to $100 a barrel as demand slows in a global economy at the “tail end” of its expansion.

Accelerating inflation and rising interest rates worldwide are likely to dent the value of commodities including oil, said Faber, who publishes the Gloom, Boom & Doom Report, at an investment forum in Sydney today.

“Global liquidity is under some relative tightening, and that is unfavorable for all asset classes,” said Faber, 62. There will be “sharp corrections’” in commodities prices.

According to the Swiss-born investor, the global economy has experienced a synchronized boom since 2001. Dr. Faber noted:

In the history of capitalism this is most unusual. When it comes to an end it should affect all countries.

Bloomberg’s Raja pointed out global stock markets losses have amounted to nearly $12 trillion so far this year, while financial institutions have been hit with $447.6 billion in credit-related losses.

Dr. Faber told the forum that he prefers holding physical commodities rather than shares or futures, and that real estate in India and Cambodia were among his favored Asian investments, according to Raja.

Cambodian Beach

Such pessimism extends to the financial sector as well. According to India’s Moneycontrol.com (home of CNBC-TV18):

Marc Faber, Editor & Publisher, The Gloom, Boom & Doom Report said, “We had expanding credit growth in the period 2001-2007. We had this credit bubble built up after 1982.” So in other words, for 25 years now credit growth is slowing down and the fundamentals of the financial sector have worsened and they will stay unfavourable for a very long time, he added.

The peak earnings of finance companies ain’t going to come back. “I don’t think that Citigroup, or UBS or any other finance stock will go back to their peak level they had reached in 2007.”

Sources:

“Faber Says Oil May Decline as Global Growth Weakens (Update3)”
Shani Raja
Bloomberg, July 21, 2008

“See long-term negative cues for fin sector: Marc Faber”
Moneycontrol.com (India), July 21, 2008

On Friday, Reuters (UK) interviewed legendary emerging markets investor Mark Mobius about investing in Polish, Russian, and Turkish stocks. Reuters’ Piotr Skolimowski wrote:

Turkish, Russian and Polish stocks are the most attractive in emerging Europe, high-profile emerging markets fund manager Mark Mobius said on Friday.

“Turkey would be at the top, then Russia and Poland as the most attractive equity emerging markets in the region,” Mobius, executive chairman of Templeton Asset Management handling some $40 billion in emerging assets, told Reuters in an interview.

A lot of attention was given to Polish equities in the piece. Skolimowski wrote:

Mobius said soon-to-be-privatised power company Enea and oil company PKN Orlen PKNA.WA were among “must have” stocks in Poland, adding another local refiner Lotos LTOS.WA could be added to that list if it merged with bigger peer PKN.

Templeton, which holds $400 million in Polish stocks, owns less than five percent of PKN as well as stakes in satellite navigation company Techmex TMEX.WA and ING Bank Slaski SLAS.WA, a unit of ING Groep, he said.

Mobius added Polish banks were unattractive at the moment because of their heavy mortgage lending and said Templeton Asset Management, an arm of Franklin Resources Inc, prefers their Thai and Brazilian peers.

Warsaw, Poland

Mobius, who has over 40 years of experience in emerging markets, added:

Anything related to oil and commodities is of interest to us.

Source:

“INTERVIEW-UPDATE 1-Mobius likes Turkish, Russian, Polish stocks”
Piotr Skolimowski
Reuters (UK), July 11, 2008

Recently, the Gulf News (UAE) spoke to Mark Mobius, President of the Templeton Emerging Markets Fund, about global stock markets. Here’s what the legendary emerging markets investor had to say:

Market Outlook

GN: How long in your opinion will the bear market last?
MOBIUS: I believe the bear market that started in August 2007 is now in recovery phase but will not be immediately followed by a strong bull market.:

GN: Is it a good time to invest in equities? If yes, then why; if not, then when will the time come?
MOBIUS: Timing the markets is a very unforgiving exercise and I wouldn’t recommend it to anyone. We at Templeton simply continue to try to buy stocks that are cheap at a given moment. The mere fact that we only have no more than five per cent in cash in most of our funds indicates that we are optimistic and that we are prepared for a market bounce.

