Jim Rogers Quotes
So I got the pleasure to listen to, and actually meet afterwards, Jim Rogers today. After hearing him and Buffet speak, I feel very confident in saying that he is way tighter and sharper than Buffet, or at least he came off that way. The guy is like 5'5, wears a bowtie, and speaks just as frankly as I do. Now I might be a little biased because he holds the same world and investment views as I do, but given his track record, the fact that he has travelled to over 200 countries, retired at 33 from a fund w/ Soros, and was called crazy for saying to buy stocks in the early 80s and commodities in the late 90s.
Anyways, the guy was so funny that he had the whole room laughing out loud most of the time. He spoke so frankly though, and I mean all of the big PMs were in there - Harry Lange, Danoff, Neal Miller, etc.
A couple quotes:
On Bonds"
"I am short bonds. Bonds peaked in 2003 and they are in a long term secular bear market. Its been tough this week, but ultimately I am extremely confident in the direction of bonds. I imagine that some of you are bond portfolio managers and analysts; if I were you I would go to your manager (boss) and ask if I could do something else." <---This quote had everyone laughing hard.
On China
"Whether you like it or not, China will be the next great country. In the 19th century it was the UK, in the 20th century it was the US, and in the 21st century it will be China. China saves 35% of income vs. our savings of 1%. Chinese laborers don't ask about holidays off in interviews like us, but rather ask how many days they can work a year. Since 1978, China has been reinvesting in infrastructure and productive capacity, and sees how the US lives and wants it for themselves. If you hear about turmoil in China, which there will definitely be along the ascent, BUY more China. I am so confident in that when my daughter was born a couple years ago I hired a chinese nanny and instructed her to only speak Mandarin to my daughter. Now my daughter is 5yrs old and fluent in Mandarin and English. I believe that my family might move to a Chinese speaking country - that is how serious I am about this. I am not a very smart man, so you don't have to believe me, but that still doesn't change what the outcome is going to be."
On US Dollar
1987 was the last time that the US was a net creditor. Since then we have been a debtor, and have seen our debt accelerate in the last 8yrs. We currently have 41 trillion in total debt, and 13 trillion in foreign debt. Our current rate of debt addition is $1 trillion of new debt added every 15months in the US. Considering the trade deficit debacle and ridiculous money and credit growth that has gone on in the past years I can safely say that my baby daughter doesn't own a single US dollar or US bank account - she has a swiss bank account. The federal reserve's official policy is to debase the currency, which is a horrible policy. Many countries in history have tried this policy and every single time it ended horribly (he then suggested reading up on the horrible turmoil when the pound sterling was no longer the world reserve currency in 1933). The US is starting to lose the world reserve currency status; look at the south koreans, the Iranians, the russians, malaysia, and china starting to decelerate their US asset purchases and said to simply look at the huge miss in foreign investment reported earlier this month. (BTW, he talked about the Iranian Oil Bourse for like 3 / 4 minutes for all those that think I am crazy). Finally, the worst thing about the dollar is the current Central Bank head Ben Bernanke. This is a guy who has publicly said that if needs be he will jump on an apache and drop dollar bills out the window all over the world if necessary. He has been studying and training his entire life on how to print money and now he has the chance. What do you think will happen to the foreign investment that keeps bond yields low, and our economy afloat, when bernanke starts cutting rates and reaccelerates bank liquidity expansion? Why do you think the smartest people in the world are all publicly stating that they are buying foreign assets and foreign currency? I mean Warren Buffet, Bill Gates, my former partner whose name I won't mention, numerous US politicians, myself. I mean people in the know, know to get out while you can. I urge you all to do the same. Outside of my working capital I own no dollar denominated assets, (commodities can be priced in any currency)." - JR
I URGE YOU TO PROTECT YOUR ASSETS.
On Commodities
"Commodities is the only bull market out there with true fundamentals. It is the second largest market next to the Fx market - shit more oil trades everyday than the entire stock market. I don't personally believe in diversification, but I know all you were taught its a good thing, so if you are looking for diversification from the coming bear market in stocks and bonds then I suggest you look at the LT negative correlation between commodities and corporate and government securities. The commodities bull market has a minimum of 9yrs left -ending in 2014- and a maximum of 16yrs - ending in 2022. I am not a smart man, don't take my word for this, look it up. These things move in cycles as companies never add productive capacity when prices are cheap, and then when prices are high they realize it takes 3yrs - 10yrs to bring material supply online. The shortest secular bull in commodities was 16 years, which is how I arrive at 2014. And if you look at the current environment I would predict it will be longer. Shit, the production companies are all acquiring one another right now, while that can have effects on share prices and idiosyncratic reserves - IT DOES NOT BRING NEW SUPPLY TO THE GLOBAL MARKET. It actually only prolongs the bull market.
