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Thursday 4 December 2008

A masterclass with the adventure capitalist

Jonathan Davis talks to globetrotting investment guru Jim Rogers about the bull market in commodities, China’s rise to superpower status — and how America lost the plot

‘What do they know of England who only England know?’ Kipling’s question, with its powerful message that true knowledge of a locality can only come with the perspective that foreign travel provides, has important echoes for the modern investor. In today’s global markets, virtually no overseas country is closed to the armchair investor. In less than a minute at the computer, you can buy an index fund that tracks the performance of the stock market in Korea, Brazil or even Kazakhstan, or shares in the largest companies in Turkey, South Africa or Ecuador.

Yet can you realistically expect to understand the risks and potential returns of stocks without any specific knowledge of the countries and cultures in which they operate? Jim Rogers does not think so. Since retiring from Wall Street in 1980 at the age of 37, with enough money to do what he wanted for the rest of his life, the one-time business partner of George Soros has made a new life for himself as a globe-trotting investment pundit, circling the planet in search of new experiences and insights.

In the early 1990s he earned a place in the Guinness Book of Records by travelling more than 100,000 miles round the world by motorbike with his then girlfriend, an adventure he chronicled in his first book Investment Biker. Nine years ago he set off to drive round the world again, this time in a curious hybrid vehicle with the body of a convertible Mercedes SLK and the chassis of an off-road vehicle used by the German military.

That journey covered 150,000 miles and produced a second book, Adventure Capitalist, in which he offered perceptions of 116 countries and passed on tips for travellers and investors. (Example: ‘While I have never patronised a prostitute, I know that one can learn more about a country from speaking to the madame of a brothel or a black marketer than from speaking to a government minister.’)

Now 65, with one small child by his wife of eight years and a second on the way, Rogers still travels the world, but at a slightly slower pace. His travels these days are more likely to take him to an investment conference in Dublin or Shanghai than to the frontiers of Siberia, but his global perspective remains. He recently left New York to live in Singapore. I ask him why. ‘To ensure that my daughters grow up speaking Mandarin,’ he replies. ‘Asia will be the future in their lifetimes.’

Mandarin is the language of the country that he regards as the next great superpower, one that will soon eclipse his own homeland, the United States, about whose economic prospects and growing moral and military delinquency he has become ever more pessimistic. Some time ago he announced that he was in the process of selling all his dollar assets and was bearish about the dollar, Wall Street and the behaviour of America’s central bank, the Federal Reserve. The financial crisis that is gripping the US, he argues, is the inevitable result of the reckless policies of a decade that has seen his country abandon all monetary and fiscal discipline in favour of a debt-fuelled consumer binge.

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