Market close above 1100 !
Friday, August 29, 2008
Thursday, August 28, 2008
11:56 am - KLCI need to break above 1078 for some real upside !
The budget 2009 rally is coming to an end very soon !
9:33 am - Again, KLCI cannot break below 1064.5
It tested yesterday once and if it test again at 1064.5, it looks like it can go down but wud probably hold till Friday Budget 2009 announcement.
Wednesday, August 27, 2008
3:37 pm - Traders Club Meeting - This Sat, 30 Aug 10 am - 12.30 noon
Dear Traders,
Our next traders club is on Saturday 30 August from 10 to 12 AM in the Philllip training room. Need some speakers. I will share Warren Buffets formula for investment success" E= MC square and a DVD of an interview of W Buffet by CNBC.
I learned about this formula from a Warren Buffet seminar given at the SC last week by one of Warren Buffet's associates. The more I think of it the more I understand why he is so rich and successful. This simple formula is so profound and can save you from the current market collapse and help you get rich in the next KLSE bull. It will also help you avoid buying shares and their share price immediately collapse.
Let me know if you wish to attend.
Bill
Our next traders club is on Saturday 30 August from 10 to 12 AM in the Philllip training room. Need some speakers. I will share Warren Buffets formula for investment success" E= MC square and a DVD of an interview of W Buffet by CNBC.
I learned about this formula from a Warren Buffet seminar given at the SC last week by one of Warren Buffet's associates. The more I think of it the more I understand why he is so rich and successful. This simple formula is so profound and can save you from the current market collapse and help you get rich in the next KLSE bull. It will also help you avoid buying shares and their share price immediately collapse.
Let me know if you wish to attend.
Bill
10:18 am - Even a counter like Bursa is looking for a technical buy !
It has formed a triple bottom ! However, volume is thin again. At this time, all volume would be low as many fund mgrs are ready to buy but not yet ! Watch out for the increase in trading volume.9:42 am - There is no follow thru on the downside for KLCI
The market likes the news of Anwar becoming a MP ! Becareful, the market is gathering strength to move up at least until Budget 2009 announcement.
Tuesday, August 26, 2008
9:54 am - Jim Rogers: An Exclusive Interview With the Legendary Investor
The First of Two Parts.]
Jim Rogers: An Exclusive Interview With the Legendary Investor by Keith Fitz-GeraldInvestment Director, The Money Map ReportEditor's Note: This article has been reprinted with permission from MoneyMorning.com
Whenever a visionary like Jim Rogers speaks, the elite investors of the world listen. And for good reason: His insights have made investors a fortune.
Our friend and colleague Keith Fitz-Gerald - the Investment Director of the Money Map Report - recently sat down with Jim Rogers for another of his exclusive interviews.
Earlier this week, the transcript of this interview was released for the first time to Money Morning readers. And he's agreed to share it with us here at Investment U.
Rogers, no doubt, has been very public about his criticism for U.S. government and corporate fiscal policy. Here he digs into the duration of the credit crisis - something on the minds of many investors today...
Dear Investment U Reader,
The U.S. financial crisis has cut so deep - and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae and Freddie Mac - that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning.
Indeed, the U.S. financial debacle is now so ingrained - and a so-called "Super Crash" so likely - that most Americans alive today won't be around by the time the last of this credit-market mess is finally cleared away - if it ever is, said Rogers.
The end of this crisis "is a long way away," Rogers said. "In fact, it may not be in our lifetimes." During a 40-minute interview during a wealth-management conference in this West Coast Canadian city last month, Rogers also said that:
U.S. Federal Reserve Chairman Ben S. Bernanke should "resign" for the bailout deals he's handed out as he's tried to battle this credit crisis.
That the U.S. national debt - the roughly $5 trillion held by the public- essentially doubled in the course of a single weekend because of the Fed-led credit crisis bailout deals.
That U.S. consumers and investors can expect much-higher interest rates - noting that if the Fed doesn't raise borrowing costs, market forces will make that happen.
And that the average American has no idea just how bad this financial crisis is going to get.
"The next shock is going to be bigger and bigger, still," Rogers said. "The shocks keep getting bigger because we keep propping things up ... [and] bailing everyone out."
Rogers first made a name for himself with The Quantum Fund, a hedge fund that's often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor's 500 Index climbed about 50%.
It was after Rogers "retired" in 1980 that the investing masses got to see him in action. Rogers traveled the world (several times), and penned such bestsellers as "Investment Biker" and the recently released " A Bull in China." And he made some historic market calls: Rogers predicted China's meteoric growth a good decade before it became apparent, and he subsequently foretold of the powerful updraft in global commodities prices that's fueled a year-long bull market in the agriculture, energy and mining sectors.
Rogers' candor has made him a popular figure with individual investors, meaning his pronouncements are always closely watched. Here are some of the highlights from the exclusive interview we had with the author and investor, who now makes his home in Singapore:
Keith Fitz-Gerald (Q): Looks like the financial train wreck we talked about earlier this year is happening.
Jim Rogers: There was a train wreck, yes. Two or three - more than one, as you know. [U.S. Federal Reserve Chairman Ben S.] Bernanke and his boys both came to the rescue. Which is going to cover things up for a while. And then I don't know how long the rally will last and then we'll be off to the races again. Whether the rally lasts six days or six weeks, I don't know. I wish I did know that sort of thing, but I never do.
(Q): What would Chairman Bernanke have to do to "get it right?"
Rogers: Resign.
(Q): Is there anything else that you think he could do that would be correct other than let these things fail?
Rogers: Well, at this stage, it doesn't seem like he can do it. He could raise interest rates - which he should do, anyway. Somebody should. The market's going to do it whether he does it or not, eventually.
The problem is that he's got all that garbage on his balance sheet now. He has $400 billion of questionable assets owing to the feds on his balance sheet. I mean, he could try to reverse that. He could raise interest rates. Yeah, that's what he could do. That would help. It would cause a shock to the system, but if we don't have the shock now, the shock's going to be much worse later on. Every shock, so far, has been worse than the last shock. Bear Stearns [now part of JP Morgan Chase & Co. (NYSE: JPM)] was one thing and then it's Fannie Mae (NYSE: FNM), you know, and now Freddie Mac (NYSE: FRE).
