AlsobyJimRogers

ABullinChina

HotCommoditiesAdventureCapitalistInvestmentBiker

IoweitalltoPaige.Ihopeourchildrenhavethebestofbothworlds:theirmother’slooks

andtheirmother’sbrains.

Preface

Readers of my earlier books will notice right away that this is somethingdifferent. It concerns neither my adventures traveling the world nor my specificthoughts about the best places to invest your money. Instead it’s about the largerlessonsthatIhavedistilledfrommylifeexperiences—lessonsthatIthinkinvestorsyoung and old will in some ways find more useful than anything I have writtenbefore.Andthathassomethingtodowiththeeventthatspurredmetowriteit:thebirthofmyfirstdaughter,Happy,in2003,andhersister,BabyBee,whofollowedin2008.

ImustadmitthatnotverylongagoIwouldhavescoffedateventheideaofhavingchildrenofmyown.GrowingupinAlabama,Iwas theoldestoffiveboys,andasmuchasIlovedmybrothers,Ispentanawfullotoftimelookingafterthem!Also,Icouldn’thelpbutnoticewhatafinancialburdenhavingfivechildrenhadimposedonmyparentsnomatterhowkeentheywereonus.Laterinlife,Iwastoobusyworkingandtravelingeventothinkaboutparenthood,whichseemedlikeanendlessdrainonthe time, energy, and money with which I was pursuing my passions. Frankly,sometimes I even felt sorry for peoplewho had kids. How did they have time ormoneyforanythingelse?Iwasnevergoingtodosomethingsofoolish.Boy,wasIwrong!

With parenthood, as with investing (and most other things in life), timing iseverything. If I’d become a fatherwhen Iwas twenty, thirty, forty—even fifty—itwouldhavebeenadisasterforme,themother,andespeciallyformykids.ButnowIhavetheexperience,time,andenergytobringtobearonmynewpassion.

WhenIwasaboy,myfatheroftenpulledmeasidetoconveylessonsintendedtobuildwhatwegenerallyrefertoas“character.”Oftenhisadvicewasverysimple—work hard, think for yourself, do right by others—but I believe those lessonsprovidedthefoundationforeverythingthathasfollowedinmylife.NowthatI’madad myself, I wanted to put them down in one place, with examples of my ownexperiences,asaguidetolife,adventure,andinvesting,bothformyyoungdaughtersandforanyoneseekingsuccessinhisorherchosenfield.Ihopethatparentswillbeinspiredtogivethisbooktotheirchildren,andviceversa,asmanyofthelessonsthatIhavelearnedapplynotjusttoyoungpeoplebuttoalladults—forexample,questioneverything,neverfollowthecrowd,andbewareofboys!

Contents

Preface

Introduction

1. SwimYourOwnRaces:DoNotLetOthersDoYourThinkingforYou2. FocusonWhatYouLike3. GoodHabitsforLifeandInvesting4. CommonSense?NotSoCommon5. YourEducation,PartI:LettheWorldBeaPartofYourPerspective6. YourEducation,PartII:LearnPhilosophy;Learnto“Think”7. YourEducation,PartIII:LearnHistory!

8. YourEducation,PartIV:LearnLanguages(andMakeSureThatMandarinIsOneofThem!)

9. ItIstheCenturyofChina

10. KnowThyselfbyUnderstandingYourWeaknessesandAcknowledgingYourMistakes

11. RecognizeChangeandEmbraceIt12. LooktotheFuture!13. LadyLuckSmilesonThoseWhoContinueinTheirEfforts

Epilogue

Introduction

MyDearDaughters,

Yourfatherisaninvestor,amanwhoworkedhardtolearnallthathecouldtoearnenoughmoneytoretireearly,and,asaresult,wasabletodosoattheageofthirty-seven.IwanttosharewithyouwhatI’velearnedfromallmyexperiences.

Growingupin thesmallrural townofDemopolis,all IeverwantedwasenoughmoneytoensuremyfreedomtodowhatIwantedinlife.Ihadmyfirstjobattheageoffive,collectingemptysodabottlesatthelocalbaseballfield.Iworkedabunchofother jobs throughoutmychildhoodandeventuallymade it toWallStreet,where Isaw the opportunity to be paid to pursue my passion for traveling all over andunderstandingtheworld.AndindeedIwas:Inlessthanfifteenyears,Iaccumulatedenoughwealthtoretire.Freedfromtheneedtotoilinanoffice,IcouldgowhereverIwishedandcombinemypassions for adventure and for learningall abouthow theworldreallyworked.

