Jim Rogers' Recent Portfolio Moves

Jim Rogers has been in the media a lot over the past couple weeks and we wanted to provide a summary of these thoughts. He is a noted investor and founder of the highly successful yet now defunct Quantum Fund (with George Soros). Rogers has been out providing his opinion on various topics and giving us a deeper glance at some of his portfolio plays. We've compiled a list of some of his major positions below. First, we'll examine some of the plays he's revealed just over this past week.

The rally we've been seeing in equity markets is a bear market rally that can last anywhere from days to months, according to Rogers. He sees the economy as getting worse before it gets better, citing more bankruptcies to come. It might be 'a bottom,' but it's not 'the bottom,' Rogers said. He's very bearish on a macro level and thinks it could take 7 to 8 years to really clean out the system. He's noted that all the bailouts have added to the risks of an economic depression. His displeasure with the US government is no secret, as he thinks they are 'throwing money' at the wrong things.

In terms of the US financials, Rogers has covered his Citigroup (C), which was a short that paid him off handsomely. He has also mentioned that he has covered most of his short positions in stocks. But, he is now short JP Morgan Chase (JPM), as he sees negative 'off balance sheet' exposure, along with derivatives exposure, and large exposure to the credit card business. Rogers has noted something that we here at MarketFolly have been talking about for some time: credit cards as the next credit crunch. And head of JPMorgan Jamie Dimon even acknowledges this as well. Rogers has chosen to short JPM for a myriad of reasons, but credit cards are certainly one of them. Even the 'good house' in the 'bad neighborhood' can't escape. While he has that short position in the financial space, he has no positions in the insurers. He notes that sure, financial institutions can rally back from their lows, but that they still aren't financially sound. He thinks that financials won't be an attractive investment for years to come. Additionally, while not a financial, he mentioned he was short IBM, presumably due to their large financial services exposure.

Rogers has again re-voiced his concern with government debt, which has recently expanded five-fold. He was previously short the long-dated treasuries, but had to cover back in the fourth quarter. He has been patiently evaluating for a time to re-enter this position for the longer trend he forecasts. In the midterm, he won't fight the government though, as he expects them to buy treasuries in an effort to stem borrowing costs. Governments around the world are printing a ton of money and borrowing insane amounts. Rogers cites this as the reason for his desire to short the bonds eventually. We agree with Rogers on this point, and are willing to have extreme patience before entering this trade in size. It undoubtedly will take much longer to play out than many realize, especially when the Federal Reserve is still active and busy. We laid out our basic rationale for shorting treasuries down the road as well. Again, as Rogers emphasizes, patience is key.

Additionally, he has been waiting to establish a short position in the US dollar. He has been long the dollar, which he says is rallying artificially, and is looking for this unwind to continue before he unloads the rest of his dollar position, as he believes the US is trying to devalue its currency. He also currently owns some Japanese Yen and has elaborated on currencies recently. Considering his distaste for some of these paper currencies, he has a small gold position. But, he prefers silver and agriculture to gold.

We already know that he is bullish on commodities, and very bullish on agriculture. He has re-hashed this view numerous times. He might be early, but he has always claimed that he is not a market timer. He feels this trend will eventually arrive and he is poised to benefit from it. Raw materials and commodities are the only sectors with improving fundamentals according to Rogers. He expects low inventories and tons of shortages in the longer term (10-20 years). You have to keep in mind that Rogers is not a market timer and instead positions himself for broad, longer-term trends. He favors the commodities themselves over commodity resource stocks. And, he has even gone out and bought physical farmland. He has active investments in Agcapita Farmland Investment Partnerships (in Canada) and Agrifirma Brazil. As we noted in our hedge fund portfolio tracking series, Rogers' ex-Quantum Fund buddy George Soros has also bought a ton of Potash. So, they definitely share a bullish stance on agriculture. Last, its also worth noting that respected investment strategist Don Coxe is also an ag bull.

Overall, Rogers has a bearish macro view and expects bear market rallies, as they are just part of the cycle. And, while certain toxic companies like the financials may rally, he notes that they still have big problems ahead of them. He isn't a market timer and expects rampant inflation as well as bull markets in agriculture and commodities. He has placed bets to the tune of these forecasts and will continue to monitor the investment landscape for broad macro trends he can capitalize on in the future.

