Renowned global investor Jim Rogers has a knack for knowing the direction of investment winds. Jim Rogers started the Quantum Fund with George Soros nearly three decades ago. He has written several best-selling financial books, and he’s a prolific commentator. Rogers has been bullish on airlines, water treatment and agriculture stocks, beside other recession proof companies. In an exclusive interview Rogers spoke to NDTV Profit's Namrata Brar about commodities, bail-put package, and his investments.

NDTV: Do you believe in the theory of commodity cycle cooling off?

Jim Rogers: There is no question that commodity prices have cooled off, but that is the way the market works. You always have consolidation and correction. Three times in the last nine years, oil prices have gone down by 50 per cent, and each time it was not the end of the bull market. If suddenly someone discovers huge oil reserves then the bull market is still on.

NDTV: But how long the bear market in the current commodity space will continue?

Jim Rogers: In the 1970s, gold went down 50 per cent, but after two years it turned around and went up 850 per cent. So I don’t know how long this correction is going to last. If the worldwide economic problem continues for a while then it can last for a longer period.

NDTV: But everybody is talking about global slowdown, so if there is no demand then how will commodity price rise?

Jim Rogers: They will have a consolidation but if you are suggesting the world in a perpetual economic decline, then we will never have any bull market.

NDTV: Regarding the bailout of mortgage giants Freddie Mac and Fannie Mae, you vocally criticized and said that ‘US is bigger communist than China.”

Jim Rogers: I would call it ‘pure socialism.’ It is welfare or socialism for the rich. It is absurd! The US national debt is $5 trillion but within a week the government doubled the national debt. On September 30, the total US federal debt passed the $10 trillion mark, which I and my children will pay off. It is bad for the US economy, dollar and inflation. The government is bailing out the Wall Street, which is not for me but for a few guys at troubled banks.

NDTV: What if somebody doesn’t bail out troubled banks as the exposure is not just limited to US financials but it is across the world?

Jim Rogers: We have had banks going bankrupt for so many years. You think the world will come to an end just because banks go bankrupt, it will not. There maybe disruptions for a while but it is not the end of the world.

NDTV: Will you buy when there’s blood on the street?

Jim Rogers: If the US and other world stock markets did have a selling climate then I would go for it.

NDTV: But what will you buy in terms of equity asset class?

Jim Rogers: Well, it depends on what goes down the most. I would probably buy stocks of airlines, water treatment, agriculture, and other recession proof companies. The way you are going to get rich in the side market is define by the companies that come through hard times with good results. Those are the companies when you have next bull market that you make a fortune. 

NDTV: Are you saying that decoupling would work?

Jim Rogers: When the largest economy in the world gets into trouble then it would also affect anyone associated with it. If you are doing business with the largest US retailer Wal-Mart then you may suffer during this phase of slowdown. But if you involved in water treatment business in India or China, then you don’t have to worry about. It is because the business has nothing to do with the US. If you are involved in agriculture business in Asia then who cares about America.  

NDTV: In India what excites you the most? As an investment story what will convince you to come and perhaps endorse India for the future? Also what worries you in terms of economic policies?

Jim Rogers: I always tell people that there is no country in the world that has the breadth and depth of culture like India. The Indian government said that inflation is caused because of commodity trade, which I think is quite absurd. India should be the greatest agriculture nation in the world, not the America. If I wanted to buy shares in India then I just couldn’t go to a broker and open an account. India has got some insane regulations which prevent India from an open and free economy. 

NDTV: What will tempt you Jim to come in and buy India story despite all those problems?

Jim Rogers: If I can find shares that I can trade freely and equally then probably I have to be outside of India. I am very bullish on tourism, agriculture and water treatment sectors. These are spectacular parts of Indian economy that despite the government could have a great future. 

NDTV: You partnered with the legendary George Soros to co-found the Quantum Fund in 1970. Over the next 10 years, the fund gained 4,200 per cent. In the same period, the S&P returned 47 per cent. So what did you do?

Jim Rogers: I performed like an ordinary investor. I worked very hard and did enormous research to find out sectors that are going to do best. Then I invested a lot of money into those sectors. I used a lot of leverage and it worked.