Rogers Holdings Chairman Jim Rogers says the global banking crisis may have more far-reaching consequences this time around than during the global financial crisis of 2008.
The investment guru, author of the book Street Smarts: Adventures on the Road and in the Markets, cautions that the worst is yet to unfold and the real bear market will kick in only in 2024 and 2025.
Rogers believes the US will be much worse-off than other countries, but warns that India will not be spared either.
In an exclusive interview with Moneycontrol, he admits that India has done fairly well in recent times compared to its global counterparts, but given a choice between India and China, he would choose the latter.
Chinese equities had come off quite significantly in the wake of the nation’s Zero-Covid policy amid an explosion of coronavirus cases, and their attractive valuations make the market appealing to Rogers.
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“India has certainly been a very good market in the recent past, and I suspect India will be better than most…But China is down a lot because of the virus and, you know, if China completely goes down, of the two I guess I'd rather buy it. I'd rather buy China than India right now just because China is down more. But I'm not rushing out to buy anything right now,” says Rogers.
Once a major selloff kicks in, Rogers won’t be averse to buying markets like India, China and Japan. He isn’t rushing to buy any of these, given the serious debt issues the world is confronting.
But does he own Indian stocks in his portfolio now? And how should one approach developed markets like the US now?
“I do not own India. I own some China, I own some Japan, and I hope to buy more of both. I own some commodities, energy, agriculture, gold, silver. I hope I'm smart enough to buy more of all of these things. Because that seems to be where the opportunities are,” he said.
“I don't particularly want to buy the US as it is near its all-time high and the debt builds up higher and higher there. I would suspect that the US will be a much worse market in the next bear market that comes versus some of the other markets that I've mentioned. And I hope I'm smart enough, somewhere along the line, to sell short. I will probably sell short in the US, because that's where the excesses seem to be more than anywhere else,” Rogers added.
But the question is, if he isn’t buying India, China or even Japan currently, where is he parking his money? Is there a hiding place amid all the volatility and uncertainty? Should one look at the obvious choice now – safe-haven assets like gold and silver -- that Rogers is known to be a proponent of? But this time his answer is not in the affirmative, at least for the time being.
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“If you go back to previous big bull markets, bear markets, when things collapse in price, even silver and gold collapse for a while. Then, of course, silver and gold turn around, and usually are one of the first things to go up again. And that will happen again. I own silver and gold. I am not buying silver and gold now. Because I expect there to be another opportunity. That may not be, but if there's another opportunity with silver and gold prices going down, I hope I'm smart enough to buy more.”
Sipping water from a silver cup, he quipped: “Indians know more about silver and gold than anybody in the world. Everything I learned about silver and gold I learned from Indians.”