Emerging markets valuations have also come up quite significantly in the past few years, but so have earnings, so emerging market equities continue to offer good price-earnings characteristics…

Emerging markets this year are expected to experience an average gross domestic product (GDP) growth of seven per cent, while developed markets are expected to grow at an average of a little more than two per cent…

I would suggest that investors take a long-term view to investing, carefully evaluate their options and of course, diversify their holdings. History has shown us that the best time to buy is when everyone is despondent and selling.

Where To Buy

GN: In which countries, in your opinion, do equities have the biggest growth potential and why (are people talking a lot about Brazil recently)?
MOBIUS: Some of the fastest growing nations in the world today are the BRIC (Brazil, Russia, India and China) countries. The Chinese and Indian consumers are the world’s new consumers and they along with consumers in Brazil, Russia, Turkey, the UAE, Egypt, Mexico, Poland and many other emerging markets are becoming an important force in world consumption. Despite the current political volatility, we have liked Turkish investments for some time, because we are able to find there plenty of well-run companies operating in a growing domestic market. Returns on capital are high, valuations are low, and the country’s economy is moving closer to the European Union.

In emerging markets in general, we will continue to focus on energy, telecom, transportation and banks.

Where To Avoid

GN: Which countries should be avoided at present as far as investment in equities is concerned?
MOBIUS: …we have minimal exposures to markets such as the Philippines and Chile due to size and liquidity issues. In the case of the Philippines, the country’s high fiscal deficit and poor corporate governance practices also raise concerns. We believe that acceleration in the implementation of financial, economic and structural reforms is vital to tackle the country’s problems. The government also needs to clean up the country’s widespread corruption and nepotism problems. We have just returned from a trip to the Philippines and found a much improved investment environment. However much still needs to be done. We exited Venezuela as soon as Chavez came to power since we saw the potential risks.

Natural Resource Sector

GN: Do you think the present bull market in natural resources has a chance to last and if yes, which natural resources will increase the fastest? Do funds managed by you take advantage of the natural resources bull market and if yes, then which specifically and how?
MOBIUS: Coming back to commodities, our funds have lots of exposure to commodities-linked companies that are benefiting from high prices and high global demand, including Vale do Rio Doce in Brazil and Gazprom in Russia. We also have exposure to the rapid rise in Chinese oil demand, through Petrochina.

In general, Russia is a big commodity play. The big run-up in the market prices of some of our Russian oil and gas holdings has automatically resulted in Russia accounting for a larger share of some of our portfolios than before. We are conscious that the Russian stock index is exposed to a correction in energy prices, but the Russian commodity-related stocks in our portfolio will continue to make good profits and record substantial margins, even allowing for price corrections.

In general, we remain optimistic about the energy sector because of geopolitical and short-term constraint reasons. While we do not project the average crude oil prices to maintain their recent lofty levels, demand growth still looks strong and makes the tight supply and demand situation even tighter.

Source:

“Where to make your stock market moves?”
Gulf News (UAE), June 14, 2008

Jim Rogers, the chairman of Rogers Holdings, spoke to Bloomberg’s Betty Liu from Singapore on Thursday on a number of topics. Below are some notable excerpts from their conversation:

Financial Sector

LIU: All right. Jim, first, talk to us about the story of the week that we’ve seen so far, Lehman Brothers, you know, you’ve been very critical so far about what’s been going on on Wall Street, the accounting, all of that. Do you believe, I mean this is relevant - do you believe that Lehman Brothers is in fact in so good shape that they’ve got no liquidity problems or what’s your view on this right now?
ROGERS: Well, okay, I am still all - short all of the investment banks on Wall Street through the ETF. I know they are all in trouble. I know most of them have phony accounting. And you know, in bear markets, they all go down to eight. So, I just presume they are all going to go to eight before it’s over, before the bear market is over.
LIU: Do you believe that we could another Bear Stearns as we did in March?
ROGERS: Oh, why not, sure. There are certainly - and I’m also short Citibank and I’m also short Fannie Mae. So, you know, some of these companies have - have horrendous balance sheets and if the bear market has a ways to go, which in my view, it does, then you are going to see some really, really low prices. But, Betty, there’s nothing unusual about this, just go back and look at any previous bear market. Financial stocks sell at unbelievably low prices during bear markets. This was not going to be any - well, this one may be a little different because it’s just going to be worse for the financial companies during this bear market, because the excesses during the past five or ten years have been so horrendous in the financial communities.

