Jim Rogers: Why (maybe) you should diversify

I've also written about the importance of diversification to reduce risk in your portfolio. As the saying goes, don't put all your eggs in one basket. But you also need to make sure they're not all on the same egg truck, either.

Diversification can limit the risks that are specific to a company or industry. For example, bad (or fraudulent) company management is a firm-specific risk. An airline employee strike, which has an industry-wide impact, is an industry risk. These are called "diversifiable risks" because they aren't directly related to the broad financial market system.


Market risk (also called "systematic risk" because it relates to the financial system as a whole) is unavoidable for anyone investing in financial markets. Market risk is affected by things like interest rates, exchange rates and recessions. Diversification can't touch market risk.

The graph below shows these two types of risk. Every investor is subject to systematic risk. Diversifiable risk is higher if a portfolio includes a small number of holdings. And diversifiable risk declines as the number of holdings in a portfolio increases - to a certain point. Having a portfolio with five securities definitely beats a portfolio of just one security. But diversifying beyond 30 securities doesn't bring any additional benefits in reducing overall portfolio risk.

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But Jim Rogers disagrees. "The expression on Wall Street is, don't put all of your eggs in one basket. Ha! You should put all of your eggs in one basket," he told me. "But be sure you've got the right basket and make sure you watch the basket very, very carefully."

Now, of course this strategy of putting all your eggs in one basket… but making sure it's the right basket, is not for everyone. It's a high risk, high reward strategy.

And Jim acknowledges that. "If you don't get it right, you're going to lose everything. But if you get it right, you're going to get very rich. And by the way, don't think it's easy getting it right. It's not easy. It takes a lot of insight and work and everything else. But, if you get it right, you'll be very rich."

- Source, Business Insider

Jim Rogers explains why you shouldn't diversify your portfolio too much

Diversification is generally considered one of the basic tenets of investing and financial planning. Owning a mix of assets, ideally with a low correlation - including, stocks, bonds, real estate and gold, for example - is Investing 101.

That is… unless you're one of the world's most famous investors. Jim Rogers, who I've written about recently (see here, here and here), is not a fan of diversification…

Jim doesn't buy into the cult of asset allocation

"Well, I know that people are taught to diversify. But diversification is just that's something that brokers came up with, so they don't get sued," Jim told me recently when I sat down to chat with him here in Singapore. Then he added, "If you want to get rich… You have to concentrate and focus."

This obviously goes against conventional thinking. But this kind of thinking is what made Jim one of the world's most successful investors. He co-founded the Quantum Fund - one of the world's most successful hedge funds - which saw returns of 4,200 percent in ten years.

He quit full-time investing in 1980 and went on to travel the world a few times. He also wrote several books about what he saw and learned. Even if you're not a travel or money junkie and know little about finance, these are some of the most educational and entertaining books you'll ever read about investing.

- Source, Business Insider

Jim Rogers: South Korea’s Bright Spot

Jim Rogers, the 75-year-old globe-trotting chairman of Rogers Holdings, reckons that South Korea could be a bright spot in an otherwise grim-looking financial landscape. And it’s all thanks to its troublesome neighbour to the north.

Rogers is convinced that North Korea will open up for business with the rest of the world. “The last time I visited the North, I went to market and there were hundreds of stalls,” he tells The Korea Times, “selling everything you can imagine. So they know how to be entrepreneurs.” And if North Korea does open up, then this will provide huge opportunities for South Korean businesses, he told investors at a talk in Seoul. North Korea offers “disciplined, educated, very cheap” labour and plenty of natural resources, while South Korea can provide “capital, management ability, and expertise”. A combination of the two could make South Korea “the most exciting country in the world over the next ten to 20 years”.

It’s a good thing that Rogers is so upbeat on at least one market, because he is otherwise downbeat. “Since 2008, debt everywhere has gone up a lot.” China in particular is in no position to repeat the huge monetary stimulus that helped to pull the world out of the worst phase of the financial crisis in 2008/2009. “Ultimately we are going to have a very serious bear market and economic dislocations… it is going to be the worst in my lifetime,” he said, echoing warnings he has made previously.

- Source, Money Week

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Jim Rogers: The Most Bullish Markets and Assets Right Now

Do you still see a rout in the making in world markets?

The next one is going to be the worst correction in my lifetime. In 2008, we had a problem because of too much debt, but now the debt in the world is much, much worse. Next time, its going to be much worse when we have such an economic problem.

In 2007, when Iceland went bankrupt, nobody had ever heard of it. Then it was the Lehman Brothers that went bankrupt. It was then that people knew that there was a problem. We are not looking at the small things.

Many Indian banks have a problem, and people are not paying much attention to it. There have been bankruptcies in China. Some things can happen, but we don’t know when. I do know we are closer.

Which asset class are you most bullish on? What are you bearish on?

I am most bullish on probably agriculture commodities, Russian government bonds in roubles, Chinese shares, Japanese shares. Some of these assets are depressed and have a chance to rise.

I am most bearish on FANG (Facebook, Amazon, Netflix and Google, which is now Alphabet) stocks in America. They cannot skyrocket from here. They are certainly turning into a bubble. Just because I said I am not optimistic, doesn’t mean I am going to sell them short, because bubbles really do strange things.

