Jim Rogers: Contrarian View Says Buy Russia, China; Likes Japan Unhedged

February 10, 2014

ETF.com: You're famous for looking at and investing in places that other people aren't talking about. Where is that right now? What part of the world are people ignoring?
ROGERS:I would start with Russia, given that it's one of the most hated markets in the world. Russia is very, very cheap, and it's a very neglected stock market with enormous natural resources. I first went to Russia in 1966 and came away negative, and I stayed negative for the next 46 years, so it's been a long-term bear for me. But in recent months I've started changing my views and have started buying shares in Russia.

Another one might be Japan. I don't know if Japan is ignored or not, but it's down 60-70 percent from its all-time highs, so it's still neglected to some extent. Sure, it's doubled in the last year, but its all-time high is 24 years ago!

Prime Minister Abe is spending and printing enormous amounts of money, which in my view will ruin Japan eventually. In 20 years, we'll look back at Japan, and its death knell will be what Mr. Abe did in 2012-2014. But in the meantime, there are staggering amounts of money and spending, and printing has to go somewhere, and I suspect a lot of it's going to find its way into the stock market.

ETF.com: Where will it show up?
ROGERS: You look at things like NTT, which has done nothing for 13 years. It goes sideways. Mr. Abe, two weeks ago, changed the situation in Japan by giving people tax-free incentives to invest in the stock market. I've seen this in many countries over the past few decades, and if you tell people they can invest in something tax free, you know what? They do it! People aren't crazy. The combination of what he's doing and this new tax incentive means, in my view, Japan is a place where you might make some money. Look at some of the blue chips in particular. They've done nothing. Normally, when people start investing in these tax-free kinds of accounts, they invest in blue chips, because that's what they know.

ETF.com: What else is unloved?
ROGERS: China. Nobody's been positive on China for six years. That market is down 60 or 70 percent from its all-time highs. But in November, it had a plenum where it decided what it was going to emphasize for the next 20 years.

I don't know what's going to happen to the Chinese stock market. But I do know that if the Chinese government is going to put some money in some areas of the Chinese economy, I probably should put some money there too. So I've started investing there as well.

I have not invested in China since November 2008, so this is another place where I've stayed away for a long time.

Another area I've started investing in is airlines. I bought an airline in Thailand called Nok Air, because they're opening up flights to Myanmar right now. I'm terrible at market timing—Thailand is almost in the middle of a civil war right now, so NOK has gone down and not up. But there are people who like to buy when there's blood in the streets, and there's some blood in the streets in Bangkok and Thailand.

ETF.com: Will Thailand escape and the markets recover?
ROGERS: I have no idea. They almost always do. Thailand has had dozens of coups in the last few decades, but they always start up again. Buying during the coups and during civil unrest has usually been profitable. This time might be different, because in the past, one of the strengths has been the king. Everyone reveres the king, but the king is very old, so it could be different. But always in the past it's been good to buy when there's been civil unrest and/or a coup.

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