I’vealwaysenjoyedworkingandbeingsuccessful,butnow,whatbringsmemorejoy thananythingelse ismy family. Iwant to sharewithyou those things that areimportantforyoutoknowsothatyoutoocanhavehappyandsuccessfullives.

CHAPTER1

SwimYourOwnRaces:DoNotLetOthersDoYourThinkingforYou

RELYONYOUROWNINTELLIGENCE.

Therearegoingtobemomentsinlifewhenyoumustmakeveryimportantdecisions.Youwill findmanypeople ready tooffer you advice if you ask for it (and even if youdon’t), but always remember that the life you lead is yours and nobody else’s. It’simportant todecide foryourselfwhat’s important toyouandwhatyouwantbeforeyouturntoothers.Becausewhiletherewillbetimeswhenoutsideadviceproveswise,therewill be at least as many times when it proves utterly useless. The only way to reallyevaluate other folks’ advice is to first learn everything that you can about whateverchallenge you are facing.Once you’ve done that, inmost cases you should be able tomakeaninformeddecisiononyourownanyway.

Youwerebornwith theability todecidewhat is andwhat isn’t inyourbest interest.Mostofthetime,youwillmaketherightdecisionandtaketheappropriateactions,andinthinkingforyourself,youwillbecomefarmoresuccessfulthanhadyougoneagainstyourownjudgment.Believeme,Iknow.

Early on in my investment career, I made the mistake of basing a few importantbusinessdecisionsoncolleagues’opinionsinsteadofconductingtheresearchnecessarytomakeaninformeddecision.Itwasn’tduetolazinessonmypart;noonecouldeveraccuseme of that. But, being new to Wall Street, I tended to assume that my more seniorcolleagues knew more than I did, and so I attributed too much significance to theiropinions. You know what happened? Each of those investments ended in failure.EventuallyIstoppedallowingmyselftobeinfluencedbyothersandbegandoingtheworkmyself andmakingmy own decisions. Talk about an epiphany. It tookme until I wasalmostthirtyyearsoldtorealizethis—andalsotoseethatit’snevertoolateforapersontochangehisapproachbothtobusinessandtolife.

I remember once reading a magazine interview with American swimmer Donna deVarona,winneroftwogoldmedalsatthe1964SummerOlympicsinTokyo.Thereporterpointedoutthatearlierinhercareer,shehadbeenagoodswimmer,butnotagreatone.Nowtheseventeen-year-oldhadjustplacedfirstintwofour-hundred-meterevents.Whathappened?Shereplied,“Ialwaysusedtowatchtheotherswimmers,butthenIlearnedtoignorethemandswimmyownraces.”

IFANYBODYLAUGHSATYOURIDEA,VIEWITASASIGNOFPOTENTIALSUCCESS!

Ifpeoplearoundyoutrytodiscourageyoufromtakingacertaincourseofaction,orridiculeyourideas,takethatasapositivesign.Sureitcanbedifficultnottorunwiththeherd,butthetruthisthatmostlong-termsuccessstoriesarewrittenbyfolkswho’vedoneexactlythat.Letmegiveyouanexample.

WhenIwas thirty-twoyearsoldorso,aWallStreetcolleagueofmine invitedme tojoin a smart and successful groupof financial guyswho regularly got together to swapideasoverdinner.Atthetime,Iandapartnerwereintheearlyyearsofourhedgefundcalled theQuantumFund. Itwas a big deal to be invited to these dinners, and, Imustadmit,Iwasa littlenervous.Afterall, thesewerethebigguysinmyfield,andmostofthemhadagreatdealmoreexperiencethanIdid.

WeweresittingintheprivateroomofafancymidtownManhattanrestaurantwhenthehostaskedeachguestatthetabletorecommendaninvestment.Mostofthemtoutedso-called growth stocks. When my turn came, I recommended Lockheed, the aerospacecompany.Onceextremelyprosperous,bythe1970sithadfallenonhardtimes.Afellowsittingoppositeme smirked and,making sure that I heard him, stage-whispered, “Whobuysstockslikethis?Whybuyabankruptcompany?”

