Long-time blog readers, if there are any ;) , probably know that one of my favourite investors is Jim Rogers. I first came to understand the commodity supercycle and the global trade boom and ascent of China from Jim Rogers (and also Marc Faber). Both of them are contrarians and way out of the mainstream so not many will agree with them, but if you are macro-oriented like I am, they can be insightful.
I have been catching up on investing after being absent for several years so I'm going through some older stuff. I came across the following two excellent interviews with Jim Rogers. These cover more about Rogers' life and are interesting to hear.
Some thoughts on Jim Rogers' views (some views from other source material other than the two videos above):
- China: Now that China, as Jim Rogers predicted 20+ years ago, has become the 2nd largest economy and one of the most influential on the planet, I don't get a good feel for Rogers' stance. I have been bearish on China for many years now but I'm not really sure how this is going to play out or what might trigger a correction. Who knows: maybe the upcoming likely(?) trade war with USA under the Trump administration might be what causes a collapse. Similar to Rogers, I think China has a good chance of becoming the #1 country in 50 years. But I don't think a totalitarian system can work with capitalism and free markets for large countries so until China changes, it is hard to be bullish.
- Russia: Rogers is a contrarian and it shouldn't surprise anyone that he has been bullish on Russia over the last few years. In addition to a democratically-elected quasi-dictator running the country, there is always the issue of weak property rights. Rogers has suggested in the past that the situation has improved so it remains to be seen.
- Debt: Jim Rogers is one of those who believes that many rich countries, including USA, France, etc, are worse than they seem due to high debt. He has been saying this for years but nothing has happened. In fact, debt has risen even more with many countries having astronomical amounts of debt. The most surprising thing to me is that even China, which had very low debt levels during the 2008 financial crisis, has huge amounts of debt now. The bond market, which is thought by many to be smarter and 10x the size of the stock market, has certainly not penalized the debtors so far. Ignoring developing countries (which are always a basket-case and usually priced properly with very high yields), it's amazing how developed countries like Italy can keep their debt game going with the Euro currency (in the past they used to devalue their own currency but now they don't have their currency anymore). I think Jim is right in the long run that once the dust settles, the creditor nations will end up with the stronger hand and more dominant (perhaps like how USA became dominant and Britain declined).
- Commodities: It seems Rogers is still bullish on commodities although I don't get the feeling he is wildly bullish as in the past. The one exception is agriculture, which he is a big fan of. He keeps repeating how farmers are going broke and the average age of a farmer in places like USA, Japan and Canada are 55+, and how there are more farmer suicides in poor countries like India and most of Africa than anything else. I think Jim Rogers is right and have been thinking of how to profit from this. Although Jim Rogers prefers commodities rather than stocks, I would rather own company shares than own the commodity.
- North Korea: Impossible to invest right now and certainly not for amateur investors but this is one of Rogers' extreme frontier markets that he likes and has said many times how North Korea is going to be one of the top emerging markets in the future. It sort of reminded him of China 30 years ago. Before hearing Rogers, I also did not know that South Korea was poorer than North Korea about 50 years ago. North Korea has been on a downward trajectory for decades but it can't last forever. As Rogers likes to say, nothing you believe will be true in 15 years--sort of an exaggeration but the gist of his point is valid--and it would not surprise me if the dictatorship collapses sooner than many people think.