The next shock's going to be even bigger still. So the shocks keep getting bigger because we keep propping things up and this has been going on at least since Long-Term Capital Management. They've been bailing everyone out and [former Fed Chairman Alan] Greenspan took interest rates down and then he took them down again after the "dot-com bubble" shock, so I guess Bernanke could try to start reversing some of this stuff.
But he has to not just reverse it - he'd have to increase interest rates a lot to make up for it and that's not going to solve the problem, either, because the basic problems are that America's got a horrible tax system, it's got litigation right, left and center, it's got horrible education system, you know, and it's got many, many, many [other] problems that are going to take a while to resolve. If he did at least turn things around - turn some of these policies around - we would have a sharp drop, but at least it would clean out some of the excesses and the system could turn around and start doing better.
But this is academic - he's not going to do it. But again, the best thing for him would be to abolish the Federal Reserve and resign. That'll be the best solution. Is he going to do that? No, of course not. He still thinks he knows what he's doing.
(Q): Earlier this year, when we talked in Singapore, you made the observation that the average American still doesn't know anything's wrong - that anything's happening. Is that still the case?
Rogers: Yes.
(Q): What would you tell the "Average Joe" in no-nonsense terms?
Rogers: I would say that for the last 200 years, America's elected politicians and scoundrels have built up $5 trillion in debt. In the last few weekends, some un-elected officials added another $5 trillion to America's national debt.
Suddenly we're on the hook for another $5 trillion. There have been attempts to explain this to the public, about what's happening with the debt, and with the fact that America's situation is deteriorating in the world.
I don't know why it doesn't sink in. People have other things on their minds, or don't want to be bothered. Too complicated, or whatever.
I'm sure when the [British Empire] declined there were many people who rang the bell and said: "Guys, we're making too many mistakes here in the U.K." And nobody listened until it was too late.
When Spain was in decline, when Rome was in decline, I'm sure there were people who noticed that things were going wrong.
(Q): Many experts don't agree with - at the very least don't understand - the Fed's current strategies. How can our leaders think they're making the right choices? What do you think?
Rogers: Bernanke is a very-narrow-gauged guy. He's spent his whole intellectual career studying the printing of money and we have now given him the keys to the printing presses. All he knows how to do is run them.
Bernanke was [on the record as saying] that there is no problem with housing in America. There's no problem in housing finance. I mean this was like in 2006 or 2005.
(Q): Right.
Rogers: He is the Federal Reserve and the Federal Reserve more than anybody is supposed to be regulating these [financial institutions], so they should have the inside scoop, if nothing else.
(Q): That's problematic.
Rogers: It's mind-boggling. Here's a man who doesn't understand the market, who doesn't understand economics - basic economics. His intellectual career's been spent on the narrow-gauge study of printing money. That's all he knows.
Yes, he's got a PhD, which says economics on it, but economics can be one of 200 different narrow fields. And his is printing money, which he's good at, we know. We've learned that he's ready, willing and able to step in and bail out everybody. There's this worry [whenever you have a major financial institution that looks ready to fail] that, "Oh my God, we're going to go down, and if we go down, the whole system goes down."
This is nothing new. Whole systems have been taken down before. We've had it happen plenty of times.
(Q): History is littered with failed financial institutions.
Rogers: I know. It's not as though this is the first time it's ever happened. But since [Chairman Bernanke's] whole career is about printing money and studying the Depression, he says: "Okay, got to print some more money. Got to save the day." And, of course, that's when he gets himself in deeper, because the first time you print it, you prop up Institution X, [but] then you got to worry about institution Y and Z.
(Q): And now we've got a dangerous precedent.
Rogers: That's exactly right. And when the next guy calls him up, he's going to bail him out, too.
(Q): What do you think [former Fed Chairman] Paul Volcker thinks about all this?
Rogers: Well, Volcker has said it's certainly beyond the scope of central banking, as he understands central banking.
(Q): That's pretty darn clear.
Rogers: Volcker's been very clear - very clear to me, anyway - about what he thinks of it, and Volcker was the last decent American central banker. We've had couple in our history: Volcker and William McChesney Martin were two.
You know, McChesney Martin was the guy who said the job of a good central banker was to take away the punchbowl when the party starts getting good. Now [the Fed] - when the party starts getting out of control - pours more moonshine in. McChesney Martin would always pull the bowl away when people started getting a little giggly. Now the party's out of control.
(Q): This could be the end of the Federal Reserve, which we talked about in Singapore. This would be the third failure - correct?
Rogers: Yes. We had two central banks that disappeared for whatever reason. This one's going to disappear, too, I say.
(Q): Throughout your career you've had a much-fabled ability to spot unique points in history - inflection points, if you will. Points when, as you put it, somebody puts money in the corner at which you then simply pick up.
Rogers: That's the way to invest, as far as I'm concerned.
(Q): So conceivably, history would show that the highest returns go to those who invest when there's blood in the streets, even if it's their own.
Rogers: Right.
(Q): Is there a point in time or something you're looking for that will signal that the U.S. economy has reached the inflection point in this crisis?
Rogers: Well, yeah, but it's a long way away. In fact, it may not be in our lifetimes. Of course I covered my shorts - my financial shorts. Not all of them, but most of them last week.
So, if you're talking about a temporary inflection point, we may have hit it.
If you look back at previous countries that have declined, you almost always see exchange controls - all sorts of controls - before failure. America is already doing some of that. America, for example, wouldn't let the Chinese buy the oil company, wouldn't let the [Dubai firm] buy the ports, et cetera.
But I'm really talking about full-fledged, all-out exchange controls. That would certainly be a sign, but usually exchange controls are not the end of the story. Historically, they're somewhere during the decline. Then the politicians bring in exchange controls and then things get worse from there before they bottom.
