Jim Rogers was interviewed on a segment of New Media on Aug. 19. Rogers is a famous investor who worked with George Soros (Trades, Portfolio) in the Quantum Fund and later traveled the world as an investment writer and "retired" investor. He tends to take a very long-term macro view with value characteristics on all kinds of investments. Commodities tend to interest him and he takes somewhat of a value approach, often talking about buying when markets are at multi-year lows. Here's a summary of his best actionable advice.
China
China is communist in name but there are many great capitalists. California is more communist than China is, Rogers said. Rogers is extremely impressed with the Chinese drive and work ethic.
America became the greatest country of the 20th century. Is had many problems along the way. But it became an astonishing success. So don't think that China won't have problems along the way. They will. But the Chinese have a wonderful word that we don't have in English. It's "weiji."
And weiji means catastrophe and opportunity are the same thing.
They go hand-in-hand. So when you see catastrophe, remember weiji. Rogers said he is panicked, He hopes we both remember weiji and take advantage of the opportunities because they will be here.
When Chinese companies start going bankrupt and if Beijing lets them go bankrupt, everybody's going to be in a panic, including me. At that time Jim hopes to be smart enough and brave enough to buy.
How to invest in an emerging/out-of-favor foreign market
Especially in the old days when he would go into a new market, Rogers would buy the biggest 10 companies on the exchange, knowing that when foreign investors came, they would buy these, too.
They have to buy them, he said. A big hit mutual fund in America can’t go ahead and buy stock in Joe's Liquor Store. You've got to buy the big 10 or the big 20.
So where should people invest in such a difficult environment?
Rogers explained that you can sell short. He is also realistic enough to realize most people won’t because they don't know how or don't think of it. People can go into cash. But most people won't do that because they've been making so much money.Â
ETFs are the worst
Exchange-traded funds are going to go down more than everything else, he said. The stocks that aren't in ETFs are best because nobody owns them, so nobody can dump them. The ETF stocks are going to get killed in the next bear market, he said. That will be true everywhere in the world.
Attractive asset classes
There are many commodities right now that are incredibly hated, reaching levels he has never seen. Investors in those markets probably won't lose as much. Russia is also a very hated market. Rogers is interested in North Korea, but there is no market yet.
Disclosure: no positions.
