Monday, August 11, 2008

Cash over equities, says Jim Rogers

The Business Times Published July 9, 2008

(SINGAPORE) Hold cash over stocks in the Singapore market, said prominent investor Jim Rogers, who has been buying into foreign currencies such as the Chinese renminbi, the Japanese yen and the Swiss franc, as well as the Singapore dollar.

'The Singapore dollar, I would hold on to it. The US dollar may rally for a while because it's been so depressed for so many years. Renminbi, Japanese yen and Swiss franc, that's about all I'm doing,' Mr Rogers told BT at the sidelines of the National University of Singapore business school commencement ceremony, where he was the guest speaker.

'The best way to invest in China is to invest in the renminbi because it's got to go up over the decade,' he added.

Mr Rogers has also considered buying commodities such as silver and base metals but said palm-oil plays have become too expensive. He had sold his palm oil stocks from Malaysia two to three years ago.

'I'm thinking about buying some silver . . . some base metals,' said Mr Rogers, who is known for predicting the start of a commodities rally in late 1998.

'I used to own palm oil stocks. I sold them too soon, foolishly. I know that they've gone up so much that I'm just sitting here saying what an *censored* I am,' added the commodities guru.

He said that although politicians have been quick to blame commodity speculators for the price spike, most governments have not offered incentives for agricultural players to boost supply, making farming 'a terrible way to make a living', he said.

Dubbing the credit crunch as 'the worst credit bubble in American history', Mr Rogers said the US market has yet to hit bottom.

He remains bearish on US financial institutions and continues to short stocks such as Fannie Mae and Citigroup.

'I'm bearish on them because the excesses in the world economy in the past 10 years have been in the American banking system,' said the Singapore-based investor. 'You don't see any 23-year-old cotton farmer driving Maseratis. You see 23-year-olds on Wall Street driving around in Maseratis and they think that's the way the world is.'

'I don't know when the bottom is but I know it's a long way from now. I'm still short on all the investment banks in America and when they rally, I short more,' he added.

Mr Rogers, who has been bullish on Chinese stocks, said he is waiting for a 'selling climax' to hit before going into equities.

'I'm waiting for a selling climax - when everybody just dumps and says 'I don't ever want to own stocks again as long as I live',' he said. 'It doesn't always happen but often after markets go down for a long time, finally people just give up and panic. If I see that kind of panic developing in China, I hope I'm smart enough to buy more Chinese shares.

'It feels like there's a selling climax coming because people are really getting scared,' he added.

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