Jim Rogers, who in April 2006 correctly predicted oil would reach US$100 a barrel and gold US$1,000 an ounce, told investors not to “give up” on Chinese shares after the country’s stock index fell almost 50 percent this year.
“Start buying when others say ‘never again,’” Rogers, 65, said yesterday at an investor conference in Nanjing.
There is “much money to be made” from investments in Chinese stocks, he said.
China’s CSI 300 Index has slumped 52 percent from its Oct. 16 peak on concern government measures to curb consumer prices will hurt earnings growth. Rogers, who first started buying Chinese stocks in 1999, said he hasn’t sold any of his holdings.
“It’s still a growth story in China,” said Andrew Sullivan, a sales trader at Mainfirst Securities Hong Kong Ltd. “It still has a good manufacturing industry.”
Rogers told Chinese investors that the current correction is “the way the market works,” and they shouldn’t be a “market timer” trying to figure out when is the bottom.
“You should get in at a time like now,” Rogers said. “I’m starting to think about buying again.”
He said he’d be “investing in China for the rest of the century.”
Investors should “learn about commodities,” Rogers said. Oil prices, which reached a record in New York trading on Friday, will go higher, he said.
Crude oil for August delivery rose US$0.57, or 0.4 percent, to a record close of US$140.21 a barrel on Friday on the New York Mercantile Exchange, extending its gain this year to 46 percent.
The price of oil will keep rising, “unless someone finds a major oil field very quickly, in accessible areas,” Rogers told investors.
“The oil trend is still high even though the US is trying to curb oil speculation,” Sullivan said.
Rogers told investors to “stay away from” the US dollar. The US currency is within 2 percent of a record low against the euro reached in April as the US Federal Reserve has cut interest rates to stave off an economic recession.
US stocks “are going to go down,” Rogers said. The Dow Jones Industrial Average fell 0.9 percent on Friday, extending the decline for the 30-stock measure to 10 percent this month, the worst June since 1930.
The US may be in its “worst recession since World War II,” Rogers said, adding that the subprime mortgage crisis in the world’s biggest economy “has many years to go.”
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