Cashing in on Kohl's: Kohl's Corporation Investment (KSS)

 #MansaMusaMentality - arguably the world's richest person in History and he is a person of color

#BreakfastClubforStocks - get your Sherlock Holmes on with news, reports, and data for stock investments ideas

This post is a part of my #MansaMusaMentality series and how I invest. Almost like case studies (known as "Detail"), I'll highlight how I invest in assets such as real estate, stocks, precious metals, cryptocurrencies, etc. And I want to foster a community culture, so I'll show you how I invest and learn from my network and maybe in the future we can crowdsource or here we call it #tribesource investment ideas for the future.

"Detail" - A Breakdown of my Kohl's (KSS) Investment

Year(s): 2019

Throwback Link(s): 

https://urbanomics.blogspot.com/2020/07/is-stock-market-weak-or-should-you-be.html

https://urbanomics.blogspot.com/2020/01/2020-kick-off-reflect-but-expect.html

A "Detail" post is about how I found this investment. Quite simply, I kept my ears to da streets. My life is not dedicated to stocks because it's not my main hustle but I do my research, use my network of connections, and make smart informed decisions. Because I've amassed a nice investment empire, not the size of Mansa Musa, I'll be damned if I leave it to someone to manage and eat all my profits. I (AND YOU) can manage your money yourself. Just like how I listen to the Breakfast Club for the culture, I listen, read, and aggregate data for that stock culture. Again, if I have time for the Breakfast Club morning show with Charlamagne tha God... I can also make time for my stock version of the Breakfast Club.  What's your excuse??

My best investments of all time will make the #MansaHallofFame.  W.R. Grace was too small to make the list but remember we're NOT here for medal...we're here to retire early. So we'll take the small wins to achieve the bigger goal. Independent -- Know Your Worth -- Freedom to Choose

So how did I find this stock? I got my Sherlock Holmes on and did my own research. I keep a log of my research and ideas so don't test me. How do I get my Sherlock Holmes on? Depending on your age you might prefer: X-Files, Murder She Wrote, Columbo :)   Here's what I found:

Stock Investment Idea: KOHL'S Corporation (KSS)

Investment Takeaways: My investment in KSS is like the life lesson of getting knocked down but getting up and trying again. Thank you Aaliyah for the amazing song "Try Again" (if at first you don't succeed...dust yourself off and try again). COVID-19 took the world by storm and knocked many countries, companies, and people down. When I first traded Kohl's in May 2019, the stock was flying high, coming off a good earnings quarter, and buzzing about a new partnership with Amazon. I knew them as the store affectionately know for "Back to School" purchases and I was curious about the "if you can't beat them...join em strategy with Amazon". It was not clear how exactly they would partner with Amazon so not long after the street was hesitant about who was getting the better end of the deal. Then you heard rumblings about the decline of mall and retail --- here were my own words in the image to the right as 2020 kicked-off. Then COVID-19 threw a knock down punch. Kohl's like many other retailers has slowly dusted themselves off and tried again. They dispelled the myth that you couldn't purchase goods from there stores as surprisingly you could pull up and pick up a purchased item which appeared to be a hit with customers as many of their locations are close but NOT always tied to a mall, like in my area.  Then I found out during the pandemic a little more about the value of the Amazon partnership. I was making a number of Amazon purchases and for those items that needed to be returned, Kohl's kept popping up as the easiest place to return those items. A great way to get us into the store. 

I also want to remind you about about how we win --- it starts with strength in numbers. But it should NOT end there as change comes from having representation in positions that can truly enact change. At the end of the day, you have to have the numbers or as we say a majority of votes to get things done. I hope more people understand this when it comes to #strengthinnumbers, politics, and changing the system. We need allies and you have to have the numbers. Change is a powerful thing and it can cause Congress (who makes laws which impact your lives) or a stock (which impacts your $$) to move in your favor when a majority of votes is had. So I got in early on this investment but listen to what just happened the other day...the cavalry is coming. They've listened to my post on Kohl's and want to hunt in packs. Thank you @LAURENTHOMAS over at CNBC for this update. Macellum Advisors, Ancora Holdings, Legion Partners, and 4010 Capital see the value and want to pressure change. Kohl's board has 12 members and this group has communicated they want 9 out of the 12 seats effectively giving them control of the company.

