Dollar Rally Will End, Rogers Says; May Short Stocks (Update2) By Chen Shiyin and Haslinda Amin May 12 (Bloomberg) -- The dollar’s rally is set to end in a “currency crisis,” investorJim Rogers said, adding that he may bet on a slide in equities after nine weeks of gains. The advance in the U.S. currency has been driven by investors covering their short sales, Rogers, 66, said in an interview with Bloomberg Television in Singapore. He may consider adding to his holdings of the yen and prefers the euro to the dollar or the pound, the investor added. “We’re going to have a currency crisis, probably this fall or the fall of 2010,” Rogers said. “It’s been building up for a long time. We’ve had a huge rally in the dollar, an artificial rally in the dollar, so it’s time for a currency crisis.” The dollar has climbed against all of the so-called Group of 10 currencies except the yen over the past 12 months, according to data compiled by Bloomberg. The U.S. currency was at $1.3592 per euro today from $1.3582. Rogers joins “Black Swan” author Nassim Nicholas Taleb in avoiding the U.S. currency. Taleb told a May 7 conference in Singapore he preferred gold and copper to the dollar and the euro as the global economy faces a “big deflation.” Gains in U.S. stocks also signal a “correction,” Rogers said. He’s avoiding equities for the next two to three years because prospects haven’t changed, he added. ‘Correction’ The Standard & Poor’s 500 Index has jumped 34 percent from its March 9 low, erasing its losses for the year. The gauge plunged 38 percent in 2008, its worst year since the Great Depression. “The market in the U.S. went up very powerfully for nine weeks in a row so of course it’s time for a correction,” Rogers said. “Fundamentals haven’t changed if you ask me. I don’t see the stock market as a great place to be in the next two to three years.” Rogers said on Feb. 11 he had renewed bets that U.S. stocks includingInternational Business Machines Corp., General Electric Co. and JPMorgan Chase & Co. will drop. The S&P 500 fell 19 percent before reaching its March low. Equity markets may dip below recent lows as more troubles lay ahead in the financial market, Rogers said in a separate interview on April 13. Rogers is the author of “A Bull in China: Investing Profitably in the World’s Greatest Market.” “Technical indicators suggest the market is overheating and investors are ready to take profit after recent gains,” Toshio Sumitani, a strategist at Tokai Tokyo Securities Co., said today. Asian Stocks Asian stocks fell from a seven-month high, led by banks and mining companies, as investors sold shares trading at their most expensive valuations in five years. TheMSCI Asia Pacific Index fell 1.3 percent to 97.25 as of 1:47 p.m. in Tokyo, snapping a six-day advance. Meredith Whitney, the former Oppenheimer & Co. analyst who predicted a slide in U.S. bank shares, said yesterday she wouldn’t advise investors to short-sell the stocks because of the government’s influence. Still, she wouldn’t own these companies because many banks are sitting on “rotting assets,” Whitney added. She advised short-selling retail and consumer discretionary companies as more jobs are cut and consumer spending declines. Rogers owns some Chinese and Japanese stocks, and also continues to hold some shares of airlines, he said without naming any companies. Stocks in nations such as Canada and Brazil that supply natural resources may also perform better than U.S. shares, Rogers added. Commodities are still among the best bets for investors because of constrained capacity, the investor said. He has been buying agriculture-related commodities and prefers silver to gold, palladium and platinum, Rogers added. To contact the reporter on this story: Chen Shiyin in Singapore atschen37@bloomberg.net; Haslinda Amin in Singapore athamin1@bloomberg.net
Tuesday, 12 May 2009
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