Jim Rogers - see his true colours

[miosux]

I think Jim will be the first to admit he lacks some of the aforementioned skills.

based on his email reply, i don't think he'll admit to anything! :p

 

[londontrader]

Dear Scroobal,

Interesting comments
Here is my contribution

"Financial predictions are binary in nature - 2 possible outcomes"

All predictions have binary results ie. you are RIGHT or WRONG. Traders are primarily interested in 3 possible outcomes - UP, DOWN, or NEUTRAL.

"Jim tends to use his clout to push the market"

It's significant that his clout has been on the uptrend. If you recall, he was in Soros' shadow after retiring from Quantum. Success tends to attract a large following and Jim has been very successful.

"and he does a series of predictions, some of it will happen and some will not."

Jim has been spot on when it matters ie. commodities & US financials summer 2007. Unlike other commentators, this guy puts up his own $ when he makes a call. But he is a real drama queen at times!

"His prediction on rising commodity prices are not prediction per se."

I'm surprised by that comment. He made an early (and correct) call on a rather unexciting asset class that usually gets relegated to some corner on the trading floor. That's impressive enough for me.

"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."

You should look at some long horizon commodities' price charts. I think you'll find that the trend isn't as obvious as econ 101 makes it out to be. You should also read about the Malthusian hypothesis and why it looked so plausible at the time but turned out to be completely wrong. The wildcard for this asset class has always been TECHNOLOGY.

"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?"

I think his thesis on china is largely correct. The story hasn't completely played out yet, so let's see what happens. I would disagree with his views on India (which he is bearish on).

"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. "

1. The context is poles apart:

Warren Buffet operates in a tightly regulated environment that requires detailed disclosure. He also has thousands of employees and shareholders to answer to. Jim Rogers is a semi-retired armchair investor, part-time lecturer and part-time media personality. Jim can pretty much say whatever he wants (and he does!)

2. Their styles are poles apart:

Warren's style is very granular ie. he likes to hole up in his office and dissect details. Jim (like Soros) is a global macro kind of guy ie. very broad investment themes and short on details.

"Jim strength is his ability to place large bets and therefore a risk taker and thats why he is celebrated."

Jim's strength is his ability to look at the same information set (available to you and I) and discard the irrelevant. He then connects the dots and discerns those linkages that escape the best of us. Soros did say that Jim was a better analyst than a trader.

"Risk taking is something that is difficult to teach"

that's right!
The best training for a prospective trader is actual trading.

"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."

That's why that Russian moron should have listened more and debated less. I think that lecture hall only had room for one prima donna!

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

The Alchemy of Finance actually makes a lot of sense. Unfortunately, Soros' poor writing skills makes for difficult reading! I suggest you read the following paper:

http://risk.lse.ac.uk/rr/files/HSS-JD-02-9-22-1032695086-15.pdf

Then go back and read Alchemy again. You should be able to see how Soros makes an early and important contribution to the literature on "Endogenous Risk".

 

[londontrader]

based on his email reply, i don't think he'll admit to anything! :p

Jim's a drama queen who likes to be provocative
But ask an intelligent question and you'll get an intelligent reply.
I've read the email exchange and the comments from those who attended that presentation.
It seems that Dimitry rubbed Jim up the wrong way from the get go! That provides the context for the rather dramatic email exchange. It is also clear to me that Dimitry missed the point that Jim was making about Russia.

 

[scroobal]

Dear Scroobal,

Interesting comments
Here is my contribution

.

Thanks for your reponses. I will re -read Alchemy of Finance. The gist of my points are
1) Jim is good but know him for what he is - a risk taker extraordinaire. A major consideration in the risk taking is speculating. Not an easy task by any means and Jim has the record to prove it.

A lot of us like to attend talks by such personalities to see how these guys tick. When Jim responded in such a manner, the guy should have known that Jim could not explain his position.

I however concede the Russian was emotional and too patriotic. He should have just listened.

2) China and commodities going up is rather basic and it has nothing to do with Jim Rodgers pointing the way. However he has been sino-centric more than anyone else. I have yet to come across anyone who thought China is not attractive or that commoditiy prices will plunge in the long run. Long before Jim came along. I will be very surprised if you can produce any material that says that China is not attractive (despite its lack of a proper legal framework) or that commodity prices will fall in the long run.