Before World War II, Japan's yen was two to the dollar. After they lost the war, the yen was 500 to the dollar. That's a collapse. That was also a bottom.
These are not predictions for the U.S., but I'm just saying that things have to usually get pretty, pretty, pretty, pretty bad.
It was similar in the United Kingdom. In 1918, the U.K. was the richest, most powerful country in the world. It had just won the First World War, et cetera. By 1939, it had exchange controls and this is in just one generation. And strict exchange controls. They in fact made it an act of treason for people to use anything except the pound sterling in settling debts.
(Q): Treason? Wow, I didn't know that.
Rogers: Yes...an act of treason. It used to be that people could use anything they wanted as money. Gold or other metals. Banks would issue their own currencies. Anything. You could even use other people's currencies.
Things were so bad in the U.K. in the 1930s they made it an act of treason to use anything except sterling and then by '39 they had full-exchange controls. And then, of course, they had the war and that disaster. It was a disaster before the war. The war just exacerbated the problems. And by the mid-70s, the U.K. was bankrupt. They could not sell long-term government bonds. Remember, this is a country that two generations or three generations before had been the richest most powerful country in the world.
Now the only thing that saved the U.K. was the North Sea oil fields, even though Prime Minister Margaret Thatcher likes to take credit, but Margaret Thatcher has good PR. Margaret Thatcher came into office in 1979 and North Sea oil started flowing. And the U.K. suddenly had a huge balance-of-payment surplus.
You know, even if Mother Teresa had come in [as prime minister] in '79, or Joseph Stalin, or whomever had come in 1979 - you know, Jimmy Carter, George Bush, whomever - it still would've been great.
You give me the largest oil field in the world and I'll show you a good time, too. That's what happened.
(Q): What if Thatcher had never come to power?
Rogers: Who knows, because the U.K. was in such disastrous straits when she came in. And that's why she came to power... because it was such a disaster. I'm sure she would've made things better, but short of all that oil, the situation would've continued to decline.
So it may not be in our lifetimes that we'll see the bottom, just given the U.K.'s history, for instance.
(Q): That's going to be terrifying for individual investors to think about.
Rogers: Yeah. But remember that America had such a magnificent and gigantic position of dominance that deterioration will take time. You know, you don't just change that in a decade or two. It takes a lot of hard work by a lot of incompetent people to change the situation. The U.K. situation I just explained... that decline was over 40 or 50 years, but they had so much money they could have continued to spiral downward for a long time.
Even Zimbabwe, you know, took 10 or 15 years to really get going into its collapse, but Robert Mugabe came into power in 1980 and, as recently as 1995, things still looked good for Zimbabwe. But now, of course, it's a major disaster.
That's one of the advantages of Singapore. The place has an astonishing amount of wealth and only four million people. So even if it started squandering it in 2008, which they may be, it's going to take them forever to do so.
(Q): Is there a specific signal that this is "over?"
Rogers: Sure... when our entire U.S. cabinet has Swiss bank accounts. Linked inside bank accounts. When that happens, we'll know we're getting close because they'll do it even after it's illegal - after America's put in the exchange controls.
(Q): They'll move their own money.
Rogers: Yeah, because you look at people like the Israelis and the Argentineans and people who have had exchange controls - the politicians usually figured it out and have taken care of themselves on the side.
(Q): We saw that in South Africa and other countries, for example, as people tried to get their money out.
Rogers: Everybody figures it out, eventually, including the politicians. They say: "You know, others can't do this, but it's alright for us." Those days will come. I guess when all the congressmen have foreign bank accounts, we'll be at the bottom.
But we've got a long way to go, yet.
Good investing,
Keith
Wednesday, August 20th, 2008[The Second of Two Parts.]Keith Fitz-GeraldInvestment DirectorMoney Morning/The Money Map Report
VANCOUVER, B.C. - Despite its many problems, China remains such a strong long-term profit play that giving up on that country now would be like selling all your U.S. stocks at the start of the 1900s - before America created massive wealth by evolving into a world superpower, global investing guru Jim Rogers said in an exclusive interview with Money Morning.
"I have never sold any of my Chinese companies," Rogers said. "You know, selling China in 2008 is like selling America in 1908. Sure, let's say the market goes down another 40% - so what! You look back over 100 years, you look back from the beauty of 1928, or even 1938 [in the depths of the Great Depression], and there is somebody who bought shares in 1908. He was still a lot better off having not sold in 1908."
During a 40-minute interview during a wealth-management conference in this West Coast Canadian city last month, Rogers also said that:
The anti-travel policies China has put in place to reduce gridlock and slash pollution during the Summer Olympic Games may actually have created a "bottom" in China stocks - possibly creating a great entry point for long-term investors.
The 34-day worldwide Olympic torch relay leading up to the opening ceremonies likely re-awakened China's deeply felt nationalism - which will be key as that country strives to build demand for its domestically produced products.
And noted that the country must still deal with such problems as pollution, rising inflation and an overheated economy.
A long-time China bull, Rogers first made a name for himself with The Quantum Fund, a hedge fund that's often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor's 500 Index climbed about 50%.
It was after Rogers "retired" in 1980 that the investing masses first really got to see him in action. Rogers traveled the world (several times), and penned such bestsellers as "Investment Biker" and the recently released "A Bull in China." He also made some historic market calls: Rogers predicted China's meteoric growth a good decade before it became apparent to everyone else, and he subsequently foretold of the powerful updraft in global commodities prices that's fueled a year-long bull market in the agriculture, energy and mining sectors.
Rogers' candor has made him a popular figure with individual investors, meaning his pronouncements are always closely watched. Here are some of the highlights from the exclusive interview we had with the author and investor, who now makes his regular home in Singapore:
Keith Fitz-Gerald (Q): There's a lot of talk that the Chinese will use the Olympics to launch a new wave of nationalism and to move ahead. Are the Olympic Games as relevant as some people think?
Jim Rogers: They've already got tremendous nationalism. But the international reactions about Tibet and the Olympic torchbearers re-awakened it.
