Jim Rogers, a financial analyst, commentator and onetime partner of George Soros going way back to the early 1970s, is bearish on U.S. equities and bullish on investing in Zimbabwe.
In an August interview, Rogers, 76, said current U.S. equities valuations are overstretched, and while stock prices could still climb higher on good news, he predicts that the next bear market could be “the worst in my lifetime.”
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Instead of U.S. stocks, Rogers said he is looking at investing in emerging markets.
“I’m buying Zimbabwe,” Rogers said in an August interview with Daniela Cambone on Kitco News, the media arm of online precious metals store Kitco. “Zimbabwe was ruined for 40 years by a crazy dictator. There’s a new guy, he may be worse, he may be better, but he’s certainly different, so you should think about Zimbabwe.”
Rogers’ style is to step away from the crowd and look for opportunities where no-one else is looking.
Rogers partnered with Soros, one of the world’s wealthiest men, to co-found the Quantum Fund in 1970. They worked together for 10 years, increasing the fund’s value 40 times.
In 1992, the fund became famous for “breaking” the Bank of England, forcing it to devalue the pound. To avoid registering with the U.S. Securities & Exchange Commission and having to comply with reporting requirements under the Dodd-Frank reform act, the Quantum Fund in 2011 became a family investment group, exclusively managed Soros’ family money.
Soros ranks No. 20 on the Forbes list of Highest-Earning Hedge Fund Managers in 2018, with a net worth of $8.3 billion. Rogers’ net worth is $300 million, according to TheRichest and WikiNetWorth.
Rogers is increasingly bullish about investing across Africa and emerging markets, Independent Online reported in 2017.
His first investment in Africa was in the ’70s. “Millions of Africans did not have bank accounts, so I invested in the banking sector,” he said. Then he invested in mines, in publicly traded companies and in companies that had been “started by gutsy entrepreneurs,” he said in a phone interview with IOL. Sometimes entrepreneurs find him, he said. Other times he surfs the internet and finds them.
“I find the most successful entrepreneurs and make them offers,” he said.
Rogers recently invested in a small mutual fund in Zimbabwe.
The country’s political landscape seemingly changed for the better after Robert Mugabe resigned in November 2017.
President Emmerson “The Crocodile” Mnangwaga is perceived as a more investor-friendly leader than his predecessor, said Kathy Davey, Africa fund manager at financial services company Ashburton Investments, in a May BusinessTech.co.za report.
The country’s indigenization policy of 51-percent local ownership for companies was initially scrapped for all sectors except for diamond and platinum mining, Davey said in a May BusinessTech.co.za report.
In November, Mnangagwa said the government would open up the platinum sector to all interested foreign investors, Modern Diplomacy reported. Zimbabwe has the world’s second largest platinum reserves after South Africa.
The Reserve Bank of Zimbabwe has also created the Zimbabwe Portfolio Investment Fund to encourage new investors into the stock market.
However, the country is still plagued with currency shortages, and that is severely hindering the economy and the operational capability of companies.
“It’s interesting to note that the Zimbabwean stock market was the best performing stock market in Africa in 2017,” Davey said. “However, this performance was largely driven by investors looking to hedge against currency shortages and devaluation fears (through the possible introduction of a new currency) by hiding in ‘real’ assets.”
Rogers said he’s excited about investment opportunities beyond mining and finance. He has his sights on tourism and agriculture. He could invest in the agricultural value chain, even in fertilizer he told IOL. He also sees tech as a great enabler to grow the African economy.
Find him an opportunity that is operating under the radar, run by a smart entrepreneur, where stock is publicly traded, and chances are, he could invest, he said.
