William Hanley of the Financial Post (Canada) caught up with legendary investor Jim Rogers while he was in Canada this week. Despite the U.S. government’s growing interventions in the financial system, the CEO of Rogers Holdings is still skeptical of a positive outcome. Hanley wrote:

“I’m pessimistic because America is in recession and that’s having an effect on Europe and Asia,” he says, adding that the recession will last longer than most and be deeper than most because the U. S. government keeps making mistakes by bailing out one entity after another.

“The 29-year-olds on Wall Street and Bay Street have been driving Maseratis,” Rogers says. “That’s about to change. All these guys are going to have to learn to drive taxis.”

The former partner of George Soros in the Quantum Fund believes there will be quite a few brokers-turned-cabbies due to changes taking place on the financial landscape. Hanley wrote:

“The new financial centre could be in Shanghai or maybe in Singapore,” Rogers says. “I really don’t know where, but it’s shifting from New York and London toward Asia.”

Rogers shared his investment strategy with the Financial Post reporter. From the piece:

He continues to own the commodities themselves, not commodities stocks, because the current drop in natural-resource prices is just a correction that could last a quarter, a half or even a year…

He has been buying shares in some airlines, “a disaster area that’s close to a bottom,” and some beaten-up Chinese stocks… Meanwhile, he is monitoring auto stocks, which may become the next disaster area over the coming years…

Rogers is holding on to the Canadian dollars – “one of the soundest fundamental currencies” — he began buying years ago when he saw the commodities boom unfolding against a much-improved Canadian fiscal backdrop. “And I will be buying more along the line.” But recently he has been buying Swiss francs and yen.

He has been shorting the U. S. long bond in the belief that the growing mountain of U. S. debt and the necessity to print money to finance it means bonds have made a long-term top. “Bonds will be a terrible place to be for many years to come.”

And for years to come, Rogers says, water treatment, agriculture and Chinese tourism will be good places to be. China and India, especially, have huge water problems, food inventories are falling even as farmland is taken out of production and 1.3 billion Chinese are now able to travel freely in the world.

Those are the next big things. The best thing to do now in these clamorous markets, Rogers tells a reporter, might be to do nothing unless you have to. “You might just want to head to the beach.”

Sanya, China
“The Hawaii of Asia”

CEP News’ Christine Wong also got the chance to talk to the Singapore-based investor a few hours ahead of his scheduled speech to the Toronto Chartered Financial Accountants Society. She wrote yesterday:

“The American government is getting it wrong… and bailing out the wrong people.” He accused the U.S. lawmakers behind the bailout plan of trying to “bail out their banking friends.”

He predicted that in two years, when other problems crop up in the U.S. financial system, “the American government will be out of bullets.”

Rogers pronounced that “America is in a recession and the world is in a recession.”

Wong also noted that Rogers isn’t too impressed by the Republican and Democratic candidates for the White House. She wrote:

U.S. presidential candidates Barack Obama and John McCain were also in Rogers’s firing line.

“Neither one of them has a clue. Both would be disastrous” for the U.S. economic recovery, he said.

Sources:

“Contrarian becomes pessimist”
William Hanley
Financial Post (Canada), October 3, 2008

“Canada Will Feel U.S. Problems, But Won’t Suffer as Much, U.S. Investment Guru Says”
Christine Wong
CEP News (Canada), October 2, 2008

Well-known commodities investor Jim Rogers is undeterred by the recent selloff in hard assets. Bloomberg’s Rattaphol Onsanit wrote this morning:

Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said a tumble in commodities from records represented a temporary reverse in a long-term rally.

“I don’t see that it’s the end of the bull market,” the chairman of Rogers Holdings, said in an interview in Bangkok before speaking at an investor conference later today. “Until either a lot of supply comes on stream or the economy collapses, the bull market will continue,” he said.

The co-founder of the legendary Quantum Fund added:

“I am contemplating whether it’s time to get involved in base metals again,” Rogers, 65, said today. “I haven’t bought any for awhile.”

Onsanit pointed out other areas Rogers felt may have potential. He wrote:

Rogers, who moved to Singapore after selling his New York townhouse last year, said he was still optimistic about agricultural commodities and China’s economy, favoring the tourism, education, infrastructure, and power generation sectors.

