Business | Features

The world, according to investor Jim Rogers

Investor Jim Rogers offers sage advice on making money in the future — and he's been retired since he was 37

  • By Mick O'Reilly, Senior Associate Editor
  • Published: 00:00 March 13, 2012
  • Gulf News

  • Image Credit: Ahmed Kutty/Gulf News
  • Jim Rogers
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Excuse me," Jim Rogers says, pulling a navy blue sock over his right foot. "I'm a little jet lagged."

A Nepalese house boy is making over the Khaleej suite at Emirates Palace Hotel, the television is tuned to CNN, his laptop is open and dinging occasional alerts for new emails, and two BlackBerrys are charging on his desk.

A lot of the problems we're facing today is that people have forgotten how to work hard. It's a generational thing. If you go to a fast food restaurant or a department store in the United States, you'll see senior citizens working behind the counter or greeting customers. They're doing it because they have a work ethic

Investor Jim Rogers

"I have a problem with jetlag," he says. "Do you have a cure?"

Melatonin, but it's illegal in the UAE and most of the Arab world.

"Really? It's an over-the-counter medication in most of the world," he says. He should know, he's been around it twice. Once on a motorbike and once in a custom-made Mercedes-Benz.

But that's what retired people do: Travel.

This investment icon in dark pin-striped suit trousers, light blue pin-striped shirt and baby pink suspenders is retired. He's 69 now. Only he retired when he was 37.

So how did the New York-born and Demopolis, Alabama-raised, Yale and Oxford-educated and now resident of Singapore make it so big he could retire at 37?

As a five-year-old, he had an innate business sense. When the crowds left the baseball diamond, Rogers would go around, picking up the soda bottles and returning them for the deposits. And he literally worked for peanuts — selling bags of them at the baseball games.

A degree in history, another in philosophy, politics and economics, and a job on Wall Street.

Back in 1973, when he had $600 to his name, he and friend George Soros set up the Quantum Fund. It did well. While the Standard & Poor's index advanced 47 per cent over the next decade, the Rogers and Soros fund had returns of 4,200 per cent.

"Hard work pays dividends," Rogers says as he relaxes in an arm chair, his piecing blue eyes forever moving, thinking, never still.

"A lot of the problems we're facing today is that people have forgotten how to work hard. It's a generational thing. If you go to a fast food restaurant or a department store in the United States, you'll see senior citizens working behind the counter or greeting customers," he says. "They're doing it because they have a work ethic. They want to work, and they're doing jobs that young people don't want to do. Young people don't want to work because they will get benefits, can have a baby and not bother to work and that's going to affect the productivity and profitability of businesses. We live in a culture where people are used to support and handouts. And we can't afford to sustain them."

Is that why the US is in the mess it's in?

"Absolutely. That and Alan Greenspan."

Without prompting, Rogers is off to the races at a gallop on how the former chairman of the US Federal Reserve set the conditions in place for crippling US debt levels by printing too much money and failing to get a grip on banks, lending and fiscal policy.

"Money was too cheap and too plentiful," Rogers says. "He caused the stock market bubble and that led to the real estate bubble and the consumer debt bubble. Now those bubbles have burst and what is Ben Bernanke — the current Fed chairman — doing? He's printing more money. Bernanke couldn't get a job as a banker. He's just a printer. That's all he knows how to do. Print money. There isn't enough trees to print all of the money Bernanke wants."

You kind of get the impression that Rogers is slightly critical?

"Sure, when the next blow comes, and it will over the next 18 months, we have nothing left."

Back in 2006, Rogers saw the mess coming — that's why he shorted US financial institutions, home builders and mortgage lender Fannie Mae.

Borrowed cash

But isn't the guy earning $30,000 and living in Alexandria, Louisiana, entitled to a home and a big pickup truck?

"Sure he is, if he worked for it and paid for it with real money," Rogers says. "The problem is that everyone is entitled to a house and a pickup truck but no one wants to pay for it in real money. It's borrowed money. And Greenspan and Bernanke weren't watching the bankers and lenders because they were too busy printing more money."

The minibar beckons, an Italian sparkling water poured into a tumbler as Rogers takes several gulps, leaving the glass half full. Or half empty?

"It's only a matter of time before the next crisis comes," he says. "Maybe by the end of this year, probably by the end of next year."