Aboutsixyearslater,Iranintothisschoolyardbully.Iresistedtheurgetoremindhimofhiscondescending remark. Itwasn’teasy,given that thestockhad risenmany,manytimesinvalue,andforallthereasonsthatIhadexplainedoverdinner:Thecompanysheda huge money-losing division and instead concentrated on the exciting new area ofelectronicwarfaresystems.Furthermore,ascouldhavebeenpredicted,defensespendinghadgrownrapidlyfollowingaperiodofdecline.

I had a similar experience with my investments in China. People used to call thecountry a graveyard for investors, and as recently as the late 1990s, few Westernersinvested there.But thosewhodidmade a fortune.What did I know that others didn’t?Well,backinthe1980s,IsensedChina’spotentialanddecidedtolearneverythingIcouldaboutitandstartinvestingmymoneythere.ManypeopletoldmeIwasinsane;thattherigidly Communist Chinese government would confiscate money earned by successfulpeople,especiallyoutsiders.ButIfollowedmyinstincts,learnedasmuchasIcouldaboutpoliticaltrendsinChina,andstudiedasmanydocumentsasIcouldfind.Mostvaluableofall, I drove across the country—and it’s a big country—several times. Here’s what Ilearnedbyseeingitwithmyowneyes:

China hadmore than one billionworkers, and over one-third of their annual incomewent into savings. That’s astoundingly high. In contrast, the savings rate in theUnitedStateswasamere4percent.(Todayit’sjusthalfthat,at2percent.)EverywhereItraveled,I saw that the capitalism, drive, and entrepreneurship that had characterized China forcenturieshadatlonglastreemergedfollowingthefailureofCommunism.Andtherewasnogoingback.

IwasstruckbyhowtheChinesepeopleworkedfromdawntodusk.Inonetown,Imeta farmer known locally as the “Apple King” because of his huge orchards. In anothertown,Italkedtoasuccessfulrestaurateur-hotelierwhoproudlytoldmehowhe’dstartedoutbysellingbreadtofarmersastheywalkedtoworkeverydayatdawn.China’scitieswere full of college kids determined to forge their own futures and enjoy greaterprosperity than their parents’ generation. People were learning English and Japaneseinstead ofRussian; they could seewho had themoney.Meanwhile, theWesternmediapersisted in referring to the country as “Mao Tse-tung’s China,” even though theCommunistdictatorhaddiedin1976.Theywereblindtothechangestakingplace—andIwould have been too, had I not gone there myself and immersed myself in Chinesesociety. I came away thinking, How could a country like this not grow? Since then,China’seconomicdevelopmenthasfarexceedednotonlythatoftheUnitedStatesbutofnearlyeveryothernationintheworld.

BEWHOYOUARE.BEORIGINAL!BEBOLD!

Takeagoodlookatmenandwomenwhohavebeensuccessfulintheirfields.Now,anyone can get lucky once, but I’m talking about people with a sustained record ofsuccess.Whethertheyareartistsormusicians,highschoolteachersorcollegeprofessors,theyallapproachtheirworkinarefreshinglyoriginalway.Thisistrueofcompaniestoo.For example, look at Apple Computer. Steve Jobs and Company refused to accept theconventionalwisdomthattheywouldbeflattenedbythegiantsIBMandMicrosoft.Applecontinuedtoproducehigh-quality,innovativeproductsandhassincebeenremovedfromthecorporateendangered-specieslist.Infact,thecompanyisthriving.

Iwantyou topursueyourowndesires andaspirationswith thatkindof courageanddevotion.Your father succeeded as an investor, but that doesn’tmean that youmust beinvestorstoo.WhatIwantisforbothofyoutobeyourtrue,original,uniqueselves.

ABOVEALL,BEETHICAL.

Asyoucontinue togrow to adulthood, Iwill continue tooffer youguidance.TheremaybetimeswhenIdisagreewithyourchoices,butyoudonothavetoacceptmyadvicemerelybecauseIamyourfather.Ilookatyouasindependenthumanbeings.Othersmaysaythatyouare tooyoungtodecideforyourselves.Isaydowhatyouwant,as longasyouuseyourownjudgmenttodeterminewhatisrightethically.Butwhileyouneednotconcernyourselfwithconventionalwisdomandotherso-calledestablishednotions,youmustrespectandfollowtherules,laws,andethicalpracticeswithoutwhichsocietycannotexist.Thisisexpectedofeveryone.Itisnotsimplytheproperwaytolive,it’sthesmartway. Honorable people don’t find themselves entangled in legal problems, and theyalways come out on top in the long run. There are smart people who have gottenthemselves in serious trouble because they tried to make money the easy way, orsometimesillegally.Hadtheyappliedthemselves,theyprobablywouldhaveearnedevengreaterprofitslegally.

