Jim Rogers talks with Steve Diggle about tripling his money and then giving it all back. The self-described “worst trader in the world” sheds light on how to think independently in order to see the truth. This video is excerpted from a piece published on Real Vision on September 20, 2017 entitled “Global Risks and Untapped Prospects - Jim Rogers.”
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A Lesson Learned the Hard Way (w/ Jim Rogers) | Perfect Timing
For the full transcript: https://rvtv.io/2Ln76jd
When I first was in the business, I used to assume that everybody knew a lot more than I did. They were educated. They were experienced and everything. And so I just assumed they said x, x was probably the case. It took me a little while, but not too long to figure out they didn't know any more than I did.
Well, the different answers to that question, I used to work for somebody named Roy Neuberger, who founded Neuberger Berman back in the '30s. And Roy Neuberger was an astonishing trader. He would be sitting there reading the Wall Street Journal, and he would say to me, there's 100,000 shares of IBM on the floor. Bid 90 and an eighth. I would say, what the hell was he talking about?
So we'd go to the floor, and sure enough, 100,000 shares of IBM for sale. I don't know how he did it. He just had a sense of watching-- that they had the tape in those days, you know? He just had this unbelievable sense of timing and trading. He was a remarkable trader.
Now, I'm horrible. He might have been the best trader I ever saw. Mike Steinhardt's another great trader, some great, great old traders in the business.
If you're going to be a contrarian investor, which you've been very successful at, and you've had some epically great calls-- I was in Asia when you started talking about mainland China, when even lived in Hong Kong, no one thought there was a future for it. So you've got a record to prove it can be done.
But I think for an awful lot of investors, both professional and people doing it with their own money, it's incredibly hard to end up with a level of conviction that allows you to be a contrarian investor. I mean, how do you develop that level of conviction?
Well, first of all, you just used the term "contrarian." And by definition, I guess that's right. I never thought of myself that way. A contrarian would just say, they're all buying x. I'm going to sell x. That's not what I do.
You're an independent investor.
Right. That's a better way. I like that. That's what I'm trying to teach my girls, to think independently, to be curious. First of all, to be curious, to go and look at that thing that nobody's looking at. And then to think independently and say, they all say this is terrible, but I know-- it goes into my brain, and I spin it around, and it comes out that I know this is going to be good in the end.
When I first was in the business, I used to assume that everybody knew a lot more than I did. They were educated. They have experience in everything. And so I just assumed if they said x, x was probably the case. It took me a little while, but not too long to figure out they didn't know any more than I did. In fact, they might know less than I did, even though they were experienced, and knowledgeable, and well-educated.