Natural Resources

Jim Rogers: Buy China, Japan, Russia, Agriculture

Last Thursday, I talked about a recent interview I listened to of well-known investor Jim Rogers. Robert Williams, the founder of the Baltimore, Maryland-based investment research/market commentary service Wall Street Daily, was asking the questions.

Apparently, I didn’t hear the entire exchange between the two. Williams got the former investing partner of George Soros in the legendary Quantum Fund to share with listeners what stocks he’s buying/intends to buy these days. From the Wall Street Daily website last Friday:

WILLIAMS: Do you have confidence in the U.S. stock market?
ROGERS: Well Bob, the U.S. stock market is making an all-time high. As you know, it’s up more highs this year than any year since 1929. That’s not a bottom. I’d rather buy – I’m buying shares in other markets around the world. I mentioned Russia… China, I bought more Chinese shares yesterday… Japan, I want to buy some more if I get time off the phone to buy more Japanese shares. You know the Chinese and Japanese markets are down 60% from their all-time highs. America’s making all-time highs as it did in 1929. I don’t know if these other markets are better, but I know buying low and selling high often turns out to be right.

(Editor’s note: Bold added for emphasis)

China, Japan, Russia. Check.

And agriculture.

On November 25, Jim Rogers appeared on the Bloomberg Television show Countdown. Host Mark Barton noted the chairman of Rogers Holdings is now an independent director of PhosAgro, Europe’s biggest phosphate fertilizer maker. Rogers shared with viewers:

So I started investing in Russia. I found this company. I’m bullish on agriculture. I’m bullish on these guys. They’re young, smart people. So here I am.

When asked what else he was bullish on in Russia, Rogers said:

I’ve been buying shares of the Moscow Stock Exchange… The easy way is the index, so I bought the ETF, as well. There are various ways to play Russia. Russia’s hated. In my view, wrongly so. And I hope, that all this is going to pass and I’ll make a lot of money.

On China, the Singapore-based investor noted:

I’m buying shares in China… Since the economic plenum of November of 2013- you know the Chinese said, “These are the areas of the economy we’re going to emphasize.” Mark, if the government is going to put a lot of money into those areas, I am too. They’ve got more money than I do. They’re smarter than I am. So I’m investing with them.

When pressed about other areas he was investing in, Rogers pointed out:

The markets that I have been investing in this year- new things- are Japan, Russia, China, agriculture. That’s where I’ve been putting my- those are all depressed markets. Why would you buy the U.S. at an all-time high, when you can buy Japan 60 percent below its all-time high, or China, 60 percent below its all-time high?

He added the following about Japanese Prime Minister Shinzō Abe and “Abenomics”:

He’s going to ruin Japan. But in the next two or three years, I hope he’s going to make me a lot of money. And the investment community. He’s making stocks go up.


YouTube Video

You can listen/read (transcript provided) to the rest of that Rogers interview by Robert Williams on the Wall Street Daily website here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Jim Rogers On Best Ways To Invest In Agriculture

On Monday, I blogged about well-known investor, author, and financial commentator Jim Rogers and his steadfast belief that agriculture is where big money will be made in the future.

Late last night I was on the website of the Wall Street Daily website listening to an interview of Rogers that was conducted by Robert Williams, founder of the Baltimore, Maryland-based investment research/market commentary service. Considering what I just wrote, it was what the commodities “guru” had to say about the best ways to invest in agriculture that grabbed my attention. From their exchange:

WILLIAMS: Jim, what’s the most effective route into agriculture for our readers interested in playing this long-term bull market?

ROGERS: Well, there are many ways to do it. The best way is to buy a farm- become a farmer if you really want to get rich because I explained before, some of the serious, serious, key fundamental problems in agriculture. So if you like the outdoors, if you think you’d be good at it, you might consider becoming a farmer.

Now most of your readers are probably not going to become farmers, but that’s the way. Or buy a farm and lease it to a farmer- somebody who’s competent. You can buy stocks. Certainly you can buy stocks. If you buy the right stocks- seed companies, fertilizer companies, or whatever- you’ll make a lot of money.

You can buy countries. Some countries are more agriculturally-oriented than others. Pakistan is a country that lives and dies on cotton more than anything else. So it depends on the country.

If you’re going to buy a lake house, I would buy my lake house in Oklahoma, not in Massachusetts, because stocks are at all-time highs. And we just discussed what’s been happening in commodities. So lake houses in Oklahoma or Nebraska are probably a lot cheaper than in Massachusetts. You can get a Lamborghini dealership in Iowa, because the farmers are going to be driving Lamborghinis, in my view, in the future.

