KUALA LUMPUR: Jim Rogers, investment expert and author, said “hysterical” investor attitudes have to change, if one wished to make good investments.
“You will likely not get rich investing in a place which has already boomed,” he said, referring to speculation.
Rogers, who has a long-term investment horizon, further reinforced his view that investment should follow basic economic principles.
“Invest where you see good value over the long term, regardless of short-term price fluctuations. Investment should be in places where the fundamentals get better, not worse,” he told participants at the CIMB Private Banking Investment Conference 2010 here on Wednesday.
Rogers said the countries he saw prospering in the next 20 to 30 years were well-managed and rich in natural resources.
“I am very optimistic about Malaysia. The stock market has appreciated only 4% in the last 13 years and Malaysia used to generate a large part of the world index, whereas now this is no longer the case,” he said.
Rogers remains bullish on commodities, China and Asian economies, foreseeing a transition of activity from the US to Asia.
“In the past, there has been little investment in productive capacity. Coupled with a shortage of farmers and depleting natural resources, investment in raw materials could offer great gains, following the old-time principle of supply and demand,” he said.
However, Rogers does not regard all commodities equally.
“Gold, which has recently reached its all-time high, is extremely strong right now. I am not rushing to buy gold,” he said.
Roger added that sugar, being 70% below the all-time high, was a better alternative, along with other precious metals like silver, platinum and palladium.
Rogers advises investors to be familiar with their commodity if they wish to invest in futures, as the potential for rapid gains and losses is very strong.
For the novice investor, he recommends investing in currencies and properties in well-managed resource-rich nations such as Brazil, Australia and Canada as well as commodity-linked indices and stocks of companies which would benefit from an increase in the commodity price.
On his personal investment portfolio, Rogers told the crowd that he had recently made a purchase of euros and had been shorting stocks of US technology companies and Western financial institutions.
Rogers co-founded the Quantum Fund, a global-investment partnership after attending Yale and Oxford University. During the next 10 years, the portfolio gained 4,200% while the S&P rose less than 50%. He has published books on international investment, commodities and his experiences in China.
Written by Koo Jie Ni
This article appeared in The Edge Financial Daily, July 9, 2010.
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