A small protest can lead to a ripple effect but you have to have the majority of the BODs with you. Outside of the corporate world, you need to have a majority of your local government and in Washington DC we need to have a majority of Congress voting on a bill for change to occur. This article signaled change was coming --- either through a) my network of Wall Street buddies buying up the stock which gives them the right to "VOTE" each share and change the board members or by b) #huntinginpacks, they band together raise enough cash and buy the entire company.  Side Note: This works well in Corporate America to effect change but a huge reason why I don't like money in politics. One person with the biggest pockets can push for change if they buy a majority of the stock and vote. No one should be able to buy your votes when it comes to social policies in life.

Outcome: I've owned Kohl's since 2019 and like the direction it's headed. This stock is one of the few here I was not showing a profit. That is changing, just look at the image above, "Shares Soar" means the stock is moving up quickly, and especially this week now that others understand the value. As we rebound from this pandemic, I anticipate the stock will climb higher. 

Good luck and time to find another stock to trade

Side Hustle 101 - Start Your Business

Started from the bottom...now we're here.  If you are starting a new business, I suggest investing your first few weeks or months developing your business plan by defining what product or service offering you plan to provide for customers. You should know if your business primary focuses on businesses (B2B) or is your focus on consumers (B2C). I often ask people how will you make money, what does it cost (expenses and overhead) to make money, and how many competitors are out there trying to take business away from your you and your company. My favorite is can your business be easily copied? Lastly what is your exit plan or at what price would you sell if you were made an offer. 

I've had a chance to participate in a few discussions or pitches and often you will hear the same responses from new and experienced business persons:
- My business is unique
- I do not know my costs, but it will not cost too much OR these costs are needed
- My services are for everyone
- I do not have any competition because I will work harder
- This business is not for sale

I do not blame anyone that responds this way because it is often human nature and when you start a business it is personal and many treat the company like their baby. But when it comes time to invest and I am running through my risk management checklist, I mentally note that this entrepreneur may not be strong in running a business and bad governance is a never a good investment.  I usually ask one question which ends my investment process: "Can I see your business plan?"

So my challenge to entrepreneurs: Learn to Develop A Business Plan.

Then have as many people as possible read it, question it, and be comfortable going back to the drawing board when tough question arise. Also, make a mental note that if you respond with one of the common answers above you may have more work to do.  Then, I recommend watching as many episodes as possible of really good business shows like "Shark Tank" or the "The Profit" that are featured on CNBC.  Chances are you will hear someone with a similar business idea as yourself and it serves as a really good opportunity to prepare yourself on how to answer those questions AND see your competition in action.

This applies to entrepreneurs, your real estate business if you're a landlord, and your financial investments if you're a money manager.  Have a plan and know your numbers (the budget).  Who cares what the hustle is as long as it's making you money (and legal).  And as Mr. Wonderful said from the investment show "Shark Tank" if your business is not making money in 3+ years...it's basically a hobby. I tend to agree as it aligns with Warren Buffett's number 1 rule to investing: "Never Lose Money".

My Personal Experience: I've started a consulting practice which has been thriving now for 2 years. I've kept it barebones and will expand when the risks make sense, so the math is simple not much expenses but I the profits are more than I would make as a salaried employee (accounting for benefits and retirement planning) I have complimented that with a rental property that I manage, and a financial investment portfolio that I manage. All of these need a well thought out plan and when the risks don't equal the reward it's time for me to walk away or exit from any or ALL of these investments.

   

Dow at 14000 (Pt.1) - Are You Too Late for The Party!?!

For the first time since 2007, the Dow Jones Industrial Average has closed above the 14,000 range.  This range puts the Dow near its all time high of 14,165.  You know you're getting old when you remember where you were...when something happened years ago. I remembered the last time we where at these levels and here was the brief post I wrote about it:

Dow 14,000 in 2007

Well I took the market for granted the last time it reached these levels but this time I understand how long its been and the gravity of what it means.

Are You Late For the Party??

My initial thoughts are yes! I get a little nervous when people that don't normally bring up the stock market in normal conversations start to talk about their portfolios and the need to get in before they miss out.  That usually means its already too late.  My goal is to attempt to check my emotions to the side and I usually like to buy the markets when things have gotten pretty bad.  Its not very easy to do and sometimes you have to stomach all the critics and naysayers that say the end will never come.  I bought my first condo in 2010 and the housing market in the Midwest had been plummeting for the last few years but I did my research and truly believed a bottom was very near and the decline, which was needed, was near the end of running its course.  If you buy then (buying @ discount) you enjoy out sized gains in the future.  I navigated the markets as well as an amateur investor could have done at the time (took my share of lumps) but and pulled a significant amount of funds into safer investments.  After 2008-9 when we were calling for the world to come to an end, we needed some confidence to help reiterate when to get back in. I was very hesitant to increasing my exposure to stocks but listening to one investor in late 2010 gave many firmer ground to wade back into the markets.  So think about that question in the future as you continue to invest thoughtfully during periods where its bleak or really booming.   

