STREET SMARTS – Adventures On The Road and In The Markets

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“If you’re so smart, then why aren’t you rich?” This was a perfect example of being smart and not being rich. I had been so smart I went broke. I did not know what the markets were capable of. On Wall Street there is no truer adage, I learned, than the one attributed erroneously to John Maynard Keynes: “Markets can remain irrational longer than you can remain solvent.” I had been smart and had lost everything for being smart. The experience was a valuable one. It taught me how little I knew about markets. And it taught me a lot about myself. Later, during a brief tenure at Columbia University, I would share the lesson with students. Do not worry about failure, I would tell them. Do not worry about making mistakes in life. 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. It is better to go bust when you are talking about $20,000 than when you are talking about $20 million. Do it early, and it is not the end of the world. Losing everything can be a beneficial experience, because it teaches you how much you do not know. And if you can come back from a failure or two, chances are you are going to be more successful in the long run. There are countless stories of very successful people who failed once, twice, three times and then came back. Mike Bloomberg got fired from Salomon Brothers, and it was the best thing that ever happened to him. He started his own company, delivering business information, and now he is one of the richest guys in the world. There is nothing wrong with failing if you learn from your mistakes.” – from Chapter 4. Beating The Bear Market


A SELF-PORTRAIT OF A CONFIDENT MAN AS AN INVESTOR AND AN ADVENTURER

Peter Thiel, a venture capitalist, had philosophy and law discipline and his understanding about the world in the past, in the present, and in the future is deeply insightful. Why? His mind is able to see the essence running through the time and even beyond. There’s something our normal eyes cannot catch but clearly tells its presence to a few great minds. Now, I see another man, Jim Rogers, an astute investor with the same disciplines: History, Philosophy, Economics, and Politics. Can you catch the theme? The author of the Seventh Sense, Joshua Cooper Ramo, who is co-CEO of Kissinger Associates, also seems to have the same ability to read and catch the essence of the time out of his deep understanding of history, economics, and politics let alone philosophy.

What do we learn from the common traits running in these people? First, ‘success,’ especially as an investor, comes through the ability to see patterns, cycles and nature of uprisings and downfalls of culture, civilization, and human behavior through history. Second, ‘boldness’ in decision made out of conviction. The courage to go against the common belief or the status quo, so to speak. What I see from Peter Thiel and Jim Rogers is that they are daring contrarians.

 By the way, what do these have to do with ‘Street Smarts?’ Surprisingly, Jim Rogers says he is the one. And you will know why once you read the book. Let’s make a journey to get some glimpse on what the street smart has to say.

This book is not about serious theories on some investments. The author rather shares his life and experiences partly on Wall Street and partly on the road and shares his view on America and the world in terms of both challenges and opportunities in simple and easy language. And his stories about his achievements and advices, albeit pungent, are uplifting to read and fascinating. Why not? When opportunities are seen and introduced by one of the great investors in our time, we’d better listen.

My summary is comprised of five parts as below.

  • The Importance of History and Philosophy
  • Quantum Fund and Opportunities Found in The Bear Market
  • Travelling The World on Motorcycle and Rise of Commodities
  • America and Creative Destruction
  • The Rising East

The Importance of History and Philosophy

‘Nothing Endures But Change.’ Born in Demopolis, Alabama, his adventure to experience the different part of the world-even if the first one was the different part of the U.S.-started as Yale offered a scholarship for his undergraduate study in history. The young man who had the insatiable curiosity of the world grabbed another scholarship to attend Oxford to study PPE(Philosophy, Politics, and Economics) after graduation at Yale in 1964. The summer experience that year in the research department of an investment firm on Wall Street was the first to expose himself to the market and that led him to decide his life direction.

I see two distinctions that separate him from his peers in his time. First, he didn’t go to business school or law school even if he was accepted at such prestigious name as Harvard but chose to study PPE, a decision not common on Wall Street, I assume. Second, he was one of a few rare Americans studying in the U.K. in his time, which means he gained rare but valuable international exposure outside of the U.S. The important thing is, even if his Yale classmates might have all traveled well, to him-the attentive and smart-this exposure gave a fundamental edge in relating things then happening in the world and finding international opportunities in investing.

