Jim Rogers Investment Advice for Parents

During the 1990s when Jim Rogers was often on TV, Bob Brinker would refer to him as "Mr. Bow Tie" for the fashion statement Rogers continues to make.

In yesterday's article "Jim Rogers reveals his Singapore investment strategy" by Elena Torrijos of Yahoo Finance Singapore, Jim Rogers says parents should:

1. Educate your kids
2. buy a home
3. Have adequate insurance
4. THEN start investing.

When asked what he believed to be the biggest mistakes he has seen people from Singapore making when investing abroad, he replied:

“They don’t know what they’re doing. That’s the biggest mistake when investing anywhere, but especially overseas. Many people wind up investing in Norway when they can’t find Norway on the map.”

Investors, he said, should know currencies, bonds, governments, taxes and the like – everything, in short. “You have to know all that when investing in your own country, but even doubly when it’s a different country,” he said.

Recent Articles:

SPY 1% Below Record High While ECRI's WLI Is Just Below A 6.3-Year High

• The latest all-time high for the S&P 500 put it nearly 26% above its 2007 high. The stock market bears who claimed we were in a "Secular Bear Market that began in March 2000" scared many out of the stock market. Those of us who stayed in the markets and added to positions during the downturns are also well above past highs.

Bob Brinker's Last Buying Opportunity

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Bob Brinker and Jim Rogers Differing Opinion on US Treasuries

This weekend Moneytalk host Bob Brinker was asked if the US could default on its debt.  He told the caller they won't default because they won't be able to issue more debt and it would be all over and  "I will say this, if the United States defaults on its debt, I can't give you any reason why anybody in the world should lend a penny to the United States Treasury.....If they actually do that, I can't give you any reason why anybody should invest in a US Treasury." 

A caller asked Brinker if owning US Treasuries was save given the uncertainties with the debt ceiling.  Brinker said he personally doesn't own any US Treasury debt but he would not make a decision to sell or hold based on this debt ceiling issue.

Jim Rogers, the man who correctly predicted the boom in commodities and told Maria Bartiromo on TV years ago to buy farm land in the US, has a completely different view than Bob Brinker .  

From Here's why Jim Rogers says his timing is terrible

Published on Mon, May 23, 2011 at 13:00
Though now known primarily for his bullishness about commodities and China, he has had other investment passions. He was a champion of emerging markets in the 1980s, from Austria to Argentina to the Ivory Coast.
...
Rogers also timed the US property market almost perfectly convinced a bubble had built there. He and Parker sold their home on Riverside Drive, a deal for USD $16 million that closed in December 2007. He had bought the home in January 1977 for USD $1,806,000, at a time the city teetered on bankruptcy and was at its nadir. "They were giving things away," he recalls.
...
Rogers says he is currently long on commodities and currencies, having started to buy the US dollar in the form of Treasury bills in November 2009.
....
He believes the current correction in commodities is a short-term blip in their upward run. That may have years to continue, just as the 1987 crash was a brief respite in a decade-long bull run for stocks.

"What will probably happen is that I will sell my commodities, and they'll double again, then I'll sell them short, then they'll double again because all bubbles go up farther than you expect," he says. "And then, if I don`t get wiped out, they'll fall and I'll make some money."

I find Roger's honesty, compared to Brinker's radio informercial to promote "Moneytalk on Demand" and his "Marketimer" newsletter, refreshing.


Note, I am NOT saying if I agree or disagree with either Brinker or Roger's here.   I am just reporting facts.  You'll have to subscribe to one of my two newsletters to get my opinion on what to do with your fixed income, which depends on your risk tolerance.

BTW, you can save "Moneytalk On Demand" fees by downloading the show for free at the KGO radio archives.

1. Right click 1 - 2 p.m. then "Save Link as" somewhere on your hard drive
2. Right click 2 - 3 p.m. then "Save Link as" somewhere on your hard drive
3. Right click 3 - 4 p.m. then "Save Link as" somewhere on your hard drive

Then listen to it from your hard drive when you have time.

Brinker's guest was Andres Ross Sorkin, author of the book "Too Big to Fail."  The movie debuted on HBO which I recorded on my DVR but have not had time to watch yet.  If anyone would like to write a review of the movie, I'd be happy to publish it here.

Too Big to Fail

"Sorkin's prodigious reporting and lively writing put the reader in the room for some of the biggest-dollar conference calls in history. It's an entertaining book, brisk book...Sorkin skillfully captures the raucous enthusiasm and riotous greed that fueled this rational irrationality." -The New York Times Book Review

"Sorkin's densely detailed and astonishing narrative of the epic financial crisis of 2008 is an extraordinary achievement that will be hard to surpass as the definitive account...as a dramatic close-up, his book is hard to beat." -Financial Times 

Jim Rogers and Bob Brinker

Bob Brinker and Jim Rogers do not see eye-to-eye.

Jim Rogers has been correctly short the banks and invested in commodities.

Bob Brinker has been fully invested in equities since March 2003. He has ridden this massive bear market down while fully invested AND while issuing several "ALL IN buy signals for new money" in the 1400s, 1300s and 1200s right before the market fell into the 800s.


Bob Brinker says inflation is not and will not be a problem while Jim Rogers says otherwise.

This is a good video interview:

Jim Rogers Says Massive inflation is Coming

From the summary of Roger's key points

• We are going to have an inflation nightmare.
  
  
• Whenever people have printed a lot of money, six months to two years later, you have terrible inflation.
  
  
• People all over the world are printing money like mad.
  
  
• Massive inflation is coming and the only way to protect yourself is to be out of paper assets and in (US Treasury Rates)

During the 1990s when Jim Rogers was warning that there was a bubble in US equities and they were not the place to invest, Brinker called him "Mr. Bow Tie." It is interesting that the S&P500 is now back to where it was when Rogers was saying commodities were the better investment.

The chart above shows the S&P500, before dividends, has lost money since January 1, 1998 while gold has more than doubled from about $350 per ounce to $730 per ounce today.

It would be interesting to see who has made and held on to more money the past ten years, Brinker or Rogers.


One thing for sure, neither has to be very happy about being down nearly 50% from the peaks when both were quite bullish for what they recommended.

*==> LIBOR Rates at a Glance <== *
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