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10 investing insights from Street Smarts by Jim Rogers

Wall Street legend Jim Rogers draws on lessons and observations from his lifetime in the markets.

By Paul Lamb

If you were an investor and become a millionaire or even a billionaire by the age of 37, what would you do?

Would you take care of friends and family, and chase your dream of being famous? Would there be art collecting and land opportunities for you? Right now, in your head, are you considering the possibilities of kicking your heels up, relaxing in your new mansion while looking ahead to a future of recreation and fun?

Maybe you go the other direction. Resting with riches might be as lifeless as a phone booth.

Perhaps you could create a lifelong journey, over the course of which making the whole world your backyard. You might be inspired to literally ride a motorcycle around the world, observing and learning about the planet earth while doing so. Maybe you’d be inspired to chronicle the journey, turn it into a benchmark for global investing, and then do it all over again when the world changes a decade later, this time in a custom built car.

If the latter option sounds more adventurous, more lively and worth your time, then you just might get along with legendary investor Jim Rogers, author of the new book Street Smarts: Adventures on the Road and in the Markets.

Rogers’ book is a summation of his rewarding life as both a traveler and an investor. Rogers offers surprising and provocative observations on how the world works, and what trends he sees in the future. Below are some tips and thoughts from his new book, Street Smarts:

1. If you were smart at the start of the 19th century, you made your way to London. If you were smart at the start of the 20th century, you moved to New York. And if you are smart at the start of the 21st century, you will find your way to Asia.

2. We are in a long secular bull market in commodities worldwide. Like all bull markets, it will end in a bubble. But the bull market still has several years to go.

3. It is good to lose money, to go broke at least once, and preferably twice. But if you are going to do it, do it early in your career. Do it early and it is not the end of the world. . . it teaches you how much you do not know.

4. The way you become a successful investor is by investing only in what you yourself have a wealth of knowledge about. Everybody knows a lot about something. Cars, fashion, whatever it is. . . just take a look at your daily life. Concentrate on what you know. . . you will see a major change coming long before anybody on Wall Street will.

5. Most successful investor do nothing most of the time. Do not confuse movement with action. Know when to sit and wait.

6. If I were to tell you that you could only make twenty-five investments in your lifetime, chances are you would be extremely careful about investing. Invest very rarely.

7. If you want to make a lot of money, resist diversification. Brokers promote the motion that everybody should diversity. But that is mainly to protect themselves. The way to get rich is to find what is good, focus on it, and concentrate your resources there.

8. New York is the economic and cultural capital of what is now the largest debtor nation in the world, the largest debtor nation in the history of the world. The world’s largest creditor nations are in Asia. That is where the assets are. That is where the dynamism and energy are.

9. Alan Greenspan’s greatest strengths were those of a politician. The way capitalism is supposed to work is that when people get in trouble, they fail. Smart, competent people come in, take over the assets, reorganize, and start again from a sound base. Greenspan’s way was to prop up failure. He and the politicians were taking money from competent people, giving it to the incompetent people, and telling the incompetent people, “Here, the government is on your side. Now you can compete with the competent people with their money and our support.”

10. I am dying to find a way to invest in both North Korea and Myanmaar. The major changes in these two countries are among the most exciting things I see right now, looking to the future. Another think I am extremely bullish on for the next twenty or thirty years is Chinese tourism. The Chinese have not been able to t ravel for decades, and now they can. Both inside and outside the country, Chinese tourism will explode.

Rogers’ insight is invaluable – and these are just some of the myriad thoughts and ruminations on the world that Jim has written in his new book.