Why are history and philosophy so important? Throughout the book, the author’s insights based on historical cases and lessons are well reflected and this can be the perfect answer in itself. The author says history and philosophy training was indispensible for him as an investor and whenever he has a chance to speak to the youth he suggests to study them.

If history affirms anything, it is the proposition put forth by the Greeks that “nothing endures but change.” It originated with the philosopher Heraclitus in the sixth century B.C., when he informed us aphoristically that it is not possible to step twice into the same river. Success in life is measured by the ability to anticipate change, and I came to Singapore in response to the realization that the world is in the midst of a historic shift, a dramatic reshaping of the terrain, a decline of US leadership in the world and a commensurate rise in Asia. … The staggering debt loads in many countries will lead to major changes in the way we all live and work. Many old institutions, traditions, political parties, governments, cultures, even nations will decline or collapse or simply disappear, just as has always happened in times of political and economic turmoil. – from Chapter 1. Portrait of The Investor As a Young Man

To those students attending my lecture at Balliol in 2010 who were still determined to work in finance, I explained how the study of philosophy and history were indispensable to me as an investor. “You must know yourself better, ” I told them, if you want to accomplish anything in life-you must learn to think at a deeper, more profound level if you want to understand the truth.” The study of philosophy helped me develop these skills. Studying philosophy trained me to think for myself, to think outside the established framework. It taught me to examine things independently, to examine every concept and every “fact.” It taught me to think around corners, to see what is missing. So many people today are caught up in conventional thinking because it is easier and safer to echo the opinion of the majority, with one’s intellectual processes circumscribed by such concepts as the state, culture, or religion. To think differently from others is difficult. Philosophy teaches you to think, and in doing so it teaches you to doubt. If history teaches us nothing else, it teaches us this: what appears undisputed today will look very different tomorrow. The most stable and predictable societies have undergone major upheavals. … Pick the first year of any decade in the past fifty years, 1960, 1970, all the way through to the millennium. The conventional wisdom that existed at the start of each decade was shattered over the following ten or fifteen years. – from Chapter 2. Innocent Abroad

We can imagine how he must have felt when his trainings finally found their way on Wall Street. I assume a lot of people who have similar backgrounds and have worked on Wall Street or in the markets just like the author totally share this sentiment! As the author says as below, ‘everything is connected’ in the world. It has been probably like that since the birth of the earth or maybe the universe. The significance of this notion especially in our time is that the degree and speed of the impact is tremendously powerful and beyond our control positively and negatively. As Ramo asserts in his book, we are living in a world where nano-second speed topology can dictate.

It was a very exciting summer. I saw the world in a way I had never seen it before. All of a sudden my studies of history and current events were more than theoretical exercises-they had practical value. My passion to know the world was put to a purpose. As a student of history, I found it fascinating to learn how the markets were driven by world events. But what really struck home, for the first time in my life, was how predictably, throughout history, world events were driven by the markets. I learned that everything was connected. I learned that a revolution in Chile was going to affect the price of copper, and thus the price of electricity and the price of houses-the price of everything-all over the world, having an impact on everyone, including homeowners in Toledo. I learned, also, that if you could figure out that a revolution in Chile was coming, you could earn a pretty good living. – from Chapter 1. Portrait of The Investor As a Young Man

The Quantum Fund and Opportunities Found in The Bear Market

The author met and worked under George Soros when he joined the firm Arnold and S. Bleichroeder for managing a fund investing at home and abroad. Later they spilt from the firm and found the Quantum Fund, the only international hedge fund then. While Soros was a trader who had a very good sense of market timing and trading, the author mainly did the research which was his passion.

What interested me was turning over the rocks and pursuing leads, discovering what was going on in the world and predicting where things were headed. This was the passion of mine that had been rewarded back in 1964 when I had stumbled onto Wall Street, finding work I would have done for nothing if simultaneously I could have found a way to support myself. I cut my salary dramatically to go off on this venture. I took a 75 percent pay cut. But the money was irrelevant to me. – from Chapter 3. On My Own

Having shared international investing background and life in the U.K., both of them made a good team. They bought and sold short stocks, commodities, currencies, and bonds located anywhere in the world. They invested where others did not, exploiting untapped markets around the globe. The Quantum Fund was one of the only a handful of hedge funds in 1970s investing in where nobody was looking. Here we find the two confident men who were riding and beating the bear market with insights and opportune timings.