SAVE.

Youwillmeet peoplewhowill urge you to spend yourmoney freely; theywill tellyou,“Youcan’ttakeitwithyou!”Asyougetolder,youwillprobablyhavefriendswhoeat at expensive restaurants every night, buy the latest gadgets or fashion trends, andspendvacationsatfancybeachresorts.Youmustavoidthetrapofspendingmoneywilly-nillysimplybecauseyoucan.Notonlyisthisaroadtofinancialruin,itcancauseyoutoforgetwhat’simportantinlife.

I am not saying that you should never travel or buy anything nice. I am merelysuggesting that you should thinkwisely aboutwhether the thingyou are contemplatingdoingorbuyingisreallyworthwhileorwhetheritsbenefitswillbe,atbest,fleeting.Iwasoncemarriedtoawomanwhowasalwaysnaggingmetobuyanewsofa,anewTV,andsoon.I’dexplainthatifwesavedandinvestedwisely,onedaywecouldaffordtensofasorwhatever.Needlesstosay,wedidnotstaymarriedlong,andnowIamluckytohaveyourmother,whosharesthesameattitudetowardpersonalfinances.

Happy, you already have five piggy banks, and you love putting money into them.Pleasecontinuetosave.Thosewhosaveandinvestwiselywillfacefewerfinancialwoesthroughout life.Andpleasehelpus teachyournewsister,BabyBee, the importanceofsaving.

CHAPTER2

FocusonWhatYouLike

AGEISIRRELEVANTWHENYOUAREPASSIONATEABOUTAGOAL.

I startedmy firstbusiness in1948at the ageof six.Perhapsa littleyoung tobeanentrepreneur, you might think, but age is irrelevant when you’re passionate aboutsomething. Instead of playing baseballwithmy friends, Imuch preferred spendingmytime collecting empty bottles at their games, to pick up a little cash.Whenmy fatheroffered to loanmemoney to startmy own business, I jumped at it. I bought a peanutparcherfor$100—ahugesuminthebackwoodsofAlabama—andwashighlysuccessfulsellingpeanutsanddrinksatLittleLeaguegames.Ihustledthroughoutthestands,tryingtogetinasmanysalesasIcouldbeforethegamesended,andbeforetoolong,Ihiredmybrothersandfriendstoselltoo.Afterfiveyears,Ipaidofftheloanfrommyfatherandstillhad$100inmybankaccount.

In graduate school at Oxford University, I realized that I liked investing better thanbeinganentrepreneur.I’dusedmyscholarshipfundstobuyalittlestockinIBMandwasquicklyhooked.Whenyoufindsomethingthatinterestsyou,donotletyourageholdyouback.Beboldand,inthewordsoftheNikesports-apparelcompany,justdoit.

DEDICATEYOURSELFTOWHATYOUFEELPASSIONATEABOUT.

Where should a person start in order to be successful? The answer is easy: Try asmany things as you can, then pursue the one (or two, or three) about which you’repassionate. Ibecamesuccessful in investingbecause this iswhat Ienjoyedmost.But ifyou love cooking, open up your own restaurant. Learn to dance if that is your forte.Become a gardener if that is your passion.Maybe someday youmightwant to open achainofgardeningshops.Thequickestwaytosuccessistodowhatyoulikeandgiveityourbest.

For me, my love for investing was linked to my fascination with researching andlearningindetailwhatwashappeningindifferentpartsoftheworld.Asastudent,evenasfarbackasgrammarschool,Ilovedtolearnaboutothercountries,includingtheirhistory.OnWallStreet,Irealizedthatpeoplewouldactuallypaymoneyforsuchknowledge;forexample,thatthepriceofcopperwouldrisebecausearevolutionwascominginChile.

The least-happypeopleIknoware thosestuck in jobs theydon’t love;manybecausethey can’t imagine giving up a paycheck. In elementary school, I had a teacher namedMrs.Martin,whobroughttolifeeverysubjectshetaught.Shealwaysseemedhappyandexcitedtoseeus.Thiswasinaruraltowninastatewiththelowestteachers’salariesinthewholecountry! I’ve rarelymet someone sohappyand sodedicatedasMrs.Martin,andsheclearlyreceivedagreatdealofsatisfactionfromherjob.

