Jim Rogers warns of meltdown

[foxfirev5]

This one idiot has scared my parents (in their 80's) so much they have gone to 100% CDs.

Be grateful. They could do much worse.

 

[DrRoy]

As a believer in contrarianism, the more people who are worried or calling for crashes, the better. Markets top out when people are giddy and complacent, not when they are scared.

 

[Scrapr]

This one idiot has scared my parents (in their 80's) so much they have gone to 100% CDs.

Well I think Jim would prefer they go to Gold.

Noticed this line at the bottom of the article:
This expert take on gold and the markets is brought to you by Live Gold Prices | Gold News | Gold Market Insights | KITCO.

Kitco is a Gold company. Jim may not even know that he wrote that article. It's an advertising piece

 

[supernova72]

If I would have changed my investment strategy based on the gloom and doom crowd my net worth would be 50% less that what little I have now.

I'm surprised that folks don't call these folks out more often on their past predictions. IMHO there is a big difference between investing and "trading" or market timing. If I were into that I'd test my luck at the roulette table in Vegas. Ha.

 

[swguy]

These folks, and the networks that control the volume of their megaphone, depend on this sort of headline to ring the cash register. I'm not real keen on participating for their enrichment. Sooner or later the market will give back some of its past gains. We don't know when, or how much. It's always good to think about how much risk you are taking in light of these certainties.

 

[Cobra9777]

DW and I structured our early retirement plan to have very little reliance on portfolio withdrawals. We both elected the annuity option on our pensions, even though one is non-COLA, one is partial COLA, and both have very average payout ratios. FIRECalc history says we probably would have been better off investing the lump sums. We both started collecting immediately as well. We paid off the mortgage and bought two rental houses. Again, history says we likely would have been better off keeping all that money invested.

We also tilted the taxable portfolio toward real estate and high-dividend ETFs so that the average yield is 3.2%. Once again, history says we likely gave up some growth potential for steady cashflow. We do have a gap that requires selling some shares in taxable from time to time. But that selling activity is more than offset by reinvestments in the tax-deferred accounts. So in reality, our WR is less than the overall portfolio dividend rate. We are 56 and 57 currently, so SS FRA is still way off in the future, but could be pulled in to 62 if the SHTF.

This was all driven by fear of a major correction right after we retired. Whatever happens, and whenever it happens, all I know is that we'll still be a bit panicky. But knowing that all that cash is flowing in without selling shares will hopefully help us get through the ordeal without doing something dumb. Time will tell if the price was too high. But I'm not the type to risk the whole game to run up the score.

 

[Running_Man]

Where is your proof for the statement that the next decline will be the worst of our lifetimes? While some people may think that will happen it is probably more likely that it will not be the "worst" of our lifetimes.

I have no idea what will happen but it doesn't really matter much.... I'll just keep with my 60/35/5 AA, rebalance opportunistically and hope for the best.

WADR, to say that a 70-80% decline is "not that unusual in the world of investments" is crazy talk. There has only been one decline anywhere near that severe... in 1929... and there are many protections put in place after that crash. Besides, if one has a balanced portfolio of stocks and bonds, the decline would be mitigated by the stability of bonds.

First I did not make a statement that the next decline will be the worst in our lifetime — I was merely stating one of the points Rogers made. I did make the statement that a 70-80 % decline is not that unusual in the world of INVESTMENTS. Investments are not the US stock market

By 1948 the German stock market fell 99 percent, which had been the world’s second largest free market economy in 1913 -- 35 years earlier (Great Britain was third) and this was the second 90+ decline for Germany during that 35 year period

In 1980 Silver fell from $49 per ounce to under $8.00 an ounce a few years later a wipeout of over 80 percent.

in 1990 Japan had the world’s second largest economy with a GDP exceeding 3 Trillion dollars, their stock market was 66% of the total capitalization of the world stock market EX-US. From the peak of 39,000 the Nikkei fell to under 8,000. a fall of 80 percent. Today the GDP of Japan is a little over 4 trillion.

In 2000 the NASDAQ reached 4,688 it would fall to 1,139 a fall of about 75 percent.

