Saturday, February 10, 2007

Investment Strategies in Global Market - Jim Rogers -2 of 4

21. One needs to buy cheap when nobody is talking about it. One will be careful to buy shares just now in India since everybody is investing in shares.

22. Jim is now buying airline stocks and bonds. In the last 5 years airlines have lost money but are operating at full capacity. One is supposed to buy low. Hence the rationale for Jim investing in airline stocks.

23. When interest rates go high shares will get hurt. In the U.S. interest rates will go higher in the next year or two.

24. India needs to open up. It is the worst bureaucracy in the world besides Pakistan and Bangla Desh. India needs to open up its agriculture, stock market and make its currency totally convertible.

25. One needs to be cautious about the stock market when foreigners start coming in. That is the time to sell not buy. Chinese stock market was declining for many years but will now start looking up. Myanmar which has been isolated for 44 years will open up. East Timor, Angola, Ethopia, Tanzania will start doing well. Europe will have problems because of bad demographics.

26. Phelps Dodge owns the 2nd largest copper mine in the world. It will not open up a new mine. It will concentrate on its current mine. This is true of all mining companies. The ones who have made it to the top in these companies are the ones who were cautious. They did not do any exploration. Those who did got fired.

27. One needs to buy the Index Funds instead of investing in specific commodities/stocks directly. 80% of the time the index funds outperform the direct investment.

28. While investing in stocks the ratios relevant for analysis are P/E ratios, Dividend yields, Price to book value etc.

29. One needs to look at iron ore rather than steel. Jim is more optimistic on Paper than steel though he has not invested in either of them as he believes that there are better options in other commodities as mentioned earlier.

30. In the last 30 years lead has not been used in petrol and paint and yet it is doing well. The supply is going down even though there is no demand increase. One needs to look at demand and supply simultaneously.

31. Worldwide sugar is projected to at least double in the next 5 years. Cotton is 50% below its all time high. And yet there is not a single article in Fortune magazine on commodities.

32. In a bull market it is better to buy and hold. If one is a good trader then one can buy and sell and make a profit.

33. Crude oil is going up like a rocket. Be careful. But buy at $ 40.

34. One can say that inefficiencies in China are promoting demand. However as China becomes more efficient there will be an increase in demand and the commodities supply will not be there. So commodities will be the market to be in.

35. Brazil has started exporting ethanol. Cars will run on ethanol. Sugar is being converted to ethanol. There will be more demand and less supply of sugar.

36. Rarely in history stocks go up without setbacks or correction.

37. Stocks went down in Japan though Companies’ profits went up. The stocks were overpriced. The bad market phase in Japan ended in 2003.

38. Today 45% of Japan’s trade is with Asia and 20% with America. It was exactly the opposite 13 years back.

39. Japan’s capital flows into Asia will increase. In fact the capital flows within Asia will increase.

40. Even though real estate is a bubble in New York still there are areas like Idaho and Okhlahoma where real estate is not a bubble. If everybody is investing in New York then that is a sign that there is a bubble in the making.

Pls Note : Above mentioned suggestions are totally the views of the respective Guru / Author and it does not guarantee any success / failure. Please invest by thinking through all the options available in the market and the decision should be purely yours. The Guru / Author does not expect / want / require any share of your Success / Failure.

16 comments:

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