Insatiably curious about the world, I was looking for whatever I could find. We agreed that the opportunities were out there, and if you find them, you invest. We were not constrained by history or geography, by tradition or similar absurdities. We invested wherever we saw opportunities, which meant we invested all over the world. We used a lot of leverage-we borrowed a lot of money to make the investments-which entailed substantial risk, but fortunately we did it right. Certainly we were right more often than we were wrong. – from Chapter 3. On My Own

At Quantum, running against the conventional wisdom, Soros and I shorted those large-cap, buy-and-hold growth stocks that were considered extremely stable, known as the Nifty Fifty-some were selling at one hundred times earnings, two hundred times earnings, all the banks, all the mutual funds were buying them… We shorted the pound sterling… In 1980, gold was on a tear-we shorted it. They were glorious and exciting years; we had gains every year. And those were the days of the bear market, when everybody thought Wall Street was a horrible place to be. In 1980, after a decade in which the S&P 500 rose 47 percent-approximating the gains my mother realized in her passbook savings account at the local bank-the Quantum portfolio was up 4,200 percent. – from Chapter 3. On My Own

The Quantum Fund is well-known(or rather infamous) as a speculator with short-selling. Yes, they are the culprit who drove British Pound, Russian Ruble, and Asian currencies into devaluation causing some of national economies into chaos in 1990s let alone the whole world inevitably. That was after Jim Rogers parted with George Soros. What I see from the Quantum Fund in 1970s is their investment decisions were made based on ‘sound’ reasoning and solid ‘fundamentals.’ How do I know? First, I see the author’s integrity from his decision not to compromise his reputation when faced with SEC probe and was forced to sign his name for what he didn’t do in 1979, even if the decision led him to leave or retire from his profession and his passion. Second, his dominant language throughout the book well reflects his philosophy that values the fundamentals, solid facts and sound decision. And lastly, his investment cases of oil, gold and defense stocks clearly demonstrate where he was coming from. The high returns prove that they saw hurdles in the difficult market as opportunities and they acted on it exactly based on market fundamentals.

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Travelling The World on Motorcycle and Rise of Commodities

MBAs out there! The smart move after you graduate is to study agriculture or mining. That’s where the future is, according to the author. In 1980s’ commodities bear market, the inventories of food worldwide were a very high 35 percent of consumption because of the stocks carried over from the previous the bull market in 1970s. Now as of 2013, fourteen years of bull market that started in 1999, those high inventories are running historically low at 14 percent level. The price will evidently rise as this bull market will continue several more years for commodities, raw materials and natural resources.

His long aspiration to travel the world started to realize after he left the Quantum Fund. While teaching at Columbia Business School and making media appearances on and off, he made a few big adventures around the globe on his motorcycle. And in 1999 he also launched the Roger International Commodities Index(RICI), an invention partly made out of necessity to cover his absence while on travel. He had been long time seeing the rise of commodities when nobody was paying attention and the launch of the index right at the foot of the commodities bear market reflects how prescient he was. Is he a just lucky guy who got it with the opportune timing? No, I don’t think so. He must have clearly felt it was coming from his insights gained on the road. Who can beat the insight of street smarts when they say ‘I know it because I saw it there?’

I have circumnavigated the globe twice now, once by motorcycle, once by car, investigating the world at ground level, charting the shifting circumstances of more than a hundred nations in the course of those five years. For me understanding history and its consequences has not been an armchair endeavor, but a hands-on adventure. It has led to great personal and material rewards, and it inevitably led me here, far from the backwoods of Alabama, to this largely Chinese outpost on the southern tip of the Malay Peninsula. – from Chapter 1. Portrait of The Investor As a Young Man