In 2007 Iceland was rated the top country in the world by the Human Development Index of the United Nations. Tops in the entire world for economic and civic life. Between 2008-2011 the Iceland stock market fell over 90 percent as the financial crisis devastated Iceland as the overburden of debt destroyed the financial system

In 2014 West Texas Intermediate oil was priced at over $110 per barrel, it fell to under $26, a 76% drop.

These examples are only a few from major world economies and major investments. The belief that it is “crazy talk” to think that the world stock market or the US market — with a demographic and debt pattern remarkably similar to Japan in the 1980’s could occur is to me wrong.

Unlike Rogers I do not see any immediate cause that will result in a drop of the magnitude he forsees, and I would not be surprised he is totally wrong, in fact I truly hope he is totally wrong, but that is easy to plan for. Equally I would not be surprised if he was correct. I think the rapidity in which financial fortunes can change are adequately displayed in the charts shown. Rogers advocates farm land and short term cash, something a man of his wealth can afford to do, I cannot see dropping ever going forward below my 25% minimum common stock holdings and I am above this level as of right now.

In general I see a world that is deflationary in nature with an aging US population spending less as time goes on being reinforced by technology dropping costs over a wide swath of the economy, and expect very low rates to continue for some time, but I am quite willing to admit this forecast could go wrong at any time, but I do have a portfolio plan to handle this.

 

[haha]

F

Unlike Rogers I do not see any immediate cause that will result in a drop of the magnitude he forsees, and I would not be surprised he is totally wrong, in fact I truly hope he is totally wrong, but that is easy to plan for. Equally I would not be surprised if he was correct. I think the rapidity in which financial fortunes can change are adequately displayed in the charts shown. Rogers advocates farm land and short term cash, something a man of his wealth can afford to do, I cannot see dropping ever going forward below my 25% minimum common stock holdings and I am above this level as of right now.

In general I see a world that is deflationary in nature with an aging US population spending less as time goes on being reinforced by technology dropping costs over a wide swath of the economy, and expect very low rates to continue for some time, but I am quite willing to admit this forecast could go wrong at any time, but I do have a portfolio plan to handle this.

Very well said. A certainty on this forum is that any public figure (like Rogers) who questions the happy days ahead, or at least reasonably contained days ahead gets called out with various attempts to undermine his/her credibility. Jimmie Rogers is no mere talking ahead, he has success as an investor. It is hard to get these things right, and the likeliest bet is almost always more of the same. This however is not necessarily the safest bet. Many of us are retired, others while not retired taste it in our mouths, and realistically would have real difficulty recovering on schedule from a decline like 1973-74, 1999-2002, or 2007-2009. And furthermore, there is a usually unspoken assumption that markets are like amusement park rides. The cars plummet down, and then they rise right back up. That has been our experience here in US markets, during the investing lifetimes of anyone here and our parents' investing lifetimes too. So we have learned not only to hang on, but to buy the dips. But what happens if the next dip is like Japan in 1989? We tend to have a glib but perhaps shallow understanding. Every cycle is a new experience, and our lives are depressingly finite.

Successful investors like Jeremy Grantham admit that the market is quite high, but say that unless inflation jumps or profit margins fall it likely will not crash. My question to me is, "Do I feel lucky?". Maybe not that lucky, so I am going much lower on equities than other recent times. I might feel disappointed if I miss another up-move, but what I really don't want to ever feel is colossally stupid. If I took a 40-50% total portfolio hit, I would cry, and not just once.

Ask yourselves, do I /we have pensions and inflation protected annuities to make all my necessary commitments? I know I don't.

Ha

 

[pb4uski]

Yup.... when you lose a world war your stock market gets creamed.... hardly a surprise. I guess I'll be a stupid redneck and take my chances that the US will NOT lose a world war during my lifetime... a risk I'm willing to assume.

Second, what relevance does German stocks, silver, Japanese stocks, crude, Icelandic stock or even just the NASDAQ have to do with the investments of people on these boards?

