(Kitco News) - Central banking is the "biggest risk" in 2023 according to Jim Rogers, a renowned investor whose fund outperformed the markets by 4,200 percent in the 1970s, despite the stagflation which characterized that decade.
"We have a lot of central banks [printing money]," he explained. "Whenever you have a lot of money-printing, it distorts markets, it distorts inflation, it distorts interest rates, and [it causes] gigantic debt."
Rogers, who is Co-Founder of the Quantum Fund and Chairman of Rogers Holdings, said he likes to purchase assets at a discount, and claimed that "commodities" constitute "the cheapest asset class."
"Silver is down 70 percent from its all-time high, sugar is down 70 percent," he said. "People haven't been rushing out and buying commodities in recent years."
Rogers spoke with David Lin, Anchor and Producer at Kitco News.
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Investing Advice
Markets in stocks, bonds, and cryptocurrencies faced bearish trends in 2022, and Rogers suggested that the way to invest in such times is to bet on what they know.
"If you want to be successful, stay with what you know," he advised. "If you don't know anything, do nothing. Put your money in the bank and wait."
Rogers, who started his career as a Wall Street analyst and moved into commodity trading with George Soros, said that if an investor loses money, then he should avoid reacting emotionally.
"If you just rush in when you're emotionally wounded, after losing a lot of money, you're usually going to make even more mistakes," he said. "My best advice to people at that stage is to do nothing, close the window, and just wait, recover. Wait until you find something that you know is going to be good. Do not get emotional."
Rogers said that he had made mistakes in his past which had allowed him to learn such hard lessons. Early in his career, he explained that he took a significant short position which ended up costing him heavily.
"I once had a great success in the markets, a gigantic success," he explained. "I got cocky… and so I said I'd wait for the market rally, and then I'll sell short. And I did, the market rallied, and I sold short, but three or four months later I was wiped out… most of the companies I shorted went bankrupt in the end, but I lost everything first."
He attributed his early mistakes to not knowing "a lot about markets" at the time.
To find out Rogers's outlook for electric vehicles and copper, watch the video above.
Follow David Lin on Twitter: @davidlin_TV
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