Jim Rogers loves his critics

welcome to Morning Star I'm Lorissa Fernand and I'm superbly honored and excited to be talking to Legendary investor and Author Jim Rogers Jim thank you so much for your time thank you for being here today I am delighted to be here Lissa my pleasure my honor thank you Jim you have seen so many Market appeals either due to a financial crisis due to a trade War due to any fact how has your understanding of what is risk and risk evolved over the years how has your relationship with risk changed well once I started figuring it all out in the beginning I thought I was smarter than the market and I was for a while but then the market showed me no no we're smarter than you are and whenever I got cocky and thought I knew what I was doing the market came along and said listen Mr Roger you think you're smart but we show you and they always showed me that they knew more than I did I eventually started learning how it all worked and I learned about risk and I learned that things could go wrong no matter how smart there was once Larissa where I shorted six stocks they all went bankrupt within two years but I lost everything first because the market went up a lot what I didn't know at the time was no matter how and I was right about all six of I said they went short they all went bankrupt eventually but what I didn't know much about was there were a lot of people in the markets and their emotions and their knowledge and their thoughts might not be completely 100% And so they might make mistakes and their mistakes could cost you money so it's not just your risk I have learned not just my risk I have to learn about I have to learn about everybody else you know there a few billion people in the world and they all think differently and have different emotions and we have to take that into consideration whether we like it or not and I still make a lot of mistakes oh Lissa I make plenty of mistakes so then how has your relationship with loss evolved are you comfortable now making those mistakes or does it still irk you I still don't like making mistakes I'm not I'm not a holy man you know I'm I'm not a priest no I don't like making mistakes uh I try to make fewer I mean I maybe it's because I try to wait until I know more and also because I have a lot more experience now I mean I know where a lot of PL you know 100 years ago I didn't know where India was now now I know where Mumbai is and I know about the market Etc so I have a lot more base of knowledge now than I did before and I hope that helps you keep changing your mind mind about now that you mentioned Mumbai you kept changing your mind about investing in India so are you very open to changing your mind about a lot of things or are you very rigid in your convictions well I hope I'm open to change my mind about everything you say I changed my mind about India I'm not sure what that means there have been certainly times in my life when I've been skeptical of India and negative on India there have also been times in my life when I've been very optimistic about India uh so whatever you mean uh I'll just set the record straight there have been times when I've been very optimistic and there have been times when I'm very negative but that's true of every place in the world and right now are you positive or negative well right now I'm mainly not investing very much anywhere because I expect some bad times to come in the US and therefore the world sometime in the next few weeks or months I'm not selling short not yet because I'm not that pessimistic but I see the signs that this long bll market and it's the longest in American history this long bull market is coming to an end but it's not enough of an end yet that I'm selling short anywhere including India I have no Longs or shorts in India and I will tell you let me say for the record so you should know and I tell people all over the world if you can only visit one country in your life it should be India there is no unbelievable the food the man-made sites the natural SS the wh the beautiful women oh my God Lissa you know how beautiful the Indian women are there's so many smart people now if you can only visit one country it should be India but the worst bureaucracy in the world is in India too you know the Indians learn bureaucracy from the English and then they took it oh the Indians made it even bit better the Indians can do many things better than the rest of us and they can certainly copy English biocracy and make it worse you know Jim when you were in your 30s you attended this Manhattan dinner where everybody shared their stock picks and you were sort of sconed because you were investing in defense stocks when nobody was and you picked up loed and this is you've always got a lot of criticism even now people sort of take a jive at you because oh Jim is again predicting the next bare Market how has your relationship with criticism evolved does it bother you still or you just what off a Ducks back well I have learned the more critics the more criticism the better the more likely I am to be right and I hope you have learned that too if you haven't Lissa you will learn that most of the time when a lot of people are criticizing you you or saying you're wrong you're probably right you're wrong on the right path no matter what it is um so when I when I get a lot of criticism uh it usually encourages me was that also