Jim Rogers: I’d Rather Invest in Russia than the US

Tuesday, 16 Oct 2012 08:48 AM

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Russia harbors better investment opportunities than the United States does right now, said international investor Jim Rogers.

The United States is dealing with fiscal issues that could require politicians to raise taxes, though Russia is opening up and becoming more investor friendly.

“In 2013 and 2014 we’re going to have economic problems,” Rogers told CNBC.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

At the end of this year, tax breaks are scheduled to expire while cuts to government spending kick in, a combination known as a fiscal cliff that could send the economy into a recession next year if left unchecked by Congress.

“Either (politicians are) going to raise taxes or they’re going to bungle something,” Rogers said.

“Raising taxes has never made the economy grow.”

Meanwhile, Roger says he is shorting U.S. stocks, technology companies especially.

“Technology has been one of the few places that is very exploited,” Rogers told CNBC.

Russia, meanwhile, is a different story.

“I’m convinced things are changing in Russia for the first time,” Rogers said, adding he is currently studying ways to invest in the country, likely through stocks or currencies.

Russia forms part of the large BRIC economies that also include Brazil, India and China.

One analyst says now is the time to invest in Russia, as stocks are cheap.

For the third time in 15 years, the time since today’s Russian markets have been in existence, stocks are trading at less than five times earrings.

The first time came when Vladimir Putin took the country’s reins in 2000 and the second time came during the 2008-09 global financial crisis.

“We are now back down there again, so while we are clearly not suggesting that you can look backward and forecast how much the market is going up, we can say from a fundamental point of view that there is a very strong valuation case for the market right now,” said Douglas Helfer, a London-based senior fund manager for global emerging markets equities at HSBC Global Asset Management, according to The Edge, a Malaysian financial publication.

“We need a normalization of global risk appetite — that’s the key — and once that happens, investors will start to look at this market.”

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

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