Can we correlate expected oil hike to Praj?

Originally posted by manish_okhade Can we correlate expected oil hike to Praj?

In an interview to NDTV Profit’s Namrata Brar and Prashant Nair, legendary investor Jim Rogers who made his fortune with the Quantum Fund, speaks about the current economic situation and his call on equities and commodities. Rogers feels that the US economy is in serious trouble and it is going to have its worst economic time probably since the 1930s.

NDTV: Jim great to have you with us on NDTV Profit. Let us start with your picture of the world particularly the US markets where you have been very vociferous against the policies by the Fed. How bad is it looking?

Rogers: The US economy is in serious trouble. The people in Washington do not have a clue on what’s going on. For two years it has been brewing and for two years they have been making mistakes. So, the US is going to have its worst economic time probably since the 1930s.

NDTV: So, it doesn’t get any better in second half of 2009 or 2010, that’s the consensus on the street. It is going to get worse but everybody believes there will be a recovery in 2010.

Rogers: If everybody believes that it is going to be better in the second half of 2009 then I promise you it is not going to be and certainly not in 2010. All of the people who are in the consensus showed us a year ago that everything will be fine but the consensus is totally dead wrong about this and it continues to be dead wrong.

NDTV: How asset classes like equities are performing at the moment because markets like India have already taken large cuts although they are performing better than others. Your call for equities in 2009?

Rogers: I have sold all of my stocks everywhere in the world except some in China. I have bought some more in China in October-November. I am not buying shares anywhere in the world as these are economic hard times.

NDTV: What’s your call on commodity counter?

Rogers: The only sector that I know where the fundamentals are improving are commodities. Many farmers in the world cannot get loans for fertilizers and inventories of food are lowest in 50 years. Oil reserves are declining around the world at a fairly rapid rate. The fundamentals because of the supply for the commodities is getting better. If you need to own something then I would suggest that you learn about owning commodities and selling stock short.

NDTV: How do you make out periods of correction and sustainable long bull run in commodities?

Rogers: If you and I new that, we would have been so rich! I am the world’s worst market timer. I am the worst short term trader in the world. I just try to do long things that are going to do better. The best sector that I know in the world right now is probably agriculture. Farming is going to be the great industry of our times for the next 20-30 years. I know being a farmer in India is a nightmare because of the government but in many countries it is going to be a fantastic industry in the future.

NDTV: So, Jim would you go longer for agriculture commodities at the moment?

Rogers: I think agriculture commodities are going to do better than others for the moment because many prices of many agriculture items are very low.

NDTV: How bad things are going to be in 2009 or 2010?

Rogers: I expect to see social unrest or civil unrest in the US a couple of years from now. There is a dramatic sea change with the world’s center moving from west to east. Many people have not figured this out yet especially in the US.

NDTV: How does it play out for an investor? What’s actionable right now, if something at all, or just sit on cash?

Rogers: Cash in an alternative for those who don’t want to try to do things. You can learn to sell it short. I started short at stocks in the US and I covered it in October-November. It is now clear that the US government has no understanding on what’s going on, so I have started to sell it short again in the US.

NDTV: What about China as many believe there is going to be social unrest there too because of huge unemployment?

Rogers: There is no question as there is already social unrest in China and I am sure that you will see more. It is because these are very tough economic times around the world. Any point of the Chinese economy that deals with the west especially retail knows something wrong right now. Some parts of the Chinese economy and some parts of Indian economy are going to do extremely well going forward but at the moment you are going to have problems. China has huge reserves but will it prevent problems, of course not. They are going to have problems too. The money is in Asia now and throughout history the center of things has moved towards where the money is.

NDTV: Jim why don’t you like a market like India at the moment, because some would say it has done well for self by not opening too much to the global markets early on in hindsight? That’s looking like a good decision.

Rogers: I don’t think it is a good decision in hindsight. If you think India internally has enough savings and you’ll come out of this then some parts of India will do very well. But I don’t see it that way in India. You have a government that is not terribly pro business or pro making money.

NDTV: We have got elections pending in May, so do you see we’ll see big bang reforms because the conditions is so bleak? May be the next government wants to encourage more investors to come in and make those concessions?

Rogers: If they do it, I will come and kiss their feet. I have been hearing from Indian politicians for many years. But if your politicians really mean it this time then it would be fantastic for the India and the world. But I don’t believe them.

Jim Rogers on a chinese TV