Jim Rogers - see his true colours

[miosux]

http://www.autopenhosting.org/futuresoptions/Jim-Rogers-Russia.html

---- Original Message -----
From: Dmitry Alimov
To: [email protected]
Sent: Friday, September 12, 2003 11:28 PM
Subject: Conversation with Jim Rogers - HILARIOUS

Jim Rogers, a famous international investor and writer attended HBS this Wednesday. In his speech, he badmouthed Russia (in his usual style) and quoted several "facts" that were completely bogus. As you would expect, I could not let him get away with lying about our country and publicly disputed his factual claims. He basically told me I was a moron and left. In response, I sent an email to him with facts and references disputing his claims (sending a copy to my HBS classmates). What ensued is quite amazing - read attached emails. Start with the first email and read from the end (my original email), then read his response and finally my rebuttal in the second email. This will be worth your time I promise. This has already been circulated all over HBS, several other universities and in the investment community in New York. Since this is already in public domain, feel free to forward on.

*see above link for full email*


By Susan L. Barreto, Senior Reporter
Tuesday, October 14, 2003

BOSTON (HedgeWorld.com)—When Russia’s positive Moody’s rating granting investment grade status made headlines last week, one Harvard Business Student undoubtedly was smiling.

This is because for the last month Dmitry Alimov has been reeling from a series of email exchanges sparked by a speech given by world-renowned investor Jim Rogers that Mr. Alimov believes falsely cast a negative light on Russia’s economic prospects.

Although the student’s email was intended to open up a scholarly debate over the future of Russia’s economy, the response from Mr. Rogers was a litany of disparaging remarks questioning Mr. Alimov’s intelligence and wisdom in believing statistics provided by the Russian government, the International Monetary Fund and World Bank.

Unfortunately, the email also was forwarded to Mr. Alimov’s classmates, along with Mr. Rogers’ response.

Mr. Rogers wrote: “I was terribly embarrassed for you when you stood there babbling on and on in front of the others about the strong ruble—a currency which has been nothing but a catastrophe for a decade (despite your painfully absurd statements), but now you have shouted your hopelessness from the roof tops for all to see.”

Respected as an authority on international investing, Mr. Rogers has written books on his travels around the world but is known mainly for co-founding the Quantum fund with George Soros in the 1970s Previous HedgeWorld Story.

Mr. Rogers, who has been hailed by Time Magazine as the Indiana Jones of finance, continues to travel and was on his way to Europe and unavailable for an interview via email or over the phone for this story. Mr. Rogers also holds a number of speaking engagements each year and is a regularly sought out for his market commentary.

Some of his most recent comments on Russia were unfounded, according to Mr. Alimov, who began questioning Mr. Rogers following the investment guru’s speech at Harvard last month.

“I have no idea why he would write something like that,” Mr. Alimov said. “In addition to getting the facts wrong, he lost any kind of decency in his language.”

Only Mr. Rogers knows what prompted him to tell the student, “It is better to remain silent and have people wonder if you are an idiot, rather than to open your mouth and prove to everyone you are an idiot beyond all doubt.”

 

[miosux]

----- Original Message -----
From: Dmitry Alimov
To: [email protected]
Sent: Friday, September 12, 2003 11:28 PM
Subject: Conversation with Jim Rogers - HILARIOUS

Jim Rogers, a famous international investor and writer attended HBS this Wednesday. In his speech, he badmouthed Russia (in his usual style) and quoted several "facts" that were completely bogus. As you would expect, I could not let him get away with lying about our country and publicly disputed his factual claims. He basically told me I was a moron and left. In response, I sent an email to him with facts and references disputing his claims (sending a copy to my HBS classmates). What ensued is quite amazing - read attached emails. Start with the first email and read from the end (my original email), then read his response and finally my rebuttal in the second email. This will be worth your time I promise. This has already been circulated all over HBS, several other universities and in the investment community in New York. Since this is already in public domain, feel free to forward on.