And the politicians, of course, need it because they've got their own problems with inflation and overheating and [pollution and] the rest of it. So, like politicians throughout history, they fan it - do their best to say: Hell, it's not our problem. It's the evil farmers. It's the French. See that store over there: It's their fault. It's the Americans."
So that is happening, anyway.
As far as the Olympics themselves, they're irrelevant.
America had the Olympics in '96 and it had no effect on the American economy - before or after. Some people in Atlanta were affected before and after. And some people who were involved with the Olympics were affected before and after.
America at that time had 270 million people. China's got five times as many people, and it's a much bigger country geographically.
Sydney, Australia had the 2000 Olympics. It had virtually no effect on the Sydney, or on the Australian economy - even though Australia had 18 million people. It's tiny … nothing. Yes, it had an effect on some people.
Greece, in 2004, had the Olympics. You haven't heard stories of a major collapse or a major revival of Greece in 2005, because the fact is that the Games didn't have much of an effect - not a noticeable effect, anyway. It had spot effects only, so I ignore the Olympics as far as the Chinese economy - and its stock market - is concerned.
(Q): Are you still bullish on China?
Rogers: Oh, yeah. I never sold anything in China. In fact, I bought more. I bought Chinese Airlines (PINK: CHAWF) last week. I flew one coming here. Maybe I made a mistake [with the investment], because it was emptier than I thought it would be.
(Q): Any thoughts why?
Rogers: One thing, you know, is that China's made it extremely difficult to get a visa right now. In the past, it's been hard to get a seat because Chinese airlines were so full. On this flight there were empty seats.
That brought home to me that they are cutting back enormously on visas right now. Discouraging travel, trying to clean the air, trying to protect against somebody blowing up the Forbidden City, et cetera. So the fact that planes are empty right now may be smarter than I thought.
Maybe I did get the bottom on the airlines, because if they are going to reissue the visas again, after all this, after September [after the Olympic Games have concluded], then the planes are going to fill up pretty quickly again. I would have picked the stock up at a bottom.
(Q): Yes.
Rogers: Anyway I'm still around China. I have never sold any of my Chinese companies. You know, selling China in 2008 is like selling America in 1908. Sure, let's say the market goes down another 40% - so what! You look back over 100 years, you look back from the beauty of 1928, or even 1938 [in the depths of the Great Depression], and there is somebody who bought shares in 1908. He was still a lot better off having not sold in 1908.
Editor's note: After interviewing legendary investor Jim Rogers at his home in Singapore back in March, Investment Director Keith Fitz-Gerald caught up with Rogers again in July - this time in Vancouver, where both were speaking at the Agora Wealth Symposium.
Jim Rogers: An Exclusive Interview With the Legendary Investor by Keith Fitz-GeraldInvestment Director, The Money Map ReportEditor's Note: This article has been reprinted with permission from MoneyMorning.com
Whenever a visionary like Jim Rogers speaks, the elite investors of the world listen. And for good reason: His insights have made investors a fortune.
Our friend and colleague Keith Fitz-Gerald - the Investment Director of the Money Map Report - recently sat down with Jim Rogers for another of his exclusive interviews.
Earlier this week, the transcript of this interview was released for the first time to Money Morning readers. And he's agreed to share it with us here at Investment U.
Rogers, no doubt, has been very public about his criticism for U.S. government and corporate fiscal policy. Here he digs into the duration of the credit crisis - something on the minds of many investors today...
Dear Investment U Reader,
The U.S. financial crisis has cut so deep - and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae and Freddie Mac - that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning.
Indeed, the U.S. financial debacle is now so ingrained - and a so-called "Super Crash" so likely - that most Americans alive today won't be around by the time the last of this credit-market mess is finally cleared away - if it ever is, said Rogers.
The end of this crisis "is a long way away," Rogers said. "In fact, it may not be in our lifetimes." During a 40-minute interview during a wealth-management conference in this West Coast Canadian city last month, Rogers also said that:
U.S. Federal Reserve Chairman Ben S. Bernanke should "resign" for the bailout deals he's handed out as he's tried to battle this credit crisis.
That the U.S. national debt - the roughly $5 trillion held by the public- essentially doubled in the course of a single weekend because of the Fed-led credit crisis bailout deals.
That U.S. consumers and investors can expect much-higher interest rates - noting that if the Fed doesn't raise borrowing costs, market forces will make that happen.
And that the average American has no idea just how bad this financial crisis is going to get.
"The next shock is going to be bigger and bigger, still," Rogers said. "The shocks keep getting bigger because we keep propping things up ... [and] bailing everyone out."
Rogers first made a name for himself with The Quantum Fund, a hedge fund that's often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor's 500 Index climbed about 50%.
It was after Rogers "retired" in 1980 that the investing masses got to see him in action. Rogers traveled the world (several times), and penned such bestsellers as "Investment Biker" and the recently released " A Bull in China." And he made some historic market calls: Rogers predicted China's meteoric growth a good decade before it became apparent, and he subsequently foretold of the powerful updraft in global commodities prices that's fueled a year-long bull market in the agriculture, energy and mining sectors.
Rogers' candor has made him a popular figure with individual investors, meaning his pronouncements are always closely watched. Here are some of the highlights from the exclusive interview we had with the author and investor, who now makes his home in Singapore:
Keith Fitz-Gerald (Q): Looks like the financial train wreck we talked about earlier this year is happening.
Jim Rogers: There was a train wreck, yes. Two or three - more than one, as you know. [U.S. Federal Reserve Chairman Ben S.] Bernanke and his boys both came to the rescue. Which is going to cover things up for a while. And then I don't know how long the rally will last and then we'll be off to the races again. Whether the rally lasts six days or six weeks, I don't know. I wish I did know that sort of thing, but I never do.
(Q): What would Chairman Bernanke have to do to "get it right?"
Rogers: Resign.
(Q): Is there anything else that you think he could do that would be correct other than let these things fail?
