By Svea Herbst-Bayliss
NEW YORK (Reuters) - Investment industry icon Jim Rogers, who helped launch one of the world's best performing hedge funds, said on Tuesday that he is betting against U.S. home builders and expects the sector will suffer more losses.
"I am short home builders and Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz)," Rogers, who co-founded the Quantum Fund with hedge fund industry legend George Soros, said at the Reuters Hedge Funds and Private Equity Summit on Tuesday.
"They will go down a lot more. You just don't clean out a speculative bubble in six months," added Rogers, who now invests only his own money. Rogers' calls, particularly his views on commodities, still resonate with other investors. He said he was short American Home Mortgage Investment Corp AHM.N and other mortgage companies as well.
The U.S. housing sector has taken a hit in recent months as home builders are reporting slumping orders and the number of U.S. borrowers falling behind on making payments on riskier types of mortgages is rising.
As a group, home builders have lost about 18 percent of their value this year, according to the Dow Jones U.S. Home Construction Index .DJUSHB, an industry benchmark.
Rogers said the call was not difficult to make considering the obvious risk at a time lenders were becoming far more lenient than ever before.
"Never in American history has there been a time where you could get a mortgage for no money down," Rogers said.
However some other investors, most notably Legg Mason's Bill Miller, considered the best U.S. stock picker for having beaten the Standard & Poor's 500 index 15 years in a row, said in December he expected home builders to show new promise in 2007. Continued...
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