Or you can buy- for most people, obviously the best way is to buy an index. Many studies have shown that index investing is far and away the best way to invest in anything- stocks, bonds, currencies, commodities, anything else. And there are plenty of exchange-traded products where it makes it very easy these days to invest in commodities.

On buying a lake house in Oklahoma or Nebraska, the former investing partner of George Soros said something similar in an May 23, 2003, interview on the Wall $treet Week with FORTUNE TV program. Nailing the U.S. housing bubble a couple years before it burst, Rogers talked property (with an eye towards natural resources) with co-anchor Karen Gibbs. From the interview:

GIBBS: How about real estate?

ROGERS: Well, real estate, Karen, depends on where you are. There is a mania, a housing bubble going on. But if you’re going to buy a second home, buy a lake house in Iowa, because Iowa is a natural-resources-based state. I’m bullish on agriculture. I’m bullish on natural resources. So houses in Iowa will probably do well. Don’t buy it in Boston. Boston is a financial town. I’m not that optimistic on financial companies or financial areas. So buy in Oklahoma, buy in Colorado, buy in states where the economy is going to get better. Stay away from places like New York and Boston — where I live — because real estate there will probably not do well.

In a Barron’s interview that appeared on the publication’s website on October 12, 2013 (blogged about here), the Singapore-based investor who correctly-called the commodity bull market that began in 1999 expanded:

I could buy farmland and become a farmer—although I would be hopeless at it—or buy farmland and lease it out. Buy shares in farms, farm equipment, fertilizer and seed companies that trade on exchanges around the world. Stock markets in agriculture-producing countries should do better than those in agriculture-importing ones. Retailers, restaurants, banks in agricultural areas will do well. Buy a vacation home on a lake in Iowa, not Massachusetts.

Good stuff. You can listen to/read (transcript provided) that recent Wall Street Daily interview on their website here. And for a trip down memory lane, that Wall $treet Week with FORTUNE exchange here.

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Jim Rogers Details Russian Investments, Shares Outlook For Developed Economies

While searching for the latest activity from the “crash prophets” this morning I came across an insightful piece on well-known investor, author, and financial commentator Jim Rogers on FT Alphaville. Izabella Kaminska reported on the Financial Times (UK) daily news and commentary blog today:

Rogers’ Russian investments now include stakes in fertiliser maker Phosagro, airliner Aeroflot, a Russia ETF and the Russian stock exchange, but he said was looking to expand into different sectors as well…

Rogers’ bullish view on Russia contrasts significantly with his outlook for Europe, Japan and the United States. Regarding Japan, Rogers proposed that Prime Minister Shinzo Abe was doing “terrible things” to Japan and advised young Japanese to leave the country as soon as they possibly could to avoid losses. However, in the short-term, he believed there were also opportunities in the stock market as a result of the extraordinary central bank action.

Regarding the Eurozone, Rogers said he didn’t own any euros, nor did he want to because he would rather buy Russia.

As ever, his outlook for developed economies remained bleak on the basis that central banks had debased the currency and that government statistics were lying about the true state of inflation in the land…

(Editor’s note: Bold added for emphasis)

It should come as no surprise to regular readers of Survival And Prosperity that the former investing partner of George Soros has been investing in Russia (blogged about in May here).

Rogers shared with the Financial Times his reasons for selecting the above Russian investments. Good stuff by Kaminska and FT Alphaville, which you can read in its entirety here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Sino-Russian Natural Gas Deal Blow To U.S. Dollar Supremacy?

“The Obama administration is playing down an increasingly warm relationship between its main global rivals, China and Russia, that it may have inadvertently encouraged.

U.S. officials maintain there is nothing to fear from the growing alliance between Moscow and Beijing, even as each throws its weight around in neighboring regions like Ukraine and the South China Sea and at international forums like the United Nations, where on Thursday they double-vetoed the latest in a series of Security Council resolutions on Syria.

Yet when coupled with growing cooperation between Russian President Vladimir Putin and his Chinese counterpart, Xi Jinping, in other areas- notably, a new $400 billion natural gas deal and apparent agreement on the crisis in Ukraine- many believe Russia and China may now or may soon represent a powerful new alliance challenging not only the United States, but also the Western democratic tradition that the U.S. has championed globally…”

-Associated Press, May 23, 2014

You may have heard about that $400 billion natural gas deal that was just struck between China and Russia. Or maybe you didn’t, as I’ve noticed the mainstream media hasn’t really been talking about it too much. Most of the outlets that did neglected to talk about the potential ramifications for the U.S. dollar.

