According to Jim Rogers, famed investor and co-founder (with George Soros) of the Quantum Fund, economic hardship in the United States is only just beginning. He predicts that in the US “we are probably going to have one of the worst recessions we’ve had since the Second World War”. In other parts of the world, specifically China, he sees opportunity and growth.
In December he published his latest book entitled ‘A Bull in China: How to Invest Profitably in the World’s Greatest Market’. That month he also sold his Manhattan townhouse (bought 30 years ago for $100,000 and sold in today’s market for $15.75 million!) and moved his family to Singapore.
He acknowledges that the Chinese market was overheating and may have been in danger of becoming a bubble, but praises the government there for its efforts to cool things down with the real estate and stock markets. He still thinks that there’s some cool down needed, but points out that he’s “starting to prepare his list of things to buy in China”. He also mentions that he’s “not thinking about buying in America”.
So, what Chinese investments is he interested in? Companies and sectors that are involved in tourism, agriculture, power generation, communication, and transportation, providing goods and services that are used nationally and regionally in China and Southeast Asia, as opposed to those that export to the US.
Manufacturers in China who sell goods to America retails giants like Sears and Wal-Mart will feel the US recession half a world away, but he says that “most parts of the Chinese economy are going to be untouched. They won’t even know America’s in recession. They won’t care if America falls off the face of the earth”.
According to Rogers, in the US “things are going to go way, way, way down. The investment banks are down now because of problems in the credit market. Wait until the effects of the bear market come along. If you just go back and look at other bear markets, investment bank stocks have gone down enormously. We haven’t gotten to that stage yet. This is going to get much worse”.
Disclaimer: I am not a financial professional, economist, or related to Alan Greenspan. Any advice, insight, information, or misinformation on this blog should not be followed based solely on me saying so. Assume that I have no clue what I'm talking about. Do your own research and come to your own conclusions before doing anything with your money. I assume no responsibility for your financial failure or success. However, if you do have success, send a little my way. -Rich.
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