Help In Getting the Timing Right

I love when investors lay their points out very quickly and in 2010 the simple points of David Tepper, a billionaire hedge fund investor, allowed many to understand why we should be in the markets. If you haven't listened to the points laid out by David, you can find the video and excerpts from that discussion here:

David Tepper Rally Video

This simple excerpt from David Tepper's discussion makes it clear (from CNBC):

"Either the economy is going to get better by itself in the next three months...What assets are going to do well? Stocks are going to do well, bonds won't do so well, gold won't do as well," he said. "Or the economy is not going to pick up in the next three months and the Fed is going to come in with QE.

"Then what's going to do well? Everything, in the near term (though) not bonds...So let's see what I got—I got two different situations: One, the economy gets better by itself, stocks are better, bonds are worse, gold is probably worse. The other situation is the fed comes in with money."

I'll conclude with my thoughts that you may be a little late to the party because David laid out the case that (1) the economy will improve and stocks do well or (2) things won't go well and the Fed will inject money (QE) making stocks do well. An indication that we should should have been in stocks enjoying the rally up until this point.  However, my next few posts will share the views of both sides who argue that from here we go HIGHER...and those that definitely think the markets go LOWER.

What Are You Reading - Barron's 2013 Roundtable

I will detail in a future post what book I'm currently reading and the tips that I've picked up along the way.  But for now I am going to try and help you (1) Learn from some of the smartest investors in the game and (2) Observe some of their best picks for 2013.  The link I will post is from Barron's and their Roundtable discussion 9 notable investors.  I instantly recognize from CNBC the familiar names (and faces) of the following investors:

• MARIO GABELLI - Dr. Love (He enjoys companies merging or making love and has a nice track record to prove it.

• BILL GROSS - PIMCO Bond King 

• ABBY JOSEPH COHEN - Goldman Sachs Strategist

But then reading the insight from the other 6 panelists left me very with some very good insight from each of these investors predictions on what to expect from the market in 2013.  The other gang of 6 were:

• Scott Black
• Fred Hickey
• Brian Rogers
• Oscar Schafer
• Meryl Witmer
• Feliz Zulauf

I am slowly becoming a sponge of information about what is happening in the rest of the world and really enjoyed Feliz Zulauf's commentary.  I also love to hear them quote history because I am a firm believer that it repeats itself , however; humans never take the time to listen.  This article also include stock selections and may serve as a great place to start for new investments in 2013. 

Barron's Rountable Part I

Barron's Rountable Part II

Billionaire Beef...

If you haven't heard...there is some serious bad blood in the streets!  While I would normally expect a diss track to be surfacing soon, this beef won't be titled "Ether" or remixed over another rapper's song as a sign of disrespect. This is a good ole fashion beef amongst billionaires who aired out their dirty laundry on national television. I couldn't believe what I was hearing and then I began to wonder if I was worth a billi how would call out my opponent. Check out two Wall Street titans (Bill Ackman vs Carl Icahn) going at each other on CNBC:

The Economy's First TIme...

First times are usually associated with fond memories that will last a lifetime. However, some first times are not what we truly expect.  I was listening/reading a discussion with hedge fund manager Kyle Bass.  I find him interesting because he tends to like going against the grain. The things that I hear from him don't always align with what many investors and analysts are saying at that particular point in time.  If you've paid attention to my posts or random outbursts I've definitely slowed down writing about all things Wall Street because the rules are being written and changing as we speak.  In the last year, you have often heard me say that the data and thus the signals I am getting are mixed.  Maybe it would be better put that situations are changing so rapidly that its tough to keep a gauge on the market unless I am watching constantly.  I prefer not to watch constantly because that would throw off my investment style and likely lead to a little more hedging or second guessing of my strategies.  While listening to Kyle Bass speak, I thought he put an interesting take on things which made me understand why I've had this whipsawed feeling about how the market is acting.  He simply stated, "We've never been here before".  Ever!  And the point he noted was quite interesting...during a peace-time era (may wanna slightly debate this part) the amount of debt we've amassed has never been this large.  Historically, it's interesting that countries massively massively build up debt during times of war to get through those periods of time.  However, why did and why now is debt level so far away from what we've historically been used to?!?  I've favored being in the market but tilted to the defensive side of things.  That is where I will stay for the foreseeable future. So dividends, growth, and maybe even higher risk debt securities are the road that I plan to take.  A little hint for my subscription folks, you'll notice that technology and software have surprisingly been in the mix!  I'll embed the video below, take a listen:

Investing for Growth or Is It a Slowdown?...