There were exceptions. From the BBC News website on May 22:

Some papers are also analysing the impact of the deal on the world currency market.

A commentary in the Beijing Youth Daily says the deal will probably encourage more countries to not trade in US dollars if China and Russia decide to switch to clearing payments in Russian roubles and the yuan.

“The world economy and finance will then embark on a process to get rid of the US dollar, and the dominance of the dollar will gradually lose its support. The US will then face more challenges in its ability to control global economics and politics,” it says…

From Liam Halligan on The Telegraph (UK) website yesterday:

The real danger, in my view, is rather more abstract — but deadly important nevertheless. If Russia’s “pivot to Asia” results in Moscow and Beijing trading oil between them in a currency other than the dollar, that will represent a major change in how the global economy operates and a marked loss of power for the US and its allies.

With the dollar as the world’s petrocurrency, it also remains the reserve currency of choice for central banks globally. As such, the US is currently able to borrow with “exorbitant privilege”, as it has for decades, simply printing money to pay off foreign creditors.

With China now the world’s biggest oil importer and the US increasingly stressing domestic production, the days of dollar-priced energy, and therefore dollar-dominance, look numbered. Beijing has recently struck numerous agreements with major trading partners such as Brazil that bypass the dollar. Moscow and Beijing have also set up rouble-yuan swap facilities that push the greenback out of the picture.

If Russia and China now decide to drop dollar energy pricing totally, America’s reserve currency status could unravel fast, seriously undermining the US Treasury market and causing a world of pain for the West. This won’t happen tomorrow or next year. It’s unlikely even by 2020. But by announcing this deal, Russia and China turned the screw half a twist more…

(Editor’s note: Bold added for emphasis)

Then there’s this from Max Keiser, an American filmmaker and host of the Keiser Report, a financial show on RT. From The Washington Times website earlier today:

He said the $400 billion, 30-year deal will further the strategic goals of Moscow and Beijing to diminish the status of the U.S. dollar by conducting world trade in critical commodities such as oil and gas using other currencies.

Russia is the world’s biggest producer of commodities such as crude oil, gold and titanium. China is the world’s biggest consumer of these commodities.

Both countries have chafed for years at having to conduct purchases and sales in dollars, as is customary worldwide. The gas deal announced in Beijing on Wednesday would be the first major commodities contract to be settled in Russian rubles and Chinese yuan rather than dollars.

“This means the U.S. dollar’s days as the world reserve currency are numbered,” said Mr. Keiser, noting that Russia and China have been investing heavily in gold.

Many analysts question whether Moscow and Beijing can succeed in displacing the dollar as the world’s reserve currency. If that happens, however, it likely would usher in a period of global financial instability and force Americans to pay much more for the massive amounts of imported energy, Mr. Keiser said…

(Editor’s note: Bold added for emphasis)

According to the Economist Intelligence Unit- the research and analysis division of The Economist Group, the sister company to The Economist newspaper- on May 22, it has been reported payments for the gas will be made in Chinese yuan rather than U.S. dollars.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

“China media: Russia gas deal.” BBC News. 22 May 2014. (http://www.bbc.com/news/world-asia-china-27514395). 25 May 2014.

Halligan, Liam. “Russia-China gas deal could ignite a shift in global trading.” The Telegraph. 24 May. 2014. (http://www.telegraph.co.uk/finance/comment/liamhalligan/10854595/Russia-China-gas-deal-could-ignite-a-shift-in-global-trading.html). 25 May 2014.

Hill, Patrice. “Russia’s Putin gains strategic victory with Chinese natural gas deal.” The Washington Times. 25 May 2014. (http://www.washingtontimes.com/news/2014/may/25/russias-putin-gains-strategic-victory-with-chinese/). 25 My 2014.

“The Sino-Russian gas deal.” Economist Intelligence Unit. 22 May 2014. (http://www.eiu.com/industry/article/431836627/the-sino-russian-gas-deal/2014-05-22) 25 May 2014.

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Jim Rogers: ‘This Is The Time To Buy Russia’

Investor, author, and financial commentator Jim Rogers has been bullish on Russia for some time now. In fact, by the time I first blogged about his optimism for the country back in February 2013, he had already invested there.

