“The world will fall apart”
— A year ago you were almost the only foreign investor in St. Petersburg forum, are encouraged to invest in Russia. You think so now? In your opinion, over the past year, the Russian economy went downhill?
— Russia has not yet returned to pre-crisis levels, but will definitely be back, just needs time. The problem is that the world in the coming years will face daunting challenges, they will occur in the United States, Europe, Japan, it will affect all countries. At the same time, Russia has gone down, there will not be a fall, but a Grand success is not worth waiting for, because the world will fall apart.
Why? What the problem is, for example, in the United States?
— America is the biggest debtor, not just in the world but in world history, and the situation is getting worse every day. Rates on these debts are now artificially low, they are insanely low, and when that changes, we will see many bankruptcies in America, including the bankruptcy of some States and cities. It will be a nightmare, and we should be very concerned about this.
Despite such predictions, you are invested in dollar assets?
— I have quite a lot of dollar-denominated assets, but only because the dollar is perceived as a safe haven, though it is a misconception. And when the turmoil, which I expect will happen, people first, the money goes into assets, which they seem to be the most secure. The next two or three years, the dollar will rise, until finally it becomes a bubble, but I hope I have enough sense to get rid of dollar-denominated assets before it burst.
— That is, first all transferred the money in dollars?
— Yes, and then the American economy will collapse.
— When it happens?
— In 2018 or 2019, maybe 2020. Pretty soon.
If, as you predict, will collapse the American economy, what will happen to the Russian?
— Russia has several advantages: first, you have little debt, and secondly, you have already faced the greatest challenges.
But even if the dollar collapses, who will look to the side of the ruble?
— I have ruble assets, and I want to buy more rubles. When investors will withdraw money out of dollar-denominated assets they have in something they invest. First choice would probably be Chinese yuan, gold will be attractive. But Russian assets can seem attractive. I am the most optimistic person in relation to Russia.
— Almost the only.
And a very good reason. In a few years Russia will be removed, if not all, most of the sanctions. Your country will be in better shape than many others, when there are crises in other parts of the world. Don’t sell rubles, and if you want to sell, let me buy them from you.
— What will happen to oil if the US and Europe will start this crisis, as you predict? Affected production and lower demand for raw materials?
Oil is already passed the bottom, she might still once in a while will drop, but in the medium to long term prices will rise. Including because of the economic crisis will affect the oil shale of the company and will affect not only demand but also supply. This is another reason why Russia is an attractive place to invest.
— Let’s say it will. Then, if we meet in another year, what will be the price of oil and the dollar to the ruble?
I don’t want to give any specific forecasts, you can find a lot in your publication.
“Children are the best investment”
— Tell us about your recent investment in Russia?
— About a month ago I bought a short Russian OFZ bonds with maturity in 2018. I don’t want to buy any long securities because of looming catastrophe, and thus almost everything will lose value, and I don’t want to do long-term investments now. So I wasn’t interested in, for example, the recent placing of Eurobonds of Russia, which occurred in late may.
You are also encouraged to invest in agriculture. When you have made the first investments in this sector and consider whether their successful, given that the indices, reflecting the value of agro-industrial companies are far behind the complex, e.g. S&P500?
Last year I advised you to learn how to drive a tractor, did you do it? Agricultural companies are really very attractive. I started to invest in them in the late 90s, and I’m sure it’s a good investment. Last year and this year the company showed excellent results, but if you look retrospectively, the sector was one of the worst, now the prices in this industry are close to the bottom, and that is why you need to invest in these companies. To judge whether this is a good investment, it will be possible in ten years. I am sure that this is the best sector for investment over the next five to ten years.
— Better than, for example, IT?
— Investing in the right company, dealing with technology, you can make a fortune. But there are thousands of them, tens of thousands, it’s very easy to lose money instead of earn. A lot of young boys and girls sitting in their garages and write some codes, some achieve huge success, but the majority will fail. Note that most of the IT companies that have emerged in the 90s, had disappeared. I don’t think you can guess the ones who survive the next ten years, so I’d rather invest in agriculture.
— Tell us whose funds you are currently managing?
— Only their own. I earned enough money to afford not to engage with someone else’s money.
And how do you assess the success of their investment?
Well, I can still pay the bills, feed their family, send their children to good schools.
And to put it all in numbers? What was the yield of your Fund in the last few years?
Even if I believed that, I wouldn’t tell you. But why do I even watch this? People who believe their money, just don’t have enough money. I have enough of them, I don’t sit at the end of each year to consider how much earned and how much you can spend.
— You are investing for decades. What kind of investment you would call the most successful?
— My children — I have two little girls. I’ve sympathized with all the parents, could not understand why spoil your life with the birth of children, to invest so much time, effort, and money. It was my biggest mistake, children are the best investment ever, they will take care of me.
— Besides children?
The years I spent on travel. I have twice been around the world once on a motorcycle, second car, spent five years. It’s an investment in the learning experience. It is very expensive, but well paid off.
A former partner of the legendary investor George Soros and co-founder of the Quantum Fund, which in 1970, that is, to the end of the decade, since the establishment, brought investors 4200% against income growth of the S&P index by 47%. In 1980, Rogers decided to separate from partner.
He was also one of the first American investors, who drew attention to China. About the long-term bullish trend in commodity markets, the Rogers began in 1999-2000, when the price of oil, gold and many other commodities were at multi-year lows.
“Experience and time spent on travelling, gave me a bullish sentiment on Brazil and China and “bear” — in relation to Russia and India,” said Rogers in the early 2000s. to Convince him at the APEC summit of 2012 was taken personally by Vladimir Putin. “I have not seen in Russia for 47 years, you have not been born when I played against investing in this country. Now I’m investing in Russia, I like it here, I see huge changes that occurred in the Kremlin, they realized that Russia needs foreign investors, persons with knowledge, expertise, and now it’s a completely different country, it is very attractive,” said Rogers, the company informed.
In 2012 he became a consultant to “VTB Capital” on attraction of direct investments in the Russian agricultural sector. In September 2014 Rogers as independent Director joined the Board of Directors.