Transcription
If what you just described happens, it's going to lead to dislocations in the market. If major countries start liquidating their holdings, Oh, it causes problems. It causes dislocations. Now, if you're clever and knowledgeable, you will find an opportunity.
>> [music] >> Welcome to another edition of Triangle Investor Interviews. I'm your host Lucian Warch and before I announce my guest, just a quick reminder of a disclaimer. This interview and all my interviews are not a recommendation to buy or sell any shares, products or services. Always do your due diligence and consult with your financial advisor.
Today, I'm joined by Jim Rogers, legendary American investor, author and financial commentator. Jim, welcome back to the show. Thank you so much for joining me again today.
>> I am delighted to be here, Lucian. I'm very pleased. Thank you. Thank you for having me.
>> Thank you for coming, Jim. I always enjoy our talks. Let's start this talk. We will start with the markets, with the general markets and AI and all all other things. How do you view global stock market over the next, let's say, 12 months? Do you think that the AI-driven rally and abundant liquidity can continue or we are approaching the kind of euphoric phase that typically ends with a sharp correction?
>> Well, Lucian, how do I know? I'm not very good at market timing. I I will tell you though that I have sold nearly everything in the world because I know that nearly all stock markets are making all-time highs. Historically, when that has happened, it's a time to worry. So, I worry. I sold. I sold too soon, obviously, but I'm watching and worrying.
>> So, you are worried about the direction of the general markets going forward, right?
>> Well, Alicia, every nearly every market in the world is making all time highs. I repeat, nearly every market stock market in the world is making all time highs. That does not happen very often. And when it does happen, people should ask questions and maybe should be worried. So, I'm worried.
>> I I am obviously early, uh but I am worried.
>> Agreed on that. Uh everyone is talking about the AI today. Do you see today's enthusiasm as a genuine technological revolution with decades of upside, or is it becoming another liquidity-driven bubble?
>> Well, we've had markets throughout Well, for a long time, and we've often had some markets that become extremely excited, whether it's electricity or automobiles or computers or whatever. At the moment, everyone is excited about AI, and AI is changing the world, just as electricity exchange changed the world. Uh will it last forever? None of them ever have. I mean, electricity had lasted forever, but not as a stock market boom. So, I've I've We've all seen this before. Do not ask me about market timing, because I'm not very good at it, but I know this has happened before. I know it's been very exciting when it happens, but I know it's always ended and ended badly.
>> It did, unfortunately. Jim, you've always been a contrarian investor. Where do you think the biggest disconnect between the market prices and economic reality exists today?
>> Well, I guess I would say in stock markets around the world. I repeat, many stock markets in the world are making all-time highs. That's a disconnect. Rarely in human history has every market in the world made an all-time high. And when it does happen, it's a time to ask questions. Is that a disconnect? I don't know. You can ask me in 2 or 3 years.
>> Yeah, but on the other hand, where do you see the disconnect, let's say, on the underpriced commodities at at the moment?
>> Well, most commodities are doing well. I guess agriculture is probably a place that people could look. Um agriculture is not booming. I mean, I don't think you know many people who are rushing off to be a farmer right now. Um people who are in universities are all begging to be farmers. They're all begging to be stock brokers. So, I guess that's the only parts of the world, the places where one could look.
>> Yeah. Uh let's touch a bit on inflation and the monetary system. We've We've gone from a decade of near-zero interest rates to persistent inflation and much higher borrowing cost. Is this a temporary adjustment, or has the investment landscape fundamentally changed for the next decade?
>> Fundamental change for the next decade? I doubt it. There's been very few things in world history or in investing history that have been a fundamental change for a decade. Yes, some things have been. Electricity, automobiles, things like that came along. But even those things did not last forever. I mean, electricity boomed. But it was not something that made fortunes for people for years. Unless they happen to find a a good company and bought it and held it for a long time. Likewise with automobiles. I mean, Ford Motor Company is still alive. But it wasn't a great stock forever. It's uh you have to get your timing right.
>> Yes. Uh Jim, do you think we will return to pre-COVID, pre-pandemic levels with inflation? Can we see those numbers again soon or ever?
>> Of course, we can. I I have read enough market history to know that most of these things have happened before. And I know that they will happen again. So, if you say ever, >> Yes. >> I can tell you yes. The answer is yes.
>> Will it Will it happen today? Probably not. But it will happen ever.
>> Yeah, I may be over Yeah, your point You're definitely right here. For decades, the global economy has revolved around the dollar-centric monetary system. Are we witnessing the beginning of the new monetary order or is the talk of dedollarization still premature?
>> Well, I own US dollars. Um I partly because I'm an American, but I would own US dollars anyway. The US dollar is the world's main currency. Uh that is going to change. Uh I don't know what's coming next, and I don't know when. But I know that throughout history we've had different currencies, different countries, different whatever, and I know that that will change again. The United States is the largest debtor nation in the history of the world. No nation in world history has ever been so much in debt, and the debt's getting bigger. I know that will change. I don't particularly like it since I'm an American, but I know it's happening. I know it will happen.
>> Yeah. Uh the governments continue accumulate record levels of debt. Yet markets seems remarkably relaxed. What do investors understand that you don't? Or is the market simply ignoring the risk? What do you think?
>> Uh my answer to you would be that the market is probably ignoring the risk. But who knows? I would just well repeat this sort of thing has happened several times in history in many countries. It's not the first time. It's happened before. We're all human beings. Human beings love easy answers. Hu- human beings want everything to be easy and right. Human beings also make many mistakes.
>> Yeah, and life is not easy and not so simple. Definitely. Uh Jim, uh before we start this interview, I saw news where Fort Knox gold has been confirmed. Treasury Secretary Scott Bessent says that all US gold is US gold is present and accounted for. That's over 1 trillion in gold. Do you believe that? That's my question.