Dima
__________________________________________________

Dear Mr. Rogers: I am the “lad” who disputed your factual claims with regard to Russia today. First of all, I would like to thank you for speaking to us at the Harvard Business School. I think I speak for my fellow HBS students when I say that we enjoyed your original views and interesting stories today. However, I must address the unfortunate reality that your facts about Russia are plain wrong. You made three principal inaccurate claims today - I will deal with all of them in sequence.

Claim #1. People are leaving Russia

Wrong. In fact, according to Financial Times, your favorite newspaper, Russia turns out to be the second largest recipient of immigrants after the US (see attached FT article). Oops. While it is true that Russia’s population is declining but the reasons for that have nothing to do with people leaving the country, it is things like low birth rate (only 1.2 per woman), which is an issue that confronts many European states.

Claim #2. Russia’s production of oil is declining, oil companies do not reinvest in production

Wrong and wrong. Russian oil production has increased for the fifth year in a row (see attached Reuters article), and Russian oil majors are reinvesting in production (many of them have US GAAP accounts audited by Big Four firms you could easily have access to if you chose to look).

Claim #3. Investors are leaving Russia

Wrong again. Equity indexes (US Dollar denominated) are trading around their all time highs (see attached Barrons article), Russian bond yields are at historical lows. As an experienced investor, surely you will recognize these as pretty convincing signs of investor confidence.

Overall state of the economy

Finally, I would like to quote World Bank’s recent report on Russia: “The Russian Federation has made remarkable progress in tackling crisis and moving towards sustainable development between 1999 and 2002. With a much more stable political environment, the government has been able to build on experience gained in the 1990s and implement a sound reform agenda, in addition to maintaining macro-economic stability. Since 1999, assisted by high commodity prices, the economy has recorded strong growth, business confidence has revived, and poverty has declined. Russia’s sovereign credit rating has improved, although it has yet to reach investment grade. The speed and extent of recovery has taken most observers by surprise. Between early 1999 and end 2001, GDP grew by 21 percent, inflation fell from 86 percent to 18 percent, the fiscal situation turned around from a deficit of 5 percent of GDP to a surplus of 3 percent of GDP, and barter and arrears largely disappeared.”

Source: http://www.worldbank.org.ru GDP growth of 21%? Hardly a picture of total collapse, don’t you think?

Conclusion I believe the facts speak for themselves. I have no time or desire to try to convince you to invest in Russia. However, I do kindly ask you to abstain from spreading inaccurate information. You are a public figure and many people including future leaders at Harvard Business School listen to you; it would be very unfortunate if they were misled by your inaccurate statements. Finally, if nothing else, it is not good for your own public image.

Kind regards,

Dmitry Alimov, CFA MBA Class of 2004
Harvard | Business | School
[email protected]
Ph 617.491.7332

P.S. I took the liberty of sending a copy of this email to my fellow students so that we can set the record straight. ____________________________________________________

 

[ashjaw]

this email exchange was dated back 2003, wonder why it starts to surface now? Anyway, it's a great debate, thanks for posting.

 

[miosux]

this email exchange was dated back 2003, wonder why it starts to surface now? Anyway, it's a great debate, thanks for posting.

coz i just stumbled across it. no big conspiracy theory. cheers.

 

[glock]

it sound more like rogers is right , not wrong . ruble is plunging , the number of russian billionaires more than halfed , oil production in trouble ?

 

[miosux]

was wrong, now right. but always a question of timing no? the exchange was referring to events in 2003/2004. assuming everything moves in cycles, any prediction will eventually be correct.

 

[londontrader]

was wrong, now right. but always a question of timing no? the exchange was referring to events in 2003/2004. assuming everything moves in cycles, any prediction will eventually be correct.

What's impt is that his orignal thesis was correct.

I wasn't aware of this email exchange (so thanks for the link) but do recall Jim's views on the "Coming Russian BUST". He was one of many (others were more dilpomatic!) who expressed serious concerns about Russia. His timing was off but his main arguments are largely correct. This is a reminder of how markets can go out of whack for many years before sobering up (usually very suddenly). Predicting the foundations of a bust up is easier than the exact timing. Recall how Soros was absolutely spot on about the Japanese blow up but a couple of years off the timing. let's also be clear that what's happening in Russia isn't the usual cyclical boom to bust to boom kinda thing.

