Legendary investor and best selling author, Jim Rogers, discusses his book, “A Gift To My Children: A Father’s Lessons For Life And Investing,” and shares his views about the economy and investing.
John Nyaradi: Hello, everyone, I’m John Nyaradi, publisher of Wall Street Sector Selector, a financial media site specializing in exchange traded funds and global markets and economic analysis. Today, I’m pleased to welcome our special guest, Jim Rogers, who is joining us by telephone from Singapore. Jim, welcome to Wall Street Sector Selector.
Jim Rogers: I am delighted to be here.
John Nyaradi: Thank you very much. As everyone knows, Jim is a legendary investor, author, and financial commentator. He has appeared on many major media sites, both print and television. He’s the bestselling author of A Gift to My Children: A Father’s Lessons for Life and Investing. So, Jim, today, I’d like to talk about your great book, A Gift to My Children.
Jim Rogers: I’ve made a few mistakes in my life. I had a few successes so I sort of wrote these things down because I wanted my children to learn these lessons. Next thing you knew, I had enough for a book. And so, even if they don’t understand some of the things now, hopefully, when they’re older, when they’re adults, then they might well read it and understand some of the things, or if I’m still alive, they’ll still ask me about them. So I hope it helps them and lots of other people, as well. I certainly made enough mistakes in my life, and maybe I can prevent some other people from making other mistakes.
John Nyaradi: I appreciate that a lot. You started your book by saying to swim your own races. Don’t let others do your thinking for you. Could talk about that for a moment?
Jim Rogers: Well yes. I learned early on that I have to do it my own way, whatever my own way is, and then, I’ll certainly be better doing it my way than trying to do it somebody else’s way, whatever it is, whether it’s swimming a race or taking a test or anything else.
So I learned that lesson early on, and I cited the example of Donna de Varona, who, you know, won a couple of gold medals in Olympics in 1964, so I’m not the only one who’s figured it out. It’s better to do things your way, and you’ll do it better that way in the end, and not worry about other people; do it your way and let them do it their way. You’ll probably be better in many cases.
John Nyaradi: Sure, that makes great sense. In Chapter 3, you talked about good habits for life and investing. What do you see as really good habits for both life and investing, both for your children and even for ourselves as adults?
Jim Rogers: Well, the first thing people have to understand is that you have to do your homework. You have to be prepared for everything, and part of that is being skeptical of everything you hear. Don’t believe anything you hear in the press or from politicians or anywhere else. Do your own homework. Come up with your own conclusions about everything, and do lots of homework. There’s no such thing as too much research no matter what you’re trying to do or accomplish, and then, after you’ve done your own homework and listened to all the other views, if you want to, but don’t even listen to them to see whether it might be wrong, then, then you might make a success at whatever you’re trying to do.
John Nyaradi: You talked about the value of education in your book. You know, we all agree that it’s important, but what I thought was really interesting was you take a real different stand on this subject. You know, we always hear about Math and Science. You talked about different things that constituted good education, and maybe you’d like to address this just a little bit.
Jim Rogers: Well, education is important for all of us. You have to learn to read and write and do arithmetic, if nothing else, but then beyond that, you have to learn how to think, and you have to learn what’s happened in the world before. I try to encourage students to study History because History would teach them that the world is always changing, and that whatever is going on, more or less has happened before, but it’s also changed. Whatever you think is correct today in 2011 is going to be very different in 2021, much less 2031.
John Nyaradi: Yes.
Jim Rogers: I also urge them to study Philosophy because that will teach them to think, and being able to think for yourself has always been extremely important and a guide to success. It certainly is these days, given the huge proliferation of TV and the internet and everything, you know. So many people follow the same ideas or the same thoughts, and that’s not going to lead to success. No one has ever been successful doing what everybody else does. So better to figure out the reality and then do it your way.
John Nyaradi: In your book you talked about looking into the future and that everyone would be a millionaire if you could read a newspaper from the future. What do you see in our future?
Jim Rogers: Well, I don’t know how you define “our,” but if you mean the US, the US is certainly, you know, the largest debtor nation, not just the largest debtor nation in the world, but the largest debtor nation in the history of the world. No nation has ever gotten itself in such a bind, and unfortunately, in Washington, they don’t seem to care. They seem to be making it worse, not better.
So the future of the US is going to be a lower standard of living for all of us who live here, for US citizens. The US is going to go into a relative decline….our standard of living has already declined compared to other people. I’m afraid that our standard of living is going to continue to decline.
Some people will do extremely well, of course. You know, even in the Great Depression, there were some people who did well and laid the foundations for great fortune. That will happen in the US again. You know, the UK was in decline for 70 years after the First World War, but there are plenty of people in the UK who made money, who had fun, who lived good lives, so even when nations or societies are in decline, it doesn’t mean everybody has to be in decline, and if you do your homework, chances are, you’ll come out fine.
John Nyaradi: We’re talking on an historic day today, when Standard and Poor’s changed their outlook regarding the United States from stable to negative. What’s your view on this whole topic?
Jim Rogers: I mean what took them so long? I just said US is the largest debtor nation in the history of the world. Other nations have already figured this out. Other banks (NYSE:XLF) and rating agencies have figured this out long ago. I’m sure you and your listeners have, too.
John Nyaradi: So starting here in April, looking ahead in the next few months, what do you see as the biggest dangers and the biggest opportunity for the average retail investor?
Jim Rogers: Well, nobody should invest in anything unless they know what they’re doing. Don’t listen to me or anybody else. Just stay with what you know. You’re going to go broke if you get your investment advice from newspapers and magazines or internet or TV. Stick with what you know. I have my own portfolio. For the most part, I’m long commodities. You know, there’s a big bull market underway in commodities that has been going on for 12 years or so. It’s got another I don’t know how many years, but it certainly has a few more years to go. If the world economy gets better, I’m going to make a lot of money in commodities because of shortages. If the world economy doesn’t get better, I’m going to make money in commodities because the government is going to print more money. Now that’s the wrong thing to do, but it’s all they know how to do, and so that’s what they will do.
I’m also long some currencies because I see more and more currency problems developing going forward, and I’m short emerging markets. I am short emerging markets and technology companies in the US. So that’s what I’m doing. I don’t know if I know what I’m doing and I hope I do, but in the meantime, for all other investors, I would urge them to learn about commodities and raw materials. If they don’t want to do that, they should just stick with what they know because that’s the only way you’re going to be successful in the long run, sticking with what you know.
John Nyaradi: We’ve been talking to Jim Rogers, bestselling author of A Gift to My Children: A Father’s Lessons for Life and Investing, and really in my view, this is great reading really for all of us as adults and for our children. To learn more about Jim’s book, A Gift to My Children: A Father’s Lessons for Life and Investing, just click on the link at the bottom of this interview.
Jim, it has been wonderful chatting with you, and thanks for joining us. And I know we’re looking forward to talking with you again soon.
Jim Rogers: Well, it was great fun. I’m sitting here on my exercise bike, so I did two things at once. Very good. Thanks very much.
If you are interested in investing like Jim Rogers, you’ll absolutely want to read “The Top Exchange Traded Funds for Your Commodity Investing List“.