Evenearlyon,IwouldhaveworkedforfreehadIbeenable toaffordit.Peoplewhofollowtheirpassionsdonot“gotowork.”Theygetupeachdayandcannotwaittohavemorefundoingwhattheylovetodo.I’maninvestor.IfI’dtriedtodosomethingelse,likebecoming a doctor, or a fashion designer, or who knows what, my life wouldn’t haveturnedoutnearlyaswell.(EspeciallyifI’dchosenfashiondesign.EvennowIneverknowwhichcolorsgotogether;thankgoodnessforyourmother.)ThatiswhyIsayitisbesttostartwithsomethingthatinterestsyouandthatyoutrulyenjoy.Evenifyoudon’tbecomewealthypursuingyourpassions,youwillberichinsatisfaction.Plus,you’llbehappy.Youcan’tputapriceonthat.

CHAPTER3

GoodHabitsforLifeandInvesting

BEASELF-STARTER.

At fourteen, I spentmySaturdaymorningsworking formyUncleChink—whohadbeen called this since the 1920s becauseAlabamapeople thought he lookedChinese—preposterous,lookingbackonitnow.Heownedatinyconveniencestoreacrossthestreetfrom a stockyard and a factory. The workers used to amble in to buy sandwiches,cigarettes,chewingtobacco—thatkindofstore.Myjobwastohelpwaitoncustomersandstock theshelves.Sometimesbusinesswasslow,but Inever sat idle, inpartbecauseofsomeadvicefrommyfather,JimSr.,themanageroftheBordenChemicalplantintown.

“Thereisalwayssomethingyoucanbedoing,”heusedtosay.“Whenthere’snothingelsetodo,dusttheshelves.”Andthat’sexactlywhatIdid.Myinitiativesoimpressedmyuncle that he gave me a raise without my having to ask for one. That came as a bigsurprise,sinceUncleChinkwasnotexactlyknowntobeloosewithmoney.

Three or four years later, I brought the same energy to a job I obtained with Mr.Brooker, a local homebuilder.At first, I couldn’t even hammer a nail straight, and themenonthejobweren’tshyaboutpointingthisout.Butwhenwewereawaitingdeliveriesofbuildingmaterialsorhadnothingtodo,I’dgatherupthescraplumberorsweepupthesawdustorwhateverelseIcouldfind.“Saywhatyouwant,”thecontractortoldthem,“butthiskidneverstops.Hehastherightattitude,hehastheproperapproach,andIwanthimworking for me.” Eventually I did learn to drive nails as quickly as anyone, digfoundations,installroofs,andalltheotherskillsnecessarytodothejob.Ifitweren’tformyworkethic,Imightneverhavegottenthechance.

ATTENTIONTODETAILSISWHATSEPARATESSUCCESSFROMFAILURE.

Ifyouloveandcareaboutwhatyoudo,youwillnaturallywanttodoitthebestthatyoucan.Ininvesting,asinlife,thesmalldetailsoftenspellthedifferencebetweensuccessandfailure.Soyoumustbeattentive!Howevertrivialitmayseem,youmustresearchandcheck each and every piece of information you need to make a decision. Leave noquestions or nagging feelings of uncertainty uninvestigated. The most common reasonwhypeopledonotsucceedisthattheirresearchisfaultyorlimitedtotheconfinesofwhatisimmediatelyavailable.Onlythroughmeticulousresearchwillyouobtaintheknowledgenecessaryforsuccess.Itrequiresabundantworkanddiligence,buttheeffortwillgiveyouadistinctadvantageoveryourcompetitors.

When I was an undergrad at Yale University, a fellow historymajor askedme howmanyhoursI’dstudiedforarecentexam.“Iputinfivehours,”hesaid,verysatisfiedwithhimself.Icouldn’tgivehimanexactnumber,sinceI’dneverstoppedstudying.ArrivingatYalefromruralAlabama,Iwasinovermyhead,totellyouthetruth.Mostoftheotherstudents had attended elite prep schools and were far better prepared than I was. Myadvantage,though,turnedouttobethatIworkedmuchharderthantheydid.Forme,therewasnosuchthingas“enough.”Nofinishline.