Beijing Opera

George Iype of India’s CommodityOnline.com shed some more light on Jim Rogers’ latest investment outlook. Iype wrote earlier today:

The high oil prices and the pull back in some commodity prices on recession fears have not dampened Rogers’ enthusiasm for resources investments. “I am very bullish on metals and precious metals. Crude oil price will continue to rise, because there is a major demand-supply mismatch. Those who blame speculators for high oil prices do not know how the Futures market and oil market operate. Rogers is also upbeat on agricultural commodities. “I am bullish on opportunities in the agricultural commodities market. I am investing there now. The secular bull market in commodities will continue to go on now for some years,” he adds.

Sources:

“Jim Rogers Says Commodities Will Rebound After Drop (Update1)”
Rattaphol Onsanit
Bloomberg, August 21, 2008

“Why Jim Rogers is bullish on commodities”
George Iype
CommodityOnline (India), August 21, 2008

The Chinese financial website ChinaKnowledge.com reported earlier today that famous investor Jim Rogers visited a sub-branch of China Minsheng Banking Corp Ltd in Nanjing and spoke to more than 500 VIP clients of the bank on global economic trends and investment opportunities in China. According to China Knowledge:

Jim said the Chinese government is the most successful government over the past 30 years, though the economy is currently facing some difficulties. However, he does not expect the current difficulties to change major economic trends; China will remain an active and dynamic economy attracting attention all over the world.

When asked about the recent scenario in Chinese stock markets, Jim firmly said the Chinese stock market deserved a favorable outlook on the basis of the country’s long and medium-term economic development prospects. The Chinese stock market is developing in an orderly manner and will further mature gradually. Far-sighted investors will see the bright outlook for the Chinese capital market, added Jim.

The American investor stepped into Chinese B-share market as early as 1999. He said the country’s tourism, public utilities, farm products and basic products markets are valuable avenues for investment.

Source:

“Jim Rogers opens an account with CMBC”
ChinaKnowledge.com (China), July 2, 2008

Yesterday, Reuters reported that Grand China Air, which is part-owned by billionaire investor George Soros, has agreed to form an airline in partnership with the Yunnan provincial government in China, according to a company executive. Reuters’ Fang Yan wrote:

Grand China Air, the largest shareholder of Hainan Airlines Co, will hold a controlling stake in the new carrier, the executive said, without providing financial details.

The new company, which is pending regulatory approval, will initially be limited to flights within the province but will apply for long-haul domestic and international routes in the future, he said.

The new carrier would be in direct competition with the Yunnan unit of China Eastern Airlines Corp, which controls more than 50 percent of the highly profitable market for flights in Yunnan, a popular tourist destination with striking mountain and river vistas.

Yunnan, China
Photo by Erica Law, stock.xchng

Source:

“Grand China Air, Yunnan govt to set up new airline”
Fang Yan
Reuters, June 10, 2008

This weekend, Bloomberg reporter William Bi reported that legendary investor Jim Rogers is bullish on Chinese shares and currency. China’s stock market, the world’s fourth largest, surged from 2005 to 2007, but has plunged as much as 39% this year. According to Bi, Rogers told a seminar in Beijing on April 26 that:

“All my new money goes to commodities and China. All the panic looks like a bottom. I have bought in the last four to five weeks. I’ve been buying shares in China for the first time in a long time.

The Bloomberg reporter wrote:

Rogers said he bought shares related to tourism and education, which “in China will continue to be a major industry.” Other investments include those of airlines, water companies and agricultural producers, he said.

“China has a huge agricultural problem,” Rogers said. The “government is doing everything it can to revive the agriculture industry.”

The co-founder of the Quantum Fund with George Soros also spoke positively of the yuan (or renminbi), China’s currency. Rogers predicted the currency could eventually rise to 2 yuan per dollar, and said:

“Don’t sell your renminbi, because it will go a lot higher in the next 20 years.”

According to Bloomberg, the yuan has gained more than 4% against the greenback in 2008, after climbing 7% last year.

Source:

“Investor Jim Rogers Buys Chinese Shares as Market Hits ‘Bottom’”
William Bi
Bloomberg, April 27, 2008