The 300 Club

Posted by Mike Tirone - Wednesday, September 28th, 2011

When Jim Rogers speaks about commodities, you shouldn't just listen, you should be taking notes. The man's investing advice -- specifically within the commodities of gold and silver -- will make you plenty of money.

This week, Rogers spoke with The Economic Times of India about the recent gold and silver prices.

He feels that gold might dip a little lower in the coming weeks, but strongly suggests that with the weaker prices comes great opportunity for investors who were late to the party of the red-hot bull market to jump on the bandwagon now. By doing so, you'll see another surge of higher prices in the future due to the sovereign debt crisis in both Europe and the United States.

“Gold has been up 10 years in a row, which is very unusual in any asset class. So if it is up this year or 11 years in a row, gold is overdue for a correction and it could have a nice substantial correction given that it has been so strong,” Rogers said.

Earlier this week, the two other “hard-money advocates” whom we look toward for advice, Marc Faber and Peter Schiff, have already suggested similar actions if the price of gold drops. Rogers shared the same feelings as his fellow gold-gurus. All three advocates sees the pullback in gold (and silver) prices as a healthy one for the long term investor in precious metals. They see it as another buying opportunity for investors looking for protection from the consistently weakening U.S. dollar and euro.

One of the most important things Rogers mentions in his interview with ET, is that everyone should buy the dips:

“I doubt if it will go to $2000 an ounce in 2011, it is more likely to have a correction which will last for several weeks, several months. It has been very strong. If it goes down some more, I would buy more gold as I have told you many times.”

Forbes Magazine's headline on the interview omitted that key point of buying the dip and sided with the more dramatic: Jim Rogers Tells India Press Gold Will Decline For 'Months'

As for silver, Rogers says to wait just a little longer before buying:

“Not yet, but if silver continues to go down as we have discussed before, I will buy more silver too. Do not sell your silver, do not sell your gold unless you are a short-term trader, but anybody who is in this for a long term, silver and gold will both go much higher over the next few years.”

Finally, when asked why he believes precious metals are correcting, if it is an unwinding of positions or an actual slowdown in investment and safe haven demand, Rogers credits the lack of confidence in the market.

“It is panic, it is fear. When fear permeates a market, everybody sells, especially the last ones in, frequently have to jump out. They have raised margin requirements for both silver and gold. So that makes it more and more difficult for people to hold on.”