Rogers: Well, at this stage, it doesn't seem like he can do it. He could raise interest rates - which he should do, anyway. Somebody should. The market's going to do it whether he does it or not, eventually.
The problem is that he's got all that garbage on his balance sheet now. He has $400 billion of questionable assets owing to the feds on his balance sheet. I mean, he could try to reverse that. He could raise interest rates. Yeah, that's what he could do. That would help. It would cause a shock to the system, but if we don't have the shock now, the shock's going to be much worse later on. Every shock, so far, has been worse than the last shock. Bear Stearns [now part of JP Morgan Chase & Co. (NYSE: JPM)] was one thing and then it's Fannie Mae (NYSE: FNM), you know, and now Freddie Mac (NYSE: FRE).
The next shock's going to be even bigger still. So the shocks keep getting bigger because we keep propping things up and this has been going on at least since Long-Term Capital Management. They've been bailing everyone out and [former Fed Chairman Alan] Greenspan took interest rates down and then he took them down again after the "dot-com bubble" shock, so I guess Bernanke could try to start reversing some of this stuff.
But he has to not just reverse it - he'd have to increase interest rates a lot to make up for it and that's not going to solve the problem, either, because the basic problems are that America's got a horrible tax system, it's got litigation right, left and center, it's got horrible education system, you know, and it's got many, many, many [other] problems that are going to take a while to resolve. If he did at least turn things around - turn some of these policies around - we would have a sharp drop, but at least it would clean out some of the excesses and the system could turn around and start doing better.
But this is academic - he's not going to do it. But again, the best thing for him would be to abolish the Federal Reserve and resign. That'll be the best solution. Is he going to do that? No, of course not. He still thinks he knows what he's doing.
(Q): Earlier this year, when we talked in Singapore, you made the observation that the average American still doesn't know anything's wrong - that anything's happening. Is that still the case?
Rogers: Yes.
(Q): What would you tell the "Average Joe" in no-nonsense terms?
Rogers: I would say that for the last 200 years, America's elected politicians and scoundrels have built up $5 trillion in debt. In the last few weekends, some un-elected officials added another $5 trillion to America's national debt.
Suddenly we're on the hook for another $5 trillion. There have been attempts to explain this to the public, about what's happening with the debt, and with the fact that America's situation is deteriorating in the world.
I don't know why it doesn't sink in. People have other things on their minds, or don't want to be bothered. Too complicated, or whatever.
I'm sure when the [British Empire] declined there were many people who rang the bell and said: "Guys, we're making too many mistakes here in the U.K." And nobody listened until it was too late.
When Spain was in decline, when Rome was in decline, I'm sure there were people who noticed that things were going wrong.
(Q): Many experts don't agree with - at the very least don't understand - the Fed's current strategies. How can our leaders think they're making the right choices? What do you think?
Rogers: Bernanke is a very-narrow-gauged guy. He's spent his whole intellectual career studying the printing of money and we have now given him the keys to the printing presses. All he knows how to do is run them.
Bernanke was [on the record as saying] that there is no problem with housing in America. There's no problem in housing finance. I mean this was like in 2006 or 2005.
(Q): Right.
Rogers: He is the Federal Reserve and the Federal Reserve more than anybody is supposed to be regulating these [financial institutions], so they should have the inside scoop, if nothing else.
(Q): That's problematic.
Rogers: It's mind-boggling. Here's a man who doesn't understand the market, who doesn't understand economics - basic economics. His intellectual career's been spent on the narrow-gauge study of printing money. That's all he knows.
Yes, he's got a PhD, which says economics on it, but economics can be one of 200 different narrow fields. And his is printing money, which he's good at, we know. We've learned that he's ready, willing and able to step in and bail out everybody. There's this worry [whenever you have a major financial institution that looks ready to fail] that, "Oh my God, we're going to go down, and if we go down, the whole system goes down."
This is nothing new. Whole systems have been taken down before. We've had it happen plenty of times.
(Q): History is littered with failed financial institutions.
Rogers: I know. It's not as though this is the first time it's ever happened. But since [Chairman Bernanke's] whole career is about printing money and studying the Depression, he says: "Okay, got to print some more money. Got to save the day." And, of course, that's when he gets himself in deeper, because the first time you print it, you prop up Institution X, [but] then you got to worry about institution Y and Z.
(Q): And now we've got a dangerous precedent.
Rogers: That's exactly right. And when the next guy calls him up, he's going to bail him out, too.
(Q): What do you think [former Fed Chairman] Paul Volcker thinks about all this?
Rogers: Well, Volcker has said it's certainly beyond the scope of central banking, as he understands central banking.
(Q): That's pretty darn clear.
Rogers: Volcker's been very clear - very clear to me, anyway - about what he thinks of it, and Volcker was the last decent American central banker. We've had couple in our history: Volcker and William McChesney Martin were two.
You know, McChesney Martin was the guy who said the job of a good central banker was to take away the punchbowl when the party starts getting good. Now [the Fed] - when the party starts getting out of control - pours more moonshine in. McChesney Martin would always pull the bowl away when people started getting a little giggly. Now the party's out of control.
(Q): This could be the end of the Federal Reserve, which we talked about in Singapore. This would be the third failure - correct?
Rogers: Yes. We had two central banks that disappeared for whatever reason. This one's going to disappear, too, I say.
(Q): Throughout your career you've had a much-fabled ability to spot unique points in history - inflection points, if you will. Points when, as you put it, somebody puts money in the corner at which you then simply pick up.
Rogers: That's the way to invest, as far as I'm concerned.
(Q): So conceivably, history would show that the highest returns go to those who invest when there's blood in the streets, even if it's their own.
Rogers: Right.
(Q): Is there a point in time or something you're looking for that will signal that the U.S. economy has reached the inflection point in this crisis?
Rogers: Well, yeah, but it's a long way away. In fact, it may not be in our lifetimes. Of course I covered my shorts - my financial shorts. Not all of them, but most of them last week.
So, if you're talking about a temporary inflection point, we may have hit it.
