- Legendary investor Jim Rogers sees a classic bubble forming in the market, from bitcoin to retail investor frenzies.
- “I’ve been to this movie before,” Rogers said. “It’s not my first rodeo.”
- Rogers breaks down what he is buying right now and where investors could shelter from a looming market correction.
- Visit the Business section of Insider for more stories.
Legendary investor Jim Rogers continues to see signs of classic speculative bubbles forming in the market as bitcoin soars in price 153% since the start of December and as retail investors flock to the stock market.
Rogers touched on the topic of stock market bubbles in an interview with Daniela Cambone of Stansberry Research on February 11.
In the interview, Cambone said a previous guest was predicting a 40% market crash in April this year. While Rogers said it wasn’t a bad observation, he would rather not predict when a bubble might burst.
“I try to play it as I go along,” Rogers said in the interview.
But the signs of a classic bubble are all there, and it plays out more or less the same way, he said. The bubble bursts and a lot of people will lose a lot of money.
“I’ve been to this movie before,” Rogers said. “It’s not my first rodeo.”
In terms of the type of correction, Rogers suggested between 50% to 60%, with some stocks going down 80% to 90%. He said this is just the reality of a market crash.
What makes this scenario more difficult is the amount of debt globally, Rogers said. There is now far more debt on the Federal Reserve’s balance sheet than during the financial crisis, due to the central bank’s response to the coronavirus pandemic.
The current levels of debt and borrowing are not good for this generation and the next generation, Rogers said. He is particularly concerned about the groupthink between the Treasury department and the Federal Reserve, highlighting that US Treasury Secretary Janet Yellen was the former head of the Federal Reserve.
“The next bear market is going to be the worst in my lifetime and the worst in your lifetime,” Rogers said.
Where to seek shelter?
For investors worried about a looming market correction, Rogers said nowhere in investing can be considered safe. But he does recommend short selling for those who are experienced, as well as going into cash.
“You have to have the right cash,” Rogers said. “In 2007/2008, a…
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