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Transcription of interview with Jim Rogers on May 13, 2013.
Douglas Goldstein, CFP�, Financial Planner & Investment Advisor
Jim Rogers is the author of Street Smarts: Adventures on the Road and in the Markets.
Douglas Goldstein, financial planner & investment advisor, interviewed Rogers on Arutz Sheva
Radio.
Douglas Goldstein: You are a well-known person on Wall Street. You�re in the Wall Street
Journal, the Financial times and in fact, you made your fortune by the time you were
40. How did you do that?
Jim Rogers: I was always pretty focused. I knew I wanted to buy my freedom at a young
age because I grew up without much money and I didn�t like it so I want to buy my freedom.
I spent most of my time doing what I love which was the investment market and when you
do what you love and you spent a lot of time and energy at it, sometimes, you�re successful.
Douglas Goldstein: There are certainly a lot of people who focus a great deal of time and
energy on the markets and are not so successful. What do you think differentiated you?
Jim Rogers: I know I was always skeptical and curious and never follow the crowd. I
know that following the crowd has never been a way to success in any field that I can think
of. If you do your own independent thinking, become skeptical, question everything and
go against the crowd, you�re probably going to be successful.
Douglas Goldstein: What are some of the specific ideas that you did that were against with
the common knowledge was?
Jim Rogers: One of the most recent ones was in 1998-1999 where I decided to come to the
end of the bay of the market and of course most people ignored and talk down about commodities
and yet I was right. It was a beginning of a nice bull market when everybody else was
ignoring it. They still don�t quite understand it but that was one that was somewhat recent
buying Japan during the tsunami was another one. People sell when there�s a tsunami
or something terrible but my experience is that it was usually best to buy at a time
like that.
Douglas Goldstein: Do you think that trading in commodities is something that�s appropriate
for regular investors?
Jim Rogers: Investors should not invest in anything they don�t know about. If you cannot
spell commodities, you certainly should not be investing in commodities. Commodities are
certainly easier. I�m not saying they�re easy but easier to understand and know about
than stocks. Not even the chairman of Toyota can know Toyota which got hundreds of thousands
of employees, parts, etcetera. Cotton is pretty simple. All you�ve got to know is they�re
too much cotton or too little cotton. I didn�t say it was easy, I just said it�s a lot
simpler to invest in commodities. None of us knew what a dot com was and millions of
people poured money into it, but we all know what sugar is, we all know what wheat is and
yet people are afraid on investing in wheat, in sugar, in coffee but they invest in dot
com but they don�t have a clue what they�re talking about.
Douglas Goldstein: Do you think that any of these commodity markets are sort of manipulated
by the ultra big players?
Jim Rogers: You can try to manipulate anything but commodities are the second largest market
in the world. If someone can manipulate one of the commodity markets, they won�t be
able to do it very long because these markets are just too big and they will be overwhelmed.
Douglas Goldstein: You seem to encourage people to invest in commodities. When you say that,
do you mean buying something and holding it or being a trader both on the long and short
side?
Jim Rogers: If you don�t know what you�re doing, please don�t do anything, but if
you know what you�re doing, the commodities can stagger amounts of money. Staggering amounts
of money can be made in anything if you know what you�re doing and if you pay attention,
but again if you don�t know what you�re doing, as many people have found out with
dot com for instance, please don�t invest unless you know what you�re doing. But if
you know what you�re doing, you can make a vast fortune in just about anything and
I strongly urge people to stay to what they know. If you know a lot about sports, invest
in sports. Don�t go over investing in something you don�t know. If you don�t know anything
about gold but you know a lot about sports, invest in sports and ignore gold. Just stay
with what you know.
Douglas Goldstein: Tell us a little bit about your book Street Smart. How did you come to
write this?
Jim Rogers: I�ve done a few books in my days to my shock and surprise and my publisher
said there are a lot of people who want to know the whole story. I never sort of told
the whole story so I said okay I�ll tell you the whole story. It�s really more a
memoir than anything else about how I got from there to here in many of my views along
the way. I made plenty of mistakes so it talks about some of mistakes and some of my successes
and what I�ve learned.
Douglas Goldstein: You also wrote a book called a Bowl in China. China is a very difficult country for many
people to enter because they just don�t understand the culture. What are some of the
highlights that you think people could learn about China to make them better investors
there?
Jim Rogers: Again don�t invest in anything unless you think you know what you�re doing.
I�ve been to China many times. I�m very optimistic about the future of China. In my
view, China is going to be the most important country in the 21st century. I�ve moved
to Asia and so that my children would grow up knowing Asia and speaking perfect Mandarin.
I�ve spent a lot of time, energy and money trying to learn about China and Asia. You
can ask me in 40 years if I�m right or not, but for the meantime, as you probably know
China has been the most successful country in the past 30 years so if that continues,
there are, there have been and they will be great opportunities there.
Douglas Goldstein: One of the rumors that I�ve heard related to China is that though
it continues to be a communist country, they allow the whole capitalist system to thrive
and they seem to have found a fair balance between the two. Is that your impression?
Jim Rogers: They are among the best capitalist in the world. I know people who say they have
the best capitalist in the world right now. California is more communist than China. Israel
is more communist than China. If you want to do something in China, you�re probably
going to be able to do it and do it well and make a lot of money.
