Sunday, March 31, 2013

Invest in Russia not US

I'm certainly not investing in the United States... the whole world is benefiting from all this money being printed, but there are better places than where the all-time high is.

Friday, March 29, 2013

Too many students doing their MBA

In 1958, America produced 5,000 MBAs per year and none of the other countries produced any. Last year we produced 200,000, and the rest of the world produced tens of thousands more. We have a glut, we have a lot more MBAs than we used to, there’s a huge amount of competition in that field, in finance. And nearly all MBAs these days study finance. In the old days some of them studied manufacturing, or marketing, or accounting, or other things. Now it’s nearly all finance.

This is at a time when there’s massive debt and leverage in the financial community. You know, back in the 60s and 70s there was very low leverage in the financial community, many investment banks were partnerships, partners weren’t about to go and risk their entire fortunes with leverage.

And of course now you have governments around the world antagonistic to finance, passing laws and regulations all the time, trying to come down hard on financial types. Finance, which was a backwater and pretty much ignored by everybody including students, has now become, in the 80s, 90s, and the last 10 or 15 years, wildly hot and popular. That’s why I’m saying this is going to change. Throughout history we’ve had long periods where the financial types were the masters of the universe, followed by long periods when the people who produced real goods were. Well, that’s changing now, going back to the old ways. We have more people in America studying public relations than studying agriculture. More people study physical education than study mining engineering.

So how much more do you need to know? 10,000 people studied agriculture last year while 200,000 got MBAs.

Thursday, March 28, 2013

Invest in things you know

Nobody should invest in anything that they themselves don’t understand. So if I sat here and said you should do x, y, z, and people don’t have a clue what I’m talking about, they should probably ignore what I say or even what you say.

Nobody should invest in something that they don’t understand. If you know nothing about gold except that it’s supposedly valuable, you shouldn’t buy it, or invest in anything you don’t know about.

But once you know a lot about something, you will probably figure out some ways to protect yourself. I mean if you have your own business, like you, usually the best thing to invest in is your own business, because you know more about that than anything else. I have various ways that I’m trying to protect myself, but even if I told you I’m doing x, I might change my mind tomorrow afternoon, and then you would be stuck doing x because I said it. I’m not going to call you and tell you I changed my mind on that position. So people really need to invest in only what they themselves know a lot about.

Wednesday, March 27, 2013

Moved to Singapore in 2007

When I moved to Singapore in 2007, I can’t tell you how many smart, educated, knowledgeable, successful people said, “Are you nuts? Why are you moving to China?” Well of course Singapore is not China, it just shows you the extent of the lack of understanding and knowledge. But also they just couldn’t comprehend why anybody would pack up and leave a great life in New York to move to a foreign country.

Most people, for whatever reason, they listen to other people, they get into their groove, and they just cannot change. Look, I make plenty of mistakes. You can ask me in fifty years if I did the right thing, bringing my children to Asia. But, when I see something, I eventually act.

Tuesday, March 26, 2013

Spotting investment trends

Jim Rogers on the topic of spotting investment trends:

I don’t know, but I do know that if something’s too good to be true then it’s probably not true. The idea that we could all buy five or six houses with no job and no money down, and then that those mortgages could be sliced and diced and made into even more miraculous AAA credit.

Looking back, even at the time it was incomprehensible to me that people would believe that. But looking back on it, I don’t think anybody could comprehend how that happened, but it did. You often see that.

Back in the late 90s there was the whole dot com thing. Everybody was talking about a new era. Even the Wall Street Journal started to capitalize New Economy, you know, everybody got sucked in. But if you have any knowledge of history, you know this can happen throughout history. All bubbles look the same, all absurd policies look the same, and they all lined up. And people always say the same things, they say it’s different this time, they say it’s a new economy, a new era, whatever, and it never is. All these absurdities always end up badly. And by the way, the Wall Street Journal stopped capitalizing New Economy in the early part of this century, because even they came to realize, oh my gosh, it was not a new economy, and it never is a new era. Mankind doesn’t change very much at all.

Monday, March 25, 2013

Historical similarlities between Japan and US economy

In the early 1990s, Japan faced problems such as we’re facing now, and they refused to let people go bankrupt, they propped up the banks, they propped up a lot of companies, and they came to be known as the zombie banks and zombie companies, and as you know the Japanese talk about the 1990s as the lost decade.

But now you’re talking about two lost decades. Their stock market is down 75% from where it was 23 years ago. That is not a typo, it’s down 75%. We’re going the same way. We refuse to let people go bankrupt, prop up everybody in sight, and the problem with that is you’re rewarding incompetence, you’re bailing out incompetence, rather than allowing new people, new energy, new capital, and new competition. It’s called the green shoots, from Joseph Schumpeter. One of the great beauties of capitalism is creative destruction, which allows the green shoots of new energy, and new capital, and new ideas to develop. They’re not allowing that in the United States these days, just as Japan refused to allow it for the last 23 years.

