Famed commodities investor Jim Rogers thinks the market is in the process of detecting the next big crisis and is still “frightened” by Russia.
“My first successful investment in Russia this year was shorting the ruble, but now I’m looking at finance, ruble bonds, opportunities in inbound tourism are all of the interest because they can provide a higher return,” he said in an interview with business daily Kommersant published on Thursday. “Frankly, investors are still frightened about the prospect of investing in Russian securities,” he said.
Rogers called the Russian market one of the most perennially undervalued in the world. He said that oil prices will recover soon, but not by much as the global economy might suffer new shocks. One is the Federal Reserve raising interest rates in the U.S. and the other is the possible election of Donald Trump. For Rogers, a Trump presidency would make markets most skittish because of his stance on trade.
Trump has said he would retool the North American Free Trade Agreement, pan the Trans-Pacific Partnership Agreement, and is more pen to trade tariffs on Chinese imports in an effort to maintain manufacturing jobs in the U.S.
Rogers told the daily that a new crisis is likely within the next two years. It will come from an unsuspecting country first, like Iceland in 2007, a year before the Lehman Brothers blow-out in the fall of 2008.
Higher interest rates in the U.S. could lead to similar moves in Europe, which are currently dealing with the unheard of the trend of negative interest rates, particularly in northern European countries.
“Out of all the central banks out there, the Russian central bank is one of the ‘least bad’,” he said.
Central Bank governor Elvira Nabiullina won Euro Money magazine’s central banker of the year award in 2015.