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Jim Rogers: 4200% Investing Returns Are Still Possible

Daily Ticker

Famed investor Jim Rogers co-founded Quantum Fund with George Soros in the early 1970s, retired at age 37, and is perhaps best known these days for his market analysis in the media.

But since his new book Street Smarts: Adventures on the Road and in the Markets is a memoir, we decided to take a step back from the markets and look at the bigger picture.

Rogers, born and raised in the U.S., moved his entire family to Singapore in 2007 because he wanted his two young daughters to grow up speaking Mandarin.

“In my view, China is going to be the most important country in the 21st century,” Rogers tells The Daily Ticker.

Rogers is a long-time China bull but acknowledges that China's rise "is not going to happen overnight or straight up." He argues that the U.S. had many setbacks on its way to the top in the 20th century, and China is sure to have similar setbacks as well.

On the same note, he’s not claiming the U.S. is going down the tubes tomorrow.

“When the UK went into decline - which was the greatest country in the 19th century - it took a long time,” he notes. “So America is not about to fall off the face of the Earth, but had you moved to New York in 1907 from the UK, you would have done a very smart thing, so that’s the way I’m looking at this now.”

Positive economic data won't shake his negative U.S. thesis. According to Rogers, “the U.S. is the largest debtor nation in the world while China is the largest creditor nation in the world."

Related: Job Market ‘Making Slow and Steady Progress Every Month’: Jack Ablin

Rogers has also been critical of U.S. higher education. He cites the rising price of tuition (a 1120% increase since 1978 according to Bloomberg) and the staggering student loan debt load (topping $1 trillion according to the CFBP) as reasons why.

“You have to follow your own passions,” he says. “But...tertiary education in America is a bubble. There's no question about that.”

As for investing advice, Rogers is more bullish on agriculture than anything else currently, and he’s positive about Russia for the first time in 46 years. He even sees positive developments on the horizon for North Korea (he invests in the communist nation via stamps and coins). He argues that the North Korean generals and leaders have been influenced by the progress they’ve seen in Moscow and Beijing, and has predicted North Korea will merge with South Korea in the next few years.

Looking at the U.S., Rogers is not enthusiastic about the recent rally in the U.S. stock market, which drove the Dow Jones Industrial Average (DJI) to close last Friday at 14,000 for the first time since October 2007. In his book, Rogers writes “there’s nothing quite like a bull market to make people feel smart.” And intelligence, Rogers argues, is not what has been driving these moves.

Related: Dow 14,000: The More Things Change, The More They Stay the Same

“The market is going up because the BOJ said two months ago we’re going to print unlimited amounts of money,” Rogers quips. “And Mr. Bernanke didn’t want to be outdone. It’s gonna end badly for all of us - we’re all going to wake up one day with a horrible headache - probably in 2014-2015, or the end of 2013.”

Related: Don’t Bet on Fed ‘Exit’ in 2013…or Even 2014: Alan Blinder

Rogers reminds us repeatedly in his book that he is not very good at market timing. He writes, “I am not very good at figuring out the moment when suddenly everybody else realizes that what is happening is insane.”

And while Rogers and Soros may have been pioneers in hedge funds and international investing in the U.S. when they started Quantum Fund back in 1973, he believes the staggering 4200% returns the fund delivered over 10 years is still possible, despite today’s more crowded investing world.

“Anything is possible if you do your homework,” Rogers asserts. “There were smart people then and I’m sure there’s lots of smart people now.”

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