Martin Lee @ Sg
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Jim Rogers Review at Shares Investment Conference

Last Saturday, I was at the Shares Investment Conference 2012 held at Suntec which featured Jim Rogers. The event was quite popular and there was still a long queue of people registering at 9am, which was the scheduled start time. We finally managed to start at around 945am, after everyone finally managed to get into the auditorium.

There were a few speakers but the greatest pull was obviously Jim Rogers, who was also allocated the longest time on stage. I guess no one in the audience will complain about that.

The other speakers were Mike Bellafiore, Avtar Sandu and Collin Seow. There were also a few other speakers who were invited to give presentations during the breaks, with Chua I-Min being one of them.

I managed to take down a lot of notes so there will be two review posts on this event – one covering the key points mentioned by each speaker and the other for the Q&A and panel discussion.

The organizers did a smart thing of giving out packed food for lunch, which avoided a nightmare scenario of long queues and insufficient food.

Overall, I felt the event was very good, even though many in the audience would probably have wished we had more time for the Q&A.

I am looking forward to the next event in the Phillip Investment Festival, the  Asian Value Investing Conference, which will feature Mary Buffett as one of the speakers.

Read on below for the key points which me and my friend managed to take down. Do look out also for the second part which I hope to complete in the next few days.

Jim Rogers

According to the official timings for the event, Jim Rogers was given more than three hours on stage. He spent the first forty minutes talking about his family and his views on the world/market, and the rest of the time answering questions from the audience.

It was quite refreshing to hear from a speaker that did not have to rely on selling you something from the stage (as many speakers do nowadays), and the clarity of his presentation made it easy for most people in the audience to understand his views.

The tone was conversational, and we did not have to sit through a long and boring powerpoint presentation. There were only a few slides showing us some pictures, which included photos of his family and a world map showing us the countries he had traveled to before. The world map was referenced many times during the presentation.

Here are some of the takeaways:

  • Jim Rogers used to be very much against having children. After having two, he realized he was very wrong. He urged everyone in the crowd to have more children (to much laughter in the audience).
  • The 19th century belonged to UK, the 20th belonged to USA, but the 21st century will belong to China. There will be problems before China became great, just like USA had horrible problems in the 19th century before it did. Which is why it is important to know Chinese/Mandarin – both his children do. He has looked at several cities (where Mandarin is used) to live in before deciding to live in Singapore.
  • While Jim Rogers is bullish about his holdings in China, they are meant for the (very) long term. They will be given to his children and he will want his children/grand children to look back one day and say “what a great investment papa made”. He had only bought China stocks a few times, each time after they went through a significant clash or correction.
  • The world is moving from USA towards Asia exacerbated by the financial crisis and mistakes made by politicians. The United States is the biggest debtor nation in the history of the world. Countries like China, Korea, Hong Kong, Taiwan and Singapore are international creditors. The US$ will not remain the world’s reserve currency forever, just like the UK pounds did not. This shift will not change overnight, but will change gradually. Those who are able to understand this shift will be able to make fortunes. He only holds US$ because it is perceived as a safe haven currency by everyone and there is much turmoil in the world now. Over the long term, the US$ will continue to devalue.
  • Bonds have been in a bull market for thirty-one years in most parts of the world. Yields are already very low and the bull market in bonds is coming to an end soon. He has shorted bonds before a few times in the last few years (unsuccessfully) but will look for opportunities to do it again. He cannot conceive of lending money to the US government for thirty years. Jim also mentioned that if you hold bonds (other than short duration of special situation bonds), you should consider selling them. Bond portfolio managers should think of getting another job.
  • Jim Rogers only holds shares in some parts of the world, one of which is Singapore. He is short on the US stocks, with a negative view for the next two years. The country he is most optimistic on in the world is Myanmar. In 1962 (before they shut off from the world), Burma was the richest country in Asia. They have become the poorest country in a few decades and have the potential to become rich again. Unfortunately, one of the few ways that you can invest there is to go there and start a company (something which he is not prepared to do). He is also optimistic on North Korea.
  • Most of his investments are in natural resources, raw materials and commodities. Throughout history, there have been long bull and bear markets in commodities. It happens this way because of supply and demand mismatches and it takes time for supply to get onto the market. The current bull market started in 1999, and has been extended because a lot of new supply coming onto the market has been delayed. All bull markets eventually come to an end when new supply becomes available.
  • Agriculture has been very bad for thirty years, but Jim Rogers foresee a reversal in the future where the farmers will become rich. Inventories in agriculture are running low and the average age of farmers have been increasing rapidly. There will be a shortage of food and farmers in the future.

Mike Bellafiore

Mike covered seven fundamentals that everyone would need to be a profitable trader. I will list them out in point form:

  • Proper preparation
    • You are only as good as the stocks you are going to trade
  • Hard work
    • Analysing the market depth and times of transactions
    • Knowing important intraday prices levels
  • Patience
    • Waiting for a good entry price level
    • Affects your exit if you enter at a bad price
    • Hard to do well from a bad entry
  • A detailed trading plan (before entering each trade)
    • Knowing what to do if the stock trades in your favour
    • Knowing what to do if the stock trades against you
  • Discipline (to follow your trade plan)
    • What do you do if your stock trades against you? Get out
    • What do you do if your stock hits your exit price? Get out
    • What do you do if your stock hits your criteria for exiting? Get out
  • Communication
    • Sharing information with community
    • Creating your own trading community
  • Reviewing and replaying your important trades
    • Trades that make the most sense to you
    • Build from your strengths
    • Get bigger in the plays that make the most sense to you
    • Find more of them
    • Trade them with more size
    • This is how you become great

Contrary to what you might think, a professional trader actually takes losses all the time. His job is to control their risks and do the right thing.

Avtar Sandu

Avtar mainly spoke about the commodities market (He was a senior manager at the commodities department at Phillip Futures).

Unfortunately, I didn’t managed to take down any notes for this session, so this will not be covered in this review.

Collin Seow

Collin was actually not one of the speakers on the original program. I guess he was given some time to talk as he had a booth at the event promoting his seminar.

Collin took up one hour from the end of the day Q&A session (which was supposed to last for two hours) to talk about using technical analysis for trading.

Interestingly, his method also uses the same metrics for the moving average cross-over method that Kok Huan had spoke about last week.

As we run out of time for the subsequent Q&A (that involved Jim Rogers), I was actually not too happy about the inclusive of this surprise segment.

Nevertheless, remember to look out for an upcoming post which will cover some of the questions asked and the interesting replies that were given during the Q&A session. 🙂

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