Editor's note: COVID-19: Economic Analysis is a series of articles comprising experts' views on developing micro and macroeconomic situations around the globe amid the COVID-19 outbreak.
The American investing guru and best-selling author Jim Rogers said on Wednesday that he would rather buy China than the U.S.
Rogers shared his thoughts on global markets and investing amid the spread of COVID-19 in an interview with China Central Television (CCTV). He praised China's control of the disease in comparison to the U.S.'s management of the situation and said he would further invest in China and Russia.
China, where the new coronavirus first broke out, has not been seen a dramatic surge in confirmed cases for more than a week. The majority of the country's cases have now been imported from abroad instead of coming from domestic origin.
As of now, at least 69,197 confirmed COVID-19 cases have been reported in the U.S. with a total of 1,046 deaths, while the global death toll soared past 20,800.
More than three billion people are living under lockdown measures as soaring death tolls in Europe and the U.S. on Wednesday underlined a United Nations warning that the coronavirus pandemic threatens all of humanity.
Here's some of what Rogers said during the interview:
Q: What are your thoughts on the current markets?
A: America's stock market went up 10 or 12 years, the longest in American history without a bear market. In the last three months before February, the market went almost straight up. And then suddenly, something hit, but it always does... There is always a reason when markets get too expensive. This time it happened to be the virus, but it was other things too.
Q: Do you think the infinite liquidity and the 2 trillion U.S. dollars rescue package in the U.S. right now is able to get us out of the woods?
A: It's going to cause a (markets) rally. A lot of money has been flooded into the system. We're going to have an artificial rally. It is going to last for a while. But before this (the coronavirus) is over, this is just going to be a serious rally because the bear market is not over there.
Q: What are the bright spots? Are there any in terms of asset classes or regional places worth to invest?
A: China has done a better job of handling this virus than the U.S. has so far. I'd rather buy China than I would the U.S... Russia is better to buy than many countries at the moment. Some industries like airlines and travel, have been just destroyed, they've been decimated. These are probably good buys... Places like restaurants, hotels and transportation all over the world (are also good buys). I bought a Russian shipping company again yesterday.
Q: What about commodities? We see gold losing some of its luster as a safe haven asset.
A: Whenever people lose confidence in paper money, and in governments, there's going to be a lot of confidence lost in a big bear market. People always buy gold and silver.
Q: How do producers remain solvent at these price levels? Where and when do you see things balancing out?
A: Many of them are not. The Saudis and the Russians are trying to put the frackers out of business and they are going to do it. (Previously) if you could spell fracking, people would give you money. Fracking will not disappear, but it is going to have to be profitable and efficient in the future.
Q: What's your suggestion for retail investors? Do you think the best strategy for them is just to hold cash?
A: All investors, retail especially, should only invest in what they themselves know a lot about. If you cannot find something, you don't know something, keep cash. (There is) nothing wrong with cash. (It is) better to keep cash and just earn very small return than to lose five or 10 percent a year. Sitting in cash is not so bad, especially when people are losing money.