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Published September 3, 2007  |
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The adventure-seeking investor
This week, JASON LOW turns the spotlight on Jim Rogers
DUBBED the 'Indiana Jones of Finance' by Time magazine, billionaire Jim Rogers first made his name through his partnership in the Quantum Fund, which he co-founded with fellow investing legend George Soros in 1970.
The fund gained more than 4,000 per cent over 10 years - during which the S&P 500 managed a 47 per cent return. That allowed the legendary Rogers to retire by the time he was 40. Rogers apparently stumbled onto Wall Street after coming out from college en route to graduate school where he was actually offered a summer job by someone he met, who coincidentally worked in a Wall Street firm. He did not know anything about Wall Street then, and was not even certain of the differences between stocks and bonds. But the man was known to love the work given to him at Wall Street once he was there. The knowledge he acquired during that first encounter and the many subsequent years of fund management eventually led him to take up mentorship position as a guest professor of finance at the Columbia University Graduate School of Business. He also became the moderator of The Dreyfus Roundtable programme on WCBS, the flagship station of CBS television network. Intrepid investor Rogers is also notable for his achievements as a globe trekker. He circled around the world twice - once by motorcycle and another time by car. His globetrotting exploits were picked up in the Guinness Book of World Records and are fervently narrated in his books, Investment Biker and Adventure Capitalist. The latter tells of his trip over three years, covering 152,000 miles and bringing him to 116 countries - including Angola, Sudan, East Timor and Congo. Those experiences helped him to understand the countries at a close-up level. He even once proclaimed that he could determine whether he could make money in a country after having spent 20 minutes on the ground. China Rogers revealed in a recent Bloomberg interview that he has sold out of nearly all his holdings in emerging markets except China. He deeply believes China will emerge as the next great country of the world. He once said that the 19th century belonged to the British, the 20th century to America, and the 21st century will be China's. His reasons? The Chinese aspire to have what the West has and have the work ethic to get there. In addition, they save about 35 per cent of their income, higher than the savings rate of Americans. The Chinese, Rogers believes, are among the world's best capitalists. And most importantly, they are 'willing to work hard, save and invest as much' to attain the lifestyles of the people in the West. 'There are 1.3 billion Chinese in China and another couple of hundred million outside China who possess a wealth of expertise and capital, and are now pouring it back into the country to help it further develop,' Rogers said at a Credit Suisse Asian Investment Conference held in Hong Kong earlier this year. 'It's all coming together.' So bullish is he about the China market that Rogers has reportedly put up his New York property for sale, with the intention to relocate to Asia. On many occasions, he made known that he is heading to a Chinese-speaking city and has hired a Chinese nanny for his young daughter to give her an early start in the Chinese language. Unorthodox as it may seem, Rogers believes that the perfect command of Mandarin is the 'most sensible skill' he can give to someone born in 2003. Rogers, however, was not as optimistic about India's future. He feels that the country's thoroughly anti-capitalist bureaucracy is making it harder for India to attract capital. Also, the lack of strong infrastructure is hurting the Indian economy. Commodities He believes that commodities are undergoing a 'secular bull market' and predicts this one will last for at least another seven years. He has also predicted that gold will reach US$1,000 an ounce and crude oil will exceed US$100 a barrel in time to come. His rationale for the commodity boom is that demand all over the world is increasing relentlessly while supply has been very limited due to the fact that there has not been much investment in productive capacity in any commodity in the past 25 years. In all, Rogers' belief in the massive potential of China, barring any major economic setbacks, coupled with his call on the bull market for commodities are food for thought for investors out there. 'The best way to profit from the rise of China is to buy commodities because the 1.3 billion Chinese in the mainland will need them sooner or later,' he said, at the same Credit Suisse event in Hong Kong. | ||||
