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So today we are going to talk about one such Wall Street mover, Jim Rogers, and understand his thinking a little more closely. So let's start straight away with number one. 4200% Yes 4200% This was the return that Jim Rogers' Quantum Fund earned in 1970. And the interesting thing is that during that same period, the SNP 500 only went up by 47%.
This one number shook the entire Wall Street. So the question arises, how did this happen? This is the story we are going to understand today. So Jim Rogers' journey did n't start on a New York trading floor. Rather, it started in a very small town in Alabama. Meaning, so small that his phone number there was just five.
Scholarships came one after another, taking him from the Deep South of America to the world's top universities, Yale and Oxford. But the turning point in his life came from a summer job that he got by chance. That's where he fell in love with investing. Imagine a world where they were getting paid to understand how the entire world, from Chile to China, works together.
But before achieving such great success, he also made some very costly mistakes, and the truth is that the most valuable lessons Jim Rogers learned were not from his victories, but from his defeats. His first big investment idea sounded like a sure shot. The plan was to buy a small cow. Raise them and when they grow up, sell them at a profit.
Simple. But one thing they did not anticipate was that a war would end and as soon as the war ended, commodity prices would crash. As a result, his entire investment of $ was lost. But this loss taught him a big lesson at a very young age that big events happening in the world can have a direct impact on even your smallest investment.
And this thought that in reality your biggest teacher is your failure. This became the foundation of his entire career. So what is the most important thing here? That is, Rogers achieved his success by following a path that was completely different from the path of the crowd. When everyone was going one way, he would turn the other way and this is called contrarian investing, of which he became a master.
If understood in simple language, it is exactly like swimming against the flow of the river. They deliberately stay away from whatever hot trend is going on and look for opportunities that no one is even noticing. Well, let's take a classic example from the 1980s. Rogers became interested in Austria when he read somewhere that the government there was introducing new regulations to boost its capital markets.
So he called the head of Austria's largest bank in New York to find out more, and do you know what happened? That banker said that there is no stock market in Austria. The moment Rogers heard this, he knew he had something big on his hands. When the country's biggest banker does not even know that there is a stock market in his country, it means that no one is paying attention there.
He immediately caught the next flight and reached Austria. After going there, he bought shares of almost every company in that small stock exchange and do you know that market doubled that year. Later people started jokingly calling him the man who woke up the sleeping beauty of the Vienna Stock Exchange.
At just 37, when most people are still building their careers, Jim Rogers retired from active fund management. But the process of learning did not stop. no way. Rather, he changed the way he conducted his research and brought it out of his New York office and onto the streets of the world. He simply believed that a country's economy cannot be understood by sitting in New York and looking at a spreadsheet.
So he picked up his motorcycle and set off. He covered 245,000 km. Traveled more than . Passed through war zones, scorching deserts and dense forests. Just to see what the ground reality is? How does the global economy actually work ? And from these experiences around the world, Rogers created some of his own rules.
And these rules were n't hot tips or shortcuts. No, it was a whole frame of thinking. A framework. So, what are these rules? First, invest only in things you have a deep understanding of. Second, be patient. Too Much Patience Sometimes the best thing to do is to do nothing. Just sit and wait for the right opportunity.
Third, never follow the crowd. Remember, most of the time the crowd is wrong. And fourthly, when there is panic in the market and people are selling everything out of fear, that is the right time for you to buy. That's where the real opportunities are found. And finally, focus on real assets like commodities and agriculture, and one of their long-term favorite investment areas is agriculture.
And this chart shows his thinking very clearly. Look, the average age of farmers is increasing everywhere in America, Australia, Japan. Young people are not coming into this work. So Rogers ' argument is very simple. In the coming times, there will be shortage of food in the world and those who grow food will be the richest.
He jokes that tomorrow's Ferrari drivers will be farmers. Not a banker. So let's now come to the most important part of this entire conversation: his final philosophy. See, for Jim Rogers, investing is n't a game of numbers and spreadsheets. It's all a game of perspective. He says the most important skill he wants to teach his children is not how to invest, but to stop following the crowd.
Question what everyone else believes. Always think about what will be the second and third consequences of any action ? This is called Thinking Around the Corners. And that's where we leave this conversation with a question. If we start thinking like Jim Rogers, what conventional wisdom is there in today's world ?
What is that thing which everyone believes to be true, which may be wrong and in which a huge opportunity may be hidden. Just waiting for a contrarian.
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