You said "I think any investor should give thought to how they would endure a 70-80 percent decline"... given that you are writing to people on this forum, who generally invest in diversified portfolios of stocks and bonds, why would we think that you were referring to someting as narrow and irrelevant as German stocks, or crude oil or the NASDAQ when you used the term "investments". Did you spend all afternoon congering up this lame defense of what you wrote?

The only sensible thing that you have said is that you would not be surprised if Rogers were totally wrong.... given his recent history of dire predictions that never come true... you got yourself a winner there.

 

[timo2]

alarmists are always right....eventually. It just depends upon which alarmist gets lucky with their scary predictions.

 

[pb4uski]

..... Jimmie Rogers is no mere talking ahead, he has success as an investor. ...

Jim Rogers is worth about $300 million... hardly a successful investor. It takes over $1.5 billion to crack into the top 400 richest on Forbes list. Rogers is a true wacko if you read what he has written and said.

Meanwhile, his co-founder of the Quantum Fund, George Soros, is worth $25 billion, #19 on the list.

 

[dixonge]

Well I think Jim would prefer they go to Gold.

Noticed this line at the bottom of the article:
This expert take on gold and the markets is brought to you by Live Gold Prices | Gold News | Gold Market Insights | KITCO.

Kitco is a Gold company. Jim may not even know that he wrote that article. It's an advertising piece

This article would fit right in at ZeroHedge. I'll be *shocked* if they haven't already linked to it...

 

[marko]

I never see these people held accountable for their wrong predictions. I can never recall anyone of the financial shows who are predicting something being asked "but you predicted such-and-such 5 times in the past and it never happened, why should we listen to you now?" Or even "what percentage of your past predictions were accurate and can you document that?"

I wish there was a website somewhere that tracked all these predictions! Market crashes, political issues, doom, gloom and even booms.

30 years ago they said that we were supposed to be completely out of oil by now, freezing due to global cooling, eating dog food due to a massive market crash and the Japanese were going to own everything in this country!

 

[marko]

One man's meltdown is another man's massive buying opportunity!

 

[haha]

Jim Rogers is worth about $300 million... hardly a successful investor. It takes over $1.5 billion to crack into the top 400 richest on Forbes list. Rogers is a true wacko if you read what he has written and said.

Meanwhile, his co-founder of the Quantum Fund, George Soros, is worth $25 billion, #19 on the list.

True I guess, if you are worth $400 million. Otherwise, I'll take his opinion.

Ha

 

[haha]

One man's meltdown is another man's massive buying opportunity!

No doubt about this. No guarantee however that the second person is the correct one!

Ha

 

[pb4uski]

True I guess, if you are worth $400 million. Otherwise, I'll take his opinion. ..

Sure, good luck with that.

 

[Elbata]

As much as I like Mark Cuban, I think he's cute, he said the market would crash when Trump is elected. He said he's selling his stock if this happens. Really? He's not saying much these days.

Didn't this guy win the Nobel Prize in Economics?

Paul Krugman Predicts Market Tank From Trump, | The Daily Caller

I'm not one to buy individual stocks, but when I heard this prediction election night, I was calling a few of my buddies for some stock tips.

 

[harley]

I just stumbled across another, more recent Jim Rogers article - The Worst Stock Market Plunge in Your Lifetime Is Coming: Jim Rogers. While I don't really have an opinion about his prediction skills, this article makes me wonder about his credibility.

In it he states

"It's been 10 years since we have had a bear market. That is very, very unusual, so the next bear market is going to be the worst in my lifetime."

That didn't sound right to me, so I did a little research. I found this document - https://www.ftportfolios.com/Common...tentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d. I couldn't figure out who to make it display without clicking on it, but it's basically a chart that shows all the bull and bear markets since 1929, and how long they lasted. Many/most bear markets came along after 12+ years of a bull. It took me less time to look that up than it did to type this post. Why didn't he look it up before making such an obviously wrong statement? And why didn't the "journalist" that posted the story do the 30 seconds of research needed to refute that point before posting it out there? I know it's just click bait, but my 12 y.o. DGD would flunk her class if she did such a poor job. And if he really wants to be taken seriously he should get his facts straight before opening his mouth.

