In the current market climate with negative yields, the US-trade war, Hong Kong protests, Venezuela’s collapse, Latvia’s banking crisis, Argentina’s government defaults, and even Michael’s Bury claims of a growing ETF bubble…it is no wonder that many investors are panicking. But the crisis could also point to ripe investment opportunities to buy cheap, as mentioned by the experts during CoAsset’s Summit of Alternative Retail Investments (SOAR). According to legendary investment expert and author Jim Rogers, he believes the next global financial crisis is coming, and it will be the biggest in his lifetime.
I had the opportunity to be on the same panel as Jim Rogers, and here are my biggest takeaways:
1. Bullish on China, bearish on US stocks
It is no secret that Jim Rogers is extremely bullish on China. President Xi’s One Belt One Road project is the most significant of our era, and any investor who can find investments to bank on this is going to make a lot of money.
Rogers shared that he believes China (not the US) will be the next global economic powerhouse, which is why he owns many investments there and is not invested in the US stock market. A list of emerging industries in China where he sees ripe investment opportunities was also shared on the screen, some of which included railroads, solving pollution, healthcare, entertainment (culture) and agriculture.
2. Investment opportunities in agriculture and entertainment
Rogers said that he is bullish about agriculture, especially in countries like China and Argentina. Agriculture has been the worst performing sector over the last 20 years, but he believes a bull run is coming, and urged investors to find opportunities in this sector.
Entertainment was another emerging industry which all the speakers agreed would be least unlikely to be disrupted in the technological age. I may have joked publicly about how we should train our kids to be an entertainer because that’s one job that will never be replaced by robots, but the truth is that the rise of the entertainment industry offers some compelling deals and returns at the moment.
Getty Goh, CEO of CoAssets, shared about how they had successfully funded several movies, such as “I’m Livin’ It” starring A-list movie leads Aaron Kwok and Mariam Yeung, which returned 9% p.a. Retail investors who wish to explore such investments in movies can turn to CoAssets, which is currently the only way for normal folks like you and me to get a slice of the pie.
3. On the ETF bubble
The panel was not favourable towards ETF, and several mentioned that they will look at investments not related to ETFs at this moment.
4. On the USD, RMB and HKD
According to Rogers, he believes that the HKD will no longer exist in the near future. At present, he is holding USD (but only because people deem it to be a safe instrument) and is planning to sell it at or near the peak when it goes up in the near future, and then switch into RMB.
Rogers: “I think the RMB has a great opportunity. Hong Kong is strong only because China is still closed to the world. Once China opens up their market and makes their currency convertible, there won’t be a need for the Hong Kong dollar anymore, and Hong Kong will look very different from the Hong Kong we know today.”
5. Not buying REITs
Marc Leong, who sits on the committee for the Singapore FinTech Association, shared that he believes malls will revamp their spaces to provide more experiences for mall-goers. However, Jim Rogers didn’t have such an optimistic view towards REITs, saying that REITs were previously great investments because interest rates were low, but they will soon be affected as interest rates are overdue for a hike.
6. On commodities
Jim Rogers shared that he is not only bullish on commodities, but that they are easier to figure out than equities because you only need to look at supply and demand. When I followed up and asked him on the panel if it was truly that easy, he added, “I said it is simple, but I never said it was easy”.
That’s indeed the case for any investment where you want to make money on!
7. Invest during crisis and disasters
The Chinese phrase 危机 translates into both crisis and opportunity. Rogers said that these are the best moments to invest.
So for those of you who believe in the future of Hong Kong (Jim Rogers doesn’t, and neither do I), you might just be able to pick up some good deals in its faltering stock market.
8. Never rely on “hot tips”
All the panelists (and yours truly) emphasized about how relying on hot tips is a surefire way to lose money, fast. Jim Rogers also explained that even if you buy on a stock tip, you may not know when to sell and exit the position, and that could be your downfall.
Like everyone else, I enjoy a good stock tip every now and then, but my approach has always been to read what others have to say, assess the stock further and make my own qualitative judgment before I decide whether to go in or stay out. If you’re keen to get access to my investment reports, you can check them out here.
9. Don’t fall for the illusion of safety
One of the key questions for the panel was on how an investor can trust the official financial numbers of Chinese companies, especially given Singapore’s notorious S-chip saga in recent history. To that, Rogers reminded everyone that even American companies (which have strict accounting standards) can have frauds – just look at Enron! And to anyone thinking that just because the numbers are official means they’re real, how can you really be sure?
Marc had a great answer for this – diversify. His solution is that if you can’t trust anything, spreading out your risks would be your best protection.
10. Do your own homework!
And as always, do your own homework before you invest in anything. If you don’t know how, get educated.
All in all, it was a great event, and I must give thanks to CoAssets for organising such an insightful summit. With so much investment tips and knowledge shared, all of us who attended surely did walk away more enlightened on what to do in these turbulent markets.