URB - Economics

I barely lasted through a board meeting that proves my building morale is in a recession maybe a depression.  The arguing gave me the impression I was watching Congress debate about taxes or healthcare. :)

Speaking of Congress! While they talk about it often, it seems like things are only done about the economy in spurts or bursts. When it gets really bad, you and I get loud enough, Congress hears our anger and they throw us a bone or two and then get back to fighting about real issues...I guess.  It's interesting the topic is never 100% about the economy.  I would like to finally write a post about whether I definitively think the economy is growing or slowing down.  Its pretty hard to tell and as you know I constantly keep my ear to da streets to get a pulse from the people.  The real people that are trying to make ends meet day to day, rather than just arguing.  There are many mixed signals out there...and I see positive signs from improving housing trends to people starting to switch jobs.  But then there are the constant reminders of high unemployment, rising grocery bills, foreclosures, city governments struggles, and the federal budget problem which confirm that the coast is not clear.

Are You Prepared For a Slowdown?

If you're like me, you've probably been keeping a close eye on the wallet nowadays.  I wanna believe that things are getting better but I need proof.  Unfortunately, part of my everyday routine is to search for clues to as to when the economy is going to get better and I didn't like what I heard.  I was listening to an economist named Lakshman Achutan and he had some interesting data to share last week.  He is predicting that America is heading into a recession after analyzing different indicators on the direction of our economy.  This is just one view of things, however; I would definitely take the time to be cautious until things get a little bit brighter.  Click the link to see the video:

RECESSION IS COMING

Notes from the Matix - April Download Pt II

Pharma
Pharma is short for pharmaceuticals and this has traditionally been an industry that I have shied away from as I’ve tried my best to incorporate a rule that I have learned from Warren Buffett and Peter Lynch awhile ago: Invest In Things That You Know

This is at odds at times with the strategy that I’ve been harnessing over time and that’s being a MACROVALUEQUANT. Often, my screens lead me select a stock that I believe has positive momentum (QUANT) and I further weed out these stocks if they are not trading at a low valuation (VALUE) and support my general view on what industries and sectors should do well in the current global economic environment (MACRO). My screens recently led me to 2 pharma stocks (See Pharma Premium Alerts Post) and I was very reluctant to nibble at the bait.

Risk On: Orexigen, St. Joe Company

I will start off by saying that my view of the economy is very MIXED. I will get into the reasons the next time around. Here are a few more free picks because these are very risky plays and I want to document my theory here. I have one premium pick posted a few weeks ago that is doing quite well. Please contact me for gaining access to my premium picks.

OREXIGEN (OREX): I hope you like this call! After this stock got hammered, I called for a 'NIBBLE' in my last post. I parsed through a ton of data on both sides of how the FDA approval would play out and I ended up with the right conclusion. The proof was in the pudding of the FDA panel advisers meeting at the end of last year. This panel advises the FDA and while they approved Orexigen, it was a narrow approval vote and the theme was that there were concerns with elevated heart readings of patients. As I mentioned before, the FDA had to pull a previous diet drug from shelves due to cardiac concerns and I have a strong feeling that they didn't want to make the same mistake again (duh). Hence, the FDA voted to not APPROVE the drug, but called for more studies.

HOWEVER, the reason I call for a nibble of this stock at the 52 week low of $2.47 is because of the probability. The probability is likely that this drug won't die. Its comprised of two drugs that have already received FDA approvals separately. That means there is a chance for a few different outcomes:
~ More testing until even FDA approval
~ Sale of existing drug to another company that can use the technology

These outcomes led me to recommend a gamble on OREX. Since then I believe its been up 44% in a few days.

St. Joe Company (JOE): JOE continues my love of all stocks controversial. I am not sure why the 'Risk On' trades are of interest to me at this point but I want to make sure that I capture it here in my posts and some of the reasons why. JOE is a tough stock to recommend because it has a LOVE/HATE story line going on. Real estate companies and prime Florida locations makes its a darling, but the downfall of all real estate across the country has many thinking its on its last leg. The story drags on amongst investment titans. This stock is loved by famed mutual fund manager, Bruck Berkowitz, and hated by hedge fund genius David Einhorn. So the reason why I picked up a few shares the other day is because of a few reasons simple to probably only me.

