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INTERVIEW Jim Rogers urges Korea to lift short-selling ban in 2022
Jim Rogers, chairman of Rogers Holdings and Beeland Interests, speaks during an online interview with The Korea Times from his residence in Singapore, Jan. 7. Screenshot from Zoom
By Park Jae-hyuk
79-year-old investor warns of 'worst bear market in lifetime'
By Park Jae-hyuk
Jim Rogers, who is often regarded as one of the world's three most renowned investors along with Warren Buffet and George Soros, did not hesitate to criticize the Korean government for its tough financial regulations that he said go against global standards.
“South Korea is one of the most difficult markets in the world for international investors to invest in,” he told The Korea Times online from his residence in Singapore. “Seoul says 'we want foreign investors,' and 'we want people to invest here.' But their actions say something else.”
His criticism was leveled at Korea's indefinite prohibition of shorting small-cap stocks, which has been enforced since early in the coronavirus pandemic in 2020.
Although the Financial Services Commission partially lifted its ban on the short-selling of KOSPI 200 and Kosdaq 150 shares last May, it is still unclear when the authorities will permit the complete resumption of the practice of betting on the fall of a stock's price. MSCI cited the uncertainty as one of the reasons for its refusal last year of Korea's request to upgrade its domestic equity market status to “developed” from “emerging.”
“Short-sellers can stop stocks from going up too much. If they collapse, then short-sellers have to buy them, and that will help the stocks from going down too low,” Rogers said. “I haven't sold short in a while, but short-selling is good for any market where it exists, including Korea.”
The 79-year-old urged Korean policymakers to immediately stop all of the country's unreasonable regulations, including the short-selling ban.
He mentioned his own experience as another example, complaining about a regulation that forced him to sell his Korean Air shares in a foreign brokerage firm and to buy them back through a Korean broker when he sought to move the stocks to a securities firm here.
“Who comes up with these crazy regulations in South Korea?” he asked. “I know businesspeople who tell me it is easier to do business in China than it is in South Korea, because of all the regulations and controls.”
Jim Rogers speaks during his previous interview with The Korea Times at the Stanford Hotel in Seoul in this 2019 file photo. Korea Times photo by Choi Won-suk
Skeptical outlook for global economy
The Wall Street legend remained pessimistic about the global economy this year. His main concern was central banks printing, spending and borrowing huge amounts of money to counteract the market's correction.
“The central banks are going to get scared, and they are going to print even more money, so we'll probably have one last big move in the markets and that will be the end,” Rogers said. “Sometime in 2022 or 2023, it will all come to an end. And we'll have the worst bear market in my lifetime.”
He warned that inflation will get worse due to the increased issuance of money. From that standpoint, he expected people to look to the U.S. dollar as a “safe haven.”
“People think the U.S. dollar is a safe haven for historic reasons. It's not, but people think it is,” he said. “So when the turmoil comes, the U.S. dollar will go higher. It will get overpriced at which point I hope I'm smart enough to sell my U.S. dollars.”
He did not express skepticism about trading in cryptocurrencies, although he disagreed with the idea of bitcoin or any other virtual asset replacing government currencies, such as the U.S. dollar.
“If a non-government crypto money ever becomes as successful as money, then the governments will say 'no, you cannot do it anymore,'” he said. “But some of my friends are making a lot of money trading all of this stuff.”
He advised investors worldwide to invest only in what they know about and to make their own decisions, rather than looking for a “hot tip” from him or anybody else.
“No investors should invest in anything that they do not understand,” he said.
Betting on Korean Peninsula's peace
Rogers, who visited North Korea in 2007 and 2013, maintained his optimistic outlook for peace on the Korean Peninsula. He viewed potential economic cooperation with North Korea as one of the solutions to South Korea's national debt that has increased significantly compared to those of other countries.
“North Korea doesn't have any debt. Nobody will lend money to the North Koreans,” he said. “So you'll have a peninsula that will have less debt as a whole than many other countries.”
Based on his optimism, the famed investor showed his interest in discovering companies that will benefit, if and when the two Koreas open up their military demarcation line. He has already served as director of Ananti, a South Korean resort developer, with expectations of the company's property in North Korea rising in value.
“I own some shares of Korean Air, not because it's a good airline,” he said. “When tourism opens again and the 38th parallel opens up, Korean Air is going to do very well, because that is the only one there.”