Why Jim Rogers Is Bearish on the U.S. and Facebook

Joel Anderson |

IBM, BAC, Jim Rogers, George Soros, Warren Buffett, Quantum Fund, bearish, bullish, America, FacebookFamed investor Jim Rogers has already said he wouldn't buy Facebook when the social networking giant files for its IPO later this week. “No, that kind of stock I don’t buy. They are usually very, very expensive. A lot of people like to buy expensive stocks like that, but I do not,” said Rogers to CNBC yesterday.

However, that Rogers seems bearish on the internet company shouldn't necessarily drive one away from Facebook. Rogers is bearish on...well, just about everything in America these days.

"It has been demonstrated many, many times before that sellers are usually smarter than the buyers, and they usually know when the best time to sell is, and Facebook is doing it," he said. Rogers also stated his general opposition to the high prices in the Tech sector, saying "I am interested in technology in some shape or form, but I can't imagine buying any of them. They are a bit hot these days and they have been for two or three months, so that is why I am short. I don't buy high-priced stocks."

Singapore's Favorite Curmudgeon

Rogers, whose legendary Quantum Fund that he founded with George Soros in 1973, managed his fund to massive returns from 1973 to 1983 before retiring. Rogers was publicly bearish on the housing market, predicting the bubble there, and suggested shorting U.S. financials in 2006 along with U.S. home builders and Fannie Mae. Now? Rogers is fairly bearish on the whole country.

In 2007, Rogers sold his New York mansion and moved to Singapore, expressing a desire to raise his young daughters in the growing Asian economies where he saw a work ethic and dedication to growth that America no longer had. "If you were smart in 1807, you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia," he told CNBC's Maria Bartiromo in a May 2008 interview. While he avoided major financial hubs like Hong Kong and Shanghai due to pollution concerns, he is making sure his daughters speak Mandarin.

Rogers was back on his soap box about the United States on Monday night, insisting that the nation's apparent modest economic recovery was a mirage. “There is an election in November 2012. Every time there is an election, the government pumps as much money as it can so it can win the election. Of course things are going to look and feel better because Bernanke is printing money and Obama is spending money,” Rogers said. “They want to fool all of us saps and get us through the elections, and then they’ll say we’ll worry about those saps next year.”

Warren Buffett Disagrees

Rogers is clearly a voice that commands attention for his history of success, but other equally wise investors have also come down on the side of an American recovery. Warren Buffett was recently the subject of a TIME article titled The Optimist and has maintained a bullish outlook on the American economy in the long term. “We have gone through, I don’t know how many, perhaps 15 recessions," Buffett said in June of last year on Bloomberg TV. "Our system overshoots periodically. And in this particular case, we had a huge bubble. So the fact that there is a correction should not be unexpected. But our system always comes back and will this time. It already is.”

Buffett, meanwhile, has put his money where his mouth is, investing billions in the equities market last year with huge investments in Bank of America (BAC) and IBM (IBM). Whether Rogers or Buffett are ultimately right is impossible to say, but one would certainly be expected to be pulling for Buffett. Either that or moving to Singapore.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
BAC Bank of America Corporation 15.16 -0.22 -1.43 78,997,682
GRPN Groupon Inc. 5.10 -0.16 -3.04 5,628,713
IBM International Business Machines Corp 158.11 -0.18 -0.11 3,374,838

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