Douglas Goldstein: What�s the driving force behind the success in China?
Jim Rogers: China is the only country in world history that I know of that has had recurring
periods of greatness. Rome was great once. Egypt was great once. Great Britain was great
once but China has had extraordinary success three or four times in the past 2000 years.
They have also had three or four periods of catastrophe, absolute unmitigated disaster
but in 1978, Deng Xiaoping i the leader said we�ve got to try something new. China has
been in decline for 300 or 400 years at that point and he opened up entrepreneurship and
capitalism again. In China, they saved and invest over 35% of their income. They work
from dawn to dust like Great Britain was 200 years ago and like America was 100 years ago.
There are enormous opportunities at least in my view.
Douglas Goldstein: Do you think that it�s reasonable if someone wants to piggy back
on that growth to buy into let�s say a China fund or a China ETF or does he really have
to more specific?
Jim Rogers: If you know the manager of a fund and you know something about, I mean you think
you know he or she is smart, that�s a good way to do it or an ETF if you know enough
about what�s in the ETF and if you know enough about China, but I will repeat for
at least a hundred times that people shouldn�t invest in anything unless they themselves
know a lot about it. Don�t listen to me or at some guy on the radio or the TV, just
stick for what you know, otherwise, you�re going to lose a lot of money.
Douglas Goldstein: Let�s talk about a little about what formed you and the way that you
view the world. Part of the experience you have was when you traveled around the world
on a Mercedes Benz for over a thousand days. How was that influenced the way you looked
at the world?
Jim Rogers: Before that, I drove a motorcycle around the world in two years, driving around
the world on a motorcycle. I wrote a book about it called Investment Biker and then
a decade later, at the turn of the millennium, my then fianc� now my wife, Paige Parker
and I spent three years driving around the world. If you want to know the world, the
best way to know it is from the ground up. Don�t just read about it or listen about
it or watch it on TV, go and do it and you will find that many of the things that you
have thought will correct in the world are not correct in the world because seeing the
world from the ground up will teach you a lot.
Douglas Goldstein: Did it teach you anything about the way you choose investments?
Jim Rogers: Not the way I choose investments but more about some of the investments I chose.
When I first went to China in 1984, I was terrified. I was told at least horrible red
Chinese communists will slit your throat etcetera. I got there and found out that nearly everything
I have ever been told about China from western propaganda point of view was inaccurate. If
they will like the rest out of it, they were just as ambitious, as hard working and wanted
the same things for their families that we want for ours and then I got more and more
involved. Now, I live in Asia. My children are stage manager. I�ve got investments
in China because I found out close to the ground that most of the stuff that we�ve
been led really was inaccurate.
Douglas Goldstein: What�s your take on what�s going to be happening in the US over the next
5-10 years?
Jim Rogers: The US is the largest [destination] in the history of the world. I don�t particularly
like saying that as I�m an American citizen, voter and tax payer but I have to face facts
if I�m going to deal with reality and with the world. America is certainly in relative
decline, if not absolute decline. The largest creditor nations in the world are China, Korea,
Japan, Hong Kong, Taiwan, and Singapore. I mean the assets, the moneys is in Asia, you
know who the debts are and where they are and the debts are getting worse, not better.
Douglas Goldstein: Do you think the United States will have a hard time to pay off that
debt or will be able to at all?
Jim Rogers: It�s humanly impossible for the US to pay off its debt. It will pay it
out someday but it will do it in worthless currency. I don�t think you ever going to
pick up your newspaper one day and US is going to say, �We�re not paying our bills anymore.�
What would happen is you�ll pick up your newspaper and find out that the currency is
worthless and they�ll pay you but it will be in worthless currency.
We have to wait and see what China does. In the meantime, China may have other plans for
its money. They could buy rice, gold, lots of things if they want to go forward, but
yes supposed nothing changes. China states they�re going to hold its US dollars and
US bonds or they will not be happy if the US if what I just said happens but on the
other hand, normally it�s better to be the creditor than the debtor when people are suffering
even if you�re the creditor who suffers, you usually better off being the creditor
than the debtor in the end.
Douglas Goldstein: How can people follow your work?
Jim Rogers: My website is www.jimrogers.com but you can go to Google and YouTube, I�m
on all these things a lot of times. There are some blogs but they�re not official.
They�re impostors who set up blogs and Twitter accounts and things like that. I don�t have
anything to do with Twitter, Facebook or the blog but they are there which is not mine.
Douglas Goldstein, CFP�, is the director of Profile Investment Services and the host
of the Goldstein on Gelt radio show (Monday nights at 7:00 PM on www.israelnationalradio.com.
He is a licensed financial professional both in the U.S. and Israel. Securities offered
through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried
by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company.
His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered
at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.
Disclaimer: This document is a transcription and/or an educational article. While it is
believed to be current and accurate, divergence from the original is to be expected. The original
podcast can be heard at https://sites.google.com/site/goldsteinradioshows/. All information on this website is purely
information and should not be used as the sole basis for making financial decisions.
The opinions rendered herein are those of the guests, and not necessarily those of Douglas
Goldstein, Profile Investment Services, Ltd., or Israel National News. Readers should consult
with a professional financial advisor before making any financial decisions. Please see
the complete disclaimer at https://sites.google.com/site/goldsteinradioshows/.