If you've missed them, you can also see Rogers' thoughts on the topics of:

• China, inflation, & the recession
• Agriculture
• Commodities
• The British Pound
• Other Currencies
• Long-term US bonds

Sources:Bloomberg, (again), CNBC, and various other media appearances

Comments

[Fremont Rea...:]

I agree with the agriculture and commodities play, with population growth it's a given demand for both will increase.

Mar 20 12:13 PM

[fran:]

have you really tried getting verification that you seek? or are you what you claim rogers to be? for starters, the canadian/brazillian partnerships and his sale of ny city townhouse are public. seek, you may find your answers. no one will do your work. have you published your investment data? enjoy the search.


On Mar 19 12:20 PM raytayzmd wrote:

> ...aack!...gag!...Jim Rogers!...how do I hate thee, let me count
> the ways!...even aside from the wisdom of taking advice from a goober
> who insists on wearing ridiculous looking bowties in public, no one
> -- I repeat with stronger emphasis -- NO ONE knows what Jim Rogers'
> portfolio moves have been!...NO ONE has published copies of his brokerage
> statements to confirm whether he's actually putting his money where
> his extraordinarily big mouth says he is...yet to my utter amazement,
> everywhere people quote his opinions -- opinions that, in REALITY,
> are worth no more than the hot air behind them...I'm willing to bet
> that after he made his wad with Soros TWENTY FIVE YEARS ago, he put
> it all in treasury notes and hasn't traded a dime since...so SHOW
> me the brokerage statements with the ACTUAL TRADES and SHOW ME that
> he is actually making money based on his opinions...PROVE IT or else
> quit shoveling his bull!

Mar 20 12:37 PM

[ValueInvestor:]

Ya, because the FDIC isn't guaranteeing your bank deposits is it?


On Mar 20 08:57 AM dkp wrote:

> The lesson of the present crisis is ; keep no cash in banks, but
> buy bricks and mortar, at least you are the master of your assets.

Mar 20 01:01 PM

[ozzy:]

Rogers is clearly an extordinary thinker. Make an effort and you can find enough to verify his track record. Like everyone else, if you don't like him, ignor him. On his comments, and my study, I purchased ABB a long time ago, at around 3.00 a share..check it out now. I have also invested in his commiditees index, which over time will prove to be wise as well. Good luck and good hunting to all

Mar 20 01:35 PM

[User 206965:]

Whats the best way to play the "Agriculture" boom that Rogers predicts is coming?????

Mar 20 01:56 PM

[yellowhoard:]

The easiest way to play ag is DAG and MOO. You get 2x leverage on farm products.


On Mar 20 01:56 PM User 206965 wrote:

> Whats the best way to play the "Agriculture" boom that Rogers predicts
> is coming?????

Mar 20 03:56 PM

[socphd71:]

Buying farmland is only for those select few who can either (a) farm it themselves or (b) hire qualified, competent, motivated farmers to farm it for them. Be aware that farmland comes in many 'flavors.' Don't buy farmland in farming areas which are about to be hit by droughts, such as the ones which have been going on in California, much of Australia, and northern China. In the USA, some of the best farmland is in Iowa -- where there was a bubble some decades back. Therefore, don't buy farmland when it is overpriced! Don't buy farmland where the crops might not make it to market. A few years ago, a most of a bumper Kansas wheat harvest had to be stored out of doors, on the ground, due to a lack of freight cars to take the wheat out of Kansas to where people were willing to buy.

In sum, investing in farmland is at least as risky as investing in the stock market. Speculating in farmland is not sane since real estate commissions are high.

Mar 20 08:13 PM

[mac.barron:]

For short term stuff, I think that yellohoard is on target and he two he mentioned are indeed an easy way to make Ag plays. Although, a long term investment, I doubt that Jim Rogers would endorse buying securities that pay out in U.S. Dollars. Also, I think that DAG may be a double long so be very cautious with it. If you have no idea why a leveraged ETF is not buy-and-hold investment do some in depth research and educate yourself about the correct way to invest with these very twitchy vehicles.

