Typically, Jim Rogers has an extremely long time frame associated with his investments. For instance, according to him China will do very well over the next 100 years. As right as he might be, I don’t have that kind of a time frame.
While Jim is starting to buy China once again, he is worried about the Chinese Credit Bubble. Just as we are. Where Is China’s Hidden Debt Bomb
Personally, I think it’s a little early for China. In my view, the Chinese market will be dragged down even further by its massive shadow banking system and by the upcoming severe 2014-2017 recession and a bear market in the US.
In terms of Russia and as I suggested before, wait and see is the best approach here. There is no doubt that the Russian market looks attractive and that there is literal “blood in the streets”, but to make money timing becomes increasingly important. After all, the Russian market has been in a general downtrend for over 3.5 years and with no sign of a turnaround.
Further, while we do not have enough data, the Russian stock market tends to do poorly during the US Recessions or Bear Markets. Since we anticipate a severe one to happen shortly, it’s another red flag to take into consideration. Either way, I would would wait for a technical reversal prior to taking up a position in this “undervalued” market.
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Jim Rogers Is Buying Russia And China. Should You? Google
Daily Ticker: Jim Rogers: Forget U.S. markets, I’m buying Chinese and Russian stocks
This week’s optimism about capital market reforms in China seemed to outweigh any investor concern stemming from the referendum on independence held in two regions of Ukraine.
Enthusiasm around China came after the State Council reiterated its desire to liberalize finance in areas such as IPOs and limits on foreign investment — even though some of these measures were originally announced months ago.
Jim Rogers, famed commodities investor and author of Street Smarts: Adventures on the Road and in the Markets, lives in Singapore and is a prominent bull on China’s long-term prospects. He tells us in the accompanying video that for the first time since 2008 he is buying shares in China “in a small way again,” which includes putting a little more in financial companies given authorities desire to open the economy more, “especially finance.”
He says he’s not buying much in China because of the country’s “big debt problem” — (“it worries me a lot”) — and he’s concerned with China’s shadow banking system.
When it comes to Russia, the country’s markets have been more than rattled by the crisis in Ukraine, with the main stock index falling 10% in March and the ruble losing 9% against the dollar in the first three months of the year.
Rogers says he bought more Russian stocks during the turmoil in Crimea and is interested in buying more.
Why?
You’re “supposed to buy when there is blood in the streets,” he tells us. “In Rusia, figuratively there is blood in the streets.”