Thursday, March 21, 2013

China trying to lower inflation

The Chinese are trying to slow things down, rightly so. They've had inflation. They've had a real estate bubble, you should always try to pop bubbles and you should always try to kill inflation, so I admire what they're doing.

China will have many problems but it's not the end of the world.

The US went through a similar economic rise with rapid growth in the 20th century with the Great Depression in the 1930s.

Wednesday, March 20, 2013

Money printing not the answer to current problems

 Debasing your currency sometimes works in the short-term; it has never worked in the long term.

Tuesday, March 19, 2013

Money printing is a dangerous game

This is the only time in recorded history that all major central banks are printing money at the same time and everybody’s trying to debase the value of the money. I suspect it’s going to end very, very badly in the end, but in the meantime a lot of people are having a lot of fun.

Monday, March 18, 2013

Sterling to continue lower

On the Moody's downgrade of the UK economy from AAA to AA1.

I'm a little surprised it took Moody's so long to get around to lowering the credit rating. The UK, the US, and other countries are in serious trouble, and the world seems to know it. It's just the rating agencies that don't know it.

I suspect sterling will continue to go down in real terms against real assets.

Friday, March 15, 2013

Gold could go down more on India policies

I own gold and silver and precious metals. I own all commodities, which is a better way to play as they debase currencies. I own more agriculture than just about anything else in real assets because of the reasons we discussed before. We were talking before about the risk-free or worry-free investment. Even gold: the Indian politicians are talking about coming down hard on gold, and India is the largest buyer of gold in the world. If Indian politicians do something -- whether it’s foolish or not is irrelevant -- if they do something, gold could go down a lot. So I own it. I’m not selling it.

Thursday, March 14, 2013

Worldwide money printing by central governments

For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don't know. It just depends on which one goes down the most and first, and they take turns. When one says a currency is going down, the question is against what? because they are all trying to debase themselves. It’s a peculiar time in world history.

I own the dollar, not because I have any confidence in the dollar and not because it’s sound – it’s a terribly flawed currency – but I expect more currency turmoil, more financial turmoil. During periods like that, people, for whatever reason, flee to the U.S. dollar as a safe haven. It is not a safe haven, but it is perceived that way by some people. That’s why the dollar is going up. That’s why I own it. Will I own it in five years, ten years? I don't know.

Wednesday, March 13, 2013

Savers are being punished in USA

Throughout our history – any country’s history – the people who save their money and invest for their future are the ones that you build an economy, a society, and a nation on.

In America, many people saved their money, put it aside, and didn’t buy four or five houses with no job and no money down. They did what most people would consider the right thing, and what historically has been the right thing. But now, unfortunately, those people are being wiped out, because they are getting 0% return, or virtually no return, on their savings and their investments. We’re wiping them out at the expense of people who went deeply into debt, people who did what most people would consider the wrong thing at the expense of people who did the right thing. This, long-term, has terrible consequences for any nation, any society, any economy.

If you go back in history, you'll see what happened to the Germans when they wiped out their savings class in the 1920s. It didn’t lead to good things down the road for Germany. It didn’t lead to good things for Italy, which did the same thing. There were plenty of countries where it wiped out the people who saved and invested for their future. It’s usually a serious, political reaction, desperation in some cases, and looking for a savior and easy answers is usually what happens when you destroy the people who save and invest for the future.

Tuesday, March 12, 2013

Rogers on Japanese tractor makers

Jim Rogers own's shares of Japanese tractor makers. Rogers is optimistic they will be more competitive abroad because of a weaker yen.

Monday, March 11, 2013

Rogers to continue buying Japan shares

Japan is one of the few places in the world where I own shares,” Rogers, chairman of Rogers Holdings, said at a Daiwa Securities Group Inc. (8601) equity conference in Tokyo today. “I have no plans to sell and plan to accumulate more when I can. Abe(Japan's Prime Minister) has been a catalyst and this will continue for several years.

Friday, March 8, 2013

US treasuries bubble burst ?

US treasuries is probably one of the last remaining asset bubbles left in the world. To buy them now would be a “terrible mistake”.

The US Federal Reserve's continued quantitative easing measures should help hard assets.

Thursday, March 7, 2013

Why Japanese stocks can go higher

They[Japanese Investors] will soon start losing money on the money invested abroad so a massive amount of that money is going to come back home. I doubt that will go into bank deposits or bonds because interest rates are so low. Then at least they can go to commodities or stocks.

Wednesday, March 6, 2013

Stocks to trade sideways range bound

Stocks, in my view, in most countries are like they were in the 1970s.

In the 1970s stock markets, and economies around the world did not do very much and were in a big sideways trading range for many years. We are in that kind of period now. 

Tuesday, March 5, 2013

Agriculture can be a good inflation protection too

I suspect agriculture products would give better protection during the next several years although gold and silver will be good too – perhaps second best.

Monday, March 4, 2013

Commodities and shortages

I'm long commodities and currencies, because if the world gets better, the shortages in commodities will make sure I make money; if the world economy doesn't get better, I'd rather own commodities because they're going to print money.

Jim Rogers

Warren Buffett

Nouriel Roubini