Book Review: Adventure Capitalist
It's been nearly a decade since we've been able to live vicariously through the globetrotting exploits of master investor Jim Rogers. In the early 1990's, Rogers hit the road, crossing the globe by motorcycle, and chronicled the adventure in his 1994 book, Investment Biker.
This time, Rogers uses a car to make the trip, primarily at the urging of his wife Paige Parker, and the journey covers 152,000 miles, through 116 countries, taking three years to complete. Adventure Capitalist tells the story of their drive around the world and then some.
Weaving a story that combines travelogue with a love story, investment advice, history, geography, economics and world politics is no easy task. But, Rogers succeeds as he had in the investment world. From humble beginnings growing up in Demopolis, Alabama, Rogers eventually co-founded the Quantum Fund, a global investment partnership. Ten years later, the portfolio had grown 4,000 per cent and Rogers decided to retire at the ripe old age of 37.
For those of us who missed out on the opportunity to invest in the Quantum Fund, at least we have Rogers to provide us with another great story and plenty of good insights. What is a recurring theme throughout the book is the anxiety and trepidation that Rogers feels whenever he and Parker are approaching a border to cross. He never knows what to expect. No matter that he has the proper paperwork in hand and the assurances of any number of diplomats — crossing any border was an adventure and often times an aggravation that lasted for days.
For those who go ballistic maneuvering through airport security in the United States, the nonsense that Rogers continually endured just to cross lines created arbitrarily by some government will astound you. And when Rogers crossed the border from India to Myanmar (formerly Burma) the tale of the crossing reads like an Abbot and Costello routine.
Rogers and his wife had left India's State of Manipur and were safely across the border in Myanmar. But wait, here comes an Indian official running after them, who says that they can't leave, because, they didn't have permission to be in Manipur. "He was telling us — I am not making this up — that we had to return to Manipur, because we were not allowed to be in Manipur, and thus we could not leave it," Rogers relates. The debate lasted for two hours before, "someone made a phone call and took the subinspector off the hook, and we were free to proceed."
Rogers constantly makes the point that the more bureaucratic red tape that a country imposes, the harder it will be for that country to attract capital, the worse off it's citizens are and investors should look for opportunities elsewhere. The question is: are there more investment opportunities overseas now, than there was when Rogers took his last trip? Unfortunately no, as Rogers writes, "When I returned home, I realized I had closed as many [brokerage] accounts on this trip as I had opened, in contrast to my previous trip, when I had opened several and closed none."
But, don't think all is well for investors in America. Both on the foreign and domestic policy fronts, politicians in the US are doing what they do best — making a mess of things. As Rogers notes, "The low opinion they [public servants] enjoy is well deserved." But, are politicians made or born? Rogers answers with, "Studies have shown that the people who in grammar school excelled at recess are the ones who wind up in politics and usually do well at it."
These same politicians have constantly preached to us since 9-11-01 that people around the world hate us because we are rich or that they hate us for our freedom. Rogers says both views are bunk. They encountered "virtually no anti-American sentiment on the ground." Foreigners are not angry with the American people, but they are angry about our government's foreign policies.
Of course one of those foreign policies is for American politicians to send millions of taxpayer dollars to nongovernmental organizations (NGOs) around the world. These NGOs are made up of consultants and middlemen who soak up the aid money long before it might reach hungry orphans. Thanks to American taxpayers, according to Rogers "[t]here are Mercedes dealers in places where there are not even roads."
When Rogers and Parker returned home, they were very surprised at how much prices have increased for goods and services while they had been away. Of course according to government statistics, prices are stable, there's even talk of deflation. Rogers takes issue with the government's official numbers, citing "hedonic adjustments" as a way the government lowers CPI increases, to help balance the budget.
Rogers is no fan of Federal Reserve Chairman Alan Greenspan, pointing out that, "Greenspan has a long, long history of failure. That is why he has a government job. He has never been very successful." In fact, Roger is no fan of central banks. He reminds us that it is a very recent phenomenon that central bankers are viewed in such high esteem, and that this will not last. The first two central banks in the United States failed, and "[t]his one will undoubtedly fail, too."
Since Greenspan "will print money until the world runs out of trees," where does Rogers suggest we put our money? He doesn't say specifically. He tells us to sell US dollars and buy commodities. But doesn't say which ones. And, Rogers seems to have gone out of his way not to mention gold. The only reference being that "there has been no independent, external audit of the gold in Fort Knox for several decades, which the U.S. government refuses to explain despite repeated inquiries."
As exhilarating as Adventure Capitalist is to read, the book has yet another story line that is very sad. Early in the book, Rogers indicates that his father, Jim Rogers, Sr. has been diagnosed with terminal cancer. Jim constantly calls home to check on his dad's condition. Jim Sr. battles his disease bravely and even joins his son in Siberia as well as serving as best man at Jim and Paige's wedding in England. Jim Sr. was always in the back of my mind as I read the book. I kept hoping that he would make it, that there would be a happy ending. Unfortunately, he didn't, dieing while Jim and Paige were in New Zealand on the final leg of their trip.
In Adventure Capitalist, Jim Rogers gives us a view of the world from the ground up. He claims no political ideology, but his message is clearly libertarian. He is constantly amazed at the ingenuity and resourcefulness of human beings, while at the same time being constantly amazed and frustrated at the stupidity of government bureaucrats, dictators and politicians. War, government bureaucracy and central banking make countries and their citizens poorer, while individual achievement, strong work ethic and capitalism create prosperity. Governments and borders are always in flux, but free market principles never change.