Before Paige and I set off around the world, I started the Rogers International Commodity Index. By the end of the 1990s, I had come to the conclusion that the bear market in commodities was coming to an end. It was a topic I had been pressing pretty consistently in media appearances, which had become a regular part of my life since the publication of Investment Biker. I saw the commodities bull market coming, but to invest in commodities while I was traveling would have been close to impossible. With commodities you have to stay on top of everything all the time. Commodities contracts expire. Who knew if I would have access to them? I decided that the solution was an index fund, and in order to invest, I would have to start my own. There were no commodities index funds at the time. Commodities were still a widely neglected and unknown sector. … In those days, of course, while I was successfully investing in them, most other people paid no attention to commodities at all. Maybe part of the problem-or part of my success-was that I did not know enough to understand that I should actually be ignoring them. Had I gone to business school, I would have known that commodities were not important and would have paid them little regard, but I did not go to business school and did not come up through a proper investment-bank training program. – from Chapter 6. The Rise of Commodities

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What happens then when food prices rise worldwide? Instability and social unrest. Out of his experience on the road, the author makes one meaningful observation. He sees the roots of civil uprising in countries in the Middle East are related with rising prices of food. What will their government do? Naturally, they will try to institute price controls. The author warns that such outmaneuver never succeeds and is against the law of market place as history proves. So we’ve been warned!

Serious supply problems like this are what have led to the bull market in commodities, and prices are going to go much higher. And instability will follow. If the price of copper goes up, not many people know it right away. But if the prices of wheat and sugar go up, everybody knows it that day, and everybody is unhappy that day. And that often leads to social unrest. Tunisia, Egypt, Libya, Yemen, Syria … they are just the beginning. With rising food prices worldwide we are going to see more discontent, we are going to see more government collapse, we are going to see more countries disintegrate. – from Chapter 14. No One Has Ever Repealed The Laws of Supply and Demand

People who have tried to outmaneuver the market place have never succeeded. No pope, no imam has the power to negate the laws of supply and demand. But that will not stop politicians. Sometime in the future you will see them institute price controls. Politicians have been doing it for a thousand years, and they continue to do it, even though it never has worked. … The Soviets did not have anything because nobody produced anything, and nobody produced anything because prices were set so low. When I was driving through Russia on my motorcycle trip, kids were using loaves of bread for footballs. The price of bread was set at an artificially low level, and it was cheaper to buy a succession of loaves than it was to buy a football(if you could find one to buy), so there they were, out in the street, kicking loaves of bread around. – from Chapter 14. No One Has Ever Repealed The Laws of Supply and Demand

That was in the fall of 2000. Mubarak was ousted in the popular uprising that swept Egypt in 2011. You have these long-entrenched dictators whose people now have access to the Internet, to a variety of social media, to endless streams of information and to instant communication for the purposes of political organizing. And the people are taking their discontent onto the streets. But the spark igniting the activity is not necessarily political so much as it is economic: surging inflation, high unemployment, and an escalating cost of living, most significantly a rise in the food prices. These are the things that make people deeply angry. (The Tiananmen Square protests in Beijing in the spring of 1989 started out as protests against inflation and rising prices. Not until the Western press showed up did students start shouting words like “democracy.”) – from Chapter 14. No One Has Ever Repealed The Laws of Supply and Demand

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America and Creative Destruction

What has made America the largest debtor nation in the world and in history? America as recently as 1987 was a creditor nation. Even if, after World War II, America came out with large debts to pay, the accumulated capital from healthy savings and sound investment into economy led the country to prosperity. Today’s America has no savings to fight for overwhelming debt. America is borrowing money to pay for military hardware and investment does not represent an ongoing source of production. America spend borrowed money on transfer payments which does nothing for future productivity. America as a nation is just consuming.

The author has some things to say. When creative destruction is not made or allowed throughout several economic crises, the problems only deepen. His pungent criticisms on America throughout the book cover such topics as problems below.

  • Education System
  • Litigation Culture versus Competitiveness
  • Tax System that Encourages Consumption Not Saving
  • Congressmen Not on Home-base But on Washington
  • Restraints of Trade Under Protectionism and Patriotism
  • Federal Reserve Chairmen Who Didn’t Allow Bankruptcies During the Crises

According to the author, especially during the financial crisis started in 2008, by not allowing failures to go bankrupt, the Fed rewarded failure, incompetence, and, in some cases, illegality. By buying bonds on what have already proved to be losing ventures, the Fed has built up unprecedented liabilities of $3,200 billion- quadrupled from prior $800 billion before 2008-on its books for which somebody somehow has to pay. Who is those somebody? Taxpayers. Insights, lessons and warnings from history has to be learned.