If and when you decide to pursue investing or whatever your fancy, do notunderestimatethevalueofduediligence.Lookthrougheachandeveryfinancialstatementyoucangetyourhandson,includingthedetailednotes.Ifyoujustreadtheannualreportsofcompanies,youwillhavedonemorethan98percentofinvestors.Ifyoureadthenotesof the financial statements, you will be ahead of 99.5 percent. Verify those financialstatements,aswellasfutureprojectionsannouncedbythetopexecutives,bydoingyourownlegwork.Talktocustomers,suppliers,competitors,andanyoneelsewhomightaffectthecompany.Donotinvestunlessyoucansaywithabsolutecertaintythatyouaremoreknowledgeableaboutthisparticularfirmthan98percentofWallStreetanalysts.Believeme,itcanbedone.Butonlywiththeextraeffort.

Inthe1960s,GeneralMotorswastheworld’smostsuccessfulcompany,andeveryonecoveteditsstock.OnedayaGManalystwenttotheboardofdirectorswiththemessage“TheJapanesearecoming.”Theyignoredhim.Infact,theydidn’tevenbothertolistentohim.Investorswhodidbroadhomeworksoldtheirhigh-valueGeneralMotorsstockthenandthereandboughtToyotainstead.TheJapanesewerebuildingsmaller,moreefficient,andextremelyreliablecars,whichquicklyfoundahugemarketworldwide,includingherein the States.U.S. carmanufacturers had been dictating to themarketplace rather thanlistening to their customers. They’ve been forced to play catch-up to their Japanesecounterpartseversince.

Here’s another example:As recently as the1990s, therewasnobetter valueonWallStreetthanSears.Itsstockalwaysseemedcheap,butfewwereevenawareofagrowingdiscountcompanycalledWal-Mart;theyneverbotheredtoexaminewhatwashappeninginsmall townsthroughout theUnitedStates.ThosewhodidbegantobuystockinWal-

MartinsteadofinSears,JCPenney,andalltheothergood-valuestores.

When investing widely in a particular nation, begin by checking the strength of thecountry’sbasicinstitutions.Doesithaverespectfortheruleoflaw?Doesitcrackdownoncorruption?Doesthelegalsystemfacilitateethicalcorporatebehavior?Youcannotdothisbysimplyreadingarticlesinmagazinesandnewspapers.Youmustgotothecountryyourselfandsee,forexample,ifthereisacurrencyblackmarket.Ifoneexists,thenyouknow that the country has problems. Blackmarket exchange rates exist onlywhen thegovernment is imposing artificial controls.The difference in parity between the officialcurrencyrateandtheblackmarketrateindicatesthegravityoftheprobleminthatnation.Itissymptomatic.Thehigherthefever,theworsethesickness;inotherwords,thegreaterthegapinparity,thedeepertheproblem.

Duringmy firstmotorcycle circumnavigation in 1990 and 1991, I looked forward tospending time inAlgeria,my second stop inAfrica. I had every intention of investingthere. But once I discovered that the country had a currency blackmarket with a 100percentpremium—well,Ilostinterestrealquickly.Algeria’sproblemscametotheforeinthenextfewyears.Ilaterfiguredouttherewereabsurdpricecontrolsandagovernmentprintinghugeamountsofmoneytopay itsbills.Workers,merchants,andeveryoneelsewerebeingsqueezed.Itwasnosurprisethatvoterssoonelectedaprotestpartythatwasthenoverthrownbyamilitarycoup. Investing incountriesoranythingelsewheneasilyobservableinformationsuggestsdoingtheoppositecanbeabrilliantstrategy,butonlyifyourowndeeperanalysisshowspositivechangearoundthecorner.Becareful!Attheturnofthemillennium,theAfricannationofZimbabwewasamajoragriculturalexporterthatalso sold coal andotherminerals abroad. Its currencywas stable, and the stockmarketattractedinvestorstosomesoundcompanies.Sincethen,however, thepoliticalsituationinZimbabwehasdeterioratedbadly,pullingdowntheeconomy.Nowthecountry,riddledwith violence and corruption, is desperately begging for food handouts, exports haveplummetedalmost tozero,and theannual rateof inflation isover200,000percent.Thegovernment just printsmoney to reward its friends, so thatmoney there loses its valueliterallyovernight.

LIVEYOURLIFEWITHADREAM.

In addition to finding a fulfilling vocation, youmust have a dream. Inmy youngeryears,Ithoughtthatmakingmoneywasfun,butIdidn’treallyhaveaplanbeyondthat.HadIcontinueddownthatpath,Iwouldhavelostinterestbynow.Investingaroundtheworldexposedme toa rangeofculturesanddifferentpeople.Eventually I realized thatmydreamwastoseekadventureandlearnabouttheworldbyseeingasmuchofitasIcould.So,attheageofthirty-seven,Ibegantravelingtheglobeonamotorcycle.

