Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
While the world economy continues to struggle, famed commodity investor Jim Rogers believes the only place to be is in agriculture, and he also expects gold will have a major correction.
“I not sure if I am optimistic about 2012, and I am certainly not optimistic about 2013, but if I were buying anything it would certainly be agriculture commodities. Going forward we have huge shortages developing of everything, including shortages of farmers. Agriculture is going to be a great place for the next 10-20 years,” said Rogers on Wednesday during an interview with CNBC.
Rogers says he is short emerging markets, Europe and technology.
“I don’t see much reason to own stocks when one can own commodities. If the world gets better, I am going to make a lot of money because of the shortages. But if the world doesn’t get better, the governments will print money. And whenever governments print money, the only way to protect yourself is to own real assets.”
Asked about potash stocks, like Mosaic Co (NYSE:MOS) and Potash Corp. (NYSE:POT) that have slid substantially this year, Rogers said he was not interested in stocks so much as the hard assets themselves. Potash Corp. is down 18.57% this year to $41.41 a share, and Mosaic Co is off 33.28% to $50.63.
Rogers has been a long-time gold bull, but he believes the precious metal is due for a correction.
“It would not surprise me if gold went down to $1,300 or $1,200. If it goes that low, I am going to buy a lot more.”
Rogers is less bearish on China.
“Some parts of the Chinese economy are set for a hard landing. The Chinese government has been trying very hard to chill a real estate boom for two-and-half years. They’ve raised interest rates two and half times. They’ve raised reserve rates a dozen times. They are going to pop the real estate bubble, but that is not the whole Chinese economy. There are many parts of the Chinese economy that will boom no matter what happens to real estate.”
Picture from Jim Rogers Adam Smith for President in 2012
