In Depth with Jim Rogers

Glenn Beck recently interviewed Jim Rogers on GBTV concerning the world’s economic conditions, social unrest and more. The three parts follow below.

Part 1:

Bloomberg Businessweek - 12 December 2011

Bloomberg Businessweek - 12 December 2011
English | 116 pages | PDF | 30 Mb

Bloomberg Businessweek Magazine: Business Week, America's leading business news magazine, makes the world of business intriguing by identifying and analyzing pivotal events, hot trends and compelling personalities. This insightful weekly magazine edifies complicated issues and conveys a sense of excitement while telling readers what they need to know, often before they need to know it.

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Exclusive Interview – Jim Sinclair: “MF Global is A Piece of Dynamite Sitting Underneath the Gold Price”

I had the chance recently to speak with the legendary Jim Sinclair, publisher of JSMineSet.com and CEO of Tanzanian Royalty Exploration Corp. It was an incredible interview—Jim spoke about gold, MF Global, mining shares, risks of the paper gold market and much more.

During the interview Jim commented on how truly misunderstood gold still is, as well as the market being nowhere near an ultimate top. His comments were, “The general thinking amongst the youngsters who run the hedge funds, is not a very pro-gold school, and its very much in error…Gold will ultimately be a top brought about by violence in the most spectactular manner—the idea that gold made a top in the $1900′s could only be drawn by those with no experience in the previous major moves in the gold market.”

When asked about the widening price ratio between gold and mining shares, Jim said, “Many gold shares are selling at a significant discount to the price of gold, but also at a discount to simple logic,” for reasons that, “there are significant competing investments that didn’t exist back in the 70s and 80s, such as exchange traded funds in gold and silver…The largest of these funds, if you read the prospectus, you find out you’re investing in a fund that doesn’t have even the legal obligation to deliver gold itself, and they have the absolute ability to only deal in paper equivalents.”

In regards to the recent MF Global collapse, Jim said, “When problems like this occur, and when investors question whether or not their statements means anything, assets without liabilities attached to them held physically or stored personally by the investor become very attractive.” He concluded by saying, “the MF Global situation—is a piece of dynamite sitting underneath the gold price.”

Jim is known by many as “Mr. Gold,” and his depth of knowledge on gold & the financial markets is quiet uncommon. This is another “must-listen” interview for gold and silver investors.

To listen to the interview, left click the following link and/or right click and “save target as” or “save link as” to to your desktop:

Interview with Jim Sinclair

MoneySense - December/January 2012

MoneySense - December/January 2012
English | PDF | 88 pages | 43.7MB

MoneySense is the country's most trusted source of information on investing, banking, RRSPs, insurance, financial planning, saving for education, home buying, real estate investing, car buying and much more.


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Rosenberg Says U.S. May Fall Back Into Recession

(Bloomberg) — David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., talks about the outlook for the U.S. and European economies. He speaks with Sara Eisen on Bloomberg Television’s “InsideTrack."

A "Must Watch" Chart for America

These days, investment optimists have to take any good news they can get. And right now, they're getting a tiny bit of good news from the XLF.

Regular readers know the big U.S. financial stock fund XLF is a permanent fixture on our "watch list." With large weightings in JPMorgan, Wells Fargo, Citigroup, Goldman Sachs, and American Express, this fund represents America's financial backbone. These are the companies that rise and fall with our ability to make money, save money, start new businesses, repay debts, and just generally "get along."

After trading in a sideways pattern for more than a year, XLF suffered a huge selloff in August and September. This selloff took XLF from $15 per share to $11.28 (a 25% loss). Shares then staged a natural "relief rally" to $13.50… and sold off again.

But as you can see from today's chart, the recent selloff ended around $12 per share. This is what traders call a "double bottom." It's where sellers attempt to push a beaten-down asset even lower... and get overwhelmed by value-focused buyers. Mind you, this bullish action is no cause for dancing in the streets... but if XLF can hold above the $11-$12 level, it's a good sign for America in general... a ray of light for the optimists. On the other hand, a break of this level means ugly things ahead.

How to Make a Fast 30%-60% Buying These Beaten-Up Stocks: TLB, PSUN

It's time to take on more risk.

At least, that's what private equity firms are doing right now. Private equity firms are investment companies that raise large amounts of capital from wealthy investors and large institutions. They use this capital to take huge, sometimes controlling stakes in companies.

And after six months of fleeing risk, which included buying U.S. Treasurys at record-low yields, these guys are beginning to go shopping.

A shopping spree makes sense, given the huge decline in small caps over the past few months. Some companies in the biotech and energy sectors are still down 40%-plus from their highs.

One sector that looks particularly attractive is specialty retailers. It includes companies like Chico's and Abercrombie & Fitch – which focus on selling one type of merchandise (clothes, pocket books, jewelry) and cater to a specific clientele.

I'm sure these two stocks won't show up on any momentum trading screens following their massive pullbacks. Even value investors may have a tough time buying these struggling retailers. But the "smart money" private equity investors are showing interest in this sector.

The chart below includes specialty retailers Talbots (TLB) and Pacific Sun (PSUN). These stocks have exploded higher in the past few days.

Talbots recently announced it received a letter from private equity firm Sycamore Partners, proposing to acquire all outstanding shares for $3. Shares jumped more than 60% on the news.

Pacific Sun announced it received a $60 million loan from Golden Gate Capital. That will give the private equity firm a 20% stake in the company. Part of the loan will be used to fund lease buyout payments on the 175-plus stores Pac Sun announced it would close. Shares jumped 35% on the news.

These aren't the only two...

Charming Shoppes, another specialty retailer, is up about 60% in two months. The firm announced it would sell its Fashion Bug label, which has more than 600 stores. Sitting on its board of directors over the past year is Michael Blitzer. He served as a principal of Portsmouth Partners, an advisory firm that provides operational and strategic services to private equity groups that focus on retail companies.

Selling its struggling Fashion Bug division will make Charming Shoppes more appealing to private equity firms. And the stock is up huge in anticipation of a possible private equity deal.

Retail stocks make for the perfect private equity investment. They can easily sell underperforming stores. Also, once these companies are private, experienced management teams can focus on growth.

After restructuring, these companies can easily be taken public again, usually making huge profits for the original acquirer. Just take a look at Dollar General, which was acquired by private equity giant KKR for $7 billion in 2007. After a huge restructuring, the company was then brought public again in 2009. Dollar General has a market cap of $13.5 billion today. KKR still owns a 30% stake.

That said, buying a stock solely on the chance it'll get taken over is not one of my favorite strategies. But one thing the two specialty retailers in the chart have in common is they were all trading at a significant discount to book value before their huge moves to the upside.

My advice is to screen for specialty retailers down at least 30% from their highs. Also, make sure they trade at a discount to book value. The book value is the theoretic amount a company would receive if it liquidated. You can find it on Yahoo Finance under "Key Statistics."

I found several companies that fit this profile, including Coldwater Creek, Christopher & Banks, Office Max, and Brown Shoe.

Buying specialty retailers under book value should provide investors with downside protection.

And if these companies report just one solid quarter – or announce a private equity agreement similar to what we've been seeing in this sector – the stock price could easily surge 30%-plus.