Jim Rogers: Lessons from a Legend

Includes: DBO, GLD, SLV, UDN, USO, UUP
by: Matthew Bradbard

Last night I took a trip down to Miami to visit with Jim Rogers at a book signing for his most recent book entitled A Gift to My Children: A Father’s Lessons for Life and Investing. After speaking briefly about his 3 year tour around the globe, he spoke a little about the aforementioned book and took questions from the audience. These are the general themes I took away, in no particular order:

Jim said numerous times he is a terrible market timer, he went as far to say he’s not the worst in the room but the worst in the world ... very humble.

While Jim’s primary residence is in Singapore, he also has a dwelling here in Florida. What I found interesting is that he rents and does not own his home here in Florida. The fact that he sold a lavish residence in New York before the real estate crash and rents here in Florida may mean that his timing is better in real estate.

Though he waited later than most, he stated that one of his proudest accomplishments was having children. For one of the most successful investors in our time, that speaks volumes about the father he most likely is. Not only did he move his family to Singapore but his two daughters will be fluent in Mandarin and Spanish.

He did not go into specifics about his bank accounts, but his two daughters have Swiss bank accounts, not accounts denominated in US dollars. What does that say about his feeling on the US dollar?

He has no short exposure in US Treasuries. Currently he thinks the multi-decade long bull market in this complex is over and he believed he would be taking a hefty short position at some time in the future.

One of the questions from the audience pertained to getting an MBA. Jim’s response in so many words was that it would be a complete waste of money and time. He suggested traveling around the world would be a more valuable experience. He went as far to say that sitting in a hot tub in Boston one could learn more than going to some of the prestigious universities there.

Jim had little good to say about the current choices Central banks are making and implied serious inflation is all but inevitable. He expects rates to be much higher but gave little indication of a time frame. He said jokingly we may run out of trees if the printing presses continue to run at their current pace.

The only real estate advice I recall him saying is buying a farm in the Midwest to take advantage of the boom he expects in Commodity prices.

Bull cycles in commodities in the past have lasted between 18 and 20 years. In his view we have another decade or so in the current cycle.

As a commodity trader, what I found most interesting was that in his jacket pocket he had a gold and silver coin and a sugar packet. This was probably to prove a point but it really hit home with me and other audience members.

Perhaps one of the most staggering things to me was how little of the general population in that room, the US and around the globe are investing in commodities. It will change and I believe those who exercise discipline in the next 5-10 years stand to deeply benefit.

Find below some historical pricing on several commodities to put things in perspective on how low and how high prices have been in the past and where we sit today. These figures are not adjusted for inflation. Being that Rogers is a terrible market timer he suggested looking at buying when prices are depressed and selling when prices are elevated.

You draw your own conclusions.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.