Eight years ago, Beeland Interest Inc. Chairman Jim Rogers forecast the start of the global commodities rally. Now he’s sold out of all emerging markets with the exception of China because, the commodities investment guru opines, that they’re "over exploited.”
Without specifying the markets, Bloomberg said Rogers stated in an interview in Singapore that, "I’ve sold out of nearly all the emerging markets. Right now, there are probably 10,000 young MBA’s on airplanes flying around from one emerging market to another.”
He also acknowledged that, "I’m hoping when the next big correction comes I’m smart enough to buy some of them back.”
According to Bloomberg, the Morgan Stanley Capital International Emerging Markets Index has risen twice as fast as a measure of developed countries this year. The emerging markets index has increased 17 percent so far in 2007, compared with the 8.2 percent gain in the MSCI World Index of developed economies. Shares in developing countries have outperformed every year since 2001, with benchmarks in Brazil, China, India and Malaysia all reaching records this year.
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Rogers, who co-founded the Quantum Fund with billionaire investor George Soros, though remains bullish on commodities including agricultural products and metals.
Bloomberg reported that the International Monetary Fund in April predicted that the world economy is expected to grow 4.9 percent this year, with expansion in developing nations helping to compensate for a slowdown in the U.S. economy.
China, the world’s fastest-growing major economy, is estimated to grow 10 percent this year; India’s economy may expand 8.4 percent.
Although Rogers stated that he doesn’t "ever want to sell China,” he admitted in his interview that "if China doubles again this year, then it’s a full-fledged bubble and I’ll have to sell.”
According to estimates by Emerging Portfolio Research Inc., global emerging markets attracted $696.4 million in the first half of 2007. That’s down from $6.53 billion a year earlier.
Editor's note:
4 Foreign Currency Plays to Beat the Falling Dollar.
Buffett, Soros, Templeton, Rogers: Learn Their Money-Making Secrets
Buffett: The best book ever written on investing.
