The Investment Biker Rides Again

In 1990 Jim Rogers embarked on a 65,000-mile motorcycle journey through six continents to explore some emerging markets. But long before Rogers made his epic journey he was already firmly established as one of Wall Street's most successful investors.

Rogers once admitted to making more money than he knew existed after he teamed up with George Soros to manage Quantum Fund. His book Investment Biker has been described as a collection of tips and hints as to where investors can make a million and where to lose one. But how good have his predictions been?

The first leg of Rogers' mammoth journey began in Ireland, which he reckoned was a victim of statism. Rogers said statism is the great political disease of the twentieth century, with Communist, socialist and many democratic nations infected to a greater or lesser degree. He added that Ireland was not one of those countries in which he could jump in and make five, ten or fifteen times what he put in. In that respect, Rogers was right, but a three-fold increase in sixteen years still looks pretty healthy to me.

Rogers' next port of call was Austria where he had made a killing six years earlier when not many people knew that the country even had a stock market. However, in 1990 he had turned decidedly bearish on Vienna. His argument was that whilst Austria was a natural crossroad between Eastern and Western Europe, increasing democracy in the east did not necessarily equate to rising prosperity. Again Rogers' analysis was proved to be correct. For almost ten years Austrian shares languished but a rally that kicked off in 2003 has lifted the Austrian Traded Index almost four-fold.

Just as Rogers saw Austria as a crossroad between east and west Europe, he viewed Turkey as a natural intersection between Europe and the Middle East. Rogers disclosed that in the back of his mind he had the idea that eventually he would invest in Turkey. But because there were no obvious bargains at the time he decided to leave Turkey alone. Since 1990, the Istanbul Stock Exchange National 100 index has doubled, which equates to an annual gain of 4%.

China was one country on his journey that greatly impressed Rogers, though. He said it was in the grip of statism but was nevertheless throwing off its yoke. He added that few Chinese believe that the government has the answers to their economic problems. However, he warned that investors in China will need a strong stomach for risk plus the patience to wait twenty years for a proper return. As it turns out, China shares have risen almost five-fold since 1992, and we are still a few years away from Rogers' twenty-year investing time-frame!

Interestingly, despite being bearish about Austria, Turkey and Ireland, Rogers admitted that he has traded in those countries even though they didn't seem like good buys when he passed through them. Rogers said it just goes to show how fast the world changes. But for me it highlights the fact that there are investing opportunities everywhere if you just look hard enough.

While Investment Biker may be over ten-years old now, it is still a great read for investors who intend to delve into emerging markets. In particular his views on the opening up of China is especially insightful.

> The Next Bull Market | Jim Rogers at the Fool Boolshop