Re: investing

James Rogers (
Fri, 23 May 1997 11:08:01 -0700

At 10:49 AM 5/23/97 -0400, you wrote:
>> From: James Rogers <>
>> My returns are almost always significantly above the market. To date I
>> have returned almost 50% on my stock investments this year.
>You take a five month return as being the least bit significant? Take
>ten or fifteen random small portfolios and one of them is going to do
>better than 15% in five months. Five month returns aren't even worth

Except that I got an 86% return last year and 113% the year before.
My returns so far this year are slightly higher than I expected, but still
more or less in line with my usual return rate. You are right, there is no
significance in 5 months worth of performance. But I have been trading a
lot longer than 5 months.

>Now, James makes fun of earning the "mere" 10% or 12% or whatever that
>an index fund will get you. Well, I'd say that there is nothing wrong
>with earning less than the maximum you possibly could. The real key is
>to save and invest with a reasonable degree of confidence. Earning 50%
>a year is nice if you can manage it, but there is nothing wrong --
>nothing wrong -- with earning a "mere" 12%. 12% will turn even a
>modest savings rate into a spectacularly comfortable retirement. I see
>no reason for embarassment at such things.

I don't "make fun" of 10-12% returns. For most people it is adequate,
especially if you don't want the hassle of watching your investments.
However, I don't agree with investing in index funds to get that 10-12%,
for reasons already stated.

>I also see no embarassment in a decision like Max made to buy Coca
>Cola. If it gets him a nice return over the long run, thats fine. If
>it doesn't do that spectacularly, thats fine too. THAT Max is
>investing is almost more important than in what -- provided we aren't
>talking about really stupid investments like savings bonds.

There never was any embarassment in buying Coca Cola. It is a proven
performer and a very safe investment for the long term.

I am not saying that active investing is for everyone. It costs time and
promotes headaches. But if you are willing to take the time and put forth
the effort, the returns can be substantially and consistently higher.

-James Rogers