Street Smarts by Jim Rogers: a Review

Jim Rogers is well known as a commentator who often appears on TV money programs, so his financial views are well known. He is also a highly successful investor, having been a partner of George Soros at one point. As many of his views ring true to me, I read his book, Street Smarts to learn more about what made him successful.

The book is mostly biographical. Rogers built an impeccable CV in his youth, going to all the right universities, joining all the right clubs. Unfortunately he does not explain how most of these early achievements came about, other than through hard work.

He explains how short selling works. He points out the gains are potentially huge but it is equally possible to make catastrophic losses. It is clear that only the smartest minds succeed in short selling. At one point, Rogers himself lost everything through uncovered short selling. He found it extremely unpleasant, but instructional.

Another unpleasant part of his (very fortunate) life was the experience of being sued. He says that the stress of defending himself at court physically aged him. Legal proceedings are to be avoided whenever there is a chance of an alternative way to settle things.

Rogers gives a formula for how to make a lot of money early in life:

  • specialize in what interests you;
  • don’t listen to anyone else who does not have at least the same level of specialist knowledge, especially brokers;
  • don’t diversify;
  • don’t wory about losing everything, especially when you are young;
  • wait for the big opportunities when you can’t lose, then make big bets.

He worked for the broker Roy Neuberger who told him “Wall Street is like the shoe business. You buy the shoes, mark them up and sell them. You don’t sit on them for months or years.”

Much of the book is biographical and contains opinions on many subjects that interest Rogers, most of which have little to do with the financial world: education, health, litigation, US soldiers overseas, why Singapore is the ideal place to live.

He predicts the demise of the US tertiary education system for various reasons – student loans, tenure, overseas competition, poor quality, short working hours. He believes the way endowments are currently invested will lead to huge losses.

I enjoyed the book because I find Rogers likeable and I agree with much that he says. But it is not a manual for financial success.

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