Exclusive: Jim Rogers Discusses Market Bubbles and One Big Regret

by Kim Iskyan, The Street:

Legendary investor Jim Rogers isn’t afraid of the unknown.

In fact, he made his fortune by investing where others feared to tread.

Rogers made a name for himself in the 1970s after founding the Quantum Fund with George Soros. The fund had gains of 4,200% in 10 years.

Rogers has traveled widely and is known for pioneering the boots-on-the-ground approach to investing in emerging and frontier markets around the world.

From his world travels and decades of investment experience, he has penned a range of best-selling books that blend investment insight, political commentary and travelogue. There are many lessons to be learned from these books.

In a recent exclusive interview, Rogers spoke about market bubbles and one of his biggest regrets. A partial transcript follows.

Q.: So when we look at global markets, which markets, [are those] that a lot of investors are very keen on [that may be in bubble territory]?

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A.: Well, I can’t think of many that people are keen on right now. America … the S&P [500], people are keen on … European football clubs … that’s a bubble.

American tertiary education is a bubble. Everybody thinks it’s the end all and be all.

America has done a great PR job of selling its universities. Everybody knows [that] grammar school, primary school and high school are a disaster in America.

But somehow or another that translates into the fact that America has great universities. Don’t ask me the logic, but that’s obviously a bubble.

Hong Kong real estate, Shanghai (China) real estate … [those] are clearly in some kind of bubble … also, Sydney (Australia) real estate.

Bonds are obviously something that is going to cause a lot of pain to a lot of people. Bonds have been going up for 35 years, literally, for 35 years.

Now, bond markets have a habit of having long, long, long cycles, 30, 35 years. It’s normal in the bond market.

At least historically in the U.S. it’s been normal, but … that’s another clear bubble.

Q.: Looking at the world, at languages and economies, if you were to try to target those parts of the world that in 15 years, 20 years would have taken a bigger step than other parts of the world, where would you go?

A.: Well, you should definitely go to Asia. I moved to Asia.

In 1807, if you were smart, you’d move to London. In 1907, you should have moved to New York.

Well, 2007, you should have moved to Asia, which is when I moved to Asia.

Because for my children, the best skills I can give them are to speak good Mandarin and to know Asia. It’s not going to make them successful, I assure you.

There are plenty of people in the world who speak Mandarin and who know Asia that aren’t successful. But it will give them a leg-up.

And if I were a bright young man or woman now, that’s what I would do, I’d go to Asia, learn at least one Asian language.

Mandarin is the best as far as I’m concerned. But I would certainly head to Asia.

My problem, another one of my mistakes, I went to China in 1984, scared to death by the way, because I had been listening to American propaganda all my life.

Evil, vicious, terrible people the Chinese. They’re going to cut your throat.

I got there and I said, “These aren’t evil, vicious, terrible people. These are wonderful people.”

Educated, hard-working and they save for the future.

But if I’d been smart I would have stayed. Shows you how smart I am.

I went there and I saw, oh my God; look at this. Look at what’s happening.

I went back to Asia several times and many times since, but you know if I was such a bright kid, I would have stayed in Asia in the ’80s.

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