Wednesday, December 7, 2011

Jim Rogers to Marc Faber: you are wrong on China (FXI, RJA, EEM)

Legendary investor Jim Rogers claims that noted China bear Marc Faber is wrong about the country and its economic future.  Goldman Sachs ( GS , quote
), Morgan Stanley ( MS , quote ) and JP Morgan ( JPM , quote ) agree with Rogers and are all also calling for a "soft landing" in China, too. In an interview with CNBC, Rogers noted that "Marc still does not understand China.  There are going to be several hard landings in the next few years, but China's will be less hard overall than others such as Greece, U.S., et al."
Rogers' disagreement with "Doctor Doom" seems odd given the fact that Faber is an old Asia hand currently based in Thailand. To be fair, Rogers himself now lives in Singapore.
They agree that at least certain sectors of the Chinese economy were destined for a "hard fall," however.
The correct answer will be reflected in the performance of China funds like FXI  ( quote
), and as China goes, so go global emerging markets funds like RJA  ( quote ).
Rogers, the co-founder of the Quantum Fund with George Soros, remains long on commodities as he states there is "100% chance" of another financial crisis that will be worse than 2008, as detailed in articles
on .
He does anticipate corrections in commodities, although these will not be devastating,
"Yes, there will be consolidations in the commodity bull market just as all markets have consolidations.  In 1987, stocks declined 40% to 80% worldwide, but it was not the end of the secular bull market in stocks," he says.
Speaking of corrections, the publicly traded portfolio that attempts to replicate Rogers' investment strategy, the Elements Rogers International Commodity Agriculture exchange-traded note ( RJA
, quote ), is off sharply for the year, down almost 20%.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.