Even as we witness rising global volatility as Wall Street shares plummet, Jim Rogers, the renowned co-founder of Quantum Fund, says that the next bear market will be worst in our lifetime. “When we have a bear market again, and we are going to have a bear market again, it will be the worst in our lifetime,” Jim Rogers, the chairman of Rogers Holdings, told Bloomberg in an interview. Interestingly, Jim Rogers has been predicting the ‘worst crash in our lifetime’ for quite some time now. In August-17, Jim Rogers told Kitco news, “We could see the worst crash in my entire life pretty soon.”
Further, the veteran investor sees rising global debt as a key cause behind stock market crisis. “Debt is everywhere, and it’s much, much higher now,” he told Bloomberg. Earlier, Jim Rogers had observed that the 2008 financial crisis was caused due to a rise in debt, and since then the debt has gone through the roof. In fact, Alberto Gallo of Algebris Investments had noted in his recent blog that global debt levels have almost quadrupled, rising 276% in the last decade to $217 trillion.
“Jim has been talking about severe corrections since I started in business over 30 years ago,” Mike Evans, Alibaba Group Holding President and a former Goldman Sachs Group banker told Bloomberg, adding, “So I’m sure he’ll be right at some point.” While Jim Rogers predicts an impending stock market crisis, market experts point out that this the current rout is just an overdue correction, and the US economy has strong fundamentals.
According to a recent Goldman Sachs report, the ongoing sell-off is not the beginning of any major bear market or a repeat of earlier financial crisis, as corporate earnings are on the path of strong recovery backed by accelerating GDP growth, rising commodity prices, and a weaker than expected U.S. dollar. “This is a correction and not a start of a major bear market,” Katie Koch of Goldman Sachs told ET Now. On similar lines, Geoff Lewis told CNBC TV18 that the underlying fundamentals in the United States are strong. “Earnings and macro-economic indicators continue to be strong,” Geoff Lewis of Manulife AMC said.
Jim Rogers had founded the Quantum Fund alongside George Soros, who is regarded as one of the most successful investors of all time. From 1970 to 1980, their portfolio returned a whopping 4200 per cent while the S&P had posted paltry returns of about 47 per cent.