Jim Rogers on... everything

As reported to me by a CLSA broker, from the CLSA Japan Forum where Mr Rogers spoke at lunchtime:

Clearly still pleased by his second trip around the world and the arrival of a second daughter, Jim impressed upon us all to have more kids and to learn the Chinese language – as quickly as possible. Below are a couple of bullet points that highlight some of the themes covered.

a) The Chairman of the US Federal Reserve is an idiot who will print money until he runs out of trees. As a result, inflation will accelerate dramatically, the dollar will likely collapse and we will enter a longer-term bear market for bonds.

b) Commodities, hard & soft, will remain in a secular bull market until 2020. Quit your job as a bond trader and try to open a lead mine (only one has been opened in the last 25 years). Commodity prices are determined by changes in supply and demand.

c) Jim did not offer numbers, but it was clear he believes that the commodities themes is going to GET CRAZY – so fill your boots NOW. Agricultural prices are set to EXPLODE – with food stocks at a 40 year low and a 40 year sustained drop in acreage dedicated to wheat. Start hoarding sugar now – starting with the lumps placed on your coffee saucer at dinner this evening.

d) Equity markets in most western/advanced countries will remain range bound over the medium-term. It is no surprise that the S&P 500 is below 2000 levels. Japan is probably a better place that the USA for equities, as there is less room to fall. Jim’s daughter has also been buying Yen as a directional bet against the carry trade. He is buying “baby stocks” ….

e) China is absolutely not a bubble for equity markets … as you need to look at the percent of the local population with money invested in equities (small at 7%) and the extent of the run-up in prices since 2000, rather than just the last two years. Buy infrastructure plays, power plants, environmental themes, tourism, companies levered into agriculture. Chinese currency could go up 4x vs the USD over the next 30 years. Sounds crazy, but think of the Yen:USD over the 1960 to 1990 period.

f) Russia is not an investment opportunity despite the commodity base. Jim’s wife is opposed to the corruption and is generally not impressed by the “bandit capitalism”. Russia will eventually be 50 to 100 countries.

h) Jim and his family are keen on Singapore – the only Chinese city with a passable environment. The casinos and population growth will probably work.

i) Bullish on Africa due to commodities. I am guessing there is less corruption and violence on the continent than there is in Russia (given f above).

j) Most of China’s neighbors will be dragged along by the growth the giant… but Taiwan is probably the best placed. This is the big winner among regional China plays.

I DON'T guarantee that this is an accurate summary of what he actually said or that I have even taken everything down correctly (... but it sure does sound like him.)