In 2007, he packed up and moved to Singapore where he is essentially shorting the West.
Behind Rogers' quick wit and endless charm are brilliant investing insights he gained during his lengthy and legendary career.
We put together 14 of the best insights that every investor will find helpful.
"Most successful investors, in fact, do nothing most of the time."
Once you've invested in something, done your research, made money, and decide to sell, you need to be careful, Jim Rogers says:
Now that is a very dangerous time. It is dangerous because you think you are really hot. It is the time when you think you know that this investing thing is an easy game. It is the time that you should open the curtains, look out the window, go to the beach, do anything but think about investing. Because now is when you're most vulnerable. You think: I have to find something else. I have to do it again. This is wonderful. This is so easy. Just as I thought after tripling my money with my puts. ... It is the great mistake people make."
Source: Street Smarts
"If you want to make a lot of money, resist diversification."
REUTERS/Erik De Castro
Brokers will tell you to diversify, but Rogers writes that this is mostly to protect themselves.
"If you buy ten different stocks, chances are some will be good," he writes. "You are not going to go broke, but you are not going to make a lot of money, either. ... The way to get rich is to find what is good, focus on it, and concentrate your resources there. But make very sure you are right. Because it is also a fast way to go broke."
Source: Street Smarts
"It is remarkable how many people mistake a bull market for brains."
REUTERS/Joseba Etxaburu
"There is nothing quite like a bull market to make people think they are smart," Rogers writes, adding: "All big bull markets, secular bull markets, end in a bubble. Everyone chases the conventional wisdom, following what they read in the press, and that presents the smart investor with opportunities."
Source: Street Smarts
"On Wall Street there's no truer adage than …'markets can remain irrational longer than you can remain solvent.'"
In the early 1970s, Rogers shorted six companies and was wiped out. He realized he didn't have the "staying power" one needs to be a short seller. "Within the next two or three years, every one of those six companies I had shorted went bankrupt, and I was a genius. Which put me in the mind of saying, "If you're so smart, then why aren't you rich?"
"This was the perfect example of being smart and not being rich. I had been so smart I went broke. I did not know what the markets were capable of."
"On Wall Street there's no truer adage, I learned, than the one attributed erroneously to John Maynard Keynes: 'Markets can remain irrational longer than you can remain solvent.'"
Source: Street Smarts
"No matter what we all know today, it’s not going to be true in 10 or 15 years."
Investors should remember that change is inevitable, and they should learn to think for themselves. From Rogers:
You pick any year in history and go back and then look to see what everybody thought was true in that year, 15 years later the world had changed enormously. Enormously. And yet in that particular year everybody was convinced that this is the way the world was ...
I have learned, for whatever reason, to know that change is coming, to know to think against the crowd, that the crowd is nearly always wrong and to try to think for myself. Now, I certainly make plenty of mistakes and have made plenty of mistakes in my life, but these are some of the things that I have learned, to try to think around the corner, try to think to the future if you want to be successful."
Source: Birch Gold Group
"If you want to be lucky, do your homework."
AFP
Rogers invested in Helmerich & Payne, a contract drilling company, at a time when business was bad. He noticed that oil and gas companies were increasingly tapping into reserves, and supply was starting to dwindle. His investment paid off, and a friend who had dismissed the idea when Rogers first mentioned it later attributed his success to luck. From Rogers:
You can invest in something all day long, but unless the fundamentals are right, it is not going to take you anywhere. Get the fundamentals right and the good news keeps coming. Lucky? If you want to be lucky, do your homework.
Source: Street Smarts
“Swim your own races.”
Rogers said that early in his career as an investor, he assumed others knew more than he did, and he would try to mimic them. Over time, he found that when he disagreed with them, he ended up being right. So he began listening to himself over others.
Source: Investment U
"If the world economy gets better, commodities are very good place to be in ... even if the world economy does not improve, commodities are still a fabulous place to be."
Rogers said that commodity prices have always gone up when a country is printing money. And every government is printing money now.
Source: Reuters
"The most sensible skill that I can give to somebody born in 2003 is a perfect command of Mandarin."
Rogers is so bullish on China that he believes educating his daughters about China is the best thing he could do for them. He has bought them DVDs in Chinese, and he has even hired a Chinese nanny so they can master Mandarin. Rogers has repeatedly said he thinks the future is in China.
Source: Credit Suisse
"Become a Chinese farmer, that's what you should do."
"At some times in history, the financials types have been in charge; at other times in history the people who produced real goods have been in charge," Rogers says. "It's the way the world has always worked. The key of course is to figure out what's coming next and go there."
Source: BBC
"If you can find ways to invest in Myanmar, you will be very, very rich over the next 20, 30, 40 years."
Myanmar, Rogers says, has an attractive small stock market and few public companies that are still being developed. This is a long bet for Rogers, who said that if people find a way to invest in Myanmar now, they will be rich over the next 20 to 40 years.
Source: Bloomberg
"India is not a place for investors, but it's a fabulous country for tourists"
Peter Guttman
Rogers is not as optimistic on the other Asian giant, India. He believes the country needs to open up its retail market and make its currency convertible. He argues that politicians need to address the nation's problems now instead of pushing them into the future:
India has a horrible economic system. Indian politicians are of course now talking the right concepts and are trying to implement them, but a lot goes wrong when they are put into practice and run up against the country's thoroughly anti-capitalist bureaucracy.
Source: Credit Suisse / Forbes
"I don’t know any way to short either Harvard or Stanford."
Explaining that ridiculous ideas work well for contrarian investors, Rogers says that he sees bubbles everywhere, including American tertiary educations and European football teams. But he doesn't know a way to short either of those. Instead he is going to short the U.S. government bond market.
Source: Investment U
"I was poor once, I didn't like it, I don't want to be poor again"
Rogers thinks the U.S. has already had a lost decade in terms of the stock market, employment, or industrial production. He doesn't think the U.S. economy is picking up:
There is apparently a bit of a housing recovery, but that's not unusual when you have a collapse; there's always a rebound to some extent … manufacturing renaissance. Please are you kidding me? Yes things are up some, but what manufacturing renaissance, I mean most of the rest of the world is still running circles around us. I don't particularly like saying this since I'm an American citizen, American taxpayer, American voter, but I have to face reality or I'll go bankrupt, too. I was poor once, I didn't like it, I don't want to be poor again."
Source: Business Insider
Now look at what hedge fund manager Jim Chanos has to say...
Bloomberg TV, screenshot
22 Brilliant Quotes From Legendary Short-Seller Jim Chanos »
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