So where's his money?

"I have only started to get back into stocks now, nothing serious," he answers. His money is tied up in anything to do with agriculture, currencies, silver.

"Here's an interesting statistic," Rogers offers, settling again into the armchair, resting easy. "The average age of farmers in Japan is 66. The average age of farmers in Australia and the UK is 58. The highest rate of suicides in Britain is with farmers.

Farming culture

"Nobody wants to farm any more. Yet there are more people than even now. Seven billion of us. What are we going to eat? Every year, the US has something like 225,000 graduates in public relations. I think there's 20,000 agriculture graduates in the US now. Have you ever tried to eat a press release?

"My advice to young people would be to get into agriculture. If you want to make money over the next 20 years, agriculture is the way to go. If you don't want to be a farmer, buy the Lamborghini dealership or a restaurant in Iowa. Why? Because the farmers in Iowa are going to be very wealthy. And they will be able to afford Lamborghinis. Fewer and fewer people are producing more and more food for more and more of us. That's only going to get worse over the next 20 or 30 years. So if you're smart, put your money into anything related to agriculture."

That's contrary to those who see technology and digital products as the way of the future.

"I have never invested in digital companies," Rogers says. "I won't invest in something that I can't understand. And it's not productive. What is actually made? What is produced? How can it be used? What is tangible? Nothing. How many people actually understand what Google does? Can it be sustained, or is it just the next ‘big thing?' And how many ‘big things' have we had in history? Every decade there's some next ‘big thing' and the only ones who make money out of the next big thing are the ones who are there first."

Five years ago, Rogers sold his New York home and moved with his family to Singapore, where he lives most of the year — when he's not travelling and fighting jet lag. "Europe is finished," he says. "The US is broken. Asia is where it's at."

Rogers has put his money where his mouth is and is heavily into Japan, Taiwan, China, Korea and Singapore.

"If you're smart, teach your children Mandarin," he says.

His two young children are learning the language and he fully expects Asia to be at the centre of economic growth and activity for the foreseeable future.

When he took up residence in Singapore, Rogers was clear in his reasoning: In 1807 smart people moved to London, in 1907 smart people moved to New York. And in 2007, smart people moved to Asia.

Not India?

"If you can only visit one country in the world, visit India," Rogers advises.

"It is a complete assault on your senses. Amazing natural beauty, diverse peoples and cultures, wonderful buildings and temples. It is a complete sensory experience for sight, smells, tastes. But never, ever do business there. The Indians have taken British administration and red tape and moved it three levels higher. It is impossible to do business there because of the regulatory environment and protectionist rules."

India rules

"Take agriculture for instance," Rogers says, returning to his favourite topic. "In India, there are land ownership rules in place that limit land ownership to five hectares. If there are ten sons in a family and each have five hectares, how can 50 hectares of land be productive? That's why India will never develop. The regulatory environment and protectionism needs to change."

And that exemplifies his belief in free market economies.

"Governments should not be in the business of giving out bailouts, whether it is to banks or car companies. Business entities need to survive on their own two feet. That's half of the reason why the world is in the mess it's in. Take Europe, for example. Its farmers are subsidised. Greece's farmers are under-productive because they don't need to be efficient."

Rogers is in Abu Dhabi looking at investment opportunities and as part of the emirate's Art of Investment programme. On that subject, he's saying little.

The house boy has finished making up the suite and a new bouquet of flowers has been delivered to freshen up the room.

He excuses himself. Those emails on the laptop are waiting for answers. And Rogers is never short of those.

Career: The Rogers Dossier

Name: James Beeland Rogers

Born: October 19, 1942

Education: Bachelor's degree in History from Yale University in 1964. He then acquired a second BA degree in Philosophy, Politics and Economics from Balliol College, Oxford University in 1966.

Milestone: In 1973, Rogers co-founded the Quantum Fund with George Soros. During the following 10 years, the portfolio gained 4200 per cent while the S&P advanced about 47 per cent.

Books

1995: Investment Biker: Around the World with Jim Rogers.

2003: Adventure Capitalist: The Ultimate Road Trip.

2004: Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market.

2007: A Bull in China: Investing Profitably in the World's Greatest Market.

2009: A Gift to My Children: A Father's Lessons For Life And Investing.

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