Actually I agree with his views on India because like Jim, I am into mainstream stereotypes. And as you know stereotypes are inherently true most of the time and people will not fault you if you are wrong.

3) Jim has never been able to explain things in simple terms. Buffet will tell you that he bought into Gillette because people have to shave and electronic shavers can't give a clean cut etc. Its not about micro vs macro. He can't seem to explain his macro position either.

Maybe like Soros he too has difficulty articulating.

 

[miosux]

Jim's a drama queen who likes to be provocative.

i caught his interview on prime time morning with that cute korean presenter. guess that's what prompted me to find out more about the man.

he was saying let all the banks fail etc without discussing the greater consequences and just slagging off on obama's team. korean chick just looked on with her cute smile without engaging him. what a waste.

i dunno... can't pin it down, but there's just something peculiar about that guy...

 

[londontrader]

i caught his interview on prime time morning with that cute korean presenter. guess that's what prompted me to find out more about the man.

he was saying let all the banks fail etc without discussing the greater consequences and just slagging off on obama's team. korean chick just looked on with her cute smile without engaging him. what a waste.

i dunno... can't pin it down, but there's just something peculiar about that guy...

Yeah, she is kinda cute isn't she! Always a pleasant start to another crappy day at the office.

Anyway, back to Jim Rogers:

1. He meant let the technically bankrupt banks fail (only a couple actually) because the long term consequences of yet another bank rescue are serious. The US has created the Mother of all Moral Harzards going forward.

2. Jim isn't being fair to Obama (then again he is never fair to anyone!). The President and his team are constrained by the need to balance what needs to done with what is politically possible.

Jim is a PRIMA DONNA and loves playing the part of the simple minded maverick that everyone underestimates. If you're been following the markets and like economics, you might see that he actually has some serious things to say (just ignore all the grand standing antics!). Remember that Jim was one half of that famous pairing at Quantum that produced 4200% returns!

 

[londontrader]

Dear Scroobal,

Just a little bit more to add:

"A lot of us like to attend talks by such personalities to see how these guys tick. When Jim responded in such a manner, the guy should have known that Jim could not explain his position."

Jim is not into explaining himself in any detail (that's giving $ away). You got to remember that he is a trader afterall. Jim also likes to hide his impressive intellect behind that larger than life persona (it gets him more TV time!)

I've had enough experience with Russia to see exactly where Jim is coming from. But I can see that someone new to the game would have trouble making sense of Jim's views.

"China and commodities going up is rather basic and it has nothing to do with Jim Rodgers pointing the way."

Jim was simply one of the few who recognised that trend very early. Something so basic should have attracted tons of investment way before Jim made that call. That didn't happen and Jim made a lot of money by moving early.

"I have yet to come across anyone who thought China is not attractive or that commoditiy prices will plunge in the long run"

You need to shift your time frame to the period before Jim made that call. Try reading some of the archived reports and you will see things like "The Economist predicts low oil prices for foreseeable future - 1999". There were also many who saw China's growth as "a false dawn". I don't have the time to dig up any links for you at the moment.

Again, I will point out that something so obviously true would have attracted the smart money long before Jim opened his mouth. Didn't happen that way did it?

"Actually I agree with his views on India because like Jim, I am into mainstream stereotypes. And as you know stereotypes are inherently true most of the time and people will not fault you if you are wrong. "

Jim is actually bullish on India's fundamentals but doubts that their govt will have the conviction to do the right things (unlike the chinese govt). I think that the fundamentals are enough to drive the Indian economy despite a crappy administration.

"Jim has never been able to explain things in simple terms"

Actually he can when he chooses to. I've sat in an investment conference with Jim and he was articulate enough when facing people who more or less spoke his lingo (financial professionals). Also helped that the media wasn't around to encourage his grand standing.

Buffet is an excellent communicator and actually enjoys sharing his knowledge. Soros has the same motivation but lacks the communication skills. Jim prefers to play the clown who is smarter than everyone else.