Jim Rogers bullish on Thai agriculture commodities

Investment wizard Jim Rogers, who co-founded the Quantum Fund with George Soros a couple of decades ago, said he would put his money in the agriculture sector if he were to invest in Thailand.

One of the world's bestknown investors, Rogers, 65, had in April 2006 correctly predicted that oil would reach US$100 (Bt3,400) a bar¬rel and gold $1,000 an ounce.

Rogers sounded bullish on com¬modities at a seminar in Bangkok yes¬terday, his first visit to the capital in 23 years.

"Agriculture, agriculture, agricul¬ture. Your government has kept mess¬ing up the sector [agriculture]. But despite your government doing that, agriculture [sector] is still doing well," the bestselling author and prolific commentator said when asked: "If you were an investor in Thailand, which sector would you invest in?"

He was quoted by Bloomberg as saying "Thailand, for whatever reason, is going through this period of com¬plications.

"I don't think I have missed any¬thing, not investing in Thailand. But since I am here, I will pay a little more attention. International healthcare might be of interest."

Rogers believes commodities are in a situation similar to stocks and mutu¬al funds three decades ago when not many investors knew what it was about. "The world has no idea that we could buy and sell commodities", he said.

He suggested investors in Thailand consider putting their money in com¬modities as they have a brighter future than stocks and bonds.

"In Thailand, you have a com¬modity exchange. But people have no idea what is commodity... But if you don't see the opportunity right now, someone else will do. Singapore and Hong Kong will see the opportunity," Rogers said.

When asked which sector he liked the most among commodities, Rogers picked agriculture. He said sugar, cot¬ton and coffee prices are 6080 per cent lower than their alltime high over the past three decades. In addi¬tion, the food inventory has been the lowest in a decade, while problems with weather, diseases, and limited number of farmers have also reduced supply.

"Most farmers are old men. Most people you know want to be in the finance business, want to be journal¬ists, but no one wants to be farmer anymore. If the situation continues like this, I see opportunity in com¬modities," he said.

Despite the recent slowdown in oil and gold, Rogers made it clear yes¬terday that global commodities "have a long way to go".

On August 6, he was quoted by Bloomberg as saying: "We are going to have plenty of setbacks in com¬modities but when they happen, please keep your heads about you, do some more homework, and if you decide that thing is still okay, I would suggest you might think about buy¬ing more commodities".

Rogers said his optimism about commodities comes from his confi¬dence in continually rising demand and limited supply. All countries, par¬ticularly in Asia, have seen growth in demand for commodities, while sup¬ply of most commodities are limited. "I don't see any major oil discovery anywhere," Rogers said.

Between stocks relevant to com¬modities and the commodities them¬selves, Rogers strongly recommend¬ed commodities. Historic record has shown that commodities rise three¬fold compared to commodity stocks. While oil rises significantly, oil stocks don't go anywhere, he said.

Rogers mentioned a study by Yale University and Pennsylvania University, which said that investing in commodities over 10 years would generate returns 300 per cent higher than investing in equities.

"With stocks, you have manage¬ment, the union, and the government involved in it. But with oil, you only deal with whether it is too much or too less. Oil has never cared who is going to be the US Fed chairman," Rogers said.

He mentioned the Enron scandal as an example. The stocks of Enron, a naturalgas company, went to zero despite the rise in price of natural gas.

Asked if it was a good time to invest in gold and oil at present, Rogers said he invested in these two commodi¬ties.

"I don't know. I own oil and gold right now. But I don't sell oil, I don't sell gold. You have to think on your own whether to invest in it. But if the price of oil and gold fall, I would invest more. I don't know when to buy but there's years to go," Rogers said.

Rogers remains bearish on the US dollar saying over the next year he would get rid of all US dollardenom¬inated assets. The total debts of the US are the largest in the world at $13 tril¬lion (Bt441 trillion) as it keeps rising by $1 trillion every 15 months.

Rogers saw the US economy as "out of control", and said the recent US dol¬lar rally would not last too long as it's a rally in a bear market.

He also thought five to 20 years from now, bonds would be a "terrible" thing to invest in. The investment in the debt market has gone past its golden period of 1981 to 2003. If investors keep investing in bonds, they would get returns of only 25 per cent per year.

"So, if you've invested in shortterm bonds, just sell them. And if you're [fixed income] portfolio managers, just quit the job. Tell your boss that you have something else to do," Rogers said.