You see,whenyoubegin something, youmaynot always have a concrete picture orvisionofthefuture.Butifyoucontinuetobepassionateandworkhardatwhatyoutrulylovetodo,thenyouwilleventuallyfindthatdream.Whichmaymorphintoyetanotherdream.Andanother.Atthispointinmylife,you,mydaughters,aremyfocusandpassion.ThatiswhyIspendeverymomentpossiblewithyou.Youaremydreamtoday,andallIwantisforbothofyoutodowhatyouloveandlivesmart,interestingliveswithadream.

CHAPTER4

CommonSense?NotSoCommon

MOSTPERCEIVEDWISDOMISAMISCONCEPTION.

I’vewrittenabouttheneedtofollowyourownintelligence,tothinkforyourself.Asyoutravel thejourneycalledlife,youwillcomeacrossconventionalwisdom—accepted“truths” about how to behave, or what to study, or eat, or how to invest. You mustremember never blindly to accept what you hear or read, nomatter howmany peoplebelieve it or how strongly they advocate it.Always consider alternative interpretations.Thepopularbeliefsembracedbythelargersocietyareoftenmistaken.Iwanttoexplainhowtomakesenseof“commonsense.”

Here’s a good exampleof conventionalwisdombeingwildly inaccurate: In the early1970s, stock prices in the defense industry plummeted because of cuts inU.S. defensespending.Somecontractorsvergedonbankruptcy(amongthem,Lockheed).Noonedaredinvest in defense, especially with conventional wisdom decreeing that defense shareswouldcontinuetofall.

But if youanalyzed the reasons for thedefense industry’s recent free fall, youdidn’thavetobeasagetoforeseeabrighterfuture.Foronething,theabsurdprotractedwarinVietnam,whichfinallyendedin1973,haddecimatedU.S.militarystrength.Thatitwouldneedadrasticoverhaul,andsoon,wasdrivenhomeominously later thesameyearwiththe Arab-Israeli War. That conflict on the other side of the globe opened America’sgovernment’s eyes to how inadequately preparedwewere to protect ourselves and ourallies.Ourgovernmentbeganpouringmoneyintodefenseonceagain,jump-startingthosecompanies’ stocks. Some increased in value by as much as a hundredfold in the nextdecadeorso—theexactoppositeofwhatsomanyanalystshadfiercelypredicted.

Anotherexample:In1970crudeoilsoldforunder$3abarrel.Mostexpertsbelievedthatthepricewouldremainlowfortheforeseeablefuture.Manywereconvincedthatnewtechnologies,with impressive-soundingnames such as diamonddrill bits, deepdrilling,andoffshoreplatforms,combinedwithmajoroildiscoveries inAlaska,Mexico,andtheNorthSea,allbutensuredlowprices.Carefulresearch,however,showedthatoursupplyofoilcouldnotpossiblymeettheworld’sincreasingdemand.BasicEconomics101toldyouthatcrudeoilpricesweredestinedtoriseconsiderably.

Accordingly,Iinvestedinoilaround1971.Tenyearslater,oilwasupto$35abarrel.By then, of course, everyone was investing in oil (including the same folks who hadunderrateditsvalue).Clearly,themarkethadoverheated.Wehadaboominexploration,and thosenewoil fieldsdiscovered in the sixtiesbegancoming tomarket.At the sametime,demandslowed,asmanypeoplestartedtobecomemoreenergyconscious,buyingfuel-efficientcarsandadjustingtheirthermostatsathome.In1978oilproductionactuallyexceeded consumption for the first time in years. I soldmy shares and did not buy oilagainuntil1998.Anyonewhohasbeentoapumplatelyknowswhathashappenedsincethen.

THEMEDIAOFTENPROPAGATESCONVENTIONALWISDOM.

You should read the newspaper every day, but approach it—and allmedia, for thatmatter—withahealthysenseofskepticism.WhenIwasyoung,newspaperswerereveredas impartial sources of news and,more so than today,manyof themwere.But like allpurveyors of conventional wisdom, they sometimes fall into the trap of reportinginformationpeddledbyself-interestedpeopleorfailingtodigdeepenoughforthefacts.More than once, I’d find myself making investment judgments based on suspectinformationorweakreporting.

