14/02/2023

The Wall Street legend predicts Trump will be re-elected as US president and global sharemarkets are heading into a dangerous bull run.

“Central banks and governments are printing and spending staggering amounts,” he said. “It has never happened like this in world history and therefore the markets are going up.”
‘Going to end badly’
The veteran investor, who founded the storied Quantum Fund alongside billionaire George Soros in 1969, said markets look as though they’re heading to a “blow-off” the crescendo rally that sometimes occurs at the top of a bull run because there is “so much money around”.
“If that happens it is going to end very, very, very badly, given all the debt and all the overpriced securities in the world,” he warned.
But Mr Rogers said he wasn’t “shorting the boom just yet”. And while he is avoiding the US sharemarket, where he believes valuations are unreasonably high, he is finding opportunities elsewhere around the globe.
I’m not buying American shares, I’m trying to find things that are depressed
Legendary investor Jim Rogers
“The American market is near all-time highs, so I’m not buying American shares, I’m trying to find things that are depressed,” he explained.
He listed a disparate range of asset classes and investment vehicles that have recently caught his attention, including Russian shipping companies, Chinese wine manufacturers, gold, silver and broad-based Japanese exchange-traded funds giving exposure to a sharemarket that is down 45 per cent from its peak.
But while he was happy to share a glimpse of his recent asset allocation activity, he added a cautionary note:
“I’ll tell you what I’m doing but if people want to invest, they should not listen to me or anybody else. If you want to be a successful investor, you should only invest in things that you, the investor, know a lot about.”
He welcomed the young and new investors storming global sharemarkets amid the pandemic via low-cost and free brokerage platforms, but also warned that new entrants can often be another sign of an impending bubble.
“Everybody wants a hot tip, everybody wants to be rich today,” he said. “I am delighted for everybody to learn about investing, they should. But they should learn sound investing and not something that is going to hurt them.”
‘Lazy man’s way’
To that end, Mr Rogers who ran actively managed investment funds for a decade in the 1970s said he had come around to the philosophy of passive investments that seek to mimic the market rather than try to beat it.
“It’s a sad commentary on active managers and all of us but the facts are that passive usually outperforms most people and it’s cheaper,” he said. “It’s a lazy man’s way, but it usually outperforms so I’m not against it.”
The revelation comes as Australian investment professionals are debating the merits of increasing the exposure of superannuation funds to passive investments, sparked by the Morrison government’s slated introduction of a new performance testing regime many experts believe will favour index-tracking strategies.
Asked to comment on the idea of superannuation or pension funds going all in on passive, Mr Rogers said:
“I’ll let Australia make its own decisions but if you ask me, most investors should just invest in an index.”