Mar 20 08:18 PM

[Greenville ...:]

Many of Rogers investments are very public. He owns and runs the Rogers Commodity Indexes including the Rogers International Commodity Index fund. He has an energy, agriculture, and I believe metals index funds. I think the thing you have to most understand about Rogers is that he is not a short term investor for the most part. He is seeing the long term horizon.

Jonathan

Mar 20 09:30 PM

[Tay:]

I agree. Would like to verify that he believes what he is advising.

He's too eager to convince and it is suspicious.

Mar 20 09:32 PM

[Mr. Ed, Jr.:]

I am sure not following the reasoning behind needing to view a brokerage statement.

Someone gives financial advice and explains why he thinks it is a good investment. You decide if the reasoning is sound.

How does a brokerage statement have any impact on the soundness of the advice ? That's a rhetorical question, because obviously a brokerage statement does not have any bearing on whether advice is good or bad. It might make you feel more comfortable, but that is an emotional response that is best left out of investment decisions.

Mar 21 02:20 AM

[fdfe:]

I have seen many of his interviews from 2003 and 2005 and 6....I am telling you this guy beats Rubini too....he has some sort of philosophical fundamental perspective that many other do not. I think that he is amazing, and if people dont want to follow his siggestions I think they should learn from his investment philosophy.....and stop acting like hedge fund manager, cnbc anchor, broker.....wise ass know it alls....cause they will end up driving tractors!!!!...lol

Mar 21 03:15 PM

[Northstar10000:]

Jim's record has been good in the area of stocks only. It is impossible to rate things like farm land. If you had taken Jim's advice
on stocks only he would have you ahead of the S&P, His commodity picks are impossible to track due to wild swings and not knowing what are his margin cushions. You could have been stopped out of gold a hundred times going long even with the trend in your favor.
I have some success buying his stock picks but he does not tell you when to sell in a timely manner. I had to get out on my own. i would rate him good but note great.

Mar 21 08:45 PM

[nova:]

Let us see what Jim Rogers really said:
- US government & economy run humongous deficits [early or later is has to be paid one way or another]
- US government wants to pay these deficits in "cheap" US$
- Regardless of the state of US and EU economies, Brasil, China and other Asian countries will continue their growth [during the Great Depression, Soviet Union and Nazi Germany were doing very well]
- US and EU policies to deflate values of their currencies will succeed [much above Obama, FED, Brown, etc., imagination]
- The only things capable of preserving their values in highly inflationary environment are "hard" assets like gold, commodities and agriculture [this has proven to be true just recently in Russia following the collapse of Soviet Union]

Conclusion
Let us thank Jim Rogers for sharing with us his thoughts.

Mar 21 09:08 PM

[wise:]

A lot of money will be made by people, whether you follow his advice none, a little, or a lot. But no one man gets it right even a majority of the time.

Mar 22 12:16 AM

[ajit:]

In this market of speculation timing is of equal important factor which he dont say , otherwise market is of cycle he will be right only .

Mar 22 08:05 AM

[ajit:]

Its a high time for this gambler's world that GOVT. must change the rules of gambling ........

Next generation will be sorry for that if this is not done......

Mar 22 08:08 AM

[Momintn:]

Has Jim Rogers become a Chinese citizen yet?

Mar 22 10:39 AM

[Mad Hedge F...:]

Jimmy is on to a winner. Traders looking for the Next Big Play are keeping a laser like focus on two key commodities. Chinese stockpiling prompted copper to break out of its recent trading range to the upside to $1.70, taking lead producer Freeport McMoran (FCX) up 30% on the week. Crude rose 15% to a high of $46. These impressive moves happened during a week when global equity markets were in complete freefall. This suggests that the bulk of the world’s growth will be in emerging economies, and that the next round of commodity buying will be even more ferocious than the last. Since I believe that the future is all about the ascent of hard assets over paper ones, this is music to my ears.

Mar 22 03:15 PM

[Plan B Econ...:]

From reading tons of articles featuring Jim Rogers, here's what I figure his portfolio looks like:

5 Major Investing Themes (a la Jim Rogers)
www.planbeconomics.com...

Mar 22 08:54 PM