REASONS I LIKE JOE:
~ Valuation: Many (wink:Einhorn) have hinted at valuation troubles lurking. I used to subscribe to this school of thought until the financial crisis taught me, there is a valuation crisis only if you can't get access to capital. Once banks got infused, they didn't have to write down every asset, they could afford to wait.

My opinion is JOE will not have to value its property at these historic lows...they can wait it out

~ Catalyst: Institutional love. This stock is attracting some big players, Bruce and I believe BlackRock on one side and of course Einhorn on the Other.

My opinion is JOE will benefit from its largest shareholders actively attempting to make this company more efficient and profitable. The don't have time to play and Bruce owns 29% of the damn stock...can you say his voice will be heard. And it has been, he's been out pumping up the stock recently, check CNBC.

~ Short Squeeze: This last one may be dumb, but everyone and their mom jumped on the Einhorn bandwagon and started SHORTING the stock. If either of my first two points prove to be correct the shares should jump as short sellers get squeezed out of betting this stock will go down. They will have to buy their shares back and...TA DA the stock rises.

Now the stock on Monday was up between 8-10% but I still bought because I think this is just the beginning of a beaten down stock with a serious plot...think Young & the Restless.
Pick up shares around $29 and anywhere below. I had to settle for $29.30 right before the close of Monday after I learned that morning listening to CNBC that Bruce it trying to get himself the Chairman spot and his business partner Mr. Fernandez the Vice Chairman spot. Can you say catalyst for change! Say goodbye to the scrubs on the board, there is a new sheriff in town. Any news like this and you will have buyers jumping on a beat down stock and short selling feeling the squeeze.

Disclosure: I own shares of St. Joes Company

Wall Street - The PULSE

Hey everybody I am back to hit you with a quick post to keep you in the loop with what's going on in the stock market. By now, I know the average person is paying attention on a daily basis because I get a weekly call from my sister asking me about why things are falling or more importantly what should I be doing with my money. And if you recall when you don't hear much from me I am usually doing one thing and that's reading. I am constantly reading about what everyone has to write and listening to what everyone has to say...to get a feel of the market's temperature. How can you do this?!?! Well simply start by tuning in here as often as you can to get a pulse, not always daily but a frequent pulse as to what may be changing out there. And if you get tired of reading, check out CNBC's homepage and select the VIDEO tab for very frequent video posting of their on air show.

Wall Street's Pulse - Awhile back I compared Wall Street to a prized fighter that was down and out, maybe like one of my favorite fighters Roy Jones Jr. The latest prognosis is still not that good...the patient needs help getting up in the ring right now and the count keeps going to about 8 (get to 10 and the fight is over). For those of you that don't know what a knockout blow is for Wall Street, well its would be a depression. And the trainers right now are the Obama Administration, The Treasury Department, and The Federal Reserve. They are constantly looking at the fighter, checking its vitals, and assessing how to help him keep fighting. But right now the vitals of Wall Street do not look good:

• Unemployment numbers continue to rise and have now been estimated to reach over 10% within the next year or so.
• Companies continue to cut jobs left and right and give not so rosy outlooks for the rest of 2009
• Consumer Savings rates were above 5%, which is at levels that we haven't seen in a long time!
• Retail Sales numbers are barely off their lows, which means people ain't buying!
• The consumer and companies are still having difficulty getting access to capital.

Investors (who are like the fans in the stands) have sobered up to these realities and almost given up on the fighter, but the trainers keep working. And their work seems to be helping the fighter get a little bit better:

• Banks are receiving more and more capital
• The stimulus plan and housing bills are aimed at helping home owners and generating jobs
• There is talk about adjusting mark to market (how banks place a value on assets they own)

What this has done is given the investors a little bit of hope that the fighter may come through and still win the fight. So they have started cheering louder and louder and the fighter has responded. The stock market has rebounded off of its March 9th lows and the banks have come back roaring. But its almost as if the crowd (investors) forgot that the fighter is still hurt and hurt badly. That's why may believe that the stock market is in a BEAR RALLY. This means alot of people think the fighter is healthy but in reality he's not. And soon those cheering fans will see the fighter get knocked down again and they will not cheer as loud.