If you look back at previous countries that have declined, you almost always see exchange controls - all sorts of controls - before failure. America is already doing some of that. America, for example, wouldn't let the Chinese buy the oil company, wouldn't let the [Dubai firm] buy the ports, et cetera.
But I'm really talking about full-fledged, all-out exchange controls. That would certainly be a sign, but usually exchange controls are not the end of the story. Historically, they're somewhere during the decline. Then the politicians bring in exchange controls and then things get worse from there before they bottom.
Before World War II, Japan's yen was two to the dollar. After they lost the war, the yen was 500 to the dollar. That's a collapse. That was also a bottom.
These are not predictions for the U.S., but I'm just saying that things have to usually get pretty, pretty, pretty, pretty bad.
It was similar in the United Kingdom. In 1918, the U.K. was the richest, most powerful country in the world. It had just won the First World War, et cetera. By 1939, it had exchange controls and this is in just one generation. And strict exchange controls. They in fact made it an act of treason for people to use anything except the pound sterling in settling debts.
(Q): Treason? Wow, I didn't know that.
Rogers: Yes...an act of treason. It used to be that people could use anything they wanted as money. Gold or other metals. Banks would issue their own currencies. Anything. You could even use other people's currencies.
Things were so bad in the U.K. in the 1930s they made it an act of treason to use anything except sterling and then by '39 they had full-exchange controls. And then, of course, they had the war and that disaster. It was a disaster before the war. The war just exacerbated the problems. And by the mid-70s, the U.K. was bankrupt. They could not sell long-term government bonds. Remember, this is a country that two generations or three generations before had been the richest most powerful country in the world.
Now the only thing that saved the U.K. was the North Sea oil fields, even though Prime Minister Margaret Thatcher likes to take credit, but Margaret Thatcher has good PR. Margaret Thatcher came into office in 1979 and North Sea oil started flowing. And the U.K. suddenly had a huge balance-of-payment surplus.
You know, even if Mother Teresa had come in [as prime minister] in '79, or Joseph Stalin, or whomever had come in 1979 - you know, Jimmy Carter, George Bush, whomever - it still would've been great.
You give me the largest oil field in the world and I'll show you a good time, too. That's what happened.
(Q): What if Thatcher had never come to power?
Rogers: Who knows, because the U.K. was in such disastrous straits when she came in. And that's why she came to power... because it was such a disaster. I'm sure she would've made things better, but short of all that oil, the situation would've continued to decline.
So it may not be in our lifetimes that we'll see the bottom, just given the U.K.'s history, for instance.
(Q): That's going to be terrifying for individual investors to think about.
Rogers: Yeah. But remember that America had such a magnificent and gigantic position of dominance that deterioration will take time. You know, you don't just change that in a decade or two. It takes a lot of hard work by a lot of incompetent people to change the situation. The U.K. situation I just explained... that decline was over 40 or 50 years, but they had so much money they could have continued to spiral downward for a long time.
Even Zimbabwe, you know, took 10 or 15 years to really get going into its collapse, but Robert Mugabe came into power in 1980 and, as recently as 1995, things still looked good for Zimbabwe. But now, of course, it's a major disaster.
That's one of the advantages of Singapore. The place has an astonishing amount of wealth and only four million people. So even if it started squandering it in 2008, which they may be, it's going to take them forever to do so.
(Q): Is there a specific signal that this is "over?"
Rogers: Sure... when our entire U.S. cabinet has Swiss bank accounts. Linked inside bank accounts. When that happens, we'll know we're getting close because they'll do it even after it's illegal - after America's put in the exchange controls.
(Q): They'll move their own money.
Rogers: Yeah, because you look at people like the Israelis and the Argentineans and people who have had exchange controls - the politicians usually figured it out and have taken care of themselves on the side.
(Q): We saw that in South Africa and other countries, for example, as people tried to get their money out.
Rogers: Everybody figures it out, eventually, including the politicians. They say: "You know, others can't do this, but it's alright for us." Those days will come. I guess when all the congressmen have foreign bank accounts, we'll be at the bottom.
But we've got a long way to go, yet.
Good investing,
Keith
Wednesday, August 20th, 2008[The Second of Two Parts.]Keith Fitz-GeraldInvestment DirectorMoney Morning/The Money Map Report
VANCOUVER, B.C. - Despite its many problems, China remains such a strong long-term profit play that giving up on that country now would be like selling all your U.S. stocks at the start of the 1900s - before America created massive wealth by evolving into a world superpower, global investing guru Jim Rogers said in an exclusive interview with Money Morning.
"I have never sold any of my Chinese companies," Rogers said. "You know, selling China in 2008 is like selling America in 1908. Sure, let's say the market goes down another 40% - so what! You look back over 100 years, you look back from the beauty of 1928, or even 1938 [in the depths of the Great Depression], and there is somebody who bought shares in 1908. He was still a lot better off having not sold in 1908."
During a 40-minute interview during a wealth-management conference in this West Coast Canadian city last month, Rogers also said that:
The anti-travel policies China has put in place to reduce gridlock and slash pollution during the Summer Olympic Games may actually have created a "bottom" in China stocks - possibly creating a great entry point for long-term investors.
The 34-day worldwide Olympic torch relay leading up to the opening ceremonies likely re-awakened China's deeply felt nationalism - which will be key as that country strives to build demand for its domestically produced products.
And noted that the country must still deal with such problems as pollution, rising inflation and an overheated economy.
A long-time China bull, Rogers first made a name for himself with The Quantum Fund, a hedge fund that's often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor's 500 Index climbed about 50%.
It was after Rogers "retired" in 1980 that the investing masses first really got to see him in action. Rogers traveled the world (several times), and penned such bestsellers as "Investment Biker" and the recently released "A Bull in China." He also made some historic market calls: Rogers predicted China's meteoric growth a good decade before it became apparent to everyone else, and he subsequently foretold of the powerful updraft in global commodities prices that's fueled a year-long bull market in the agriculture, energy and mining sectors.