the case when you were very young for example the dinner but you in your 30s no no of course not when when I was first went to Wall Street I I didn't know anything I knew I was in New York I knew something bad happened in 1929 but I didn't know anything else I didn't know there was a difference in stocks bonds I was totally ignorant but I learned and but of course when older people or more experienced people said something I thought they knew what they were talking about and it affected me when I when I was criticized I eventually learned of course they didn't know any more than I did and I shouldn't worry about it but in the beginning it certainly worried me more than it does now by all standards you've been extremely successful okay how has that changed the way your relationship with money the way you approach money the way you invest money well yes I have been successful enough that I can pay my bills and I like being able to pay my bills but I guess the answer to your question is I know that money is complicated and I hope I can teach my children that they should save they should invest and that money is not easy money doesn't fall out of the sky it doesn't grow trees as we all know and that they need to learn to save their money invest their money and be careful of their spending going into debt is usually not a good thing unless you know a lot about what you're doing but what about your relationship with money do you feel now you can take much more risk than you did when you were young or wice Vera well I know now that I shouldn't take risk I know that taking risk is not a wise thing to do that I should be careful and be sure of what I'm doing you say taking risk yeah I mean everybody I know say of course says I take a huge risk all the time I'm investing in usbekistan right now for instance many people can't find usbekistan on the map so they think that must be a huge risk um but in my view I don't like taking risk I try to be careful and do my research and be knowledgeable about what I'm investing in and that reduces the risk I still make mistakes Lissa don't worry but I try to reduce I try to be sure more careful about what I do before I do it but I still make mistakes after you make an investment what are the factors that bother you about it the the information that's subsequent to you putting down your money well the market is the thing that worries me the most you know if I buy something at 20 and it goes to 15 then I it worries me a lot I assure you I'm not a a totally idiot so the market action is what worries me the most after I make an investment and even if it goes up it worries me because I know it might be doing something because people don't don't understand so no the market action is what worries me the most positive or negative can you share with me a bias investment bias or cognitive bias that you had that you've successfully overcome as an investor well I I know I I cannot think of anything uh there's no industry or company or country that I would not invest in given things if they were right I mean if things changed you know I didn't invest in usbekistan for decades but now things are change I think things are changing in usbekistan so I've started investing there but for all of my life many decades I didn't want to have anything to do with most of the former Soviet States but now I'm investing in usbekistan so I hope I hope the answer to your question is there is no Prejudice that is so strong that I could not change so what how do you okay let let me reframe my question how do you ensure that you are not locked in your own thesis in the Echo chamber of your mind that you're open to saying okay I was completely wrong on this angle well I've been completely wrong many times you want to hear you want to hear about my first wife oh my gosh was I wrong about her um and by the way I ran into her a few years later and at the time I'd been unhappy but I said thank goodness I am so glad I'm not still married to her so even that gigantic mistake I thought turned into a good learning experience so the answer to your question is I don't know I cannot think of anything right now uh not a Prejudice but the rule is I usually don't like to buy stocks that are very expensive if you showed me a company that's selling at 50 times earnings I don't think I would do much to pursue it unless I pursued it as a possible stock to sell short so no I don't have any that I can think of any strong prejudices that are a permanent rule is there any investing principle that you didn't believe in when you started off that you fervently believe in right now well when I started off I thought people knew what they were doing you know I thought I thought all the people with experience and education knew what they were doing as investors they were all these people older than I was more experienced well educated I thought they knew what they were doing I now know that most of us don't know what we're doing when we invest best and a lot of it is based on emotion hearsay rumors Hot Tips one of the first things you should learn theis is don't listen to Hot Tips no matter where you are or who you are don't listen to Hot Tips these are things that I have learned and I hope I've learned them well did you ever listen to a hot tip and burn your finger yes yes no no I I will yes yes I if somebody if Joe or s or somebody who has experienced in in a