Rogers Likes Agriculture Over Oil and Gold

Apr.14.09 | About: VanEck Vectors (MOO)

Famed investor Jim Rogers was on Bloomberg yesterday and had a few thoughts on oil, gold, and his new book - A Gift to My Children: A Father's Lessons for Life and Investing.

That's not a very flattering freeze-frame above - parts 2 and 3 are also available at YouTube.

For at least the last year or so, he's been pretty consistent about his favorite investment over the short-term and there were no changes today - agricultural commodities.

On market bottoms:

I don't know if this is going to be as bad as the 1930s - it may well be. But a rally is not unusual at a time like this. We've certainly seen a bottom. Is this the bottom? I don't think so. I think we're going to see more bottoms in the next few years.
I would expect to see more problems. Probably this fall or next year we're going to see currency problems. We're going to see more bankruptcies, so there are going to be more problems in the financial markets which does not mean that we can't have big rallies.

We're having one.

I don't know how much longer it's going to last. I am not participating - at least in the stock part of the rally. I'm participating by buying commodities because, if the world economy is going to be better, commodities are going to be the best place to be. If the world economy is not going to be better, commodities are still going to be the best place to be, or at least the least bad place to be.

On whether to hold oil or gold through the rest of the year:

Of those two I would rather own oil. The IMF is trying to sell its gold. The IMF is one of the largest holders of gold, so you’ve got this huge supply overhang. Whether they sell it or not, the world is expecting them to sell it, so I'd rather own oil than gold.

I'd rather own agriculture than either.

Apparently he hasn't heard about the willing buyers in Asia for all the IMF gold - that seems to be the consensus opinion of nearly all who have commented on this subject. Interestingly, for as far back as I remember, Rogers has never been real bullish on gold simply because, in his view, central banks have too much of it and are more than happy to continue to sell it.

It's a half-hour long interview - here's the summary:

00:00 Inflation; Asia; agricultural commodities
06:21 Investors should expect more "bottoms"
08:40 Commodities; U.S. stocks, bonds "last bubble"
13:24 Japan love hotels, stocks; Thai politics
18:09 Currency crisis; agriculture, China strategy
26:27 Prefer oil to gold; China, Brazil real estate
28:44 Angola. Ethiopia; U.S. bailouts, economy