Now onto what I believe and what I'm doing:

I believe the fighter is still hurt badly which means don't cheer (or buy stocks just yet). I truly believe that safer alternatives are out there and should be evaluated for your portfolio. I still like OWNING CASH, and not doing a whole lot especially in your retirement portfolios...don't be the hero or the only one cheering when the fighter just got knocked down again. Invest in safer alternatives:

Cash
Gold (GLD)
High Yield Corporate Debt (LQD)
Municipal Bonds (TFI)

And if you feel like you need to be in the markets, be careful and be a bottom feeder...the nastiest thing out there. Wait until things gets really bad and nibble on the most beaten down sectors. For instance I do this when the banks look really bad, like when everyone though Citigroup was going out of business and I buy just a little bit of the bank stocks ETF on steroids (FAS)...it gives me 3X the returns of bank stocks, but I bite just a little. And when things start to look like they are on a roll I sell. I don't panic about selling to early because in a few days I start to look for a point to be a top feeder and bet that things will come back down and buy the FAZ, which bets the banks will fall...TIMES 3X! But don't stick around to long in these trades or else you'll be writing me with heartburn as I have often had, but irrational fans sober up eventually.

Jim Rogers ~ Market Expectations

When trying to gauge how low the markets can go, I often do a couple of things, and that is to try to find out what is the worst cause scenario and an have an expert tell me in their words. When their are folks like Larry Kudlow telling the people to buy into a falling economy I like to hear the other end of the spectrum so that I can come to my own conclusion. So my interest in understanding how bad the economy is took me to statements recently made by famed investor Jim Rogers. Here are recents comments compiled from Bloggingstocks, Moneymorning, and CNBC:

"I'm extremely worried," he says. "I have been for a while, but I just see things getting much worse this time around than I expected." To Rogers, a longtime Fed critic, Bernanke's decision to ride to the market's rescue with a 75-basis-point cut in the Fed's benchmark rate only a week before its scheduled meeting (at which time they cut it another 50 basis points) is the latest sign that the central bank isn't willing to provide the fiscal discipline that he thinks the economy desperately needs. "

"Conceivably we could have just had recession, hard times, sliding dollar, inflation, etc., but I'm afraid it's going to be much worse," he says. "Bernanke is printing huge amounts of money. He's out of control and the Fed is out of control. We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene."
Rogers looks at the Fed's willingness to add liquidity to an already inflationary environment and sees the history of the 1970s repeating itself. Does that mean stagflation? "It is a real danger and, in fact, a probability."

Where he expects the pain to be most intense is on Wall Street. He says he hasn't covered his short positions on the investment banks or Citigroup (C, Fortune 500) and won't for a while. "Those things are going to go way, way, way down," says Rogers. "The investment banks are down now because of the problems in the credit market. Wait until the effects of the bear market come along. If you just go back and look at other bear markets, investment bank stocks have gone down enormously. We haven't gotten to that stage yet. It's going to bring their balance sheets under duress. This is going to get much worse. But that's where there have been excesses for the past decade or so. And whenever you have a bear market come along the great excesses of the previous period are the ones that get cleaned out the most."

Markets do not trust the governments' plans to keep struggling banks alive and investors will only calm down when the companies with bad assets are allowed to go bankrupt, legendary investor Jim Rogers, CEO of Rogers Holdings, told CNBC on Friday.

"The way to solve this problem is to let people go bankrupt," Rogers said. "Then you will hit bottom and then you start over. The people who are sound will take over the assets from the people who aren't sound and we will start over. This is the way the world has worked for a few thousand years."

The current rescue plans, which will force governments to issue more debt, print money and flood the markets with liquidity, will flare up inflation after the crisis is over and will create worse problems, Rogers warned. "We're setting the stage for when we come out of this of a massive inflation holocaust," he said. And the plans are unlikely to fend off a severe economic downturn, as the crisis starts affecting all walks of life. "We had the worst excesses we had in credit markets in world history. We're going to have to take some pain," Rogers said.

Economies who did not take part in the subprime bonanza are likely to suffer along with Wall Street and the developed economies as the crisis unfolds, he warned. "What about all the people in countries that minded their manners, saved their money, didn't get overextended and now all of a sudden they're being asked to bail out a bunch of guys on Wall Street who were incompetent at best and some of them crooks?" "I thought it outrageous that anybody has to step in a bail out a bunch of 29 year olds driving Maseratis," he said. There are not many safe havens in the volatile markets, he said. "I have an enormous amount of cash and I've been using it to buy more Japanese yen, more Swiss Francs, more agricultural products… there's a liquidation phase going on, where everything is being liquidated. They're selling everything in sight."
"In a period like this the way you make money coming out of it is to own the things were the fundamentals have not been impaired," Rogers added.