The co-founder of the Quantum Fund with George Soros and Bloomberg’s Liu revisited the topic of financials later on in the interview:

LIU: All right. And Jim, you know, I want to turn back to, of course, the Fed and the banks and all of that. You were talking before about some of the stocks that you’re short on. Are you short on Lehman Brothers?
ROGERS: I’m short the ETF, Betty, the investment bank ETF, which means I’m short all of them. I am not short any specific investment banks. First of all, I have too many friends at all of those places, I don’t want to short any of them specifically. So, I am just short at the ETF, which means I am short all of them, I mean some would do well, some will do probably too badly, but the ETF in my view is going to go down a lot more.
LIU: Well, does what happened with Lehman Brothers over the past week, does it perhaps stoke your interest in shorting Lehman along with Citigroup? And Fannie, I believe is the one you talked about as well.
ROGERS: I’m already short Fannie Mae and Citibank, and have been for sometime. I’m just going to kind of stay with the ETF. It’s easier for somebody like me, who’s too lazy to spend a lot of time on any specific one, except for Citibank and Fannie Mae.

Monetary Policy

LIU: All right, Jim. So, tell us, you have also been very critical of the Fed and Ben Bernanke. I want to ask you first one thing. How do think the Fed has handled so far what’s been going on on Wall Street? You think that they helped situations or actually made things worse?
ROGERS: They made things worse, Betty. They printed huge amounts of money, which has caused great inflation which could cause the dollar to go down, and the Federal Reserve has taken on something like $400 billion of bad assets on to its balance sheet. Now, you and I as American taxpayers are going to have to pay off that debt some day. What’s Bernanke going to do? Get in his helicopter, and fly around, collecting bad debt? Is he going to start repossessing cars, repossessing houses that go bad? I mean, this is insane Betty, the Federal Reserve has $800 billion on its balance sheet. They have already committed $400 billion to bad debt. What then they are going to do next? Where are they going to get the money the next time things start going wrong?

Investment Strategy

LIU: Okay. Okay, well, given that scenario, Jim, as an investor, where are you going to put your money right now?
ROGERS: I own commodities, I have been buying agriculture, I bought airlines today. I bought a lot of airlines around the world today, both stocks and bonds. Swiss franc, Japanese yen, renminbi, these are the few things I have been buying recently.

Airlines

LIU: You bought airlines? A lot of people are very bearish on the airlines, talking about the fuel cost. Why are you buying airlines?
ROGERS: Well, Betty, you just got through the same why, everybody is very bearish. No, I don’t buy things just because people are bearish, but I fly a lot, and the planes are full. You cannot buy a new – if you order a new plane today, you couldn’t get it for several years. This Boeing and Airbus have problems. You read every day that the airlines are cutting back their capacity. Fares are going up. I mean, Betty, everybody knows about the fuel cost. Is there any airline left that doesn’t know we have fuel problems? They are adjusting for all of it.
LIU: Well, that’s true. But there’s also talk about bankruptcies in the airline industry. And you think some could go bankrupt?
ROGERS: How much more bullish in the news do you want? Twenty-four airlines have gone bankrupt this year. That’s great news. You know, five out of the seven largest American airlines went bankrupt during this decade. So, fine. Bankruptcies are signs of bottoms, not signs of tops.