 

[Goh Meng Seng]

What's impt is that his orignal thesis was correct.

I wasn't aware of this email exchange (so thanks for the link) but do recall Jim's views on the "Coming Russian BUST". He was one of many (others were more dilpomatic!) who expressed serious concerns about Russia. His timing was off but his main arguments are largely correct. This is a reminder of how markets can go out of whack for many years before sobering up (usually very suddenly). Predicting the foundations of a bust up is easier than the exact timing. Recall how Soros was absolutely spot on about the Japanese blow up but a couple of years off the timing. let's also be clear that what's happening in Russia isn't the usual cyclical boom to bust to boom kinda thing.

Dear London trader,

Did Jim Roger predict the collapse of US financial system?

Well, economic cycle booms and busts and it is not meaningful to have predictions stretched more than 3 years because it has no value whatsoever in government fiscal and monetary policy manipulation nor investment strategies.

Goh Meng Seng

 

[londontrader]

Dear London trader,

Did Jim Roger predict the collapse of US financial system?

Well, economic cycle booms and busts and it is not meaningful to have predictions stretched more than 3 years because it has no value whatsoever in government fiscal and monetary policy manipulation nor investment strategies.

Goh Meng Seng

Dear GMS,

Jim was one of many who voiced early concerns about the US financial system. He didn't accurately predict the onset of the crisis, the person who did is Prof Nouriel Roubini. However, once the crisis got underway in 2007, Jim did predict the path the crisis would take. As a result, he was able to profit while others lost their pants.

"Well, economic cycle booms and busts"

We are not dealing with a typical boom to bust scenario. The seeds to this crisis were laid 10 years ago. The proper benchmark is the Great Depression style scenarios.

"it is not meaningful to have predictions stretched more than 3 years"

Think of an economy as a complex system, made even more complex thru links to other economies. Observing the build up of a set of conditions (ingredients) for the onset of a problem is straightforward. Understanding how these ingredients interact with one another to create a systemic crisis, is pretty challenging for the best of us. Predicting when the crisis will occur is pretty damn near impossible. What we do know is that once the build up of ingredients gets firmly entrenched, the crisis can happen tomorrow, next month, next year or within the next 10 years. What's impt is that one day, the crisis will happen!

"it has no value whatsoever in government fiscal and monetary policy manipulation nor investment strategies."

I think the moral of today's story is that:

Once you are made aware of an entrenched set of conditions that pose a significant risk, you need to start thinking about the right policy response. It is not impt whether the blow up happens within a 3 year window or a 10 year window.

In the Singapore context, think about what the situation would be today, if the MAS had implemented tougher regulations regarding the sale of structured products before all this crap happened. They had more than enough warnings about the risks associated with this issue many years ago! My foreign colleagues are surprised at the muted response to a clear regulatory failure on the part of the MAS. I can only tell them that this is a UNIQUELY SINGAPOREAN kinda thing.

 

[miosux]

What's impt is that his orignal thesis was correct.

I wasn't aware of this email exchange (so thanks for the link) but do recall Jim's views on the "Coming Russian BUST". He was one of many (others were more dilpomatic!) who expressed serious concerns about Russia. His timing was off but his main arguments are largely correct. This is a reminder of how markets can go out of whack for many years before sobering up (usually very suddenly). Predicting the foundations of a bust up is easier than the exact timing. Recall how Soros was absolutely spot on about the Japanese blow up but a couple of years off the timing. let's also be clear that what's happening in Russia isn't the usual cyclical boom to bust to boom kinda thing.

i predict singapore will have a health care crisis when the population hits 6.5M + 30 years. i'll be right eventually, but does that make me an expert fit to run the country? :p

 

[scroobal]

Dear GMS,

Jim was one of many who voiced early concerns about the US financial system. He didn't accurately predict the onset of the crisis, the person who did is Prof Nouriel Roubini. However, once the crisis got underway in 2007, Jim did predict the path the crisis would take. As a result, he was able to profit while others lost their pants.

