The Financial Times published an interview with Jim Rogers, who’s one of my favorite investors. He’s written incredibly interesting books on macroeconomic adventures, but more importantly managed to retire 30 years at the age of 37 after making a fortune with George Soros for his Quantum Fund:
What is your basic investment strategy?
Buy low and sell high. I try to find something that is very cheap, where a positive change is taking place. Then I do enough homework to make sure I am right. It has got to be cheap so that, if I am wrong, I don’t lose much money. Every time I make a mistake, it is usually because I did not do enough homework.
Do not underestimate the value of due diligence. In the 1960s, General Motors was the world’s most successful company. One day, a GM analyst went to the board of directors with the message: “The Japanese are coming.” They ignored him. Investors who did their homework sold their GM stock – and bought Toyota instead.
I’m not buying any stocks at the moment. If anything is undervalued now it is commodities and some currencies.
Where should people put their money in the recession?
Invest only in things you know something about. The mistake most people make is that they listen to hot tips, or act on something they read in magazines.
Most people know a lot about something, so they should just stick to what they know and buy an investment in that area. That is how you get rich.
You don’t get rich investing in things you know nothing about.
You can read the full interview here.