I mean there has only been 1 lead mine to come online in the last 25yrs; last lead smelter was in 1969 in US.
Last major oil find was over 35yrs ago. Traditionally the UK, Malaysia, and others were net exporters of oil; before the decade is over they will be importers. Hell, I mean Indonesia is about to be kicked out of OPEC b/c it is about to turn into an oil importer. BASICALLY SUPPLY IS DOWN AND DEMAND IS WAY UP. Asia is growing fast (indonesia, malaysia, s.korea, vietnam, china, india, taiwan) and is consuming more and more energy. Russia is stripping its productive capacity and to centralize the control the natural resources, which is something that is very bullish for energy prices. The biggest farce is Saudi Arabia. In 1979 they stated that they had 260 billion barrels of oil, and every year since they have never changed that number until last year when they said they have 261 billion barrels. Now I wonder how this can be given that there has been no discoveries and 63 billion barrels produced since 1979? They won't let anyone audit their oil fields, and I think that is because they know, as I suspect, that we will find out that their oil reserves are far below the 260 billion they have had for the last 27 years.
I URGE YOU TO BUY COMMODITIES. This is one of those rare opportunities in history where there will be people that generate enormous wealth investing in commodities - please get rich along with me."
I should mention that he said that there is only 10 commodity mutual funds and a couple paragraphs dedicated to commodities in the major financial publications. He said that banks hate commodities, but that by the end of the bull market there will be live reports from the pits in Chicago, a whole section dedicated to commodities in the papers, and everyone will think he's crazy when he comes back in 10yrs and tells us to sell. He said that by that time everyone will be buying commodities and know, like they did in 1999 and 1929, and more recently in the housing market, that prices always go up."
On Specific Opportunities
Soft Commodities - Suggested a long cotton short zinc trade.
Nat. Gas is really cheap right now relative to oil and you probably could short oil and long natural gas.
Said that water was THE MOST IMPORTANT commodity and will blow away everything else in the coming century. He said that water shortage is the biggest risk to his chinse thesis, and that right now water is more important and valuable to India and China than oil. He believes that there will be a couple more wars fought over oil in this century, but that there will be many more fought over water assets.
I got to talk to him a little afterwards and can honestly say that this guy was the most impressive speaker / investor that I have ever seen in my life.
Anyways, the guy was so funny that he had the whole room laughing out loud most of the time. He spoke so frankly though, and I mean all of the big PMs were in there - Harry Lange, Danoff, Neal Miller, etc.
A couple quotes:
On Bonds"
"I am short bonds. Bonds peaked in 2003 and they are in a long term secular bear market. Its been tough this week, but ultimately I am extremely confident in the direction of bonds. I imagine that some of you are bond portfolio managers and analysts; if I were you I would go to your manager (boss) and ask if I could do something else." <---This quote had everyone laughing hard.
On China
"Whether you like it or not, China will be the next great country. In the 19th century it was the UK, in the 20th century it was the US, and in the 21st century it will be China. China saves 35% of income vs. our savings of 1%. Chinese laborers don't ask about holidays off in interviews like us, but rather ask how many days they can work a year. Since 1978, China has been reinvesting in infrastructure and productive capacity, and sees how the US lives and wants it for themselves. If you hear about turmoil in China, which there will definitely be along the ascent, BUY more China. I am so confident in that when my daughter was born a couple years ago I hired a chinese nanny and instructed her to only speak Mandarin to my daughter. Now my daughter is 5yrs old and fluent in Mandarin and English. I believe that my family might move to a Chinese speaking country - that is how serious I am about this. I am not a very smart man, so you don't have to believe me, but that still doesn't change what the outcome is going to be."
On US Dollar
1987 was the last time that the US was a net creditor. Since then we have been a debtor, and have seen our debt accelerate in the last 8yrs. We currently have 41 trillion in total debt, and 13 trillion in foreign debt. Our current rate of debt addition is $1 trillion of new debt added every 15months in the US. Considering the trade deficit debacle and ridiculous money and credit growth that has gone on in the past years I can safely say that my baby daughter doesn't own a single US dollar or US bank account - she has a swiss bank account. The federal reserve's official policy is to debase the currency, which is a horrible policy. Many countries in history have tried this policy and every single time it ended horribly (he then suggested reading up on the horrible turmoil when the pound sterling was no longer the world reserve currency in 1933). The US is starting to lose the world reserve currency status; look at the south koreans, the Iranians, the russians, malaysia, and china starting to decelerate their US asset purchases and said to simply look at the huge miss in foreign investment reported earlier this month. (BTW, he talked about the Iranian Oil Bourse for like 3 / 4 minutes for all those that think I am crazy). Finally, the worst thing about the dollar is the current Central Bank head Ben Bernanke. This is a guy who has publicly said that if needs be he will jump on an apache and drop dollar bills out the window all over the world if necessary. He has been studying and training his entire life on how to print money and now he has the chance. What do you think will happen to the foreign investment that keeps bond yields low, and our economy afloat, when bernanke starts cutting rates and reaccelerates bank liquidity expansion? Why do you think the smartest people in the world are all publicly stating that they are buying foreign assets and foreign currency? I mean Warren Buffet, Bill Gates, my former partner whose name I won't mention, numerous US politicians, myself. I mean people in the know, know to get out while you can. I urge you all to do the same. Outside of my working capital I own no dollar denominated assets, (commodities can be priced in any currency)." - JR
I URGE YOU TO PROTECT YOUR ASSETS.
