Updating Jim Rogers' World View

It has been a while since I have checked in on Jim Rogers and his world view. He is the most traveled and convincing speaker / investor in global markets, and has become decidely anti-American, even though he hales from Alabama. He recently moved his family to Singapore to get closer to the locus of future world growth, Asia, and more specifically China. He also is fleeing the American dollar, which he considers to be doomed.

Jim Rogers first gained fame as the partner of George Soros managing the Quantum Fund in the 1970s. He did very well for himself garnering a net worth over $100M by 1980. Now, almost 30 years later, he has grown that to over $1B, according to news reports. Since the late 1990s, Rogers has been an outspoken bull on commodities. His self-designed commodity index has returned almost 500% over that time. Here is a chart of the index performance over the past 3 years (since trading began in 2005):

The "sell signal" is clear at about 37.50 on this chart. The Sell occurred on around July 20, which was very close to other commodity downturns (some of which did begin back in June). But observing this Sell would save quite a bit of future losses until commodities strengthen.

But what sets Jim Rogers apart more than his wealth, is his unique contrarian perspective on the world and investments therein (though, maybe a little less contratrian today, then in 2000 during his world tour of investment locales, with wife Paige). (see "Adventure Capitalist").

I am leary about commodities over the next 6 months to a year, as the world economy temporarily slows and the US dollar strengthens relative to other weakening economies (mostly Euroland). I recently sold almost all my commodity stocks, except for one mutual fund (VGPMX) and my Canroy stocks.

But, I agree with Jim Rogers' long term thesis that the balance of world economic power will shift to Asia over the coming 20 years and will be marked by a long running shortage of materials while enduring increasing demand. I will invest accordingly and keep an eye on the dollar to signal my move back to commodities and energy.

I found a couple recent stories on Jim Rogers and will provide a link to them so you can read up and learn what Rogers is up to:

The first is "Rogers Sill Bullish on Commodities" August 15, 2008 at the "Living off Dividend website: http://livingoffdividends.com/2008/08/15/rogers-still-bullish-on-commodities/

The second story is from Bloomberg News which I have repeated below:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aLr71mSZqOLI

Avoid Dollar `At All Costs,' Investor Rogers Says (Update2)
By Zhang Shidong

June 30 (Bloomberg) -- Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said investors should steer clear of the dollar as the U.S. economy slows and favor commodities this year.

The dollar has slipped 7.7 percent against the euro and 5.9 percent versus the yen in 2008 as the Federal Reserve cut interest rates to stave off a U.S. recession. Oil prices have doubled in the past 12 months, while gold is up 44 percent.

Avoid the dollar "at all costs", said Rogers, chairman of Rogers Holdings, in a speech in Shanghai today. "The best investments in 2008 are commodities and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything, including seeds.''

Oil and metal prices in New York have surged as a slumping U.S. currency made them cheaper for non-dollar investors to buy as a hedge against inflation in a slowing global economy. The dollar has stabilized in recent weeks, with currency volatility falling by the most since 1999 this quarter.

The comments from Rogers, 65, come two days after he told investors at a conference in Nanjing not to "give up" on Chinese shares, which have made China the world's second worst performers this year. Rogers, who first started buying Chinese stocks in 1999, said he hadn't sold any of his holdings.

Commodity Bull

Investors failed to take heed today, as the benchmark CSI 300 Index extended an eight-month slump amid expectation government measures to slow inflation will hurt corporate profits. The gauge is down 53 percent from its Oct. 16, 2007 record and has dropped 23 percent in June. That would be the index's worst month since it was introduced in April 2005.

Rising food and fuel costs have helped to drive China's consumer prices to their highest in almost 12 years, prompting the central bank to lift interest rates six times last year and order banks to set aside a record amount in reserve to curb loan growth.

Speculation that the People's Bank of China would raise borrowing costs for the first time this year dragged the CSI 300 down by 5.5 percent on June 27.
Rogers, who now lives in Singapore, is best known for being a commodity bull since 1999, before the market started to rally in 2002. His Rogers International Commodity Index has more than quadrupled since it started in 1998.

The price of wheat, rice and soybeans reached records this year after adverse weather curbed global output and reduced stockpiles amid rising demand.

"Not High Enough"

Rogers is anticipating further gains in crude oil, which reached an all-time high of $142.99 a barrel on June 27. Futures were recently at $142.74.

"Crude oil prices are not high enough to stop people from consuming more energy,'' the investor said. "The bull market will not go to an end until supply and demand come to a balance.''

His comments today echo the themes in his latest book "A Bull in China: Investing Profitably in the World's Greatest Market,'' in which he tells investors to get out of the dollar, teach their children Chinese and buy commodities.

Rogers said last October he planned to shift all his assets out of the dollar, which fell to a three-week low against the yen on June 27. He predicted last month that the U.S. currency's decline would pause in the second quarter because it was overdone.

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net.