Jim Rogers, who co-founded the Quantum Fund with George Soros, deeply disagrees with Federal Reserve governor Janet Yellen’s assertion that there will never be another bear market in her lifetime. One could take place “as early as next year” – and if it does, says Rogers, “it could be the worst in my life”. He is particularly worried about the level of debt, “which has skyrocketed since 2008”.
However, while “great fortunes can be made in a bear market selling short”, he’s currently long stocks because “there are still reasons to be optimistic in various markets”.
He’s recently bought more stocks in China, Japan and Zimbabwe. “Lots of Chinese companies are highly indebted”, admits Rogers. And the strong trading links between China and America mean that “when their American customers… get in trouble, many Chinese firms will also suffer”. Yet “the Chinese economy has consistently done better than the rest of the world, and will continue to do so”.
Meanwhile, America’s decision to withdraw from the Trans-Pacific Partnership means that China will dominate Asia over the next few decades.
Rogers also notes that, despite the recent gains in the Nikkei, “the Japanese market is down 50% from the all-time high 27 years ago” – so it has plenty of room to rise further. Prime Minister Shinzo Abe is “doing everything to keep the market up”, including persuading the central bank to “print staggering amounts of money to buy stocks and bonds”. Overall, there’s a strong possibility that “the Japanese market may go back to its all time high”.
Finally, Rogers is “very optimistic” about agricultural investments, which “will do well even if there is a bear market”.