Which lesser-known markets have the potential to make it big?

Zimbabwe could be one. It has been a disaster for some years. We are going to have a new government next week. Colombia is very exciting, too.

- Source, Live Mint

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Still not invested in Indian market, missed it, says Jim Rogers

Indian markets are at a record high. What’s your take? Did you invest in India after exiting in 2015?

No. I have not invested in the Indian markets. I should have, everybody should have, but I have missed it. I don’t like to buy anything at all-time highs. So, I am doing nothing. I am watching. I am not going to jump onto a moving bus, because if you do so, you only get hurt.

There is a lot of easy money in the world, especially in India, and it is going into the market. That is always worrisome, because when the rest of the world starts having problems, India will have a problem, too.

What do you think of the ongoing trade war situation? What could be the likely outcome?

Something is going to happen to make it sound better. Mr Trump or somebody will put together something that will sound good. But next year, or the year after, when economies around the world have a problem, that is when he (Trump) is going to lash out and have a real trade war, and that will make the next economic problem even worse.

- Source, Jim Rogers via Live Mint

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Jim Rogers: North Korea Is Where China Was In 1981

Jim Rogers: Trump is Making China Great Again

Rogers Holdings Chairman Jim Rogers on the Trump administration's trade talks with China, North Korea and the investment opportunities in Asia.

- Source, Fox Business

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Jim Rogers on Nothing Exempt

Jim joins us for a very nothing exempt discussion on markets and the world. Let us know what you thought in the comments below.

- Source, Nothing Exempt

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Jim Rogers: I'll invest in North Korea as soon as it's legal

Rogers Holdings Chairman Jim Rogers on plans to invest in North Korea once it is legal.

- Source, Fox Business

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Jim Rogers: Great fortunes can be made in North Korea

Legendary investor Jim Rogers tells IGTV’s Victoria Scholar that great fortunes will be made in North Korea once it opens up. He also talks about why he’s bullish on equities in China, Russia and Japan and on agricultural commodities.

- Source, IG UK

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Gold Is Going Through The Roof, Rest Assured

Legendary investor Jim Rogers said enjoy the market rally while it lasts, issuing a dire warning that “the worst correction of his lifetime,” is coming for stocks.

- Source, Kitco News

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Jim Rogers: These are the most interesting markets today

High-potential markets today

Jim has told me before that he’s interested in disaster… and he still is.

Kim: Jim, where do you see opportunity and good value today?

Jim: I have been shouting that North Korea and South Korea would soon merge for a few years now, and it looks like it’s finally going to happen. [Jim told us that he was bullish on North Korea in 2016.]

Not tomorrow. But unless Mr. Trump messes it up, and he might, that problem is being solved as we speak for many reasons. [North Korea’s leader and Trump are due to meet in a few weeks.] But that would certainly prevent American taxpayers from spending a lot of money… Korean taxpayers… it’d prevent everybody from spending a lot of money. So let’s hope it happens. I would be terrific. It would be a great opportunity for investors. In the North they need everything, they have nothing. Virtually nothing. So it would be a great opportunity for all of us.

You’re probably going to say to me, “What would you buy?” And there’s nothing to buy in North Korea, there’s nothing public I own. North Korean coins. I own Korean Air Lines (Korea Exchange; ticker: 003490) because I assume there’ll be a lot more air traffic. I own a South Korean ETF. [The iShares MSCI South Korea ETF (NYSE; ticker: EWY) is one ETF you can own.] But other than that, I don’t really know a way to invest.

Also, Russia is still hated by most investors, which is terrific, it means it’s still cheap. I am looking for Russian investments. I’ve bought more Russian government bonds recently in rubles because they have a very high yield and I’m optimistic about the ruble – certainly that the ruble is making a bottom, if it has not made its bottom already.

Vietnam is doing very well right now. I prefer the bad things that are hated. But there are big changes in the country, and it’s right on the Chinese border. It’s a country of 90 million people, educated, disciplined, hardworking. They call themselves communist, but take that with a grain of salt.

I’ve mentioned Nigeria and Kazakhstan before.

China. I’m looking for investments in China. China is 40 percent below its all-time high. Japan is 50 percent below its all-time high. I’d much prefer China and Japan to, say, America and Germany. You know, these are markets that are near all-time highs. And I know that watching you guys, you know to buy low and sell high.

Jim mentioned Japan. So I asked him… when we look at debt profiles and countries most likely to blow up from debt, wouldn’t Japan be at the top of that list?

Jim: Absolutely. Japan has staggering internal debts. They have a lot of external reserves, foreign-currency reserves, but they have huge debt and they keep running up debt after debt after debt. I can give you scenarios where there isn’t a Japan in 50 years. I mean, they have a declining population. Their debt is going through the roof. It’s a fantastic country, but it’s in serious, serious decline.

But that doesn’t mean that the stock market cannot go up for a few months, or a year, or two. So I’d rather buy Japan than many other countries.

Kim: It sounds like you’re talking about the disconnect between the fundamentals of a market or an economy, and the direction or trajectory of its stock market.

Jim: There’s a difference in a short term and a long term. I know Japan is going to disappear, but there’s still time to make some money if the world doesn’t fall apart in the next three or 10 months.

- Source, Standberry Churchhouse