Jim Rogers is a legend in the world of trading. He is renowned across the globe for being able to make money, seemingly no matter what he does. To that end, he even founded his own index – the Rogers International Community Index. But why did trading appeal to him in the first place? And just what is it about unglamorous trades that brings in the money?
Jim Rogers stumbled into trading completely by accident. Needing a summer job before heading off to university, he applied for anything and everything, and ended up working on Wall Street. Rogers didn’t know anything about it – but he immediately fell in love. He had found his passion, and he knew there would be no university, no law school, no medical school… he wanted to stay where he was, and be paid to predict the future!
Jim’s ket to success comes with being able to find the trades that are being ignored. Perhaps they are boring. Perhaps they are unglamorous. But if they are being ignored, they will also be cheap. And if they are being ignored, if they are cheap, and if they look as though change is about to happen (this is where knowledge of the sector comes in) then buy them – and you will make a profit. And of course, even if the changes don’t happen, you won’t have had to invest much, so you won’t lose much. It’s ideal.
Jim Rogers says that he could write a book about his failures, and that he even lost everything at one point. This was after he had seen others do exactly the same, at which point he had been rather pleased with himself that he had not fallen into the trap of overtrading. Just a few weeks later, his profits – and his savings – were wiped out. He had become complacent, expecting that nothing was going to go wrong, and that just set him up for trouble because he wasn’t looking for it. Jim learned many things from this, including the fact that every situation, good or bad, has its own set of problems. Look at both sides before choosing what to do – this will prevent many failures.
It is also worth remembering that things change, and are changing all the time. Don’t rely on what you always did because one day that won’t work anymore. The internet is changing everything we know, so no matter what we think is true, that truth will be different in a few years’ time. Pick any year in history, says Rogers, and 15 years later it will all be completely different. This is why flexibility is important, as is knowing your market and being able to spot changes before they happen. Being able to do this means you can buy or sell at the right time and make good money.
As a final thought, Jim Rogers doesn’t want you to emulate him. You are not going to be successful if you follow other people. Investing in what you know is the only way to be successful. Everyone knows a lot about something, and that is the thing you need to invest in. Whatever your passion is, stick with it. If you are passionate about something you will see changes before many other people, as that is what you read about day in, day out. You will notice.
Focus on your strengths and don’t rely on tips from other people.