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Sept. 25, 2017, 4:49 a.m. EDT · CORRECTED

Jim Rogers says ETF holders will get mauled by ‘the worst’ bear market in a ‘lifetime’

Critical information for the U.S. trading day

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By Barbara Kollmeyer, MarketWatch

An earlier version of this column inaccurately described a prediction by Jim Rogers. The column has been corrected.


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Jim Rogers says global debt will cause pain in stock markets.

Now that the Fed has finally started to peel off the quantitative-tightening Band-Aid, things should start getting back to normal.

That's a good one, given no one really knows what normal is these days. A pullback from the record highs of yesterday looks to be in store, and gold bugs should cover their eyes, because the market has been playing catchup to Fed rate-hike hints.

We’re diving right into our call of the day , which comes from Jim Rogers. In a sweeping interview with RealVision TV, the veteran investor warns another bear market is coming, and that it will be “horrendous, the worst.” Speaking to his interviewee, who came into the markets in 1986, he said that pullback would be “the worst in your lifetime, in your financial experience.”

It’s the level of debt across global economies that will be to blame, he says.

And retail investors who have been piling into exchange-traded funds will be particularly vulnerable to that next big mauling. For those ETF owners — who are all in on easy S&P plays right now — here’s his message:

“When we have the bear market, a lot of people are going to find that, ‘Oh my God, I own an ETF, and they collapsed. It went down more than anything else.’ And the reason it will go down more than anything else is because that’s what everybody owns,” he says.

Like others, the chairman of Rogers Holdings is worried about bond and stock valuations right now, and about breadth in the market — that is, the number of stocks moving higher versus those heading the other way.

But within this disaster in the making, he sees one opportunity.

“If somebody can just take the time to focus on the stocks that are not in the ETFs, there must be fabulous opportunities in those stocks because they’re ignored,” he says. “Some of them have got to be doing very, very well. And nobody’s buying them, because only the ETFs buy stocks.”

What does Rogers like? Overlooked and hated markets — agriculture and Russian stocks — and he remains a fan of Chinese stocks. The Singapore-based investor owns gold, but says the metal isn't hated enough to buy right now and it’s going to get “very, very, very overpriced” before the current run is over.

It’s a fascinating interview, chock-full of advice. Check it out on Real Vision here .

Final note here, if you were paying attention, you would have heard Rogers‘s prior warnings about dire collapses and crashes over the summer. Here’s another look at some of his crash predictions.

The chart

A big mover today is gold  , which is selling at a pretty steady clip after the Fed’s rate-hike hint. Silver is getting hit even harder  .

“What is more, it has fallen below the technically important 200-day moving average, which could spark technical follow-up selling and exacerbate the price slide,” say Commerzbank analysts in a note. Here’s their chart:

Key market gauges

Down day for stocks is building, with the Dow /zigman2/quotes/210598065/realtime DJIA +0.17%  , S&P /zigman2/quotes/210599714/realtime SPX +0.06%   and Nasdaq /zigman2/quotes/210598365/realtime COMP -0.87%   off. In Asia /zigman2/quotes/211618636/realtime XX:ADOW -1.13% , the Nikkei /zigman2/quotes/210597971/delayed JP:NIK -0.39%  pushed ahead, lifted in part by a Bank of Japan statement and a yen that kept falling against the dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0076% . Europe stocks /zigman2/quotes/210599654/delayed XX:SXXP +0.29%  are stepping higher. Oil is off.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,433.48
+46.50 +0.17%
Volume: 324.93M
Aug. 7, 2020 5:10p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,351.28
+2.12 +0.06%
Volume: 2.28B
Aug. 7, 2020 5:10p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
11,010.98
-97.09 -0.87%
Volume: 3.85M
Aug. 7, 2020 5:16p
loading...
/zigman2/quotes/211618636/realtime
XX : Dow Jones Indices
3,245.87
-37.17 -1.13%
Volume: 0.00
Aug. 7, 2020 1:15p
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/zigman2/quotes/210597971/delayed
JP : Nikkei
22,329.94
-88.21 -0.39%
Volume: 0.00
Aug. 7, 2020 3:15p
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/zigman2/quotes/210561789/realtime/sampled
US : Tullett Prebon
105.9200
-0.0080 -0.0076%
Volume: 0.0000
Aug. 7, 2020 4:59p
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/zigman2/quotes/210599654/delayed
XX : STOXX
363.55
+1.06 +0.29%
Volume: 0.00
Aug. 7, 2020 11:03p
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