Wednesday, December 13, 2006

Jim Rogers loves China, commodities; hates dollar, bonds..

And probably the guys from Refco. I digress.

Via Bloomberg, a half hour lecture from London by Jim Rogers where he expounds on his big picture views of the investment world going forward. As mentioned, he loves China, calling them probably the world's best capitalists, and believes we are only roughly half way through a long boom in commodities. On the flipside he does not have a favorable view of the dollar, stocks in general, nor is he fond of bonds.

Bloomberg Video: Jim Rogers in London.

[Requires Windows Media Player.]

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Monday, December 11, 2006

Louise Yamada: Gold going to $3000.

I did a double take when I read that prediction from Louise Yamada. If you're not familiar with who she is, she was a long time technical analyst at Smith Barney who eventually rose to run the Technical Research department there. Citibank decided to shut the operation down a few years ago, and she formed her own company; you can read more of her bio here.

I highlight some interesting bits from this article, but if you're interested in gold, take the time to read the whole thing.

Bloomberg: Gold Is Cheap, Yamada, Banks Assert as Sales Pared.


Just because gold is down 14 percent from its high of $732 an ounce on May 12, doesn't mean the rally that began six years ago is coming to an end anytime soon.

The swooning U.S. dollar, which has become a proxy for the slowing American economy and the nation's humiliating lack of success arranging regime change in Iraq, banning weapons of mass destruction in North Korea and Iran and reducing its trade and budget deficits, is making gold Wall Street's darling again for 2007.

``Gold is the purest play against the dollar,'' said Louise Yamada, managing director of Yamada Technical Research Advisors LLC in New York, who sees gold surpassing $730 next year on its way to $3,000 within a decade. Yamada, the former head of technical research at Citigroup Inc., proclaimed gold cheap in 2001 when it fetched $279.

She now has lots of company among the world's biggest financial institutions. Deutsche Bank AG's chief metals economist, Peter Richardson, made gold his favorite pick for 2007. JPMorgan Chase & Co. analysts John Normand and Jon Bergtheil on Dec. 7 said only corn could rival gold as the best bet while Merrill Lynch & Co. analyst Michael Jalonen elevated gold's value through 2010.

``If you can only make one commodity investment,'' gold is the ``choice for 2007,'' said Richardson from his office in Melbourne.

That's partly because five of the past six bear markets for the dollar led to an increase in gold.

To be sure, there are enough skeptics to make the betting on gold controversial.

``It's rare that an asset outperforms others consistently year on year,'' said Andrew Kinsey at Johannesburg-based Craton Capital, whose $267 million precious-metals fund rose 51 percent this year. ``The dollar-gold relationship may break down next year. Geopolitical risks and energy prices could rise to the forefront and impact gold more than the value of the dollar.''

The U.S. dollar will rebound in 2007, said Joe Prendergast, global head of currency strategy at Credit Suisse in London, during a recent radio interview with ``Bloomberg on the Economy with Tom Keene.'' He predicts a 3 percent appreciation for the dollar by December 2007.

Some analysts say the current consensus that predicts no end to the dollar's weakness is wrong. ``The dollar is completely undervalued,'' said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures Ltd. in Tokyo. ``Metal prices are hitting the tops. This month and next January, base and precious metals prices will go down.''