Despite the recent crisis in the Crimea and subsequent sell-off of Russian assets by international investors, the former investing partner of George Soros hasn’t changed his mind about the former Communist nation. Gertrude Chavez-Dreyfuss and Daniel Bases reported on the Reuters website Sunday:

“Russia’s stock market right now is one of the cheapest in the world, and probably one of the most hated,” said investor and commodities guru Jim Rogers, chairman of Rogers Holdings, in Singapore. “This is the time to buy Russia.”

(Editor: Bold added for emphasis)

Chavez-Dreyfuss and Bases added later in the piece:

Rogers, who has been investing in Russia for the last 1-1/2 years, said he bought Russian stocks last week. He said if more sanctions are imposed and the equities market declines further, there would be more buying opportunities in Russia.

Rogers said he is looking for non-energy companies – a tall order considering the RTS Index of 51 leading Russian companies is heavily skewed toward energy (58 percent of the index) and basic materials (13 percent)…

(Editor: Bold added for emphasis)

In January 2013, the Singapore-based investor identified Russia as one market holding the best prospects for investors. Next month, Rogers made it known he had bought Russian bonds and currency. By September, he revealed he had also bought Russian ETFs, but explained:

I don’t want to buy their oil and gas plays because I own enough oil and gas. I’m looking for other kinds of companies in Russia.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Source:

Chavez-Dreyfuss, Gertrude and Bases, Daniel. “Analysis: Russia sell-off spurs hunt for bargains.” Reuters.com. 30 Mar. 2014. (http://www.reuters.com/article/2014/03/30/us-emergingmarkets-russia-investing-anal-idUSBREA2T03720140330). 31 Mar. 2014.

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Peter Schiff’s Investment Advice Before The Fed Reverses, Increases QE

While I’m jonesing for a new entry on The Schiff Report YouTube video blog, I did watch Euro Pacific Capital CEO and Chief Global Strategist Peter Schiff on CNBC’s Closing Bell on January 28. Schiff, who correctly-called the U.S. housing bust and 2008 global economic crisis, told viewers the U.S. economy is actually doing “lousy” and that he thinks the Federal Reserve will reverse course on quantitative easing this year, increasing the levels of “stimulus.” When asked what one should do with their money, Schiff advised:

You should be buying gold. You should be buying mining stocks. You should be investing abroad. You should be getting out of the U.S. dollar. Because ultimately, that’s going to be the big casualty here. When the Fed surprises everybody and does more QE, and people realize the box that we’re in- that it’s QE Infinity, that there is no exit strategy, that exit is impossible, that it’s ever larger doses of this monetary heroin- the bottom is going to drop out of the dollar. You know, an economy that lives by QE dies by QE. We better be prepared for that.


“Yellen Will Reverse Taper and Increase QE”
YouTube Video

By Christopher E. Hill
Survival And Prosperity (survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Jeremy Grantham: Farmland And Forestry Favorite Long-Term Resources

One “crash prophet” post down, one more to go tonight (I’ll update the “Crash Prophets” page once I’m done with both). Next up is Jeremy Grantham. He’s out with a new quarterly investment letter? Nope. But I did manage to catch an interview with the British-born investment strategist that was published on The Globe and Mail (Canada) website on January 30. From their exchange with Grantham, co-founder and chief investment strategist of Grantham, Mayo, Van Otterloo & Co. (GMO):

How do you play this sort of environment?

There is no easy answer, and anyone who thinks there is one is either ignorant or a crook. If you get out too soon, you’ll be victimized as an old fuddy-duddy. If you stay in too long, you’ll be just another trend-follower. But we know what the Fed does, and we know what [incoming Fed chair] Janet Yellen thinks. She says the market is not badly overpriced, which means she’s not going to get disturbed if it were 20% or 30% higher. Consequently, I don’t think that is unlikely.

Is this bubble-and-bust cycle one that can and should be avoided?

Of course it can and should be avoided. But by appointing Janet Yellen, you know there is no inclination on the part of officialdom to change the game. Bernanke and Yellen are guaranteed extensions of what I think of as the Greenspan experiment in stimulus and relatively lax regulation. It is a totally failed experiment, with enormous pain. Will they never learn?

“It is a totally failed experiment, with enormous pain. Will they never learn?”

Back around Thanksgiving, I pointed out the following in Grantham’s last investment letter (covering Q3 2013):

In “Ignoble Prizes and Appointments,” Grantham predicted yet another market “bust” shortly. Grantham wrote:

But back to Yellen, who has happily gone along with the failed Fed policy of hoping madly for a different outcome despite repeating exactly the same thing. The past consequences of this strategy have been so dire on two occasions and threaten to be just as bad again sometime within two or three years.

