The way of the successful investor is to do nothing—until you see money lying somewhere around the corner, and all that is left for you to do is go over and pick it up, says legendary investor Jim Rogers
Jojo Puthuparampil
"While I have never patronised a prostitute," writes legendary American investor Jim Rogers, "I know that one can learn more about a country from speaking to the madam of a brothel or a black marketer than from meeting a foreign minister." Seeing and assessing markets across the globe from ground zero has been Roger's style. "The best way to profit from the global situation is to see the world mile by mile," he says. Adventure Capitalist is the mile-by-mile account of Roger's latest road trip across 116 countries, analysing regional markets and evaluating investment opportunities.
Behind the wheel of a sunburst-yellow custom-built convertible Mercedes, Rogers and his fiancé Paige Parker began their 'millennium adventure' on January 1, 1999, from Iceland. The journey—which ended three years later on January 5, 2002, in New York—took Rogers and Parker through 152,000 miles and half of the world's 30 civil wars, and resulted in the Guinness World Record for the longest continuous car journey. The couple traversed many countries where most rarely ventured such as Angola, Sudan, Congo, East Timor, and drove through deserts, jungles and epidemics. They marveled world's wonders like Grand Canyon, Victoria Falls and Taj Mahal, ran into deadly blizzards in Iceland, descended eight stories down ground level to visit an ancient subterranean city in suburban Istanbul, purchased diamonds from Namibia (which later turned out to be polished glass), camped with nomads and camels in western Sahara, witnessed 'butt dance' near the Senegal Mali border, moved past Bulgarian sex workers who raised their skirts to advertise their wares, drank salt-tea in Mongolia, gulped snake's gallbladder in China, and ate worms, termites and grasshoppers. Best of all, they saw the real world from the ground up – the only vantage point from which it can be truly understood – economically, politically and socially.
Rogers entered the investment business in 1968 with $600 in his pocket, and he left it in 1980, at the age of 37, with enough money to satisfy a lifelong yearning for adventure. He began globe-trotting with an around-the-world motorcycle trip 15 years ago, covering more than 100,000 miles across six continents (that journey became the subject of his first book, Investment Biker).
Rogers is a contrarian. His success in the market has been predicated on viewing the world from a different perspective. He dismisses the majority world view as bilge and counters much of what the glib Street savants say. His take on Iran, one of the so-called rogue countries, captures his approach. "Forget what Washington tells you; there is a lot of positive changes coming in Iran. Demographically, it is a very young country. And it is ripe for investment. I am very optimistic about its future." Rogers became a China enthusiast much before the world reckoned the communist country's capitalist credentials. “Twenty-first century belongs to China the way 20th and 19th centuries belonged to the US and Europe, respectively," he asserts.
According to Rogers, 'new economy' is not as hot as it made out to be. "Everyone talks about new economy. Well we have heard that before. The railroad and radio changed the world much more than information technology is said to be changing the world now. Radio Corporation of America (RCA) became one of the largest corporations in American history and made huge profits. But if you had bought shares in the RCA in the late 1920s, you would never have made any money because the shares never again got as high as they got during the mania. It wouldn't have been any different had you bought shares in the railroads in the 1840s. By the time the mania hits everyone is getting involved: banana salesmen, hairdressers and dentists. By the time the bubble has grown really big, the smart money is usually on the run," he says.
Rogers differentiates between trading and investing. "Traders are the short-term guys, and some of them are spectacular at it. I am hopeless at it—perhaps the world's worst trader. I see myself as an investor. I like to buy things and own them forever. And what success I have had in investing has come from buying stock that is very cheap. Even if you are wrong, when you are buying cheap you are not going to lose a lot of money. But buying something simply because it is cheap is not enough—it could stay cheap forever. You have to see a positive change coming, something that within the next two, three years everyone else will recognise as a positive change."
Risks never deterred Rogers in real life. But when it comes to investing he is surprisingly cautious. "I don't ever take risk with my money," asserts the adventurer who considers being the father of his daughter as his greatest escapade in life. "The way of the successful investor is to do nothing—not until you see money lying there, somewhere around the corner; and all that is left for you to do is go over and pick it up. You wait until you see something you think is a sure thing."
According to this adventure capitalist, the mistake that many people make in the stock market is buying something, watching it go up and thinking they are smart. "They take a big profit and immediately go looking for something else. That's the time when you should put the money in the bank and go to the beach for a while until you calm down. Because there are not many opportunities that are ever going to come along. But you do not need many if you do not make many mistakes."
Rogers' predictions are as startling as his perceptions: he insists it is time to dump shares and buy commodities (the commodity bull market has already begun), remains bullish on Angola and Bolivia (the transition of these countries from conflict to peace is positive), and foretells that the dollar, euro and yen will be doomed (he is yet to find a substitute for these currencies). He reserves the heaviest jab for desi pundits who position India along with China: India, he predicts, will soon break into several small countries.
India is not the only country that Rogers expects to disintegrate. "One of the more visible changes the world is undergoing right now is the end of the age of empire builders," he writes. "Over the past 300 years, thanks to technological advance, countries tended to grow bigger and bigger. That tendency is reversing. There are about 200 countries in the world today. Over the next three to five decades, there will be 300 or 400."
Born in 1942, Rogers had his first job at the age of five, picking up bottles at baseball games. Decades later, he co-founded the Quantum Fund, a global investment partnership, towards the end of 1960s. During the next 10 years, the portfolio gained more than 4,000 per cent, while the S&P rose less than 50 per cent.
Adventure Capitalist is the most adventurous journey one is likely to take within the pages of a book—the perfect read to armchair adventurers, global investors, car enthusiasts and anyone interested in seeing the world and understanding the markets as they really are.
Adventure Capitalist
Author: Jim Rogers
Publisher: Random House
Edition: 2003, hardcover
Price: Rs1,060
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