Friday, November 2, 2007 2 comments ++[ CLICK TO COMMENT ]++

Bloomberg Interview with Jim Rogers

Bloomberg had a lengthy interview with Jim Rogers today. Nothing new in my eyes but I'll quickly run down his points...

Note: Jim Rogers is never specific and most of his suggestions are for the long term. Keep that in mind when thinking of what to invest in.

What Jim Rogers is BULLISH on:

  1. commodities in general: he says we are probably in the 3rd inning (for foreigners not familiar with baseball that's 3rd inning out of 9 innings)... he doesn't say what to buy but he suggests not buying what is near a 52wk high (like gold or lead right now) but what is nowhere near a high (like sugar). Also note that he generally likes commodities and not commodity equities.
  2. agricultural commodities: Nothing new here. I'm bearish on commodities for the time being but if there is one commodity area that looks ok, it's agriculture. Read my prior post on Jim Rogers to get more information on my thoughts on securities that you can investigate (note: the securities I mention are my own thoughts and not what Jim recommends).
  3. currencies like Renminbi, Swiss Franc, and Japanese Yen: Someone was asking how to invest in renminbi and he said you can go and open a bank account in China, but if you can't do that then banks like Everbank offer Renminbi accounts, incidentally insured by FDIC. I looked it up and Everbank seems to only offer a money-market account in renminbi paying 0% interest. It doesn't look like there are any CDs or bond-like instruments in renminbi. I can be wrong and I only took a quick look so if one is interested they shold do their own research.

What Jim Rogers is BEARISH on:
  1. Wall Street banks: he is short wall street banks, including citigroup... he says there are more problems and to look up something called "level 3 accounting". Supposedly that is about to take effect next year and banks can't hide stuff anymore, or something like that (I didn't really understand what he was talking about. Never even heard of level 3 before in my life).
  2. Chinese stocks: Although it wasn't really a bearish call, he did imply that Chinese stocks may correct. He is bullish on the economy but not necessarily on Chinese stocks.
  3. India: He still doesn't like India... likes the country but not the equities...

One problem I have with Jim Rogers, apart from not agreeing with some things, is that he is very vague and looks at everything from the super-long-term. I don't invest with such a long timer horizon so some of his insight is not useful to me, although I do think about it somewhat. For example, he says the renminbi can go up 2x or 3x over the next few decades like the Yen did in the 70's and 80's. So, simply holding money in a renminbi bank account will make you wealthy. But how many people can simply put money into a renminbi account and wait however long it takes (up to 20 or 30 years) for it to appreciate?


2 Response to Bloomberg Interview with Jim Rogers

March 20, 2008 at 11:01 PM

What does it mean to be short on something? Sorry for the silly question but I am pretty new to investing. Thanks!

March 22, 2008 at 1:09 PM

Short position is when you try to profit from a price DECLINE. In contrast, the average person who buys stock is actually taking a "long" position.

When we take a long position (the usual case), we buy a stock and hold it hoping that the price goes up. Then you sell it at a higher price and make the profit off the difference. The strategy with a long position is to buy low and sell high.

To go "short", you will BORROW a stock and then SELL it on the hope that the price will decline. When the price declines, you BUY BACK the stock and give it back to whoever you borrowed it from. Your profit will be the difference between the sale price and the price you bought back at. The tactic with a short position is to sell high and buy low.

Anyway, to sum up, shorts are those who profit from market decline...

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