 

[JoeWras]

I just stumbled across another, more recent Jim Rogers article - The Worst Stock Market Plunge in Your Lifetime Is Coming: Jim Rogers. While I don't really have an opinion about his prediction skills, this article makes me wonder about his credibility.

In it he states That didn't sound right to me, so I did a little research. I found this document - https://www.ftportfolios.com/Common...tentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d. I couldn't figure out who to make it display without clicking on it, but it's basically a chart that shows all the bull and bear markets since 1929, and how long they lasted. Many/most bear markets came along after 12+ years of a bull. It took me less time to look that up than it did to type this post. Why didn't he look it up before making such an obviously wrong statement? And why didn't the "journalist" that posted the story do the 30 seconds of research needed to refute that point before posting it out there? I know it's just click bait, but my 12 y.o. DGD would flunk her class if she did such a poor job. And if he really wants to be taken seriously he should get his facts straight before opening his mouth.

Maybe he is predicting an 85% down market for 5 years. Worst in his lifetime, right? (Just going on the quote you excerpted.) Edit: he said more than 50%. There ya go! 85% for 5 years. Worst ever.

 

[IMATERP]

For someone always so bearish, I'm surprised he has any money left. Jim and Eliot Wave need to go to the "bullpen."

 

[HFWR]

And another...

https://www.cnbc.com/2018/04/17/mor...that-the-end-is-near-for-the-bull-market.html

The firm maintains that boosts from fiscal policy are largely priced into the market and unlikely to last much longer.

"The feelgood aspects of said policy appear at or nearly in the price of US markets, whereas the downsides are less accounted for," the 31-page research paper said.

“While there's a fair amount of debate about how much this fiscal expansion extended the economic cycle, for markets our analysis suggests we're closer to the end of the day than the beginning."

This will be require a "sector and stock-specific" focus as the bull market hits its peak later in 2018.

Funny how active stock picking is always the antidote...

 

[gcgang]

And another...

https://www.cnbc.com/2018/04/17/mor...that-the-end-is-near-for-the-bull-market.html





Funny how active stock picking is always the antidote...

I always thought Jimmy Rogers was entertaining. Maybe it was the bow tie he always seemed to wear.

I don't think Jimmy advocates stock picking. Buy GOLD when it dips (to $1,000) is what he says. But now he's not looking for the sell off until next year. Thank goodness we've still got a little time.

But he wasn't wearing his bow tie. Didn't seem so entertaining now.

 

[audreyh1]

I just stumbled across another, more recent Jim Rogers article - The Worst Stock Market Plunge in Your Lifetime Is Coming: Jim Rogers. While I don't really have an opinion about his prediction skills, this article makes me wonder about his credibility.

In it he states That didn't sound right to me, so I did a little research. I found this document - https://www.ftportfolios.com/Common...tentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d. I couldn't figure out who to make it display without clicking on it, but it's basically a chart that shows all the bull and bear markets since 1929, and how long they lasted. Many/most bear markets came along after 12+ years of a bull. It took me less time to look that up than it did to type this post. Why didn't he look it up before making such an obviously wrong statement? And why didn't the "journalist" that posted the story do the 30 seconds of research needed to refute that point before posting it out there? I know it's just click bait, but my 12 y.o. DGD would flunk her class if she did such a poor job. And if he really wants to be taken seriously he should get his facts straight before opening his mouth.

Yeah, it’s not the summer of 2019 yet.

I’m amazed when people, especially talking heads, get facts wrong who lived through them just like I did.

 

[HFWR]

I always thought Jimmy Rogers was entertaining. Maybe it was the bow tie he always seemed to wear.



I don't think Jimmy advocates stock picking. Buy GOLD when it dips (to $1,000) is what he says. But now he's not looking for the sell off until next year. Thank goodness we've still got a little time.



But he wasn't wearing his bow tie. Didn't seem so entertaining now.

Yeah, Rogers and other permabears are more likely to recommend [-]beaver cheese futures[/-] gold. It was in the other recent thread where active stock picking and professional management would be kings.