Jim Rogers gives the best investing advice you’ll hear, talks next big market crash

Jim Rogers, chairman of Rogers Holdings and co-founder of the legendary Quantum Fund, said that the next financial crash could be even worse than what we saw this year.

“This certainly has been the worst in my lifetime. We’ve had a huge rally because governments everywhere have printed and spent staggering amounts of money, but it just means that the next time it’s going to be worse still,” Rogers told Kitco News.

While monetary stimulus may have provided short-term relief to the financial markets, the enormous amount of debt created as a result will create negative consequences for the economy in the long-term, Rogers said.

Rogers’ comments come as the S&P 500 climbed to new all-time highs on Wednesday, with gold prices falling on the trading day.

The S&P 500 last traded at 3,398.34 while spot gold traded at $1,966 an ounce.

The rally in equities since March was largely due to the debt build-up from quantitative easing, Rogers said.

“Six months ago the United States was the largest debtor nation in the history of the world. Never has anybody been so deep in debt. Since then the U.S. has increased its debt by trillions more. If you give me a few trillion dollars, I will show you a very, very good time,” he said.

On gold, prices still have a lot of room left to climb, Rogers said, adding that Warren Buffett did not enter the gold market too late with his recent purchase of Barrick Gold shares.

“If I’m right, gold is going to go much, much, much higher before this is over. Gold may well turn into a bubble. I hope it doesn’t, because if it turns into a bubble, I’ll have to sell it and I never want to sell it. I want my children to have my gold and silver someday,” he said.

Rogers draws on his decades-long investing experience, from his early days on Wall St. to his successes with the Quantum Fund, to give candid advice to any investor looking to win in the long haul.

“You want to know how to be a successful investor, stay with what you know,” he said.

Rogers launched the Quantum Fund in the 1970s with partner George Soros. Over the next ten years, the fund returned 4,200% while the S&P climbed 47% during the same period.

While Rogers never had a formal business education at a business school, he was able to excel on Wall St. after graduating from college by digging deeper into his analysis than his peers.

“I started realizing that if [a key for me] was to find something cheap that was changing and I realized it by the numbers,” he said. “I was once working on reading an annual report and doing a spreadsheet and an experienced guy walks in the room and said ‘people still do that? Nobody looks at spreadsheets anymore.’ He laughed at me. I was embarrassed but I kept doing it,” he said.

Rogers is a long-term value oriented investor, preferring to buy companies that are relatively cheap, while also on the cusp of positive change.

“If you can find something that is cheap and has a positive change, you’re probably going to get very rich,” he said.

His last advice to investors? This is a tough game, he said.

“I want to emphasize again, it’s not easy. This is not an easy way to make money or to even make a living, so it takes a lot of work, like most things in life,” he said.

 

By David Lin

For Kitco News

David