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‘I have seen this movie before’: Legendary investor Jim Rogers unloads on the bubbles forming across markets, particularly in big tech stocks and bitcoin — and shares the 4 alternatives he would buy for his kid over the next decade

Jim RogersREUTERS/Vivek Prakash

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Jim Rogers is worried about the state of the market. And he says you should be too.

That may seem bizarre considering stocks are near record highs with an economic recovery — which will likely be aided by more robust stimulus from a Democrat-controlled government — still waiting in the months and years ahead. 

But he's part of a growing chorus of those warning that speculation in financial markets is growing out of control as central banks continue to buy up bonds, causing price multiples to soar.

In a recent interview with The Economic Times, the famed investor and chairman of Rogers Holdings said that bubbles are forming in global markets, especially in tech stocks.

"Apple, Amazon, Google, Tencent and Samsung, some stocks are turning into a bubble. It is not a complete bubble yet but I can see bubbles developing," Rogers said.

"If you go to Korea or America or London or Japan, everybody is jumping into the market. People who do not know anything about markets are jumping in and buying," he continued. "I have seen this movie before, when you go to the dentist and the receptionist wants to talk about stocks, you should be worried!"

He added: "This has happened many times in history. It is happening again. It is not a bubble yet but I can see a bubble developing in some asset classes in some countries."

Rogers said that because of central bank policies, stocks will likely continue to rise through at least most of 2021, but will then crash either at the end of 2021 or the start of 2022.

He also said he believes bitcoin is in a bubble, and seemed to caution investors about the cryptocurrency space generally.

"Many cryptocurrencies have disappeared and gone to zero. We all watch bitcoin but there are many others that have disappeared completely," he said. "I do not know who is buying bitcoin. It looks to me like a bubble. I have seen many bubbles in my life."

Areas of the market Rogers is betting on for the next decade

While Rogers' worries run far and wide, don't mistake him for a complete pessimist. 

Rogers is plenty bullish on several assets — including some sectors of the stock market. 

He said he expects some of the sectors that were hurt most by the global COVID-19 outbreak to recover.

"I know we are going to fly to New York again in the future. I know we are going to fly to London again in the future. I am looking more at the areas that would have been damaged: travel, tourism, entertainment, transportation and agriculture," Rogers said.

He also said he's been buying, and will continue to buy, Chinese stocks.

Outside of equities, Rogers said certain commodities are poised for gains. He said he has been "buying agricultural indices more than anything," but also likes gold and silver, and doesn't plan on selling any of the three anytime soon.

But of all these assets, Rogers' has his favorites. When asked to share the three investments he would make for his daughter over the next decade, Rogers gave four. 

"Silver, agriculture, and airlines," he said. "I mean silver and agriculture are easy to say, maybe oil. Oil is a disaster and if it is for a decade, probably energy."

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SEE ALSO: Bank of America says the warning signs that stocks are hurtling into bubble territory are growing — and pinpoints 6 that could signal a bear market is beginning

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