Jim Rogers: Brace for your biggest bear market and invest in agriculture

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by Jessica Amir

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Legendary investor and financial market expert, Jim Rogers says the next bear market could start in 2019 and is going to be the worst in our lifetime. Jim also talks about the shine of investing in agriculture, Russia, China and Japan.

Jessica Amir:
Hello I’m Jessica Amir for the Finance News Network honoured and privileged to be joined by renowned investor and financial expert, Jim Rogers. Jim welcome back to FNN.

Jim Rogers: I am delighted to be here, I am a fan.

Jessica Amir: First up, since Trump came into power we’ve seen a lot of volatility from global markets hitting all-time highs, to plunging to fresh lows after Trump introduced tariffs, which China has retaliated to. But what do you make of all this?

Jim Rogers: Mr Trump has promised several times that he wants to trade war and the people around him, and the ones he he’s gathering more and more of are very much in favour of trade wars. So I’m afraid that it’s going worse over the next couple of years and when things get worst, Mr Trump will try even more trade wars. So Jessica you should be knowledgeable, while you’re at FNN know you are knowledgeable. You should start getting worried and you should start getting prepared, because before this is over, we’re going to have a very bad bear market.

Jessica Amir: As you’ve just alluded to and what you have mentioned in the past, you’re predicting the worst bear market for stocks in your lifetime and that’s before even mentioning a trade war. So what can we expect from global markets this year Jim?

Jim Rogers: I’m very bad at market timing Jessica. You should watch FNN, I’m telling you I’m hopeless at it. But my view for what it’s worth, having told you I’m hopeless is that there’ll be a rally later for whatever reasons, somebody will come to their senses. Mr Trump changes his mind everyday or so, who knows what he’ll wake up doing next week. So we’ll have a rally and then that rally will be the last rally, it could be a big rally, but then that’ll be the last rally. And then we start going into the bear market later this year or next year. It’s been 10 years or nine years depending on how you count, since our last bear market. That’s an unusually long period of time.

Now the Central Bank of America by the way says we won’t ever have a bear market again. So if you believe the central bank, you should not listen to me at all just Jessica, it’s never going to happen again. I happen to know they’re wrong and the next bear market is going to be the worst in our lifetime. That’s not such a strange statement, I mean we’ve had bear markets every few years forever and the last bear market was terrible, because of too much debt. Well Jessica, the debt has gone through the roof, but the next one’s going to be bad. And when will be having that bear market, I suspect it was going to be later this year, but I am hopeless. Whenever it starts, whether it’s in 2030 or this year I don’t know, but when it comes, it’s going to be a mess.

Jessica Amir: The US Federal Government has increased expected forward-looking deficits. How worried should we be?

Jim Rogers: We should all be extremely worried about this. As I said, the market in 2008/2009 was caused by too much debt all over the world, including the US. The debt has gone up many times since then. The central bank alone has increased its debt by over 500 per cent, in just nine years. So this is going to and I’ll be very concerned. I don’t know the specific numbers in Australia, but I can tell you everywhere, even China has debt now. China never had debt for decades, but we’re in agreement, now China has debt. So we’ve all got serious problems facing us.

Jessica Amir: Moving back to the US. Where do you see the Dow Jones sitting by the end of the year?

Jim Rogers: By the end of the year it probably will have gone up and then gone back down. So let’s say it’ll be where it is now. But by 2019, what we should be worried about this year is not going to be nearly as bad as 2019 and maybe 2020.

Jessica Amir: Jim you previously mentioned investing in China, Japan and Vietnam. But what other sectors or parts of the globe should we be eyeing for 2018 and beyond?

Jim Rogers: Agriculture I’m very optimistic about worldwide, especially in China and especially in Russia. You see Mr Trump is making China great again, he’s making Russia great again. He claims he’s making America great again, but his trade wars are actually helping other people more than America. So I would certainly go agriculture worldwide, certainly in China, in Russia, probably even in Australia too. But I’m keen on Australia, I’m keen on Russia, I may buy more Japanese shares in the next rally whenever it comes. The Japanese market is down nearly 50 per cent from its all-time high, the US market is near to its all-time high. So I prefer to buy things that are cheap, rather than things that are near all-time highs.

Jessica Amir: Can you say what stocks you’re loving at the moment?

Jim Rogers: I’m hesitant to do that because then people rush out and buy, and they don’t know what they’re doing, which I know over the years is not good for them, or anybody else - not good for you or them. I guess I would say, may well an index find on the New York Stock Exchange of agriculture is RJA, that’s the symbol for Rogers Agricultural Index. It’s an index, not a specific stock but it is treated like a stock. I said I’m optimistic about agriculture, so maybe something like that I would mention to people.

Jessica Amir: What’s your advice to investors in this very volatile environment?

Jim Rogers: If you’re going to invest, be sure you invest in things that you know about, because there’s going to be very very difficult times and a lot of people are going to lose a lot of money, but I’m not one of them. Just stay with what you know and if you don’t know anything, just put your money in the bank and wait. Probably if you put your money in the bank you’ve got in the right currency, I happen to think the US dollar is going to be the best currency for a while. Then it’s going to turn into a nightmare by two or three years, but in the meantime, I would put money into the US dollar, in the bank, if you don’t know what else to do. But just stay with what you know, don’t listen to me.

Jessica Amir: What do you think investors should be doing to hedge?

Jim Rogers: They probably should buy a farm and become a farmer. But if you don’t want to buy a farm, think about buying agricultural products. Agriculture has been a disaster for 30 or 35 years, that’s in the process of changing. So agriculture and farmers are going to be in driver’s seat, the tractor driver seat, in the next five years or so.

Jessica Amir: Jim Rogers, it’s been an absolute pleasure, thanks so much for joining us.

Jim Rogers: OK let’s do it again, thank you.


Ends
 

Jessica Amir

Finance News Network
Jessica is a senior finance journalist and presents bulletins including the Market Outlook, Market at Midday and Market Wrap. She also interviews ASX CEOs and leading fund managers. She joined FNN in January 2017 with over six years of broadcast journalism experience including with Sky News Business, ABC 1, ABC's The Business and ABC24. She’s also worked as a TV reporter for Prime 7 and WIN News. Jessica has worked in financial planning for over six years with leading wealth managers and in real estate.