It has been going on for thousand years; history is replete with examples. The fact is people get greedy… bankers, clergymen, academics, politicians… especially when times are exceptionally good. People cut corners, do things they might not do under normal conditions, and because times are good, because there is so much prosperity, they are not held to account. Stocks go up. Investments pay off. The corners that are cut actually make people a lot of money. No one questions, or even cares, what happened-they are happy with all the money they have made. Manias cover a multitude of sins. “You only find out who is swimming naked when the tide goes out,” says Warren Buffet. – from Chapter 9. “Capitalism Without Bankruptcy Is Like Christianity Without Hell”

 Misfeasance is not limited to business, nor is it anything new. It has been with us forever. And so too has incompetence. Neither should be rewarded. Economic slowdowns are inevitable. They have occurred regularly since the founding of the republic. We had one of the regular slowdowns in 2002. The one that began in 2007~2008 was much worse because the debt was up by a staggering amount. What will America do next time? We cannot quadruple our debt again. We cannot print reams of money again. Can we get away with it one more time? I doubt it. Certainly not two more times. Sometime in this decade the whole system is going to collapse. In 1907, when it collapsed, it could be saved because the United States was a rising nation. It was going from debtor to creditor status; it was on an ascending curve. It is now a debtor to a descending curve. In 2008, had the government allowed the losers to go broke, certain safety nets would have come into play-the government was then solvent enough. There would have been three horrible years, but by now we would have recovered. But that opportunity has passed. The next time it happens, there will not be enough money, and not nearly enough faith in government. Adam Smith said it takes a lot to bankrupt a country, but we are well along the path. – from Chapter 9. “Capitalism Without Bankruptcy Is Like Christianity Without Hell”

Capital is agnostic. That is one of the truisms of the system under which we live. All capital cares about are security and getting the best return. Some raise this as a criticism, as evidence of the evils of capitalism. OK, fine, maybe it is. But it is also the way the world has worked for thousands of years. And nobody knows this better, or appreciates it more, than the capitalists who made fortunes riding the recent bull market over the edge. All should have been allowed to fail. The more of them that shared the fate of Lehman Brothers, the better-off the system would be. As former astronaut Frank Borman, then CEO of Eastern Airlines, said, “Capitalism without bankruptcy is like Christianity without hell.” – from Chapter 9. “Capitalism Without Bankruptcy Is Like Christianity Without Hell”

The Rising East

If America is the largest debtor nation in our time, where is the largest creditor nation? Yes, as you’ve guessed, they are in the East. That’s where the assets are. That’s where the dynamism and energy are, ones that America once had. And savings are very high there just like in America a century ago. The author especially pays attention to China and calls the nation as a capitalist. And he links what China is doing and buying up as a capitalist in the world to the rise of commodities. And by now you can guess what it implies. Yes, they have been buying up everything which will affect the price of everything.

By 1990, China had a real stock exchange. The reason the country is booming today is the unleashing of entrepreneurship. People can do what they want. Yes, there was central planning; yes, there were government companies; yes, yes, yes to all that. But what some see as socialism-with-a-Chinese-face is simply a vestige, a reflection of the fact that for thirty five years everything in China was owned by the state. What you are looking at in China today is Capitalism. The Chinese are among the best capitalists in the world. California is more Communist than China. Massachusetts is more socialist than China. I have run into many businesspeople who love doing business in China, because once they get approval to go forward, they are left pretty much unfettered. And getting approval is not that hard. Of course, there are constraints and there are horror stories. But for the most part these people would rather do business in China than just about anywhere else in the world, including South Korea, including Europe, and certainly including the United States. – from Chapter 14. No One Has Ever Repealed The Laws of Supply and Demand