(Editor’s note: Italics added for emphasis)

Getting back to that Globe and Mail piece, there was this investing nugget:

What’s your favourite long-term resource?

Forestry and farmland, if you can find those properties that have the least overpricing. They would tend to be overseas, in reasonably stable countries. Unless I could get a share in the Moroccan government’s phosphate enterprise, in which case I would do it with a quarter of my net worth and feed it to my grandchildren.

Grantham, whose individual clients have included Secretary of State John Kerry and former Vice President Dick Cheney, talked about his “feeling about the state of the world,” environmental issues related to investing, stock picking, and timber as well in the remainder of the discussion, which you can read in its entirety on The Globe and Mail’s website here.

By Christopher E. Hill
Survival And Prosperity (survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Retired BP Geologist Warns Global Oil Production Declining Over 4 Percent Annually

It’s been a long time since I last talked about peak oil production. Peak what? Yeah, the mainstream media would rather run stories about alternative energy and “unconventional” oil production, as if it will somehow make up for declining “conventional” oil production before we’re hit with another energy crunch.

I’ve been following this topic for close to a decade now. And some pretty informed individuals have deduced not only is the era of “cheap” crude oil gone, but global oil production is in the midst of a steady decline. Dr. Nafeez Ahmed wrote on The Guardian (UK) website on December 23:

A former British Petroleum (BP) geologist has warned that the age of cheap oil is long gone, bringing with it the danger of “continuous recession” and increased risk of conflict and hunger.

At a lecture on ‘Geohazards’ earlier this month as part of the postgraduate Natural Hazards for Insurers course at University College London (UCL), Dr. Richard G. Miller, who worked for BP from 1985 before retiring in 2008, said that official data from the International Energy Agency (IEA), US Energy Information Administration (EIA), International Monetary Fund (IMF), among other sources, showed that conventional oil had most likely peaked around 2008.

Dr. Miller critiqued the official industry line that global reserves will last 53 years at current rates of consumption, pointing out that “peaking is the result of declining production rates, not declining reserves.” Despite new discoveries and increasing reliance on unconventional oil and gas, 37 countries are already post-peak, and global oil production is declining at about 4.1% per year, or 3.5 million barrels a day (b/d) per year

(Editor’s note: Italics added for emphasis)

Dr. Miller, who used to prepare the annual BP in-house projections of future oil supply, not only agrees with the conservative conclusions of an earlier study by the government-funded UK Energy Research Centre (UKERC) which predicted “a sustained decline in global conventional production appears probable before 2030 and there is significant risk of this beginning before 2020,” but is dismissive of shale oil and gas preventing a decline in global oil production.

Dr. Ahmed wrote an incredibly insightful piece, which you should read in its entirety over at The Guardian website here, since this really isn’t on the radar of the American press despite EIA data showing it should be a concern.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Jeremy Grantham’s Latest Investment Advice

It’s been a while since I’ve blogged about Jeremy Grantham, the co-founder and chief investment strategist of Grantham, Mayo, Van Otterloo & Co. (GMO). To be fair, the British-born investment advisor has been taking a break from his popular quarterly investment letter that’s published on the GMO website. For those of you who aren’t familiar with Mr. Grantham, he’s designated one of this blog’s “crash prophets” along with Marc Faber, Jim Rogers, and Peter Schiff due to his special talent for correctly-calling the direction of the financial markets. He so good that individual clients have included Secretary of State John Kerry and former Vice President Dick Cheney.

Grantham was the subject of a September 20 article in The Wall Street Journal in which Ian Salisbury asked him about investment-related topics, such as the depletion of natural resources on Earth. From the Q and A session:

Q: What are investors supposed to do?
A: The investment implications are, of course, own stock in the ground, own great resources, reserves of phosphorous, potash, oil, copper, tin, zinc—you name it. I’d be less enthusiastic about aluminum and iron ore just because there is so much. And I wouldn’t own coal, and I wouldn’t own tar sands. It’s hugely expensive to build coal utilities, and the plants they have to build for tar sands are massive, and before they get their money back I suspect that the price of solar and wind will have come down so much.