>> Well, I mean, Scott Bessent is a very intelligent person. He now works for the government. So, you have to remember that when smart people work for the government, they have different different views. They have to have different views. Um as I say, Scott is a smart person, but that does not mean that everything is all right in Washington. I repeat, the US is the largest debtor nation in world history, and the debt's getting worse. Whenever this has happened in the past, it's led to problems. I know it will lead to problems again. I don't know when. Scott would tell you, "Don't worry. Don't worry." I repeat, Scott's a smart guy, but I worry.
>> Okay. Uh let's touch on the central banks. The topic is always the central banks buying gold, but let's let's let's touch on the other side of of the story. If a major holder, such as Russia or any other country facing severe fiscal pressure, were forced to liquidate a significant portion of its gold reserves, would that simply create a buying opportunity, or could it fundamentally alter gold's long-term outlook?
>> Well, if what you just described happens, it's going to lead to dislocations in the market. If major countries start liquidating their holdings, Oh. It causes problems. It causes dislocations. Now, if you're clever and knowledgeable, you will find an opportunity. But that doesn't happen overnight. That takes a time. Takes a long time, usually. But yes, if you have everybody changing and say we must liquidate, that leads to opportunities. Just be careful because the first month is not going to be fun.
>> Yeah. Gold is in the correction territory. It has corrected. Do you see more pain ahead or do you see a strong upside here from here?
>> Well, I own gold. I own silver. I have for many years. I suggested everyone should own some gold. Everyone should own some silver and because throughout history, gold and silver have been valuable and been protection. I mean, Jesus Christ was sold for 30 pieces of silver. And that was hundreds of year hundred more than hundreds of years ago. Silver and gold have always been useful and practical and protective. They will be again. Everybody should have go some gold in the closet. Everybody should have some silver under the bed. You need it. And when you need it, it's very late. It's too late to buy. You need to buy it when nobody cares.
>> So as a gold holder, you basically you care if the price goes down or up, right?
>> Well, for me I don't. I just own it. If it goes up, I don't sell it. If it goes down, I hope I'm smart enough to buy more.
>> Fair enough. Uh let's touch on the >> Now, I would just repeat to them there are many people who are good traders, good market timers, and they can buy and sell gold and silver in the market and make fortunes. I am not one of those people. I don't even try.
>> Understood. Understood. Uh let's touch on silver. You You mentioned silver. For years, some investors have argued that silver prices have been artificially suppressed uh through the paper futures market. Do you think there are there's any merit to those claims?
>> No. I do know that there have been times when it appears that governments have artificially trying to suppress gold or silver, and they have been. I mean, governments Some governments at times have tried to make the price of gold and silver go down. But, I know that history shows that in the end markets are smarter than governments. There is no government in history that's been smarter than the markets. I mean, governments don't like that, but markets have always been smarter than any government you name.
>> Okay, so in the majority >> will be. >> Yeah. In majority of cases, you believe that the market simply is reflecting supply and demand here.
>> In the end, yes. Whether we like it or not, nobody has changed the laws of supply and demand, and no one ever will.
>> Yeah. Uh if the confidence in paper markets were ever seriously challenged, could silver react very differently from gold?
>> Well, yes and no. There is a theory, I think it started in the Bible or somewhere, that gold and should be 16 times the price of silver. And that has often happened. But there is nothing I do not know any rule that has always been true except buy low, sell high. I mean that gold and silver will get very cheap sometimes and get very expensive sometimes. But I repeat to you, for me, I just own the stuff. I don't try to trade it. I don't try to market time it. But I know people who are extremely good at it and make a lot of money trading gold and silver. I am not one of them. My view is I just own it. It's in the closet. It's under the bed. I'm not trying to buy and sell and trade gold or silver.
>> Got it. Okay. You are bullish on gold, silver. You are bearish on the general markets heading. I get that. But what else, what other asset classes do you prefer at this moment that you're most bullish on beside gold and silver?
>> Well, I mean there are not many, but if you look around the world, it's remarkable. Nearly every stock market in the world has recently made all-time highs. I don't remember any time in my life when every market was making all-time highs at the same time. I do know that when And happened, you can read about it. It's better time to ask questions and be worried. I mean I repeat, we're all human beings. The whole world cannot be perfect the same time. It never has been. And I'm sure it never will be. So, I would suggest that people ask questions and maybe worry.
>> Mhm. Is it a good time to stack more cash? To maybe take the opportunity of buying, let's say, if we see a correction or a crash, to buy some asset classes. Do you think it's a right time to stack cash?
>> I repeat, I am bad at market timing. But at the moment, I have a lot of cash because I expect opportunities like that to come again.
>> Mhm. Mhm. >> But I'm bad at market timing.
>> Understood. Maybe final question for you, Jim. What's the biggest investment mistake you think investors are making it right now, today?
>> Throughout history there have been times when everybody thinks things are great and will not be wrong and not go We will not have problems. It's happened many times in world history. But history is very clear.
>> [cough] [clears throat] >> There are always problems coming in the future. And they will again. So, I would say to everybody, anybody who thinks don't worry we will not have problems. Okay. If you're good at market timing fine. But please remember that throughout history good times have always have always been followed by bad times. So, be careful.
>> That's a fact. Jim, what can we expect from you going forward? Are you writing any new books? Any new initiatives?
>> No, I am not writing any books at at the moment. Um I don't think I have anything to say that I haven't said already. But [clears throat] if I do, I hope I'm smart enough to sit down and write a book. If I do, I will let you know.
>> I would definitely read it. That was Jim Rogers. Thank you so much, Jim, for joining me today. Always a great chat.
>> It is my pleasure. It is always fun to talk with you, and I always learn something. Thank you. Thank you. Thank you.