Beware These Market Bubbles
History repeats itself… especially in the world of investing. Jim Rogers (who happens to be a Singapore resident) made a fortune predicting major market events. He’s a history buff and knows that, as he says, “if you understand history, you’re probably going to be a much better investor.”
Jim co-founded the Quantum Fund with George Soros. This became one of the best-performing hedge funds in history. From 1970 to 1980, the fund gained 4,200%. Beyond being an investment legend, Jim is a best-selling author and world traveler – setting a world record for crossing six continents on a motorcycle. He is also known for starting the boots-on-the-ground approach to investing in emerging and frontier markets.
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When he talks about the long-term trends that shape global markets, savvy investors listen. I recently sat down with Jim for an extended one-on-one, exclusive interview. Check out a few excerpts from our conversation below…
Jim Rogers on when to sell
Me: Jim, we’ve talked about buying… how do you know when to sell an asset?
Jim Rogers: When people are getting hysterical, you can sense it just by market action… if you read the press you can see when everybody’s talking about whatever it is that’s the best thing, something going to change everybody’s life… and how, boy, it’s a whole new era… You hear the same words every time, every time, they are the same. Investors and the press use the same expressions about how great things are now. [For example,] Amazon can never go down, and will never go down and is going to go own the world someday.
When you hear all that kind of talk… I mean, fortunately or unfortunately, I have read about a lot of markets in my day and they always say the same thing. Absolutely, “a new era.” Oh, how many new eras have we had in history? It’s just amazing.
Me: So you’re talking about really using history to interpret the current market.
Jim: Yes… If you understand history, you’re probably going to be a much better investor. You’re going to be a much better at everything if you understand history, because it all happened, this all happened before. I assure you, we all put our trousers on one leg at a time, and we always have, and we always will.
But you need to understand the basics of how the world works and the best… A good way to do that is to know about what has happened before. And if you know what’s happened before, then you’ll probably be a step ahead of figuring out what’s going to happen.
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