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Gold Prices Are Not In A Bubble – Jim Rogers

احدث اجدد واروع واجمل واشيك Gold Prices Are Not In A Bubble – Jim Rogers

Gold prices are not in a bubble because not everyone is buying yet, but that doesn't mean that prices for the yellow metal can't take a "rest" for a while, said Jim Rogers, noted commodities investor.

Gold prices gained nearly 30% in 2010 and hit record nominal price levels, which has prompted some market observers to warn that the precious metal is in a bubble and could burst, sending prices down sharply.

"When there's a bubble, everybody is buying something and it's going up every day. You cannot say that about gold," Rogers said.

He said jewelry shop windows have signs that say "We buy gold" and that most money managers still do not have gold holdings in their portfolio. When jewelry stores have signs up saying "we sell gold" and have lines outside to buy, when everyone owns gold that will be the sign of a top. "Those days are not here yet…. But this is absurd - you can't have a bubble until everybody owns something," he said.

Rogers spoke to Kitco News on the sidelines of the annual economic outlook discussion sponsored by The Executives' Club of Chicago.

Gold prices have come off the all-time highs set in late 2010, and given that gold has risen annually for the past 10 years he wouldn't be surprised if the metal takes "a rest." But that doesn't mean he's predicting that will happen.

"I own it, I'm not selling it, but the way markets work, it's certainly overdue for a rest. I don't know if it's going to rest or not," he said.

He said he is not buying any gold right now, just watching. If prices fall, he said he'd probably buy more, but wouldn't say if there is an attractive area. "I'm not a trader. I don't pay that much attention. If I'm paying attention and if there's an opportunity I hope I'm smart enough to take advantage of it," he said.

In 1973 Rogers co-founded the Quantum Fund with George Soros and is the author of Hot Commodities among other books.

He has advocated many times that investors seek real assets, saying that the world is changing from valuing financial centers to areas where goods are produced, and suggesting that college students are better off getting degrees in agriculture and mining than MBAs.

Long-term Rogers is bullish on commodities, but short-term the volatility in commodity prices can be contrary to long-term positions. Risk management is as important to commodity markets as it is in other financial vehicles and he said selling short is one way to do it.

"Selling short is the best way I know to hedge yourself. Throughout my investment career I've nearly always had some shorts – I'm short some things, long others. That doesn't necessarily mean you're safe. I've had it where my shorts go up and my longs go down, so I've lost money on both sides," he said.

He wouldn't suggest what allocation an investor should have devoted to commodities in their portfolios. Instead he said people should never invest in something they don't know and stick to what's familiar. "You should have 100% of your money in things you know about. You should have none of your money in things you don't know anything about.

Don't listen to people like me, make your own decisions and know your own stuff and once you know it then put a lot of money in it," he said.

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