Investor Jim Rogers told Bloomberg in an interview that the Chinese stock market has risen too quickly since November last year. The Shanghai Composite has already doubled and reached a peak since June 2008. This is not a good sign and the Chinese stock markets may collapse.
Mr. Rogers who is currently the chairman of Rogers Holdings opined that when stock prices rise too quickly, a collapse may be inevitable. Since November, he has not made any new investments in Chinese stocks. However, he has also not sold any shares that he bought through progressive investments since 1988. Mr. Rogers currently resides in Singapore and told Bloomberg “I much prefer to buy when things collapse”. In addition, Mr. Rogers disclosed that he currently prefers investing in commodities rather than shares, as China will require commodities to maintain a sustained economic growth.
He also disagreed with US Treasury Secretary Timothy Geithner that Chinese consumers need to increase consumption to boost economic growth. Instead, he said, “the Chinese consumers are already consuming more. The Chinese economy has such a remarkable performance because they have massive savings and investments. There is no need to tell them to increase consumption and not save”.
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