It pays to listen to people who know what they’re talking about. In the world of investing, one of the people you should listen to is Jim Rogers.
Jim Rogers is one of the world’s most successful investors. He co-founded the legendary Quantum Fund – which generated returns of more than 4,200 percent over ten years – and has driven around the world… twice.
Jim has also written several excellent books that blend travelogue, investment insight, and political commentary. Today, Jim is viewed as one of the founding fathers of the boots-on-the-ground approach to investing in emerging and frontier markets around the world. (We discussed lessons from Jim’s books here and here… and here.)
So, when he talks about the big-picture trends that are shaping world markets, it’s worth listening.
I recently sat down with Jim (who is a fellow Singapore resident) for an exclusive one-on-one interview (you can get immediate access to the full, Jim Rogers unplugged video, by clicking here). Below are a few excerpts from our conversation…
Beware these market bubbles
Me: So when we look at global markets, which markets… [are those] that a lot of investors are very keen on [and may be in bubble territory]?
Jim Rogers: Well, I can’t think of many that people are keen on right now. America… the S&P, people are keen on… European football clubs… that’s a bubble.
American tertiary education is a bubble. Everybody thinks it’s the end all and be all. America has done a great PR job of selling its universities. Everybody knows [that] grammar school, primary school and high school are a disaster in America. But somehow or another that translates into the fact that America has great universities. Don’t ask me the logic. But that’s obviously a bubble.
Hong-Kong real estate, Shanghai real estate… [those] are clearly in some kind of bubble… also, Sydney real estate.
Bonds are obviously something that is going to cause a lot of pain to a lot of people. Bonds have been going up for 35 years. Literally, for 35 years. Now, bond markets have a habit of having long, long, long cycles, 30, 35 years. It’s normal in the bond market. At least historically in the U.S. it’s been normal, but… that’s another clear bubble.
[Jim told me this in early October… between then and the end of November, the iShares 20+ Year Treasury Bond ETF (NASDAQ; ticker: TLT) dropped 10 percent. That is an absolute shellacking in the bond world.]
Why you should move to Asia (or at least learn Mandarin)
Me: If you look at the world, and you look at languages, and you look at economies… if you were to try to target those parts of the world that in 15 years, 20 years will have taken a bigger step than other parts of the world, where would you go?
Jim Rogers: Well, you should definitely go to Asia. I moved to Asia. In 1807, if you were smart, you’d move to London. In 1907, you should have moved to New York. Well, 2007, you should have moved to Asia – which is when I moved to Asia.
Because for my children, the best skills I can give them are to speak good Mandarin and to know Asia. It’s not going to make them successful, I assure you. There are plenty of people in the world who speak Mandarin and who know Asia that aren’t successful. But it will give them a leg up. And if I were a bright young man or woman now, that’s what I would do, I’d go to Asia. Learn at least one Asian language. Mandarin is the best as far as I’m concerned. But I would certainly head to Asia.
Why Jim Rogers didn’t stay in Asia a long time ago
Jim Rogers: My problem, another one of my mistakes, I went to China in 1984, scared to death by the way, because I had been listening to American propaganda all my life. Evil, vicious, terrible people the Chinese. They’re going to cut your throat. I got there and I said, “These aren’t evil, vicious, terrible people. These are wonderful people.” Educated, hard-working, and they save for the future.
But if I’d been smart I would have stayed. Shows you how smart I am. I went there and I saw, oh my God look at this. Look at what’s happening. I went back to Asia several times and many times since, but you know if I was such a bright kid, I would have stayed in Asia in the 80s.
More from Jim
During the rest of our interview, Jim also talked about some of the biggest mistakes he’s made, both in life and in markets… one of the biggest dangers of success… and some of his favourite markets today.
You can get full access to some parts of this interview here.