How To Invest Like Jim Rogers
Making millions and retiring in your 30s is every investor's dream. But for legendary commodities trader Jim Rogers, it was just the beginning of a career on Wall Street that has spanned six decades and produced a net worth in the hundreds of millions.
Rogers' amazing success was built on his uncanny ability to spot long-term trends well before the masses, earning him a reputation as a contrarian. But now, after "retiring" at 37, scoring huge gains in commodities in the early 2000s and correctly predicting the financial and housing crisis, Jim Rogers has his sights set squarely on what he calls one of the greatest opportunities he has ever seen.
Jim Rogers' Biography
Rogers showed a penchant for business at an early age. His career as an entrepreneur began at age 5 with selling peanuts and picking up empty bottles left behind at baseball games in Alabama. After graduating from Yale University in 1964 with a bachelor's degree in history, Rogers headed to Wall Street and worked as an investment banker, meeting future business partner and billionaire George Soros.
In 1973, Rogers and Soros started the legendary Quantum Fund, producing a staggering 4,200% return in the next 10 years while the S&P 500 gained just 42%. That incredible success early in his career enabled Rogers to retire at the age of 37.
Since then, Rogers has remained active as a private trader and investor, scoring several big wins along the way. He also wrote a well-received book, "Investment Biker," that chronicled his 1990 motorcycle trip around the world.
Jim Rogers' Investment Strategy And Big Wins
Rogers uses a top-down economic model. This big-picture worldview guides his investment style: He says he can't time the markets, so he takes a long-term approach.
Rogers is known as a contrarian investor. His willingness to go against the grain and buck popular opinion has produced some of his best ideas.
Rogers has a knack for spotting a long-term trend long before the masses. He was a pioneer in international investing with his Quantum Fund in the 1970s and early '80s. He called the commodities boom in the late '90s, launching his Rogers International Commodity Index in 1998 -- well before the commodities boom of the 2000s ripped across the Street. He also cashed in on the financial crisis of 2008, shorting Fannie Mae before shares crashed from above $60 to just pennies.
|Rogers is known as a contrarian investor. His willingness to go against the grain and buck popular opinion has produced some of his best ideas.|
The hallmark of all Rogers' trades and investments is patience. Whether he was waiting for the commodities boom in the early 2000s or betting against financial stocks in 2008, Rogers emphasized the important of patience to execute a great trade or investment: "I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime."
Jim Rogers' Portfolio: What's He Holding Now?
Rogers has his sights set squarely on what he calls one of the best investment opportunities he has ever seen: food and agriculture.
"We're going to have serious food shortages, not just in America but in the world," Rogers has said. "When I speak to universities and students, I tell them all they should be studying agriculture. The farmers are going to be driving Lamborghinis. ... There are a few parts of the world economy that are going to boom over the next few years -- agriculture is one of them. It's not going to be all disaster."
Rogers is also bullish on commodities, saying central banks' easing efforts will support hard assets. He particularly likes precious metals such as gold and silver. In 2011, Rogers said: "In 1987, stocks went down 40% to 80%. But now you don't even remember 1987 -- it looks like a blip if you look at it. That's what's going to be happening with silver and gold."
Rogers is also investing in Asia on the belief that the Eastern Hemisphere is in the early stages of a long-term economic boom. Rogers has said that "if you were smart in 1807, you moved to London. If you were smart in 1907, you moved to New York City. And if you are smart in 2007, you move to Asia."
That's exactly what he did, moving to Singapore in 2007 to capitalize on regional growth and enable his daughters to learn Mandarin.
In February 2011, Rogers started the Rogers Global Resources Equity Index, an index fund that focuses on the best, most liquid companies in agriculture, mining and metals, as well as the energy and alternative energy sectors.
Action to Take --> It has never been easier to invest like Jim Rogers: He offers a number of exchange-traded notes (ETNs) that enable investors to follow his customized strategies, which he personally manages. These ETNs include the RBS Rogers Enhanced Commodity Index ETN ( RGRC ) , RBS Rogers Enhanced Agriculture ETN ( RGRA ) and RBS Rogers Enhanced Precious Metals ETN ( RGRP ) . However, these ETNs are relatively new and thinly traded, meaning they're not too liquid yet.
For investors looking for more liquidity and trading volume, check out Market Vectors Agribusiness ETF ( MOO ) , an exchange-traded fund comprising agriculture stocks. For exposure to agriculture commodities, take a look at iPath DJ-UBS Grins ETN ( JJG ) , an ETN that tracks the price of corn, beans and wheat, three leading agriculture commodities. With average daily volume of 319,000 and 29,000, respectively, both of these investments provide more liquidity, which reduces slippage and volatility.