Favorite Book: Security Analysis by Ben Graham

The book that I still to this day tell people to read is Security Analysis by Ben Graham. I read it decades ago. Short of that, The Intelligent Investor by Graham and Dodd. Graham's ideas of investing in fundamentals and cheap stocks, I realized that's the that's the kind of investor I was, that's what I loved and thought was great. So, I recommend that book when people ask me what book to read or books to read I tell them about Ben Graham.

Markets: Russia Is Very Cheap

Well, mainly I am cautious about the stocks all over the world now except for a couple of places, where they are down a lot. If and when stocks all over the world go down or if and when India goes down a lot, then I would certainly re-examine India.

At the moment I am mainly looking at Russia. In fact, I am buying shares in Russia right now. Russia is very cheap compared to markets all over the world. The main problem is stocks in much of the world are up and I prefer not to buy when things are going up and I know that there are going to be some problems in the markets in the next year or two. My hope is that when problems come to the world markets, I am smart enough to buy lots of stocks. 

The U.S. Dollar Is Going To Go Higher

The U.S. Dollar is going to go higher, it is going to get overpriced, it might even turn into a bubble. At that point, I am going to have to sell my U.S. Dollars because bubbles always come to an end. I have a few thoughts on where I will put my money when I get out of my U.S. Dollars going forward but we will have to wait to see what happens.

Rising Interest Rates Will Cause Serious Problems

Never in the history of the world have interest rates been this low. They think this is the solution. But I want you to know that eventually and soon interest rates are going to go higher again and when interest rates go higher again we are going to have serious, serious problems all over the world.

The Next Bear Market In Stocks

No, I will just say it will be the worst in my lifetime. It has been over 10 years since we had a serious bear market in the United States. I would suspect by the end of this year or next year, it will start. These things always start small, where people are not looking and then they work to the major markets, and then you see them on the major news. 

 In 2007, Iceland went bankrupt but nobody noticed or cared. Then Ireland went bankrupt. Then a few weeks later, Bear Sterns went bankrupt and a few weeks later Northern Rock, the English Bank, went bankrupt. Then eventually Lehman brothers went bankrupt and by then, everybody knew there was a problem. But it had been there for over a year and it has always worked that way. It starts when we are not watching. It has already started. Latvia collapsed. Argentina, Venezuela, Turkey, some banks in India are having problems, Indonesia has started having problems. It has not made to evening news yet. 

All these markets are small but until they make it to the big markets, people do not notice.

“ The more certain something is, the less likely it is to be profitable”.

Trade War: Will China Sell U.S. Treasuries?

"The idea that China would dump its $1.1 trillion of Treasuries to retaliate against U.S. tariffs is often dismissed as improbable. It’s seen as a nuclear option that would inflict more harm on China’s economy than America’s. 

Yet the tensions rippling through global financial markets could still lead Beijing to reduce its stockpile in the $15.9 trillion Treasuries market -- not to retaliate, but to defend its currency if it goes into a free-fall. The offshore yuan has slumped 2.6% this month to about 6.92 per dollar as the trade standoff intensified, reaching the weakest since December." - in Bloomberg

Read the complete article here: Trade War May Yet Spur China to Sell Treasuries as Yuan Tumbles

Stocks: The Next Bear Market

In 2007, Iceland went bankrupt, but nobody noticed or cared. Then Ireland went bankrupt. A few weeks later Bear Sterns went bankrupt and a few weeks later Northern Rock – the English Bank – went bankrupt and then eventually Lehman Brothers went bankrupt. By then everybody knew there was a problem. 

It starts when we are not watching. It has already started. Latvia collapse. Argentina, Venezuela, Turkey, some banks in India are having problems, we have issues in Indonesia; so it has already started showing. It has not made to evening news yet.

India: "I am not a big fan of Mr. Modi"

I invested in India before Mr. Modi was elected. I owned the Indian shares, but then after few weeks seeing that he did not do much, I sold Indian shares. I have had no position in India since. Modi has done some nice things. He has done a few small things. He has not done any big good thing as far as I can think. I am not a big fan of Mr. Modi. He gets great, great, great publicity all over the world and he is very well liked all over the world. But as far as the real policy (is concerned), I have not seen much dramatic change, yet. 

Related trading instruments: WisdomTree India Earnings Fund ETF (EPI), iShares MSCI Emerging Markets Index ETF (EEM)

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Cautious About Stocks All Over The World

Well, mainly I am cautious about the stocks all over the world now except for a couple of places, where they are down a lot. If and when stocks all over the world go down or if and when India goes down a lot, then I would certainly re-examine India.

At the moment I am mainly looking at Russia. In fact, I am buying shares in Russia right now. Russia is very cheap compared to markets all over the world. The main problem is stocks in much of the world are up and I prefer not to buy when things are going up and I know that there are going to be some problems in the markets in the next year or two. My hope is that when problems come to the world markets, I am smart enough to buy lots of stocks. 

S&P 500 Index: Lack of Market Breath

Today if you look at the S&P 500 Index for instance in the United States, I think there are only 40 or 45 stocks that are above their 50-day moving average to use the technicians kind of talk. Everything else is in a downtrend. Definitely a lack of breath. Over 90 percent of the stocks are in downtrends, 10 percent are in uptrends but they're big companies and since the S&P 500 Index is capitalization-weighted those 50 stocks, 40 stocks, are dragging the average to all-time highs now.

A Bear Market Can Start This Year

Jim Rogers has talked with ET Markets today. The wide ranging conversation touched several different topics such as the prospects from investing in India, the outlook for the U.S. stock market, the Russian stock market and agricultural commodities. You can read the complete interview here: "Don't miss the signs like in 2008, bear market is coming, reiterates Jim Rogers"

Video: Investing Lessons

A fantastic video interview with Jim Rogers on Real Vision. 

Steve Diggle and Jim Rogers discussed contrarian investing, tape reading, how to use independent thinking in investing, the importance of experience and making mistakes as a part of the acquiring knowledge. 

My Favorite Investment Book

The book that I still to this day tell people to read is Security Analysis by Ben Graham. I read it decades ago. Short of that, The Intelligent Investor by Graham and Dodd. Graham's ideas of investing in fundamentals and cheap stocks, I realized that's the that's the kind of investor I was, that's what I loved and thought was great. So, I recommend that book when people ask me what book to read or books to read I tell them about Ben Graham.