The Motley Fool Discussion Boards

Previous Page

Motley Fool Global Gains / GGM: Global Gains Philosophy


Subject:  Investment Biker Discussion Date:  5/26/2009  11:38 AM
Author:  TMFMmbop Number:  1693 of 5166

Hey, Fools.

I hope you're ready to kick off the discussion of Investment Biker by Jim Rogers on Thursday, the second book in our ongoing Global Gains curriculum.

Member wpr101 jumpstarted the discussion a bit back on this thread ( on the concept of buying every half decent company in a country you believe in, but I wanted to start a formal thread for the book to encompass the entire discussion. This is that thread.

I have full notes on the book that I'll save for later, but I wanted to throw out a few topics to get us started and talk a little bit about why this book was chosen for the curriculum. Hopefully many of you had the chance to read and enjoy the book; let's get started:

Why it was chosen
Jim Rogers is a bit of a celebrity in the global investing space, and this is one of his best-know, best selling, and best books. It combines a few keen investing and cultural insights with a very entertaining story about his two-year motorcycle journey around the world. Many of the countries in the book have changed significantly since Rogers’s trip, but a few have not -- an interesting happening in its own right. But the purpose of this book was to give folks who may not have traveled everywhere a feeling for just how different the world is from region to region and from country to country. Further, Rogers provides a few good frameworks for how to think about investing in emerging markets. Finally, it’s an entertaining read that we hoped many of you enjoyed (leaving aside Rogers’s somewhat sketchy and far-too-frequent mentions of his attractive, much younger female travel companion).

Some things potentially worth discussing
We can talk about the various travel experiences and black market currency strategies as well, but in terms of investing ideas, these are a few that struck me as interesting…

1. The time to buy is when no one else is paying attention (so it’s cheap), and the time to sell is when you’re on the front page of the paper (after a catalysts has been realized).

This is sentiment-based approach, and I wonder if it limits your holding periods. I feel like emerging markets investing actually required very long holding periods to be successful, though given the wild volatility, one can certainly make money the other way.

2. Make broad bets on countries you believe in.

wpr101 talked about this in the thread linked above, but I feel like the ETF approach or the broad bets appraoch works better in very frontier economies (Cambodia?) than in countries with more developed markets (China, Brazil). When it comes to China, I think you want to exercise a lot of discretion in the stocks you choose to buy.

3. The best way to invest in China is through Chinese companies, not multinationals.

Rogers writes, "I’d be tempted to sell short almost any non-Chinese company with a massive investment in China, because the Chinese frame of reference won’t allow outsiders to make the big money…How, then, should a prudent Western investor play the Chinese economic explosion? If you want to get involved, you should get a Chinese company to do business for you in China."

Many advisors recommend that folks get China exposure through companies like YUM! Brands and GE because it lowers the risk profile of the China investment. But I agree with Rogers, you really want to own domestic Chinese companies. I'm sure people have thoughts on this.

Finally, I wonder how Rogers reconciles his loyalty to free markets with the recent financial trauma, which was exacerbated by financial giants who were left unchecked and took on exorbitant risk. Now, there were certainly some distortions in the marketplace that supported them as they took on those risks, but there’s no doubt they weren’t as rational and risk-averse as Rogers seems to think they are. In fact, the world is an interesting laboratory these days, with China, India, and Brazil all achieving healthy economic growth under regimes that offer different degrees of freedom and regulation.

Let's hear your thoughts!

Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us