By Mark Gilbert
Dec. 4 (Bloomberg) -- Jim Rogers has three pearls of investment wisdom to pitch: ``Get out of the dollar, teach your children Chinese, and buy commodities.''
Rogers, 65, co-founded the Quantum Hedge Fund with George Soros, pocketing enough money to retire at 37 and fund a series of around-the-world road trips. In ``A Bull in China: Investing Profitably in the World's Greatest Market,'' Rogers details how to put your money where his mouth is.
``Just as the 19th century belonged to England and the 20th century to America, so the 21st century will be China's turn to set the agenda and rule the roost,'' he writes. ``Whatever the risks, this much is clear: It's more scary to have all your savings in the U.S. stock market than it is to put a portion in China -- whether investing in China's growth or as a hedge against a potential U.S. slowdown.''
He's practicing what he preaches. His daughter, Happy, has a Chinese nanny. When we met at a conference in London on Oct. 31, Rogers said he'd found a buyer for his six-story New York townhouse at more than the $15 million asking price. He's moving his family to Asia, though he chose Singapore over China because the air quality is too poor in Shanghai or Beijing, he says.
Throughout the book, Rogers lists companies that investors should consider buying shares in. Juice makers, meat processors, tractor manufacturers, wine producers, brewers and medical companies are all analyzed. You could construct an interesting portfolio just by following his recommendations.
Bumpy Ride
Don't expect a one-way ride, though. ``From 1993 to 2001, the Shanghai market suffered 20 mini-crashes of more than 10 percent in a month,'' Rogers warns.
Right from the beginning, he addresses the key concerns that might deter investors. The prospects of Taiwan provoking military conflict, for example, are slim: ``Powerful business leaders are the first force pushing for a peaceful resolution to the Taiwan- China conflict,'' he writes. ``They know better than anyone that poor relations with the mainland have only prevented Taiwan from reaching its full potential.''
Not convinced? Then buy defense stocks that would benefit from a war, such as China Aerospace International Holdings Ltd., Jiangxi Hongdu Aviation Industry Corp., or Jiangnan Heavy Industry Co.
Rogers spies opportunities in most of the challenges China faces. Surging energy needs make oil and coal producers potentially lucrative. Water shortages and droughts boost the attractiveness of utilities in Singapore able to meet China's needs, such as Bio-Treat Technology Ltd., Asia Environment Holdings Ltd. and Asia Water Technology Ltd.
`Hello, Sexy Sedans'
``For every 1,000 people, the U.S. has 700 cars,'' Rogers writes. ``At last count, and despite the increased congestion, China had only 24 cars per 1,000 people. So long, trusty bicycle. Hello, sexy sedans and Chinese convertibles. There are big gains to be had from China climbing into the driver's seat of the world auto industry.''
The best way to play that evolution, however, might be by investing in toll-road companies, such as Jiangsu Expressway Co., rather than carmakers or auto-parts manufacturers, Rogers says.
He's not concerned that slumping U.S. growth will derail China. ``While China's growth is dependent on the U.S. to some extent, the tie may not be as strong as you may think,'' he writes. ``It's still mainly a psychological effect on confidence and growth. In real economic terms, the impact isn't as great. It's even lessening on a regional level, where China's Asian neighbors are busy developing on their own.''
Rogers is a lot less evangelical in print than in person. Surprisingly, that makes his arguments for why everyone should hitch at least some of their savings to China's star all the more compelling.
``A Bull in China'' is published by Random House (221 pages, $26.95).
(Mark Gilbert is a columnist for Bloomberg News. The opinions expressed are his own.)
To contact the writer of this review: Mark Gilbert in London at magilbert@bloomberg.net
Last Updated: December 3, 2007 11:13 EST |