Rogers' candor has made him a popular figure with individual investors, meaning his pronouncements are always closely watched. Here are some of the highlights from the exclusive interview we had with the author and investor, who now makes his regular home in Singapore:
Keith Fitz-Gerald (Q): There's a lot of talk that the Chinese will use the Olympics to launch a new wave of nationalism and to move ahead. Are the Olympic Games as relevant as some people think?
Jim Rogers: They've already got tremendous nationalism. But the international reactions about Tibet and the Olympic torchbearers re-awakened it.
And the politicians, of course, need it because they've got their own problems with inflation and overheating and [pollution and] the rest of it. So, like politicians throughout history, they fan it - do their best to say: Hell, it's not our problem. It's the evil farmers. It's the French. See that store over there: It's their fault. It's the Americans."
So that is happening, anyway.
As far as the Olympics themselves, they're irrelevant.
America had the Olympics in '96 and it had no effect on the American economy - before or after. Some people in Atlanta were affected before and after. And some people who were involved with the Olympics were affected before and after.
America at that time had 270 million people. China's got five times as many people, and it's a much bigger country geographically.
Sydney, Australia had the 2000 Olympics. It had virtually no effect on the Sydney, or on the Australian economy - even though Australia had 18 million people. It's tiny … nothing. Yes, it had an effect on some people.
Greece, in 2004, had the Olympics. You haven't heard stories of a major collapse or a major revival of Greece in 2005, because the fact is that the Games didn't have much of an effect - not a noticeable effect, anyway. It had spot effects only, so I ignore the Olympics as far as the Chinese economy - and its stock market - is concerned.
(Q): Are you still bullish on China?
Rogers: Oh, yeah. I never sold anything in China. In fact, I bought more. I bought Chinese Airlines (PINK: CHAWF) last week. I flew one coming here. Maybe I made a mistake [with the investment], because it was emptier than I thought it would be.
(Q): Any thoughts why?
Rogers: One thing, you know, is that China's made it extremely difficult to get a visa right now. In the past, it's been hard to get a seat because Chinese airlines were so full. On this flight there were empty seats.
That brought home to me that they are cutting back enormously on visas right now. Discouraging travel, trying to clean the air, trying to protect against somebody blowing up the Forbidden City, et cetera. So the fact that planes are empty right now may be smarter than I thought.
Maybe I did get the bottom on the airlines, because if they are going to reissue the visas again, after all this, after September [after the Olympic Games have concluded], then the planes are going to fill up pretty quickly again. I would have picked the stock up at a bottom.
(Q): Yes.
Rogers: Anyway I'm still around China. I have never sold any of my Chinese companies. You know, selling China in 2008 is like selling America in 1908. Sure, let's say the market goes down another 40% - so what! You look back over 100 years, you look back from the beauty of 1928, or even 1938 [in the depths of the Great Depression], and there is somebody who bought shares in 1908. He was still a lot better off having not sold in 1908.
Editor's note: After interviewing legendary investor Jim Rogers at his home in Singapore back in March, Investment Director Keith Fitz-Gerald caught up with Rogers again in July - this time in Vancouver, where both were speaking at the Agora Wealth Symposium.
Monday, August 25, 2008
12:37 pm - KLSE Market Outlook from Bill Wermine.
Dear Traders,
Last Wednesday I attended a talk by Robert Miles, "Unravelling the Genius of Warren Buffet" at the securities commission. Less than 80 guests attended and many were employees of the SC and executives of local stockbrokers. Robert Miles has written several books about Buffet and travels the world educating investors.
He shared some powerful insights of becoming wealthy which could be applied to the KLSE. He appears to be a very wealthy man as he is a close friend of Buffet and it would make sense that some of Buffet's wealth and recommendations has rubbed off on him.
In my opinion when so few investors attend a talk of this quality we are close to a bottom in the KLSE. It means investors and traders have given up. Many are going to options,currency and get rich on the internet seminars or MLM. Low volume on the KLSE supports this opinion. Not many sellers left.
Remember it is always darkest before the dawn.
Consumer sentiment in Malaysia is at an all time low- even lower than the 1997 crises according to PNB Parabas. Current PE is at 9.8 which is at the 3rd Standard Deviation of value.
I do not think the political turmoil has much to do with world wide demand for semiconductors and palm oil but scared investors are caught up in the panic and even dumping quality issues.
Smart money is buying these issues at bargain levels. Just read the insider buying report in the weekly Edge
Come to our next traders Club on Saturday 30 August at 10 AM to 12 AM at the Phillip Office and let us discuss these issues even if you disagree, I will share a few of his insights that I took away from his talk. We also plan a video clip from an interview Warren Buffet gave to CNBC. (Hopefully the clip will arrive from Amazon Books by next Friday. I ordered last Wednesday and am having them ship by Fedex) As of today the package has reached Japan when I checked the shipping tracker number)
If any of you have anything to share with the group next Saturday please let me or Martin know. We are short of speakers. Let me know if you wish to attend. No matter how bad is the sentiment the show must go on. We will hold our traders club even if only one trader shows up.
Martins number is 03 2084 9999 ext 3533 and email is martin_tf_wong@hotmail.com.
Below is a price/ volume chart of FXI. It is an exchange traded fund listed on the NYSE which holds quality China shares. It is bottoming after repeated tests and shakeouts. There is evidence of hidden potential buying by smart money. Should China recover that is bullish commodities/ crude oil and palm oil and that will benefit certain KLSE shares. At this level the fear, doom and gloom is the greatest but guess what the risk is low at this level with a high potential reward. Once the crowd jumps in and the news is good again- guess what ? the risk becomes high and reward is small . For you who trade US markets buy at this level- risk to USD 39 and target USD 47. This is a 2 dollar risk for an 8 dollar profit.
Last Wednesday I attended a talk by Robert Miles, "Unravelling the Genius of Warren Buffet" at the securities commission. Less than 80 guests attended and many were employees of the SC and executives of local stockbrokers. Robert Miles has written several books about Buffet and travels the world educating investors.