The Chinese are going around the globe and buying up all sorts of productive assets, oil fields, plantations, mines, everything they can find, because they see what I see, and that is a shortage of raw materials. And they are making many friends doing it. Their method stands in sharp contrast to that of the United States and the old colonial powers of Europe, who went in and essentially took things by force, paying well below value when they paid anything at all, while pushing people around and telling them how to live and whom to worship. Nobody objects to the way the Chinese do business. They boss nobody around. They show up with money and say, “Let’s make a deal. The deal you need is the deal we need.” They make the deal, everybody is happy, and then they go away. No propaganda. “This is strictly business, folks, nothing else. Not like the old days.” In Africa they are very popular because they pay top dollar. Chinese leaders have visited nearly every country in Africa in the past decade or so. … The Chinese are doing the same thing in South America and Central Asia. They buy whatever they can. They are making enormous inroads, locking down minerals and other raw materials, while other countries, including the United States, appear to ignore or be blind to the fact that the world is running short of them. The Chinese are anticipating. They are out in the world reacting to what they see coming. They are acting in the part of the good capitalist while America acts like the arrogant superpower of the 1950s, the postwar period in which the country did not have to worry about a thing. – from Chapter 15. The Sun Is Rising In The East

CONTEMPLATION: A WISE OLD MENTOR SHARES HIS WISDOM

Plenty of valuable investment cases and lessons in the market and from history aside, I rather consider this book as a self-portrait or semi-autobiography. His words and narrations are simple and clear, which is a gift for an investor who somehow deals with sophisticated financial products. Soros also published books but his language somehow doesn’t seem easy to digest. This is one reason why I see the author as a wise old mentor who wants to pass his wisdom, knowledge and advices to readers. I loved this aspect being guided by him in a wise way. He has messages as several personas-as a professional, an investor, a visionary, and as a father let alone a critic! I would like to share his wisdom without much elaboration and then like to close the book review.

Message To Young People In Choosing His Profession

“I cut my salary dramatically to go off on this venture. I took a 75 percent pay cut. But the money was irrelevant to me. The advice I give everyone, the advice I will give my children, is this: before asking how much you are going to get paid for a job, first decide whether it is the right job, whether it is the right place for you, because if it is the right place and you do the job right, the money will come. The money will find you, I assure you. The money should be the least of your questions.” – from Chapter 3. On My Own

Message On The Importance of Fundamentals

“I went to see the chairman of Helmerich & Payne. He took me aside-I was twenty-nine years old-and he said, “Listen, this is a terrible business. I just want to alert you. I am here, this is my family company, and obviously I am not going to leave, but you really should not be investing in this business.” In the annual report that I had read, he had explained the downturn in business as something beyond the company’s control-there had been a long decline in the number of drilling rigs, the report stated, because drilling for gas or oil had not been profitable. And that just excited me more. Everywhere I went I could see that supplies were drying up.” – from Chapter 3. On My Own

“I pointed out that the embargo had been lifted after five months, and yet the price continued to climb. OPEC had been formed in 1960, I reminded him, and every year the ministers met and every year they raised the price of oil, only to see the market laugh at them and to watch the price go down. But here, in 1973, when they raised the price, it stuck. Why? Because shortages were developing. Nobody was drilling for oil. Reserve supplies were running out. People invested, the markets reacted, and things went up. The fundamentals were right. You can invest in something all day long, but unless the fundamentals are right, it is not going to take you anywhere. Get the fundamentals right and the good news keeps coming. Lucky? If you want to be lucky, do your homework. As Louis Pasteur pointed out, “Luck favors only the mind that is prepared.”” – from Chapter 3. On My Own

 Message On The Future  

“Some have labeled me an alarmist, a modern-day Cassandra. But nothing I see in the future need serve as cause for alarm, or even come as a surprise. The winds of change are blowing, they are blowing from the direction of China, and they are blowing in predictable fashion. What we are witnessing is business as usual, history turning a familiar page. And throughout history such moments of transition have presented opportunities to the attentive, so I am wildly optimistic about many things to come.” – from Chapter 1. Portrait of The Investor As a Young Man

