Monday, 7 October 2013

Jim Rogers: An even worse catastrophe is coming.

It seems that the legendary investor Jim Rogers who currently lives in Singapore is getting pessimistically cautious about the stock market again. (See the following report in Italic). As always, he stressed "QE revenge", "Huge debt in the history" and "Every few year sees a recession".

Who am I to argue with Jim Rogers? Besides, in the interview, he simply reminded investors to stay put and keep observing for now, neither buy nor sell, which I totally agree. ( As of now I keep 80% of my portfolio in Cash. The rest 20% in REITs and Business trust to generate some income for expense. I am looking for opportunities in blue chips and small cap dividend stocks.)

However, it worth mentioning that Jim Rogers sounded even more pessimistic about stock market back in Dec 2012 in his blog. (See the screen shot from his blog).

Fed announced QE3 in Sep 2012. Most people believed market would "give Fed some face" , but Jim Rogers believed different.
How was the result turning out? Well, let the chart speak for itself.


Jim Rogers has a two-word message for U.S. investors: "Be careful."
"The U.S. is the largest debtor nation in the history of the world," Rogers told Wednesday night by phone from Singapore. "We may well have a big, big rally in the U.S. stock market, but it's not based on reality. I would encourage investors to know you're in a fool's paradise, be careful, and when people start singing praises, say, 'I've been to this party before, and I know know it's time to leave.'"
For Rogers, the author of "Street Smarts: Adventures on the Road and in the Markets," it is only a matter of time until the U.S. stock market runs into devastating problems due to the Fed's quantitative easing program and the prevalence of similar stimulative programs around the world.
"First of all, throughout American history, we've always had slowdowns every four to six years. That means that sometime in the next couple of years—three years, maximum—we are going to have problems again, caused by whatever reason," Rogers said. "For instance, there was 2001 and 2002, and then 2007 and 2009 was much worse. Well, the next time it's going to be worse still, because the level of debt is so, so, so much higher. Every country is increasing its debt at the same time."
Stimulative measures by central banks, such as the purchasing of assets with created money, boost asset prices in the short term. But Rogers said that central banks can only do so much.
"This is the first time in recorded history that we have every major central bank in the world printing money, so the world is floating on an artificial sea of liquidity. Well, the artificial sea is going to disappear someday, and when it does, the catastrophe will be even worse. Yes, it's coming," Rogers reiterated, adding: "If I was smart enough to tell you when it's going to happen, I would get rich."
Indeed, even though he predicts a catastrophe, Rogers is not yet advising investors to sell.
"I don't see any reason to rush out and sell stocks now, because of these artificial currents which are taking place," he said. "I'm not buying U.S. shares at the moment, but I'm not shorting either, because I am concerned this may turn into a huge bubble. So I'm sitting and watching."
So what would persuade Rogers to sell?
"If the market doubles in the next six or eight months, which it's done in the past, then I'd have to start thinking about selling short," Rogers said. But until then, "because of the uncertainty—at least in my mind—I'm not doing anything."

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