Legendary American investor Jim Rogers, commentator and onetime partner of George Soros going way back to the early 1970s, said he sees a classical bubble forming in the market, from bitcoin to stocks, and a looming correction that could burn a lot of investors’ money.
A growing number of financial analysts are speaking about a speculative bubble as retail investors flock to the stock market and the price of bitcoin has soared 153 percent since the beginning of December.
While he cannot predict when the bubble will burst, the signs of a bubble are there, Rogers said in a Feb. 11 interview with Daniela Cambone of Stansberry Research. it will burst sooner or later and a lot of people will lose a lot of money. It will burst sooner or later and a lot of people will lose a lot of money, Rogers said.
“I’ve been to this movie before,” Rogers said. “It’s not my first rodeo.”
He suggested a 50-to-60-percent correction on stocks, although some counters could plummet 80-to-90 percent.
The massive amount of debt held by governments globally due to their response to the coronavirus pandemic could make the crash worse than the 2008 financial crisis, Rogers said.
In 2018, Rogers said the U.S. equities valuations were overstretched already and predicted that the next bear market could be “the worst in my lifetime and the worst in your lifetime.”
His advice is to pile into the U.S. dollar as a cushion against the imminent crash. However, that goes against contrarian views that anticipate the U.S. dollar could diminish in status as the world’s reserve asset.
Other analysts have advised investors to move towards other countries’ currencies or even digital currencies.
Commodities such as gold and silver remain fairly cheap relative to bonds, property and stocks, which Rogers said are already in bubbles.
“If there’s a correction, I will buy silver and I’ll buy more silver. Silver’s down 45 percent from its all-time high,” he said.
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