Commodities

LIU: Right. You know, staying with oil and commodities, we’ve seen a pullback in some commodities in recent months. But which commodities do you like right now, Jim, and which don’t you like?
ROGERS: Well, I mean, yes, a lot of commodities have come down pretty hard. If people are talking about a bubble, I’d like to know what they’re talking about. I mean, many commodities, nickel, zinc, lead are down 50 percent. Silver is down 80 percent from its all-time high. Sugar is down 80 percent from its all-time high. What kind of bubble is that? Cotton is down 40 percent from its all-time high. Coffee is down 60 percent from its all-time high. I have been buying agriculture recently, I’m holding off a little bit right now because it looks like Congress is determined to do something to drive down commodity prices. If they do, it’ll be a fantastic buying opportunity and I’ll buy more.
LIU: Jim, you - .
ROGERS: But what I bought most recently is more agriculture.
LIU: More agriculture? In China, did you buy?
ROGERS: I bought agriculture stocks in China. It’s not legal for - I mean, it’s almost impossible for foreigners to buy commodities - commodities and sales in China.
LIU: Right. Okay, also, you’ve said before that we’re half- way through the commodity bull run. You still think that, or I mean how long can this bull run last for?
ROGERS: Well, Betty, there are number of acres devoted to wheat farming. It’s been declining for 30 years. The inventory of food is at the lowest level in 50 or 60 years. We are burning a lot of our agricultural products in fuel tanks now, as fuel. That’s useless, that’s hopeless. Talk about a bubble, that’s a bubble. It’s crazy that we’re spending so much money burning our agricultural products as fuel. But you can go on a long time, nobody has discovered any major oil fields for over 40 years. Betty, all the oil fields in the world are in decline. I mean, there’s been one lead mine opened in the world in 25 years. The last lead smelter built in America was built in 1969. Unless somebody starts bringing on a lot more capacity soon, that bull market has got a ways to go.

Oil

LIU:All right. Jim, also talk to us about oil. You know, you’ve been very bullish on oil. We’ve had a lot of people talk about, you and I had a debate about whether or not there’s speculation in oil markets right now. You say no, others say yes, like Soros, he says it’s going to bubble. What do you know that others don’t about the oil market?
ROGERS: Look, look, Betty, there are always speculators in every market. Look at the New York Stock Exchange right now. You think there aren’t any speculators down there on the floor of the stock exchange? There are always speculators. That’s what business is all about. I submit to you that most of the people and - I don’t know about most of the people, I shouldn’t say that, but we know that the IEA, the definitive authority on oil has said that the world has an oil problem. The Saudis have told Bush that we have an oil problem. Betty, if there is lot of oil, please, would somebody tell us where it is, so we can all invest in it? The world has a serious oil problem. Now, Betty, that does not mean that oil cannot go down 50 percent. During this bull market since 1999, oil has gone down twice by 50 percent, going down by 50 percent in 2001 and again, in 2000 whatever it was, ‘05 or ‘06. So sure, you can have big reaction in any bull market. But that’s not the end of the bull market. There is no supply of oil unless you - somebody can tell us where the oil is, the bull market in oil has years to go despite new corrections which may or may not come.
LIU: Well, but you know, and I know you always hate having me ask you about - about limits or caps and all of that. But, given the supply/demand situation that you’re talking about, how high can oil go?
ROGERS: Betty, I know you - how you’re paid to ask questions like that, but I don’t know the answer. I’m not smart enough. I know that unless somebody discovers a lot of oil, the price of oil can go to $150, $200. You pick the number.

U.S. Dollar

LIU: All right, Jim. And I’ve got to turn to the dollar very quickly. What do you make of the comments by Bernanke earlier this week, noting the dollar slide, you have been very, very critical of Bernanke on this.
ROGERS: It is astonishing. Now, this is a man that under oath in Congress said, “If the price of the dollar goes down, it doesn’t affect ordinary - it doesn’t affect most Americans.” So, I almost fell out of my chair when I saw him say that. We know the man doesn’t know about markets, we know he doesn’t know about the currencies. Now, we know he doesn’t even understand civil economics, simple economics. So, I was astonished to see him, what, two or three days -
LIU: Right.
ROGERS: - suddenly said, “Well, if the dollar goes down, it affects us all.” It’s called inflation. So, somebody’s been teaching him economics. It’s about time, he should go back and take Economics 101.

The 11 minute 49 second Bloomberg interview can be viewed here.

Source:

“Rogers Says Bull Market in Oil Has ‘Years to Go’ (Transcript)”
Bloomberg, June 6, 2008