Investing.com – Investor Jim Rogers has joined the chorus in forecasting a drop in US tech stocks. In particular, he considers the stocks of Apple, Amazon and Google to be highly overvalued.
In 12 months, Apple's growth exceeded 110%, Amazon – 83.95%, and Tesla – 769%. The NASDAQ index during the same time rose by almost 48%.
“If you pay attention to stocks that do not fall at all, there are several bubbles growing there. Apple, Amazon and Google are growing every day, they are trading at very high prices, because people start thinking: “These shares will never fall, they will always grow,” the owner of Rogers Holdings told RBC Investments.
However, he is confident that no asset can grow forever. “I will not buy these shares because I know this is a bubble,” he emphasizes.
Back in late August, Investing.com wrote about the Buffett Indicator, which indicated the overheating of the US market.
Since then, we have witnessed a strong correction in the major indices in September, which may not be exhausted yet, as the lack of new stimulus from the government and the Fed, as well as political uncertainty ahead of the US presidential election add volatility to the market.
However, the fundamental resilience of tech giants, which showed real growth in profits during the pandemic, is beyond doubt. (Tesla stands apart here, because the “Robinguders” who have taken the stock to the skies do not pay attention to the fact that now the main multiple – P / E – is over 1,077 according to finviz.com, and Forward P / E is 129.94 ).
Nevertheless, Jim Rogers does not believe that there is a chance to make good money on the “overheated” securities of the largest IT companies and intends to look for promising shares in unpopular and depressed industries, including among Russian assets. Since 2014, he has been investing in the Moscow Exchange, PhosAgro and Aeroflot.
Now businessmen are attracted to the tourism and entertainment sectors, and this is understandable, given not only the collapse of these sectors into a pandemic, which creates good buying opportunities, since they have not yet recovered, but also the fact that in 1980 Rogers left Wall Street and became carried away travel: his two tours around the world (on a motorcycle and a car) hit the Guinness Book of Records.
“People have stopped going to bars and restaurants, leaving their homes, flying airplanes – but they will do it again. And that's where I look for opportunities, ”says the famous investor.
In the 1970s, Rogers, together with George Soros, founded the Quantum Fund, which brought 4200% of the income to investors in ten years, reminds RBC.
Apparently, Rogers' secret of success is not so difficult – he prefers to “buy cheap”.
Earlier in an interview with RBC Investments, he complained that he could not invest in Venezuela or North Korea, since being a US citizen had no right to violate American sanctions.
“These are countries that are experiencing a catastrophe and it is cheap to invest in them. Take a closer look at Venezuela, you can invest there. There is a disaster! If you invest in a destroyed country, then in five to six years you can usually earn a lot of money, ”the publication quotes him as saying.
The text was prepared by Alexandra Shnitnikova