Going long gold is an awfully crowded trade these days. But Jim Rogers says gold is going to go much higher, so he isn’t selling. Also, he advises that you stay away from mining stocks and just buy the gold.
Alix Steel from TheStreet.com interviewed Rogers.
Rogers’ love of gold is nothing new, but with gold in a strong bull market, I wanted to know if the trade was too crowded.
Jim Rogers: I don’t ever like to buy something making all time highs however I’m not selling my gold. Gold is going to go much higher in the course of the bull market. Doesn’t mean it can’t go down 20 per cent next year but during the course of the bull market it is going to go much higher it is certainly not a bubble yet.
Jim you are typically a contrarian investor. If everyone is buying, shouldn’t you be selling?
Jim Rogers : Yes, I should be selling at the top, but I don’t think this is the top. Gold, if you adjust it for its old highs, adjust it for inflation back in 1980, gold should be over $2000 an ounce right now. In my view, in this bull market in commodities gold will make all new highs adjust for inflation.
What about mining stocks as a way to play rising silver and gold prices?
Jim Rogers: Not with my money. The studies show that you would make more investing in commodities themselves rather than commodity stocks unless you are a very good stock picker. If you are a good stock picker, unless you find a company that is going to discover silver in Berlin you buy all you can and then you call me and I’m going to buy it too ….short of something like that and there are a hundred gold stocks and most of them don’t pan out. But if you own gold, gold is making all time highs.