Jim Rogers’s view on Euro, Gold, China and Commodity at Shares Investment Conference. Part 2

• Especially after the US, China and German elections. Right now a lot of leaders are spending money to shore up the economy to keep the jobless rate low.
• He thinks 2013/14 we will see slow down in growth when investment for election start to taper off.
• Not a lot of people know it, but printing of money is already happening.
• Jim is short on US stock market. But in general he does not do short long term. Short is not the way to get rich. Because with shorting, you can only get maximum 100% profit.
• Action: So one way to protect one’s portfolio is to own real asset. If not, do index investment. He cited that as high as 75% of the time, index investment beat active fund management. You can read more here.

• Owning read assets like Gold and Silver is the way to go to protect your investment. He owns Gold and Silver coins not ETFs, gold bars or mining stocks. He feels that coins are a lot more liquid.
• As part of the government’s plan to promote Singapore as a precious metals trading hub, the 7% Goods and Services Tax on precious metals will be removed from Oct 12. This is good news but how it will impact retail investors is yet to be seen because this tax change is mainly targeted at traders.

Side line: one audience asked if the world will be a better place if we go back to Gold Standard. Where countries can only issue the amount of money equivalent to the gold reserve they hold. Jim feels that it may work for a short time, but politician will some how find a way to go around the guideline. Plus one side big effect is the fluctuation of the currency, since the value of gold fluctuate a lot.

Euro Crisis– This topic was discussed panel style.

• The 3 persons panel felt that it will be a different Euro post Germany’s election. The situation in Europe is very hard to correct because it is about behavior and culture. European like their short work day culture and is not willing to give it up so easily.
• Greece has high chance of getting the boot from the EU. Over there 1 in 4 works for the government and have rampant tax evasion issue (read more here).
• When EU starts to buy bonds or lends money to bail out weaker members, it is like taking money from competent and law abiding members and giving it to incompetent non abiding members to manage. The person that is suffering most are the members that played by the books and yet saw their savings wiped out.

Trading – Some good trading tips from Mike Bellafiore in his session about “Beating the Market”.

• When trading, look for psychology change. Which means change of trend lines. There are many technical indicators out there, pick what you are comfortable with and stick with it. DON’T switch from one to another.
• Professional traders do not predict trends. Before any trade, they only need to understands their RISK REWARD ratio and cut lost level. In anther words, always have a plan before any trade.

Quotable quotes.

“I do not give hot tips. Because you will not know what to do with it later. For example, if you go out and buy a stock. After 2 months the price double. Now what? You would not know to keep or sell to take profit. I will not be there to advice you. Similarly, if the price falls by half. Now what? Most likely you will be blame me and still not know what to do it. So do only invest in what you are comfortable and know a lot about.”- Jim Rogers

Sum up

It is well worth my money and time to listen to all 3 guest speakers. Especially Jim where he share his ideas and thinking unreservedly. Will I do all the things he said, most likely not. But at least we get a little wiser on the macro economic environment and spur me on to learn more about commodity. Was the article clear for you? Have feedback or question? Feel free to ping me. Cheers.