Friday, August 29, 2014

Jim Rogers on Investing & How The Markets Work


This is how markets work. Something, a stock, land, or some other store of value, will bump along at a stable price. Eventually something changes the supply-demand balance. The price starts going up because people realize, "Hey, they have a new product," or "The railroad is coming through Smithtown." The price goes up  for legitimate and sound reasons.

There comes a time though, when people buy land in Smithtown only because its price is going up. At that point, my mother calls me and says, "I want to buy some acres, " or "I want to buy this stock."

"Why mother?"

"Well, Jim, its tripled over the past year."

"That`s not the way you are supposed to do it," I say. "You don`t buy it because it`s tripled. You buy it before it triples."

But this is what happens. People see the price going up and know that here is the gravy train that is going to make them rich. The newspaper will have stories about Joe and Sally, how they are now rich because they bought all this land or a few shares of stock in the coal mine. The price now goes up because the price is going up.

This stock or these acres become vastly overpriced. The smart guys who bought early, who bought because their family had lived in Smithtown for a hundred years, they start selling. They realize that this is becoming unsound. It turns out it`s not economical to put yet another General Motors factory here, so new people don`t buy land. The demand tapers off.

For sound economic reasons the price starts coming down. Now we have passed the peak. There are now sound economic reasons for manufacturers to put their factories in Taiwan instead of Smithtown. The price of land goes down and goes down - all for sound economic reasons.

Now comes the time when people start selling because the price is going down. People look back and say, "Everybody knows you should not own land in Smithtown. It`s been going down for 5 years."

Everybody now sells because its the only thing to do. Before there was a buying panic, now there`s a selling panic. People scream, "I don`t care if land is cheap in Smithtown and I can have a mansion there for virtually nothing. Everybody knows its a bad place to invest. Get me out!"

Prices collapse. Everybody knows the price is going to nothing. Panic, the crescendo - that`S when you buy because then it`s all over. It will be a while before things start to come back, but come back they will.




Jim Rogers is a bestselling author, financial commentator and successful international investor. Rogers was a co-founder of the Quantum Fund (considered to be the first truly international fund of its kind) and is the creator of the Rogers International Commodities Index (RICI).

Tuesday, August 26, 2014

Russian Stock Market Extremely Hated


Russia is one of the most hated stock markets in the world, perhaps second only to Argentina, which is hated more. I have learned, when things like that happen, they usually put it cheap, Russia has a convertible currency, has a very low debt, has lots of resources, and when the stocks get knocked down, I started investing. 

Listen, I was very bearish on Russia for forty six years of my life. I’ve only started becoming positive on Russia in the last couple of years. I do think I see opportunities and therefore I’m investing.






Jim Rogers is a bestselling author, financial commentator and successful international investor. Rogers was a co-founder of the Quantum Fund (considered to be the first truly international fund of its kind) and is the creator of the Rogers International Commodities Index (RICI).

Monday, August 25, 2014

BRICs Developing an Alternative Banking System



To put together a competing world reserve currency and develop an alternative banking system, the BRICs might consider throwing India out of the equation, Jim Rogers said. India has been said to be the stumbling block in establishing the new world bank. “India and Brazil have big (national) debts. Russia is not a big debtor and has big international reserves,” Rogers noted, pivoting to Russian advantages in the interview. “Russia has a freely convertible currency and none of the others have a freely convertible currency.”
Jim Rogers thinks Russia should spend its time courting suitors in its own neighborhood, however. “If I were Russia I would be more interested in selling to Asia than South America.”
As reported two days ago in ValueWalk, the leaders of Russia, India, Brazil, China and South Africa are in meetings ending July 17 to bring together plans to create a $100 billion bank to compete with the World Bank and International Monetary Fund. The planed bank is a piece in a larger puzzle to provide a global alternative to Western dominance of the financial system. This has been a stated goal of Russia and China, both of whom have engaged in trade deals that eschew the use of the US dollar. - Source, Value Walk



Jim Rogers is a bestselling author, financial commentator and successful international investor. Rogers was a co-founder of the Quantum Fund (considered to be the first truly international fund of its kind) and is the creator of the Rogers International Commodities Index (RICI).

Saturday, August 23, 2014

Brazil Real to Compete with the US Dollar




Discussing the recent BRICs conference, Jim Rogers noted the steady drumbeat to displace the US as the world’s reserve currency of choice. “Brazil wants to compete with the IMF, the World Bank and the US dollar,” as do all participants in the BRICs conference, Rogers said when speaking on an RT interview.
“Brazil, China and Russia could easily put something together to compete with the US dollar,” Rogers said, leaving out one component of the BRICs alliance. “The US dollar is a terribly flawed currency. I’m an American. I hate to say that. But the US has serious problems, the world has serious problems. We need something else” and potentially a competing world currency could be developed. If this were to occur, the US and its economy might be put in a straight jacket as the ability to engage in large deficit spending could be curtailed.


Jim Rogers is a bestselling author, financial commentator and successful international investor. Rogers was a co-founder of the Quantum Fund (considered to be the first truly international fund of its kind) and is the creator of the Rogers International Commodities Index (RICI).
JIM ROGERS BLOG

Popular Posts