So I wouldn’t use that, but I think oil, the metals and particularly the fertilizers, I would own—and the most important of all is food. The pressures on food are worse than anything else, and therefore, what is the solution? Very good farming, which can be done. The emphasis from an investor’s point of view is on very good farmland. It’s had a big run. You can never afford to ignore price and value, but from time to time you can get good investments in farmland, and if you’re prepared to go abroad, you can do it today. I wouldn’t be too risky. I would stay with distinctly stable countries—Australia, New Zealand, Uruguay, Brazil, Canada, of course, and the U.S. But I would look around, in what I call the nooks and crannies. And forestry is the same. Forestry is not a bad bargain, a little overpriced maybe, but it’s in a world where everything is overpriced today, once again, courtesy of incredibly low interest rates that push people into investing. A wicked plot of the Federal Reserve.

Grantham also shared with Salisbury where he thought stocks were heading. Basically, not only does he think equities can go “a lot higher than this” with Fed backing, but they could even reach bubble territory.

It’s a really good, insightful interview, capped-off with a discussion about unbridled American optimism, which you can read in its entirety here on The Wall Street Journal website.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Salisbury, Ian. “Our Chat With Jeremy Grantham.” The Wall Street Journal. 20 Sep. 2013. (http://online.wsj.com/article/SB10001424127887323665504579032934293143524.html). 24 Sep. 2013.

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Jim Rogers: Chinese Stocks Are ‘Getting Closer To A Buy’

This morning I read a pretty good interview of well-known investor Jim Rogers that took place on June 13 on Fusion MarketSite, the official blog for New York City-based financial services holding company Fusion Analytics Holdings LLC. The former investing partner of George Soros shared the following nuggets with readers:

• Still bullish on China, but noted they have a water problem. Rogers suggested:

If you want to make a lot of money find companies that are working to fix that problem.

• Chinese stocks are “getting closer to a buy.” Rogers revealed:

I bought a few shares on Friday. Their market is getting to the point it should be bought.

• Thinks bond markets worldwide are in a bubble. He’s short junk bonds.

• While still bullish on agriculture, suggested:

Before we talk agriculture, I would look at natural gas, as any commodity that has that big a collapse should be looked at.

• And as for his home these days, Jim Rogers thinks Singapore is becoming the Switzerland of the East. He explained:

Overall, Singapore is doing well. Singapore is becoming the new Switzerland as its sits right next to China and has been helped by problems with offshore havens like Switzerland and Cyprus. It will be the fastest growing money center in the next 10 years.

You can read the entire interview on Fusion MarketSite here.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Jeremy Grantham On How To Avoid The ‘New Dark Ages’

“The investment business has taught me – increasingly as the years have passed – that people, especially investors (and, I believe, Americans), prefer good news and wishful thinking to bad news; and that there are always vested interests to offer facile, optimistic alternatives to the bad news.”

-Jeremy Grantham, “The Race of Our Lives”

I just finished reading the latest installment (covering Q1 2013) of Jeremy Grantham’s quarterly investment letter. Grantham is the co-founder and chief investment strategist of Grantham, Mayo, Van Otterloo & Co. (GMO), and has a special talent for correctly-calling the direction of the financial markets. In “The Race of Our Lives,” the British-born investment adviser discusses the fall of civilizations, and ponders the fate of ours. Grantham wrote:

Our global economy, reckless in its use of all resources and natural systems, shows many of the indicators of potential failure that brought down so many civilizations before ours. By sheer luck, though, ours has two features that might just save our bacon: declining fertility rates and progress in alternative energy. Our survival might well depend on doing everything we can to encourage their progress. Vested interests, though, defend the status quo effectively and the majority much prefers optimistic propaganda to uncomfortable truth and wishful thinking rather than tough action. It is likely to be a close race.

The body of the letter goes on to focus on falling fertility rates and the increased adoption of alternative energy, which Grantham believes could prevent us from going over the proverbial cliff.

As for investment advice from Grantham, whose individual clients have included Secretary of State John Kerry and former Vice President Dick Cheney, there’s this nugget tucked away in the “Epilogue”:

The two favorable factors described, with luck and some improved effort and leadership, may buy us enough time to completely retune our agricultural system, for it will take many decades to change attitudes and build the infrastructure, training, and research to move to complete agricultural sustainability. That in turn would allow us time in a stable environment to address the problem that will no doubt take the longest time of all: addressing our failing supplies of metals. Yes, we are blessed with large supplies of aluminum and iron ore, although, like agriculture and civilization itself, their usefulness to us is completely dependent on the availability of cheap energy. More to the present point, affordable supplies of most other metals, some very useful, will run low this century and must be replaced by organic alternatives, which process will need all the time and research that success with the other factors might be able to deliver.

