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More reviews by Wayne E. Yang
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Adventure Capitalist by Jim Rogers
If you have had success as a founding member of one of the world's best-known hedge funds, what do you do with your spare time and money after you retire from the fund? If you are JIM ROGERS, you travel the world. In ADVENTURE CAPITALIST, Rogers and a companion made an around-the-world journey on motorcycle. He reprises the journey in Adventure Capitalist, "[covering] 152,000 miles [and] traveling through 116 countries," only this time in a souped-up Merecdes Benz.
The "Sunburst Yellow" Mercedes, a hybrid SLK roadster and G-Class sport utility vehicle, serves not as status symbol, but as product of a practical decision. The make, Rogers reasons, is popular with everyone from political leaders to crimelords to warlords, and thus more likely to have an availability of parts and mechanics, regardless of geography. (At one point, they are accompanied for several days in Siberia by Eugen, "Mercedes' number one mechanic in Russia.") Throughout the trip, which he makes with his fiancee Paige Parker, there are run-ins with rag-tag and unpredictable soldiers, policemen and border guards, not to mention a Russian mob chief they befriend who tells them: "If you do have problems, let me know, and whoever it is, we will have them killed."
Rogers, who says that he is "curious by nature," goes to lengths to prove it. "I was going around the world to do the kinds of things that people around the world do." Instead of contenting himself with sampling the local beer, he also tries gallbladder, dog meat and silk worms. He seems to particularly enjoy silk worms, which he gobbles like popcorn, but he is no fan of China's mao tai, which he says is "worse than gasoline with rotted milk of magnesia."
Getting to hear an experienced investor's observations during his travels makes for a compelling read. Rogers, who first made his reputation at famed hedge fund Quantum, later cemented his reputation as an investor in the emerging markets, often in countries with stock markets so nascent that their listed stocks number only handfuls. He invests wholesale into these countries if he sees signs that an economy is getting ready to take off, investing in basic economic companies that might benefit from the opening of the country. Rogers' modus operandi is to go to these countries and get on the ground floor, talking to local businessmen, consumers and government officials to get behind the scenes, often well before the arrival of other Western businessmen and fund managers.
"I differentiate between trading and investing. Traders are the short-term guys, and some of them are spectacular at it. I am hopeless at it -- perhaps the world's worst trader. I see myself as an investor. I like to buy things and own them forever. And what success I have had in investing has usually come from buying stock that is very cheap or that I think is very cheap."
Fans of Rogers, who enjoyed Investment Biker, will enjoy this book as well, though they may be forgiven if they find some of the tales familiar. When you travel the world, you invariably happen upon some of the same places (in this case intentionally, since one of Rogers' goals is to see how his views on some regions might have changed). The outlook is not as good this time. He seems disappointed, for instance, in the corruption and malaise he finds in Russia, Africa and Latin America, noting that: "When I returned home, I realized that I had closed as many accounts on this trip as I had opened, in contrast to my previous trip, when I had opened several and closed none."
Asian readers may wonder how Rogers views their region. They will find that Rogers' view is not way out of line with that of Marc Faber, who has been arguing why investors should go "long" certain countries in Asia and "short" the United States. Even as some commentators jump on the bandwagon of a U.S. economic recovery, investors like Rogers continue to point out why they see potential long-term weaknesses in the U.S. economy. Rogers, on his web site, said earlier this year that he finds certain aspects of the U.S. economy troubling to him, particularly the U.S. government's propensity to run deficits and its weak dollar policy.
"While all this was going on, you kept hearing how foreigners wanted to put their money here because the United States had better accounting standards, better regulation than any other country in the world. Which, of course, was total garbage. Now we understand that our accounting standards and practices -- both government and corporate -- are among the worst."
In Adventure Capitalist, he is bullish on parts of Asia and enamored particularly of China, touting that "the twenty-first [century] will be the century of China." "The Chinese called themselves Communists, but they are among the best capitalists in the world. These are people with a very long entrepreneurial history, and when Deng Xiaoping in 1978 said it was time to try something new, announcing the policy of the Four Modernizations, he called upon that history, unleashing the same spirit of enterprise that had put China in the forefront of world commerce, industry, and technology following the turn of the first millennium."
He is a fan of Singapore, which he says is "is perhaps the greatest success story of the developed world in the past forty years." His praise goes further. "Singapore conceivably could become the Venice or the Florence of the digital age." Rogers is not as high on Korea, however, whose prosperity he says "is artificial and comes at a price." "Only with a Big Mama or Big Daddy, in the form of the endless flow of U.S. military money into the economy, can such a system work." Japan, meanwhile, may be "the richest country in the world" but remains an "economic goliath [...] in longer-term trouble," due to its aging population, massive internal debt and the drag of ceaseless pork barrel from its ruling parties.
Rogers' statements will sometimes seem harsh, for instance, when he makes clear his disdain of multilateral institutions such as the International Monetary Fund and the World Bank, both which he says should be abolished. During one stopover, he sees their representatives "everywhere, and many of them had been there for years, international parasites living off the ongoing local conflict, with every reason to sustain the strife rather than end it."
His criticism of their ineffectiveness is more than valid, but his off-the-cuff solutions do not go into much depth, for instance, when he suggests debt forgiveness for emerging countries, but says "part of the deal would be no more foreign aid." The reader has to content himself with these soundbites, instead of more reasoned analysis of such "solutions," since Adventure Capitalist is ultimately more of a travel book than a treatise. On that score, it should rank up there with better travel books, but the words "investment" and "capitalist" probably scare away some potential readers. That is a shame, because Rogers has an easy, engaging way of talking about his travels, and he does a great job of working history and economics into his commentary without slowing his narrative. There is a dearth of books from people like Rogers, writers who enjoy a solid reputation in the investment world who can tell us how they see the world from road level.
Wayne E. Yang
29/09/2003
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Wayne E. Yang is based in New York, where he lives with his wife and two children. His web site is www.wayneyang.com. |
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