On Commodities
"Commodities is the only bull market out there with true fundamentals. It is the second largest market next to the Fx market - shit more oil trades everyday than the entire stock market. I don't personally believe in diversification, but I know all you were taught its a good thing, so if you are looking for diversification from the coming bear market in stocks and bonds then I suggest you look at the LT negative correlation between commodities and corporate and government securities. The commodities bull market has a minimum of 9yrs left -ending in 2014- and a maximum of 16yrs - ending in 2022. I am not a smart man, don't take my word for this, look it up. These things move in cycles as companies never add productive capacity when prices are cheap, and then when prices are high they realize it takes 3yrs - 10yrs to bring material supply online. The shortest secular bull in commodities was 16 years, which is how I arrive at 2014. And if you look at the current environment I would predict it will be longer. Shit, the production companies are all acquiring one another right now, while that can have effects on share prices and idiosyncratic reserves - IT DOES NOT BRING NEW SUPPLY TO THE GLOBAL MARKET. It actually only prolongs the bull market.
I mean there has only been 1 lead mine to come online in the last 25yrs; last lead smelter was in 1969 in US.
Last major oil find was over 35yrs ago. Traditionally the UK, Malaysia, and others were net exporters of oil; before the decade is over they will be importers. Hell, I mean Indonesia is about to be kicked out of OPEC b/c it is about to turn into an oil importer. BASICALLY SUPPLY IS DOWN AND DEMAND IS WAY UP. Asia is growing fast (indonesia, malaysia, s.korea, vietnam, china, india, taiwan) and is consuming more and more energy. Russia is stripping its productive capacity and to centralize the control the natural resources, which is something that is very bullish for energy prices. The biggest farce is Saudi Arabia. In 1979 they stated that they had 260 billion barrels of oil, and every year since they have never changed that number until last year when they said they have 261 billion barrels. Now I wonder how this can be given that there has been no discoveries and 63 billion barrels produced since 1979? They won't let anyone audit their oil fields, and I think that is because they know, as I suspect, that we will find out that their oil reserves are far below the 260 billion they have had for the last 27 years.
I URGE YOU TO BUY COMMODITIES. This is one of those rare opportunities in history where there will be people that generate enormous wealth investing in commodities - please get rich along with me."
I should mention that he said that there is only 10 commodity mutual funds and a couple paragraphs dedicated to commodities in the major financial publications. He said that banks hate commodities, but that by the end of the bull market there will be live reports from the pits in Chicago, a whole section dedicated to commodities in the papers, and everyone will think he's crazy when he comes back in 10yrs and tells us to sell. He said that by that time everyone will be buying commodities and know, like they did in 1999 and 1929, and more recently in the housing market, that prices always go up."
On Specific Opportunities
Soft Commodities - Suggested a long cotton short zinc trade.
Nat. Gas is really cheap right now relative to oil and you probably could short oil and long natural gas.
Said that water was THE MOST IMPORTANT commodity and will blow away everything else in the coming century. He said that water shortage is the biggest risk to his chinse thesis, and that right now water is more important and valuable to India and China than oil. He believes that there will be a couple more wars fought over oil in this century, but that there will be many more fought over water assets.
I got to talk to him a little afterwards and can honestly say that this guy was the most impressive speaker / investor that I have ever seen in my life.
posted by Not Sure if Al Gore or Global Warming is a Bigger Joke at
11:10 PM
3 Comments:
Oh, and one more thing. When asked where the inflation is and why rates are showing it he replied that the government is lying to you and that if you went shopping instead of your butler you would know that real prices have risen dramatically more than what the government is pumping out. Second, he said that foreign asset buying has unreached unprecedent levels.
so the combination of these two events is the only reason rates aren't double digit.
Made me so happy to hear him tell everyone at FMR that CPI was understated and that the gov't is lying to us.
Do you know any of the 10 commodity mutual funds that he was refering to? I did a quick search and didn't find any.
Goldman Sachs Index, Rogers Index, Oppenheimer Real Asset Fund, CRB, are some that come off the top of my head. But thats the point; its hard to find any. Definitely a bullish sign. Hope all is well T.Free.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home