high position said X well I thought they knew what they were talking about or they wouldn't say anything I have subsequently learned that many people will talk whether they know what they're talking about or not not you of course but there are many people out there that will say things even if they don't know what they're talking about can you name me an investor you would love to spend time with no no know you want to name or you don't know an investor you would love to spend time with no and the main reason I say that is because I have learned that when I listen to other people I usually make a mistake for whatever reason I'm sure it's some flaw in my character but if I listened if I had done it with Joe and Joe told me blah blah blah about X and I listened and I've invested in it I'd lose money nearly always so for there's something in my psyche that if I hear it from somewhere else I'll probably make a mistake but you could also make a mistake if you just keep listening to yourself right if you're locked in your own e Echo chamber absolutely I know about my mistakes I've been making them for decades oh I absolutely know yes and maybe part of the reason and you make me think about it if I had dinner with with Sally and she told me something and I Vis it might be because I accept what Sally has said instead of doing a lot of research myself and I assume Sally has done her research and maybe she hasn't so I guess what I have I'm saying to you what I have learned myself is I need to do a lot of research myself to be sure of what I'm doing do you find you've been very lucky would you say that you've been a very lucky person how do you view luck oh Lissa if I'd been lucky I'd be really rich I wish I'd been lucky oh my gosh uh no I I have found that but when I make a mistake I'd like to say it's bad luck but it's always that I haven't done enough work I'll give you in 1980 one day on a Friday I shorted oil I sold oil Short Selling short is something you do when you think something is going to go down in price I sold it a short on a Friday afternoon because they've been going through the roof that weekend Iran and Iraq went to war oh my gosh I went through the roof you know I got killed U now you would say that's bad luck then I would say no I'm not bad luck somebody knew I mean you don't move two armies together to go to war on a Saturday unless somebody has been making some preparation so somebody had done enough research to know there was a lot going on I had not I did not maybe it was impossible because armies tried to be secret but Iran's Army and Iraq's Army were both big armies so somebody knew I didn't and I lost money I'd love to say that's bad luck but I know it's I was cocky and didn't do enough homework when you talk about doing your homework and your research how much of how much of a role does gutfield does instinct come into play oh I wish it were that easy no I wish there were a chapter three that I could look it up I can find the answer on page 37 no no it's a huge amount that goes into making a successful decision it's not just numbers I but you have to understand everything and there's all when when I make a mistake I find out there was something else I forgot about or didn't think about well I just told you about the war I I thought I knew that the price of all was too high and was selling at Crazy Prices then I found out why because Iran and Iraq were going to war uh somebody knew that to repeat myself so no what I have found is when I make a mistake there's always something I did not think about or I got lazy or sloppy I just didn't do enough research what is the trait where you seeing another person that instantly repulses you that you want to keep your distance uh but the thing that I'm trying to teach my children is to be curious to always ask questions to look under the rocks to find out what's really going on you know most people if they see something on the Internet or on the TV they think it's accurate I'm trying to teach my children no you have to ask question after question after question and double check everything and I'm not talking about just investment I'm talking about life uh you have to double check everything and that is something that all of us especially when we're young think we're cocky we think we know everything and then as we older get older we get lazier so I'm trying to make sure my children know always ask questions and be skeptical do you ever regret moving to Asia or was that one of the best decisions you made no I I think as far as I'm concerned it's a very good decision moved here because I wanted my children to speak Mandarin in their lifetime Mandarin is going to be an extremely important language it already is in their lifetime they're still teenagers but it's already very important I thought I could see that coming and so it was very important to me that my I'm trying to prepare them for their 21st century and so far I think that I've done the right thing you've authored a fair number of books what drives you to be a writer well I never expected to be a writer I remember I drove around went around the world on my motorcycle and the night I got back I was at a big dinner in New York I was at a table and the guy to my left happened to be the editor of a major magazine he said yeah I haven't seen you in a while where you been I said I just got back to Dave from two years