Skip to main content

Jim Rogers on Russia, emerging markets

Noted investor Jim Rogers is making some headlines this week, as he warns of a bubble in the Russian stock market and an end to the global "liquidity party".

Let's focus on Russia first. Rogers does not like what he sees in Russia, and thinks that the overvalued Russian stock market could be headed for a bust, "sooner rather than later".

Reuters article quote:

"I wouldn't put a nickel of my own money in Russia, and I wouldn't put a nickel of your money there either," Rogers, a long-time commodities bull, told Reuters by telephone from New York on Wednesday.

"Everything about Russia is one big bubble, and it's going to pop. It's going to happen sooner rather than later," said Rogers, who co-founded the Quantum Fund with George Soros in the 1970s and has focused on commodities since 1998.

"When that happens, people will look around and say, how did that happen? That's when we'll find out about all the skeletons in the cupboard."

The article goes on to mention the Russian state's intervention into business deals with foreign companies and state confiscation of assets. Rogers also calls into the question the quality of many recently listed Russian companies, and says many of the shares trading on the Russian market could decline significantly or disappear in the event of a shakeout.

So I guess the question here is this: is Rogers short the Russian stock market? I know that he's always had a bearish view of their "outlaw capitalism" and has stayed away from their market in the past. Maybe he's just taking the time to voice his concerns again, now that a bust seems closer at hand.

He's also been out front this week on the possibility of a crash in emerging markets and the US property market. In fact, Rogers says the fallout of a real-estate bubble could lead to a financial crisis.

The fund manager, who co-founded the Quantum Fund with billionaire investor George Soros in the 1970s and has focused on commodities since 1998, said the crisis would spread to emerging markets which he said now faced a prolonged bear run.

"When you have a financial crisis, it reverberates in other financial markets, especially in those with speculative excess," he said.

"Right now, there is huge speculative excess in emerging markets around the world. There will be a lot of money coming out of emerging markets.

Rogers says that he's sold off his emerging markets investments, except for shares in China, where he is willing to sit out a potential 30-40 percent decline.

"This is the end of the liquidity party," said Rogers. "Some emerging markets will go down 80 percent, some will go down 50 percent. Some will most probably collapse."

He's definitely sticking his neck out here, but it's always interesting when you're reading or quoting Jim Rogers. His latest call is reminiscent of Marc Faber's recent cautionary stance against over-inflated asset markets worldwide. We'll keep our eyes peeled.

Popular posts from this blog

Finance Trends 2019 Mid-Year Markets Review

Email subscribers of the Finance Trends Newsletter receive the first look at new articles and market updates, such as the following piece, sent out to our email list on Sunday (6/14).   Hello and welcome, everyone! If you received our last email notice over the July 4th holiday, you'll know that this weekend's newsletter will serve as a mid-year market update and a follow-up to issue #29, " How to Reinvest in a Rising Market ".   Ladies and gentlemen, without further ado, let's start the show...  Finance Trends Newsletter: Our Mid-Year Market Review When we last spoke, back in February, the U.S. stock market was rallying off its December-January lows. As the S&P 500 and Nasdaq reclaimed their 200 day moving averages in February and March, it became increasingly apparent that a lot of retail investors (and perhaps some institutional investors) were left under-invested while watching this recovery move from the sidelines.  The U.S. stock ...

Round trip stocks: momentum booms and busts

" No tree grows to Heaven ." - Old proverb adopted by Wall Street. What happens to hot momentum stocks when their rocket fuel runs out? How long can they continue to fly before they come crashing back down to earth? Why is the stock that you paid $100 a share for now trading at $39? These are questions that many novice traders and investors may be struggling with in the wake of the most recent market correction. Momentum stocks have been hit hard as the Nasdaq 100 and Russell 2000 indices have moved lower in recent weeks. Caught unaware by the recent slide, some traders may be wondering when their beaten-down stocks will snap back and allow them to exit with smaller losses (or even reach the mythical "break even" point).  While growth stocks still firmly within their uptrends may form constructive technical bases and move higher after this correction, others may experience sharper pullbacks or break down into full "stage 4" declines (see chart below...

How to "Pull the Trigger" on Your Trading Ideas

In our last post, I quoted hedge fund manager, Jim Leitner on the importance of following up on your investment ideas.  Today I'd like to follow up and share some thoughts on how you can learn to consistently "pull the trigger" on your best trading setups and investing ideas. In order to help you do that, we'll take from the best and offer up key insights from interviews with top traders and trading psychologists like Alan Farley, Brett Steenbarger, and Doug Hirschhorn .  Now before we get to their key insights on overcoming trading anxiety and pulling the trigger on your trading ideas, let's remember what Jim Leitner said in his interview: "Learn to love to listen to people and when you hear something interesting, follow up on it. Don't just think, "Well that's an interesting idea" only to find out a year later that the company you could've bought shares in is now up 500-fold. You never want to say woulda, coulda, shoulda...