Jim Rogers, a founder of Quantum Fund, Doubles Down on View that Crash is Coming
In the two years since the legendary investor made this brazen call in an interview with Business Insider, global markets have weathered various storms and US stocks have hit successive record highs.
"I've been wildly bullish on many things many times, but often it's things that people don't understand," he told Business Insider during a recent interview.
"That's how you get rich: You buy things that other people don't care about. .... It's the same thing successful investors have been doing for hundreds of years: You find things that are cheap that nobody wants, and make a lot of money," Rogers said. "And likewise, you sell short things that are overvalued." He continued: "You might make a lot of money if you've done your homework. And in those days, we certainly did a lot of homework."
The Quantum Fund he cofounded with the billionaire investor George Soros was one of the most successful hedge funds in the 70s and 80s. The portfolio used a good amount of leverage to invest in risky stock-index and currency futures to earned a 4,200% return over 10 years through 1980 versus 47% for the S&P 500.
Several of his reason are as follows:
- "Nobody's reduced their debt since 2008," he said, specifically calling out the US and China.
- "He thinks he's smarter than history," Rogers said of Trump. "History would indicate that he's not correct in that nobody ever won a trade war, and trade wars are not good for anybody."
"Everybody has to invest in what they know about," Rogers said when asked about the opportunities for investors, given the risks he sees ahead he does the following.
- Rogers doesn't own any US stocks.
He's particularly wary of the technology companies that form the so-called FANG stocks. Facebook, Apple, Netflix, and Google's parent, Alphabet, are "definitely overvalued," he said.
- He's bullish on Russian agriculture. "I hope it's the best of all worlds: Agriculture is depressed and Russia is depressed," Rogers said. "The currency is depressed. If I get it right, I'm going to make some money."
He is a director and owns shares of PhosAgro, a Russian fertilizer maker that trades in Moscow and London. He has also been buying shares of Far East Shipping Co.
- He's buying US dollars.
"I expect people to be fleeing to what they think is a safe haven," Rogers said. "My plan is, the US dollar is going to get overpriced. It could even turn into a bubble depending on how bad the turmoil is. And hopefully, I'll be smart enough to sell."
If he's able to take profits in good time, he said, he would consider investing the proceeds in gold, silver, and the Chinese renminbi.