Global markets riding high on fragile optimism, warns Jim Rogers
Give us a sense of the kind of moves we're seeing from the U.S. We've had several updates over the past week regarding trade deals with major global economies. Where do you think the market is headed now that there's a bit more clarity on the trade front compared to earlier?
Jim Rogers:
Well, the U.S. market hit an all-time high yesterday, so it's been going up. I've sold everything. I'm very skeptical about this rally. I see signs that we're going to face problems—though they're not here yet. I sold too soon. But that's not the first time I've done that. I'm quite good at selling too early.
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But when are you planning to buy again? More importantly, which sectors or regions are you interested in right now?
Jim Rogers:
Well, the situation is that markets all over the world are hitting new highs. Everyone's having a good time. In my experience, when everyone is enjoying themselves, that's when you should start worrying. So yes, I'm worried, but clearly, I'm early. I've been early before—this time is no different. So I don't think I'm the right person to ask right now. I wouldn't be buying at this point—I'd be selling, though the market seems to suggest I'm wrong.
Help us understand the rationale behind your decision to sell most of your holdings, especially since the market is at an all-time high. For example, trade deals with major economies like India haven't been finalized yet. If all goes well, do you believe this uptrend can continue? And what are the potential problems you foresee?
Jim Rogers:
For the first time in my investing career, I believe that the people in Delhi now truly understand that prosperity and success are good. For decades, they've said those things, but they didn't really mean it. Now, something's changed—India recognizes the need for success and economic growth. I'm extremely optimistic. In fact, I'm more optimistic about India now than I've ever been in the past—because I believe that the policymakers in Delhi finally get it.
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That's an interesting take. But if you're so optimistic, why are you still not buying into Indian markets? Is it due to high valuations? If the markets correct—say by 10% or 15%—would you be interested then?
Jim Rogers:
I have no idea what the magic number is. I'm not good at that. If the Indian market starts falling and there's genuine fear and despair, that's when I might consider coming back. Whether that happens at 8% down or 28% down—I don't know. I just hope I'll recognize the signs when there's enough fear to warrant buying again.
Many foreign investors seem to share your sentiment. The kind of FII outflows we've seen from Indian equities this past week has been quite significant. On the flip side, domestic confidence appears to be strong and is helping balance those outflows. Where do you think Indian markets are headed, given this contrast?
Jim Rogers:
Again, I'll admit I'm not good at market timing or short-term trading. Any success I've had has come from finding undervalued assets and holding them for the very long term. India is going to be one of the great countries of the world again. It has been in the past, and I believe it will be again. So I just hope that if the Indian market falls significantly—whatever the reason—I'll be smart enough to buy in.
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