Message On Being a Successful Investor  

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-you know a lot about something. If you do not know what it is you know a lot about, just step back and take a look at your daily life. When you walk into a doctor’s waiting room, what magazines do you pick up? If you turn on a television, what kinds of programs do you watch? Soon you will probably figure out what your real interests are, what you are really knowledgeable about. … The fundamental strategy is this: stay with what you know and expand on it. If somebody calls you up and says, oh, my gosh, there is this great new computer process… ignore it. You do not know anything about computers. Cars are what you know. Concentrate on what you know and any changes you see-you will a major change coming long before I ever will, long before anybody on Wall Street will, because cars are your passion; they are what you are sitting around reading about all the time.” – from Chapter 4. Beating The Bear Market

“Do not confuse movement with action. Know when to sit and wait. You bought that stock ten years ago, and you did nothing for the next ten years-you did nothing but watch what was going on, nothing but watch for changes. That is how you make money. Now, after you sell the stock, it is just as important to do nothing. Just wait patiently. Wait until you see money lying over there in the corner.” – from Chapter 4. Beating The Bear Market

“If you want to make a lot of money, resist diversification. Brokers promote the notion that everybody should diversify. But that is mainly to protect themselves. If you buy ten different stocks, the chances are that some will be good. You are not going to go broke, but you are not going to make a lot of money, either. … The way to get rich is to find what is good, focus on it, and concentrate your resources there. But make very sure you are right. Because it is also a fast way to go broke. It is why brokers tell you to diversify-to prevent your going broke and suing them.” – from Chapter 4. Beating The Bear Market

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Message As a Father To His Daughters and To Young People

“There is nothing better than having to struggle and make your own way. Once you have money, of course, you do not want to do that. I would hate for my children to have to go out and make the sacrifices I had to make, but at the same time I have to leave them with something more than material wealth. If I can leave them smart, educated, knowledgeable, ambitious, persevering people, I can lose everything and it will not matter-I will have made an investment that will outlive them, a portfolio of much greater value than any amount of money I might bequeath to them; I will have prepared them to make their way without any money from me, and that is much better. Whatever they inherit can be lost in five years of fifty years, but if I leave them with the proper mind-set, who cares? If I leave them nothing else, I hope to leave them with the courage to dream, to pursue their passion whatever it might be, to dare to try even if they fail. I want them to understand that the only real failure is not to try, the only improper question the one unasked. If I have been successful as a father, each will, when she is my age, look back over her life with no regrets, and her story will read like a tale out of an Arthurian romance, a quest to stir up adventure, a crusade to cover the territory, to scare up dragons beyond every new mountain, driven by the conviction, the unshakable understanding, that money is the lance, not the grail.” – from Chapter 16. Creative Destruction

A Fascinating Read: What Makes This Book Valuable

Normally, I elaborate with a few points in ‘What I Enjoyed From This Book’ in my Contemplation but it’s not necessary this time. I enjoyed every bit of this fascinating book written by an adventurer and I’m sure every reader will do so. This book can be easily read and enjoyed to the max even if readers don’t have any clue on economy, investment or finance. But if you consider yourself a leader, I strongly recommend this book even if you are not from finance or investment related industry. You can get a valuable insight on how the world and the economy have been throughout history through the eyes of the author and how the future will go and where opportunities will be. This book will surely make you resourceful. His advices, criticisms, and valuable wisdom coming out of his own experience and of historical insight are all fascinating and worthwhile to spend your time on this book. I especially loved his human aspect as a father who has a deep loving heart toward his children and the youth, which made this book inspirational let alone insightful.

CLOSING

Life is an adventure. This is a book about investment and at the same time about his wisdom expressed through his adventures on the road and in the market. I see a confident man with integrity who is living without regret and who has valuable messages and inspirations to pass to us. Full of wisdom, insights from history and philosophy and opportunities and visions on the future in simple and clear language, it’s a fascinating read. If you want to understand commodities, the market, economy and the world in terms of historical cycles, this is definitely a good read. Recommend to everyone as well as investors who wants to make successful adventures in life and in the markets.

 

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WHO SHOULD READ THIS BOOK:

Investors. Leaders. MBAs. Also, recommend to anyone who wants to gain wisdom, insight and opportunities on the market and in investing especially.

RATING: 5 out of 5

RECOMMENDED CATEGORIES:

Business, Investment, Auto-Biography

ABOUT THE BOOK

Author(s): Jim Rogers

Published: 2013, USA

Publisher: Crown Business

Hard Cover, 249 pages

 

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