It was a fruitful trip for celebrity global money manager James Rogers, who just returned from seven weeks in Asia, where he visited Shanghai, Singapore, and Hong Kong. No, he wasn’t there for investment reasons but rather to get his 3-year-old daughter, Hilton Augusta, to learn the Chinese language. “Hilton is now bilingual,” he told me. There are 1.5 billion people in the world who speak Chinese every day, he said. “It’s going to become the most important language in her lifetime. There was just no downside taking her there.”

Not surprisingly, Mr. Rogers, 62, a frequent guest on TV business shows, has some Chinese investments, namely stocks and commodities. But unlike many of his peers, he’s not committing any fresh money to the country. The reason: He sees a hard landing (a big sell-off) in Chinese real estate, which he describes as having a bubble that he expects to negatively impact the country’s economy. “If it happens,” he said, “it’ll scare a lot of people, including me, and then I’ll buy China” – meaning additional purchases of the country’s shares and commodities. He’s especially enthusiastic about commodities, observing that China will be forced to buy things it doesn’t have, like crude, cotton, and nickel.

Overall, Mr. Rogers, who is wrong at times but never in doubt, figures it behooves investors to have China represented in their portfolios because, as he sees it, “the 21st century is the century of Asia.”

But what about the impact of his projected real estate bubble in China? “Sure, there’ll be pullbacks there, but you use them as opportunities, not to panic,” he said, “since the downside is limited and the upside is enormous.”

Mr. Rogers, who manages his family money through the New York-based investment firm Rogers Holdings, partnered with financial whiz George Soros in the 1960s and 1970s. He made millions in the process.

As for his current investment activities, Mr. Rogers, interviewed in a phone chat while he was pedaling away on one of the many exercise bikes in his Upper West Side house, is currently about as active in the markets as one of those long-buried Egyptian mummies. “I’m just sitting back and looking out the window now,” he said, “and I think you ought to tell your readers this is a good time to go to the beach.”

Last October, he told me he expected the American stock market to falter late this year, and he still thinks the same way. The big problem, as he sees it: Excessive fiscal and monetary stimulus, which will end later this year, leading to rough economic times in 2006. “We get a recession about every five years,” he noted. “The last one started 4 1/2 years ago in 2001, so we’re about due.”

Add to this concern economic slowing in Europe, his outlook for a hard landing in China, and his expectations that Fannie Mae will go bankrupt, and Mr. Rogers looks for the American stock market to be flat to down this year and do worse in 2006.

The biggest excesses here, he said, are in the financial area, which make up about 30% of the S&P 500 earnings. He refers to all kinds of financial companies, such as brokerages, money managers, banks, mortgage companies, and real estate investment trusts.

In 1981, he recalls, energy also represented 30% of the S&P 500 earnings while in 2000, a combination of technology, telephone, and press-related companies accounted for a similar portion of earnings. At that earnings level, they both proceeded to collapse, which is precisely what he sees for the financials. In fact, he views financials as a ripe area for short sales (a bet their stock prices will fall), and he is short both Fannie Mae and Citigroup. Mr. Rogers is also short homebuilders, since he views many key housing markets to be a bubble, especially New York, California, Florida, Massachusetts, and Aspen, Colo.

He admits he’s losing money in the homebuilding sector, but he said he’s making up for it in Fannie Mae.

What has he learned in the last 20 years in the investment business? “That I have to wait [in short sales] a year after I think there will be problems and I’m still usually too early,” he said.

Any final thoughts? Learn to speak Chinese, he said. He’s so smitten with the country, in fact, that he’s thinking of moving there for a year or two.