(Editor’s note: Italics added for emphasis)

Another fine investment letter from the “crash prophet,” which you can read in its entirety on the GMO website here (.pdf format).

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Mayan ‘Apocalypse’ Update

All is well.

Calling it a night… and a b’ak’tun.


Edwin Hawkins Singers, “Oh Happy Day” (1967)
YouTube Video

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States’ Response To Health Emergencies Analyzed

How prepared is your state for major health emergencies?

From a press release issued earlier today by the Trust for America’s Health (TFAH) and the Robert Wood Johnson Foundation (RWJF):

In the 10th annual Ready or Not? Protecting the Public from Diseases, Disasters, and Bioterrorism report, 35 states and Washington, D.C. scored a six or lower on 10 key indicators of public health preparedness.

The report, issued by the Trust for America’s Health (TFAH) and Robert Wood Johnson Foundation (RWJF), found that while there has been significant progress toward improving public health preparedness over the past 10 years, particularly in core capabilities, there continue to be persistent gaps in the country’s ability to respond to health emergencies, ranging from bioterrorist threats to serious disease outbreaks to extreme weather events.

In the report, Kansas and Montana scored lowest—three out of 10—and Maryland, Mississippi, North Carolina, Vermont and Wisconsin scored highest—eight out of 10…

(Editor’s note: Italics added for emphasis)

“There continue to be persistent gaps in the country’s ability to respond to health emergencies, ranging from bioterrorist threats to serious disease outbreaks to extreme weather events.”

I’m not surprised. Just one more reason preparedness makes an awful lot of sense these days.

Illinois, where I currently live, received a score of 5 out of 10 possible points in the report.

Boo!

Wisconsin, where I’m planning on moving to down the road, received 8 out of a possible 10 points (as noted in the report).

Nice.

You can read Ready or Not? in its entirety here on the RWJF website or here on the TFAH site.

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Jim Rogers Talks About Potential Investment Opportunities In Commodities, His Portfolio

I don’t like to buy things that are moving up. I like to buy things that are moving down… I don’t want to buy anything for a 5 to 10 percent move- that’s not the way I invest. Now, there are many short-term traders who make brilliant amounts of money as short-term traders and a 5 or 10 percent move up is great for them. It’s not my way of investing. I like to find things that are going to go up for many years and go up many many percentages.

-Investor Jim Rogers, on CNBC Awaaz (India) in early September

Legendary investor Jim Rogers recently appeared on the Indian financial news channel CNBC Awaaz. On their Market Leaders show, Rogers talked primarily about commodities, potential investment opportunities in hard assets, and what his portfolio looks like these days.

When asked if the commodities bully market is over, the Singapore-based investor who correctly predicted its beginning back in 1999 told viewers:

Oh no no no, not at all. It will be over eventually. It will be over someday. All bull markets have come to an end. But Gorica (spelling?), it will not come to an end until a lot of supply comes on-stream.

On the topic of supply, Rogers said:

I don’t expect world economic conditions to get better anytime soon. I would suspect that 2013 and 2014 will see worse economic conditions after the American election is over, and after the German election is over. I think you’ll see worse conditions. Which means, of course, that there’s not much supply. Now Gorica, if the world economy gets better, then obviously they are going to be shortages of commodities because we don’t have much supply. But, let’s assume I’m right, and the world economy doesn’t get better, then you’re going to have most governments printing a lot of money- that’s not good for the world. But unfortunately, that’s what politicians do. And when people debase currencies, when they print money, the way to protect yourself is to own real assets.

The creator of the Rogers International Commodities Index (RICI) back in 1998 said there were potential investment opportunities in agriculture, precious metals, and crude oil. On agriculture, Rogers said:

If I were an investor looking to invest in commodities, I would start by looking at the things that are most depressed…

Sugar, for instance, is 65 or 70 percent below it’s all-time high… You know, sugar is down 65 to 70 percent from where it was 38 years ago Gorica. That’s astonishing…

Cotton had a big run-up two or three years ago. Made all-time highs. It has come down sharply since then because people planted more cotton. But I would be optimistic about cotton because the prices are down dramatically from where they were. They still are not high enough to bring in lots of new production yet. The world economy has not collapsed yet. China is a net importer of cotton. So, I would be looking favorably at cotton. If someone were looking for a potential place for new investments in agriculture, I would suggest cotton as a place to start looking, because the prices are down from historic highs.

