Thursday, November 02, 2006

Personalities: Jim Rogers 0 comments

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In recent years Jim Rogers appears to have come to prominence. The main reason is the rise of commodities as an asset class, a trend he had predicted in the late 1990s. It would pay for us Singaporeans to know him as well; he might well be moving his family to Singapore! This was reported in the press recently; he wants to stay close to where the action is --- Asia, the world's growth engine for the new century (as seen by him).

He is best known for being the co-founder of the global macro hedge fund Quantum Fund together with the more famous George Soros. The fund started in early 1970, and Rogers left in 1980 a multi-millionaire and semi-retired; he now manages his own money. He was the research point-man for the fund. So it is clear that he is a fundamentals guy, and given the sweeping investment approach of Quantum, he tends to operate along the lines of big-picture macroeconomic analysis in picking assets to invest in. That means he takes a broad global perspective for good countries to invest in, betting on whole industries (ie. buy the leading sector stocks) or on the country itself. He takes the short side as easily as the long, but does seem to be partial to two asset classes: equities and commodities.

The Rogers investment approach is typically oriented towards betting on secular trends, as opposed to short-term changes. Rogers himself admits that he is the world's worst trader. Such a heavily fundamentals-based approach in global macro investing is rare, and to do it well involves being constantly in touch with the various social, economic and political facets that will have a bearing on the various asset class valuations. Indeed, it requires hard work to the point of obsession, and the ability to think independently from the herd --- a contrarian mindset. Indeed, Jim Rogers reads widely, and travels widely, in order to get a broad perspective of things, as first-hand as possible.

Besides being a co-founder of Quantum, Jim Rogers is primarily known for two other things: travelling around the world on a motorbike over two years (starting 1990) where he experienced the various countries first-hand, and his late-1990s bullishness on commodities which led him to devise the now-well known Rogers International Commodities Index that tracks all key commodities. He has written a book on each of these two topics ("Investment Biker" and "Hot Commodities" respectively). He was probably one of the first to see the structural changes the commodities asset class would experience due to the rise of China, a country he liked very early on and in which he continues to be maximum bullish now (which is why he wants to relocate to Asia and desires his infant daughter to learn Mandarin). Commodities is right up his alley: it is governed by the laws of demand and supply, probably more than any other asset class, and cannot be manipulated easily over the short-term, and even more impossibly over the medium/long-term --- an ideal ground for the well-researched, well-reasoned fundamental analyst.

It would be exciting to have him in Singapore. For such a well-travelled and famous investment personality to choose Singapore as his home (and probably his base for conducting his investment activities) would be one hell of an endorsement indeed.

(1) Money Masters of Our Time (by John Train)




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