driving around the world on my motorcycle he asked me a few questions he said I want the story so we did a big story I don't know eight or 10 pages in a big magazine about going around the world that the book publishers read it and so they called me and said let's do a book I never planned to do any books and it turned into a book it was a lot of fun and it was successful and so when I occasionally do something right I now try to do a book I never planned to be a writer oh my gosh what are some of the authors that you like or the books that that have really inspired you or you despised that evoked a lot of emotion in you hate or love or whatever well I can think of a couple early in my investing career there was one called the intelligent investor and it was about the best way to invest you know to buy things that are cheap or where the fundamentals are right Etc and that was extremely influential for me it was another one called the money game which was by a journalist his pin name was Adam Smith it was full of stories about Investors their mistakes and their triumphs they were both very influential and interesting to me what if your daughters as young women were going to make an investment you knew was going to blow up okay and they really wanted to bet their money on it how would you convince them not to do so well that's an extremely interesting and good point Point mistakes usually I learn a lot from my mistakes I I told you before about once when I lost everything and got wiped out even though I was right uh but I learned from the mistake and M mistakes teach me much more than successes and I that's a very good point I don't know it hasn't come up yet but if and when I see my children trying to make a mistake I hope I hope I will let them make the mistake but I'll try to make sure it's not a big mistake it's not too expensive because mistakes usually teach people I wish I were smart enough that I didn't have to learn that way but I'm not would you be able to recollect what a mistake or so that you really really learned from it really hit home my first wife what a horrible mistake investing well you know I I thought I I thought it was a horrible tragedy that we split and it was I was in horrible pain but now I think my goodness what a good lesson what a spectacular lesson that was for me and it is for everybody we all have failed relationships if we're talking about that kind of mistake so it can be a learning experience a good learning experience as far as investing is concerned usually when I make a mistake it's because I did not do enough research I always find out later what I didn't do I wish I found out before I made the mistake but the mistakes always teach me something I didn't do and one of my last questions to you is do you feel that the world that the world your children are inheriting is a much more fearful place to be well LSA if you go back and read history it's always been a horrible fearful but disastrous place to be you know if we look if we were sitting here in 19 nah 1910 the world was great 19th century been a century of great prosperity and expansion International Trade expansion all over the world the German and the royal families took vacations together they married each other etc etc and we would have said what a wonderful place to be what a wonderful time in history to live if we were to hear in 2012 uh 1912 as you probably know two years later the first world war broke out and everybody was saying after well first everybody said ah it'll be over soon oh every this Triumph we will Triumph within a few weeks a few months of course in a few months they alling oh my God how do we get into this mistake how do we get out of this disaster and it was too late it was too late no it's not that easy to get out of a gigantic War but this is something that two or three years before it was inconceivable inconceivable to the world that something like that could have happened again and it did so whatever we think Lissa and if you look at history no matter any year you pick I promise you 15 years later the world had changed completely no no matter what people thought in 1900 was wrong in 1915 no matter what people thought in 1920 was wrong in 1935 you pick any year and you will see that whatever we think is wrong and whatever we think here in 2023 is going to be totally wrong in 2038 so whatever you know and think you know I will tell you it's wrong I'm me too not just you all of us and any reason you're not on social media I'm too lazy I guess I don't find it interesting uh what would I do what would I say you could answer your critics you could troll others I let my critics the best answer to my critics is just wait and the market will show who was right and who was wrong and I have learned if Sally's says oh my God you're wrong about that stock I have learned that the best answer is just time and time will show us who was right and who was wrong and so far I've been wrong less than I've been right and Jim I think that's about it and I loved talking to you thank you so much for your time well Lissa I will say I love talking to you and I hope we can do it again sometime before 15 years okay done Cheers Cheers thank you this is Lissa for Morning Star thank you for watching

Channel: Morningstar India

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Length: 25min 34sec (1534 seconds)

Published: Tue Nov 28 2023