Financial predictions are binary in nature - 2 possible outcomes. Jim tends to use his clout to push the market and he does a series of predictions, some of it will happen and some will not.

His prediction on rising commodity prices are not prediction per se. This is his latest hobby horse. There is finite resources including arable land. With mounting population increases, the trend is only one way in the long run. Its something everyone knows. Its something that is found in every 101 course touching on economics, sociology, public policy etc.

The other hobby horse of his China. That another 101 - the worlds largest consumer market. Goods have no value until they are consumed. Where is your best bet for consumption?

This is where Jim differs from Buffet. Buffet actually talks about what is going to happen in the market in the near future and he actually list the struts and beams to support his position. Looking at both of them, they are poles apart.

Jim strength is his ability to place large bets and therefore a risk taker and thats why he is celebrated. Risk taking is something that is difficult to teach and thats the reason why thet are invited to HBS. Not to listen to their prediction but see how their mind works and what sets them apart from the rest.

If you read Soros book on Alchemy, it does not make much sense. Another risk taker.

 

[khunking]

I think the escalating racial tensions due to immigration in Russia will do the society in. Both writers seem to focus mainly on economic issues.

 

[Seee3]

[it is not meaningful to have predictions stretched more than 3 years because it has no value whatsoever in government fiscal and monetary policy manipulation nor investment strategies.]

Such time frame may no longer be applicable today. New investment strategy seems to follow that of computer war game. Understand the underlying danger and knowing when to move during "false recovery" and withdrawing quickly at the first sign of an attack. It's a tough game.

We have heard good news of american bank recovery. Some say the plan is working. Others say it is one off, using money from AIG. But one thing is certain. There will be rallies in the stock. Within the next 3 years there will be many such short events. Dash and take cover each time. If we escape after each dash, we advance financially. However, one wrong move, we will be dead. The saddest thing is that if we hold and hide, as the 3 year trend is volatile, we will may still die because no one know if it will sink into the greatest depression.

 

[jimmyfallon]

That Dmitry is a snobby dumbass and has been proven wrong.

 

[Trout]

Economize, Localize, Produce.

That's what everyone should strive for in the next couple of years - learn to live on <1/2 your current salary if its possible (for the financially better off), source your business and personal needs locally, because the logistical aspects will become tougher, and you would need to rely on what's available locally to carry on, and try to produce something that is of true value to your local community.

 

[captainxerox]

this guy staying in singapore right?

 

[londontrader]

i predict singapore will have a health care crisis when the population hits 6.5M + 30 years. i'll be right eventually, but does that make me an expert fit to run the country? :p

1. You're making a prediction that has been talked about (and agreed on) for some time. Jim (and a few others) were talking about Russia's deep rooted problems when the vast majority were celebrating the next Russian Boom. Can you see the difference?

2. So what's makes an expert fit to run a country? Aside from predicting problems and identifying the drivers, one also needs the solutions and be a master of "the art of the possible". I think Jim will be the first to admit he lacks some of the aforementioned skills.

 

[londontrader]

this guy staying in singapore right?

Indeed he is, with his 2 kids learning mandarin seriously

 

[londontrader]

That Dmitry is a snobby dumbass and has been proven wrong.

Dimitry is typical of the Russian nouveau riche with intellectual aspirations. Very thin skinned, very cock sure of themselves and with a tendency to think that $$$$ is the be all and end all. Hmmm sounds like we have a fair share of "Dimitrys" in Singapore too.

 

[miosux]

Economize, Localize, Produce.

That's what everyone should strive for in the next couple of years - learn to live on <1/2 your current salary if its possible (for the financially better off), source your business and personal needs locally, because the logistical aspects will become tougher, and you would need to rely on what's available locally to carry on, and try to produce something that is of true value to your local community.

the economy will take even longer to recover should everyone decide to economize to a large extent