Jim Rogers Shorting Junk Bonds

April 05, 2016

When Jim Rogers talks, investors listen. One of the world's most famous investors, Rogers is known for his no-nonsense style and investment wisdom. He is author of several best-selling books, including his latest, "Street Smarts: Adventures on the Road and in the Markets." ETF.com recently spoke with Rogers for his take on the latest financial market developments.

ETF.com: Gold is up significantly this year, from a low of $1,050 to around $1,220 currently. Are you buying?

Rogers: I own gold, but I've not bought gold for several years. I'm expecting a better opportunity to buy gold sometime in the next couple of years.

Gold has had rallies like this a few times in the last few years. I'm very bad at market timing, so I have no idea what will happen with this one, but I am not buying.

ETF.com: How about oil? It bounced off $26 and rallied all the way up to $40. Do you think the lows are in for oil?

Rogers: In my view, oil is making a bottom. What normally happens is you have a big drop, then you have a dead-cat bounce, and then you test the lows.

That's what's happening with oil now; we're in the process of making the bottom.

ETF.com: Generally speaking, when it comes to commodities, do you think the bear market is finally over?

Rogers: Yes―if it was a bear market. Back in 1987, stocks went down 40 to 80%. Many people said the bull market in stocks was over. It turns out, that was nothing more than a correction. They said the same thing in '89, and a few other times during that long bull market.

If this was a bear market for commodities, in my view, it's come to an end. If it was just a long correction in a bull market, it's also come to an end―especially in agriculture.

ETF.com: Chinese stocks and emerging markets in general had a great month in March. Do you like China? Where else do you see opportunity?
Rogers:
I own China and I haven't sold any Chinese shares at all. I will probably buy more, given the right opportunities and the right circumstances.

Other things I recently bought are short-term ruble-denominated Russian government bonds. I am also taking a look at shares in Russia, Kazakhstan, Nigeria, Angola and Iran.

But for the most part, I may not buy much of anything these days, because I'm pessimistic about the world. There's going to be serious financial market problems sometime in the next couple of years.

Everybody's going to be affected, including China. When you have Europe and America and Japan and other places with problems, everybody's affected.

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