What lessons have you learnt from the financial crisis
that started five years ago and how has your investment mantra changed
since then? Can you tell us how your portfolio has changed over the
course of this crisis?
Jim Rogers : Governments and central banks have reacted to the crisis
in what they view is the correct manner, but, in my view, it is an
artificial manner, and they are only making the crisis worse. The reason
it is stretching out as a problem is that they never let the problem
cure itself.
For instance, in 2001 and 2002, there were economic
problems in the world and they hurt, but they were not that bad. The
next one came in 2007-08 and it was much worse because the debt had
risen by then. Central banks, especially the American central bank,
started printing money and everything felt better for a while. Then the
problem came again and central banks led by the Americans, and
governments led by the Americans, again ran up even more debt and
continue to do so. Many of us feel better, especially the ones getting
the money, but, overall, it is worse now and the situation continues to
deteriorate because the debt is so much higher now. The next time we
have a slowdown, it is going to be a lot worse. In America, the debt
quadrupled and a lot of it is garbage—we are floating on an artificial
sea of liquidity, and it is wonderful if you are in the right boat.
Problems always come no matter what governments say and
we have always had slowdowns in America after every six or seven years
even in good times. Be very worried because the next time around, things
are going to be much worse, especially in countries where the debt is
much higher. In the 1920s and 1930s, the centre of the world moved from
the UK to the US, primarily due to financial problems and mistakes made
by the politicians. The same thing is happening now, and the centre of
the world is moving from the US to Asia, exasperated due to the
financial crisis and mistakes made by politicians. In the 1930s, US was a
creditor nation, but it suffered badly, but not as badly as some of the
European nations. Asia will suffer the next time around, but the West
will suffer even more. I would rather be with the creditors than with
the countries (that) have huge debts. - in livemint.com
Jim Rogers started trading the stock market with $600 in 1968.In 1973 he formed the Quantum Fund with the legendary investor George Soros before retiring, a multi millionaire at the age of 37. Rogers and Soros helped steer the fund to a miraculous 4,200% return over the 10 year span of the fund while the S&P 500 returned just 47%.