He shared some powerful insights of becoming wealthy which could be applied to the KLSE. He appears to be a very wealthy man as he is a close friend of Buffet and it would make sense that some of Buffet's wealth and recommendations has rubbed off on him.
In my opinion when so few investors attend a talk of this quality we are close to a bottom in the KLSE. It means investors and traders have given up. Many are going to options,currency and get rich on the internet seminars or MLM. Low volume on the KLSE supports this opinion. Not many sellers left.
Remember it is always darkest before the dawn.
Consumer sentiment in Malaysia is at an all time low- even lower than the 1997 crises according to PNB Parabas. Current PE is at 9.8 which is at the 3rd Standard Deviation of value.
I do not think the political turmoil has much to do with world wide demand for semiconductors and palm oil but scared investors are caught up in the panic and even dumping quality issues.
Smart money is buying these issues at bargain levels. Just read the insider buying report in the weekly Edge
Come to our next traders Club on Saturday 30 August at 10 AM to 12 AM at the Phillip Office and let us discuss these issues even if you disagree, I will share a few of his insights that I took away from his talk. We also plan a video clip from an interview Warren Buffet gave to CNBC. (Hopefully the clip will arrive from Amazon Books by next Friday. I ordered last Wednesday and am having them ship by Fedex) As of today the package has reached Japan when I checked the shipping tracker number)
If any of you have anything to share with the group next Saturday please let me or Martin know. We are short of speakers. Let me know if you wish to attend. No matter how bad is the sentiment the show must go on. We will hold our traders club even if only one trader shows up.
Martins number is 03 2084 9999 ext 3533 and email is martin_tf_wong@hotmail.com.
Below is a price/ volume chart of FXI. It is an exchange traded fund listed on the NYSE which holds quality China shares. It is bottoming after repeated tests and shakeouts. There is evidence of hidden potential buying by smart money. Should China recover that is bullish commodities/ crude oil and palm oil and that will benefit certain KLSE shares. At this level the fear, doom and gloom is the greatest but guess what the risk is low at this level with a high potential reward. Once the crowd jumps in and the news is good again- guess what ? the risk becomes high and reward is small . For you who trade US markets buy at this level- risk to USD 39 and target USD 47. This is a 2 dollar risk for an 8 dollar profit.
Have a profitable week ahead
Bill
9:15 am - KLCI had to break higher above 1087 to resume its uptrend
Else I am seeing a reversal very soon !
Saturday, August 23, 2008
3:18 pm - Chart of the Week - Sunway City Berhad
It has a double bottom support @ rm2.00. This is where you stop should be.
Friday, August 22, 2008
3:52 pm - A beautiful up bar for KLCI today !
The question is can it sustain to next week for the by-elections.
3:34 pm - Here is a swing trade for Genting.
However, volume is low. But it is worthwhile. Buy at rm5.68 and put your stop @ rm 5.50 for a tight stop.
9:15 am - KLCI is ready to move up today !
With crude oil hitting usd121, our plantation counters will move up again !
Thursday, August 21, 2008
10:59 am - I havent been watching Gamuda !
Gamuda had a sell down ! Anyway, you shud be out by now at least at rm2.70. If you are not out yet, wait for the next rebound and get out immediately then.
Wednesday, August 20, 2008
Tuesday, August 19, 2008
Monday, August 18, 2008
9:43 am - Weekly Report by Bill Wermine
Dear Traders,
There has been some extreme moves in commodities/ currencies of late and those who hold Man Funds need not worry. You have some of the best traders working for you to manage the volatility. Our Australian dollar denominated funds lost 5.8 % in the month of July however the gains over the last year more than absorb this loss.
Outright currency or commodity exposure could have resulted in much larger losses. In fact some hedge funds have suffered 50 % losses in the last month .
Attached is a draft article to be published in Malaysian Business on 1 September. It is based on Phillip Capital Mgt research on the AUD and my own forecast on plantation shares. Please do not circulate this article until MB publishes it
Also there will be a talk by Robert Miles, one of Warren Buffets fund managers on 20 August at the Securities Commission beginning at 9 AM. You may call 03 2282 9276 for information. He will detail some of the strategies of Warren Buffet. I plan to attend
For my managed accounts last week we bought Nestle from 27.25 to 27.50 from the proceeds raised from selling our MayBank shares. Nestle is stable, good management and deals in products that we all need. Nestle had a selldown from a high of 32.00 in April and is now resting at a weekly support having been tested several times. The tests are on low volume which means few holders wishes to sell at this level. Even with some people predicting depression, the end of the world and the collapse of the twin towers this share should hold up.
Have a good week ahead
Bill
There has been some extreme moves in commodities/ currencies of late and those who hold Man Funds need not worry. You have some of the best traders working for you to manage the volatility. Our Australian dollar denominated funds lost 5.8 % in the month of July however the gains over the last year more than absorb this loss.
Outright currency or commodity exposure could have resulted in much larger losses. In fact some hedge funds have suffered 50 % losses in the last month .
Attached is a draft article to be published in Malaysian Business on 1 September. It is based on Phillip Capital Mgt research on the AUD and my own forecast on plantation shares. Please do not circulate this article until MB publishes it
Also there will be a talk by Robert Miles, one of Warren Buffets fund managers on 20 August at the Securities Commission beginning at 9 AM. You may call 03 2282 9276 for information. He will detail some of the strategies of Warren Buffet. I plan to attend
For my managed accounts last week we bought Nestle from 27.25 to 27.50 from the proceeds raised from selling our MayBank shares. Nestle is stable, good management and deals in products that we all need. Nestle had a selldown from a high of 32.00 in April and is now resting at a weekly support having been tested several times. The tests are on low volume which means few holders wishes to sell at this level. Even with some people predicting depression, the end of the world and the collapse of the twin towers this share should hold up.
Have a good week ahead
Bill
Friday, August 15, 2008
Thursday, August 14, 2008
10:26 am - Be ready to buy into IOI Corp and other plantation counters
I say get ready to buy but not yet !
Wednesday, August 13, 2008
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