Jim Rogers Investment Principles
The good thing regarding these principles is that Jim Rogers does not mind giving out his views on the markets, being one of the top interviewees on CNBC, Bloomberg TV and others. This leads to the possibility, despite the fact that he has never given actual advice on how he makes investment decisions, of analysing his comments and books, and extrapolating the possible ways in which he approaches the market. One thing that seems to stand out of his comments is that Jim Rogers uses purely fundamental analysis approach to investing. This means he analyses basic investment data, such as supply and demand, economic fundamentals, balance sheets, and global money flows. Another feature that often stands out from Rogers' interviews is that he does not put great emphasis on market timing per se, but wants to enter a long term trend early. He often says that he is "the worst market timer in the world." The quote is often referred to when there are doubters on his views and short term fluctuations go opposite his views, but often, in the long term, his analysis is absolute correct. A case in point is his long term view on China, which Rogers' detailed in his book "Bull in China." To put his money where his mouth is, on top of investing heavily on the Chinese stock market, despite the often extreme volatility of the market, he even moved his family to Singapore, in order for his children to learn Chinese, the language he sees the most important for the ongoing century. Jim Rogers is most often quoted on his views for the commodities market, where his has been the most right, most of the time. Unlike some pundits who look at the commodities market one quarter at a time, he concentrates on the long trends, bull and bear markets that last years or decades. In Rogers' interviews, he most often quotes his analysis on the most basic of variables on the commodities market, such as long term supply and demand, which then translates to his investment entries or exits. Unlike many traders, he does not seem to rely on technical analysis to exit a long term trade, but instead waits for the fundamentals to change in order to reverse a trade from long to short or vice versa. Rogers often does not seem to care for diversification, other than being active in many markets, such as several commodities markets and the stock markets different sectors, long or short. For example, he rarely quotes intermarket correlations or other variables that would play into a diversification strategy. In this way, his strategy is to go for absolute returns on his portfolio, without a benchmark to compare his views to, a very common strategy used in hedge funds. On the markets that you can find out his views, recent and historical (many of the older interviews are valid for a long time due to his long term investment philosophy), on markets including the U.S. dollar, agricultural commodities, Chinese stock market, U.S. stock market, and Indian stock market. On top of Jim Rogers principles, many investors also analyse the investment principles of George Soros, who run the Quantum Fund with Rogers early on. Unlike Rogers, Soros has written several books on his investment principles, that famously led him to make one billion dollars in a single trading day in the 90s trading against the British pound. |