Regarding precious metals, the Chairman of Rogers Holdings repeated a lot of what he’s been saying lately about gold. Rogers said:

I own gold. I am not selling gold. Whenever gold goes down, I buy more. If it goes down a lot, I hope I’m smart enough to buy a lot more, because the price is going to go up much higher over the next decade. Gorica, politicians around the world are printing a lot of money. That’s the wrong thing to do but that’s what they’re doing. And whenever they print money, the way to protect yourself is to own gold, silver, platinum, palladium. Any precious item will protect you in periods like that.

The former investing partner of George Soros likes the prospects of silver more than gold. Rogers explained:

Well, of the two, if I had to buy one today, Gorica, I would buy silver… Silver is about 40 percent below its all-time high. Gold is about 10 or 15 percent below its all-time high. I usually prefer the things that are cheaper. I’m not buying either today, but if I were buying one today, Gorica, I would buy silver on a valuation basis. I own them both. I’m keen on both. Both will go much higher over the next decade. Silver, at the moment, happens to be the cheaper of the two.

The commodities guru sees crude oil going over $150 a barrel in the coming decade. Rogers told viewers:

If America goes to war with Iran, crude’s going to go to $200. If Spain goes bankrupt next month, or somebody, some big surprise occurs in the market, then crude could go to $80 or $70. Who knows where it would go with some sort of sudden bankruptcy. It depends on world conditions. When crude goes down, I buy more. If it goes up, I sit and watch, because I do know that crude is going to go over $150, over $200 a barrel- U.S. dollars a barrel- over the course of the decade…

But I own it, and I don’t plan to sell it for a long time to come.

Talking about his investment portfolio, Jim Rogers revealed:

I mainly am long commodities and long currencies. And I’m short stocks in my portfolio…

I happen to be very bullish on commodities. I think I know what I’m doing. I think that the big shortages are developing, as I said. Whether the economy gets better or doesn’t get better, I want to have my money in commodities.

Great interview.


“Market Leaders: Jim Rogers”
YouTube Video

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

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Peter Schiff Claims QE3 Attempt To Inflate Another Housing Bubble, Shares Investment Advice

Anyone who’s visited Survival And Prosperity over the last two weeks probably noticed all the housekeeping items and other topics besides finance I’ve been blogging about. Whew! Time to move on. And who better to get back on track with as it concerns economics, finance, and investing than one of the original “crash prophets,” Peter Schiff. In his September 14 entry on the The Schiff Report YouTube video blog, Schiff, who correctly-predicted the bursting of the U.S. housing bubble and 2008 global economic crisis, explained to viewers what QE3 was really about:

This is the plan that Ben Bernanke has. Ben Bernanke’s plan to revive the U.S. economy, and create jobs, is to inflate another housing bubble. That’s it. That’s what the Fed’s got. That’s what it came up with. As if the last housing bubble worked out so well for the economy, that the Fed wants an encore…

How is another housing bubble going to solve anything. Now one thing that Ben Bernanke hasn’t figured out yet- it ain’t gonna work. No matter how much he tries, no matter how much air he blows in to that housing market, he’s not going to reflate that bubble. There are simply too many holes in it, and there is no precedent for relating a busted bubble. More likely, all that cheap money is going to go someplace else…

So where is all this money going to go? Commodities. It’s going to go to gold. It’s going to go to silver. It’s going to go into oil. It’s going to go into agriculture. It is not going to make the economy better. It’s going to make the economy worse. It’s not going to create jobs. But what it is going to create is a higher cost of living for everybody, whether you have a job or whether you’re unemployed. And believe me, if people are spending more money on food, and more money on energy, they’re not going to have any extra money left over for discretionary spending. None of this is going to work.

The President/Chief Global Strategist of Euro Pacific Capital and CEO of Euro Pacific Precious Metals shared the following investment advice:

You’ve got to look through all this smoke. You got to buy gold, buy silver. Get out of dollars. Get out while you can. Get into real things. Own stocks outside the United States, in currencies with dividends and income that are not U.S. dollars.

This is the most important thing that you can probably do. You’ve got to save yourself first if we’re going to save our country… We’re going to go over a real fiscal cliff. We have a real crisis coming because of the Fed, but we’ve got to protect ourselves.


“Operation Screw: The Fed goes all-in on QE”
YouTube Video

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

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Christopher E. Hill, Editor
9984 Visits November 2014
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