Review of Jim Rogers' Investment Autobiography, Street Smarts

credit: sg.asiatatler.com

Famed investor Jim Rogers has published a book that is part autobiography, part geopolitics, and part investment wisdom. Street Smarts: Adventures on the Road and in the Markets (Crown Publishing, 2013) gives his views on investing, which countries are growing more powerful and which are declining, what America must do to reform its society, and the value of raising children. Despite its wide scope, the book does not meander. Rogers engaged me throughout with his ideas about television (like me, he avoids it), politicians, ethics, and what it takes to succeed.

As an autobiography, the book reveals that Rogers single mindedly tried to understand how markets worked and struggled without pause to do so. He enjoyed learning how the world works, so he was motivated to understand markets as well as wanting not to lose money. He worked on holidays and through weekends. He had few distractions as none of his earlier marriages lasted long or produced children. The picture on the left shows Rogers with his third wife, Paige. He now has two Mandarin-speaking daughters as well. Rogers insists that he was successful because of his ability to think independently and willingness to travel and look at  information sources himself.

The two main themes of the book are the transition to Asia as the economic powerhouse as American leadership declines and "a cyclical shift away from financial firms as a source of prosperity" (P. 5) in favor of producers of real goods, especially foodstuffs. (As an aside, brick and mortar education may be replaced by distance learning, and Rogers predicts many of today's elite universities will go bankrupt.)

Rogers states that the United States needs to do five things to be saved: change the tax system, change the education system, institute health-care and litigation reform, and bring the troops home" (P. 241), but he is doubtful that these reforms will occur because of the power of special interests. He suggests that the legislative branch  no longer meet in Washington, D.C., and instead the representatives and senators should in their local areas and meet virtually, avoiding the power of the special interest groups.

Since Rogers conducts his business dealings ethically and believes his good name is invaluable, I found it interesting that he glosses over human rights violations in many of the leading Asian countries, comparing these problems to those in early America:  lack of real democracy in the early years of the American Republic and the existence of a late 19th-century plutocracy. In other words, according to Rogers the United States committed many of the same sins now found in Asia. I find this comparison unfair as our government has committed crimes of omission (because the Constitution limits its powers) rather than commission, such as throwing people in prison because of their beliefs. Rogers' unwillingness to come to terms with Asian oppression is the weakness of this book. He feels that China, Myanmar, and North Korea will eventually change for the better. So invest today! Despite this flaw, the book is well worth reading.

I have previously recommended Rogers' Investment Biker book to my economics students and will add this book to my list of recommended books as well.

See my previous blogs about North Korea here and food prices here and here.

Striking Parallels in History

Perhaps a future historian might write the following about the United States: "America's very overseas successes from WWII to the wars in Iraq and Afghanistan began to create internal tensions as presidents amassed too much power and prestige at the expense of Congress, poor Americans lost their houses and fell into debt, the old European and Asian allies became resentful, immigration policy became illogicical, and a government system developed to rule itself was strained by having to manage nation-building."

Here is what professor Gregory S. Aldrete wrote about Imperial Rome (The Roman City: Rome, Pompeii, and Ostia, Greenwood Press, Westport, CT, 2004).
"Rome's very overseas success, however, began to create internal tensions as individual generals amassed too much power and prestige, poor Romans lost their farms and fell into debt, the old Italian allies and half-citizens became resentful, and a government system developed to rule a city was strained by having to manage an empire" (P. 8).

Aldrete's analysis applies to us as well as Imperial Rome and is somewhat chilling, yes? We can have an empire OR we can have prosperity and freedom, but we cannot have both.