Although Wall Street generally predicts that both US stocks and bonds will perform well next year with a soft landing of the US economy and an increased expectation of interest rate cuts from the Federal Reserve, legendary investor Jim Rogers remains pessimistic about the market outlook.
Rogers predicts that asset prices will plummet and an economic disaster will come. He plans to profit by shorting the "darling" of the US stock market, such as Tesla and Nvidia, when the time is ripe.
At the age of 81, Rogers co founded Quantum Fund with American financial giant George Soros, known for investing in commodity futures and known as the "commodity king".
"Bonds are foam, real estate in many countries is also a foam, and the stock market is preparing for a foam," the senior investor said in a recent media interview.
Rogers has sold off many of his stocks and bonds because he expects a painful market crash, but he has not yet started short selling stocks.
He pointed out the "warning signs" of impending collapse, including a few stocks driving major stock indexes higher this year, and novice investors boasting to all their friends about how easy it is to make money through stock trading.
When the time is right, short the "Seven Technology Giants"
Rogers stated that he is eager to short the tech giants of the US stock market - Apple, Alphabet, Amazon, Microsoft, Meta, Tesla, and Nvidia.
"When the hot market ends, the last big rising stocks are the best short sellers," he said. "Those stocks that have performed exceptionally well and are very expensive - I hope I am smart enough to short these stocks next time."
An economic disaster is imminent
"I suspect that next year's situation won't be so pleasant," Rogers said. He pointed out that he is not sure if there will be an economic recession or a mild decline in the future, but he is "worried" that there will be the most severe economic recession since the 2008 financial crisis, since which the global debt burden has been inflating.
"The next economic problem will definitely be the most serious one I've ever seen in my life, because debt is simply unbelievable," he said.
Rogers also predicts that inflation, which has cooled significantly over the past year, will accelerate back to painful levels. In addition, he also accused the Federal Reserve of having no idea what it was doing, and condemned everyone over the past century, except for a few central bank leaders, as foolish bureaucrats and scholars.
Rogers suggests that people hold precious metals because during times of panic, precious metals are often more valuable than other assets.
"Everyone should have some gold and silver under their bed," he said. "You see, all farmers know that when a serious disaster occurs, it's best to keep some gold and silver in the cabinet."