Jim Rogers: I Bought China ETFs After The Panic

Famous investor says he's buying China for the long term and not buying U.S. stocks.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

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 sat down with Rogers for his take on China's volatile stock market. Read Part 2 of our interview with Rogers: Jim Rogers Waiting For Lower Prices In Gold & Oil.

ETF.com: Everyone wants to know what you think about what's been going on in China. We saw that sell-off during the past several weeks and the question everyone's asking is, “Is the stock market crash in China going to continue, and is it a bubble bursting?”

Jim Rogers: It wasn't a bubble. It never got to that stage. It could have turned into one. But as far as the drop, I have been buying. I bought Tuesday of last week [July 28]. Before that, I bought on July 8.

There was serious panic in the streets recently. Is it over? I have absolutely no idea. Normally, if you buy when you see that kind of panic you're OK a year or two later. Maybe not in this case, but we'll see.

To make a long story short, I have been buying on days of absolute serious, wild panic. Otherwise, I've been mainly sitting and watching. I've not sold anything at all.

ETF.com: What kind of shares or funds have you been buying?

Rogers: I bought a couple baskets of shares; I also bought individual shares. In November 2013, there was a major economic gathering in Beijing, which the government called one of the three most economic important events in China in the past 35 years.

At that meeting, they listed the parts of the Chinese economy they're going to be emphasizing in the next couple of decades. We're talking about pollution, health care, railroads and finance. That's where they're going to be investing going forward.

Beijing has more money than I do. They're smarter than I am. If they're going to put their money in those industries, I will too.

ETF.com: It sounds like what you're saying is that this stock market crash is not going to derail the long-term story in China.

Rogers: Absolutely. This may cause a temporary setback, but I remember that in America in the 19th century, as we were rising to power and glory, we had 15 Depressions.

We had a horrible civil war. We had very few human rights. We had very little rule of law. We had massacres in the streets. And yet we became a pretty successful country.

China's certainly going to have problems. Everybody who rises, whether it's an individual or a family or a company or a country, has problems along the way. So my approach to China is, if and when there are problems or hysteria or panic in the markets, I try to buy.

ETF.com: Going back to the topic of investing in China, would you be a buyer of China in Hong Kong or in the mainland? Does it make a difference?

Rogers: Yes, it makes a difference, because at various times the different shares are cheaper. One of the things I bought recently was a Chinese closed-end fund that trades in Australia that sells at a 30 percent discount.

There are various ways to buy China. A-shares are the normal shares that trade in Shanghai. Usually it's better to buy non-A-shares than it is to buy A-shares.

At the moment, H-shares that trade in Hong Kong are cheaper. That’s the same situation with S-shares in Singapore. They're the same stocks, but you can buy at a cheaper price in a different market. It's not something that exists in most countries. But for historic reasons, these opportunities do exist in China.

ETF.com: Just to clarify, you would avoid the A-shares and focus on the H-shares and the S-shares?

Rogers: I wouldn't say I would avoid them because I do own A-shares. I try to buy the cheaper, and frequently the other shares are cheaper. There are situations when the A-shares are cheaper. The only thing I would avoid is paying higher prices than are necessary.

ETF.com: Did you happen to buy any China ETFs recently?

Rogers: Yes, I have bought ETFs and currently own a couple of Chinese ETFs that trade in the U.S.

ETF.com: Can you tell us which ones those are?

Rogers: I'd rather not. I found too many times if somebody says a name, people rush out and buy it and have no clue what they're doing. I don't really like to encourage that kind of behavior. If they can't find the names of Chinese ETFs, they shouldn't be investing.


ETF: Switching gears a little bit, what are your thoughts on the U.S. stock market?
Rogers
: I'm not buying U.S. stocks because they're near an all-time high. That's not my way to invest. Things like Japan or Russia or China are well below all-time highs, and I prefer to buy low and sell high. I don't like to buy high and hope it goes higher. I'm avoiding markets that are making new highs.


Contact Sumit Roy at [email protected].

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.