Ihavesincelearnedhowbettertojudgethecontentofstoriesinthemedia,occasionallyturning their inaccuracies to my advantage. In cases where I’m making an investmentdecision(oradecisionaboutforwhomtovote,etcetera),Icross-checkinformationfromthe media with other available sources including government reports, internationalorganizations,companyreports,competitiveviews—whateverIcanfind.Iscanthecopycloselyforlanguagethatsoundslikeitcamestraightoffacompanypressrelease.AndIcarefullyanalyzeanystatisticalargumentstoseewhethertheclaimbeingmadeisbasedonsoundstatisticallogic.

When I was a guest professor of finance at Columbia University in the 1980s, mystudents often seemed surprised by how much detail I brought to bear on makingdecisions,butthisisthebasictoolofanyonehopingtotranscendconventionalwisdom.IwillreadanydocumentIcangetmyhandson.IfIhavedoubtsaboutthingsIseeonTVorreadinthepaper,thenIgowhereverIneedtogointheworldtoinvestigate.Seekingoutmultipleperspectivesonthesamestorywillalwayshelpyoufigureoutthetruth.

Ofcourse,hereinthetwenty-firstcentury,wearedelugedwithinformation,muchofitfromdubious(andbiased)sources.It’ssurprisingtomethatsofewpeopleseemtobothertoconfirmtheinformationthey’reabouttousetoreachkeydecisions.ItwastheFrenchwriterVoltaire, in hisDictionnaire Philosophique, who said: “Common sense is not socommon.”AndasU.S.ArmygeneralGeorgePattononceputit,“Ifeveryoneisthinkingthesamething,someoneisnotthinking.”

CHAPTER5

YourEducation,PartI:LettheWorldBeaPartofYourPerspective

DONOTRELYONBOOKS;GOANDSEETHEWORLD!

Travelandseetheworldextensively.Youwillbroadenyourperspectivemanytimesover.Ifyoureallywanttoknowyourselfandyourcountry,goseetheworld.

Yourfathercansay thiswithconvictionbecauseIhavebeenaroundtheworld twice.Beginning in 1990, I spent twenty-two months traveling through six continents on amotorcycle.Onmysecondtrip,whichstartedin1999,yourmotherandItraveledatotalof 245,000 kilometers in a special Mercedes through 116 different countries for threeyears.We sawwith our own eyes diverse lands and nationalities. In the course of ourtravels,wewereofferedanynumberofdelicacies,includingalivesnakefordinner.Itwasslaughteredandpreparedbeforeoureyes.AndIlovedit!

WedrovethroughwarzonesinAngola,WesternSahara,India,Sudan,andotherpartsoftheworld.Infact,wemadeitapointtovisitthe“frightening”partsofcitiestoseeifthey were really dangerous. You know what we learned? That people everywhere arebasically the same, nomatter their ethnic group, language, religion, food, or dress.Welearnedthatthereisnoreasontofearforeignersorforeignpeoples.

Youwill discovermore about yourself as you encounter and experience the world’sdiversity.Youwilldevelopintereststhatyouneverentertainedbeforeandrecognizeyourstrengths and weaknesses. You will realize that some things that you’d thought wereimportantareoflittleconsequence.Whatyouwearorwhoyouknoworwhereyoudineorfromwhere you originatemaymean less. Iwas once a baseball fanatic but nowknownothingaboutthegame.

It’s important that you not simply visit other countries as a tourist. Yes, do see themonuments and eat at predicable restaurants, but also see for yourself how differentpeoplelive.Experiencelifeastheydo;seetheworldfromthegroundup.Byobservingordinaryliferatherthanmerelyvisitingtouristattractions,youwillforeverbestumblinguponexperiencesthatwillraiseimportantquestionsinyourmind.

TheEnglishauthorandpoetRudyardKiplingwrote inhispoem“TheEnglishFlag,”“What can he know of England who only England knows?” I urge you to leave yourcountryforafewyears.Youcanalwaysreturn,butyouwillhaveanewunderstanding.Ofeverything. The knowledge and experiences you will have gained will benefit you inuntold ways, making you a better person, worker, and even parent. Our family isAmerican,andwewillcontinuetospendagooddealoftimethere,butwehavemovedtoAsia to help give you as much exposure as possible to the bigger world beyond U.S.borders.

UNDERSTANDTHESIGNIFICANCEOFBRICS.

While a student at the University of Oxford in the 1960s, I managed my ownscholarshipmoneyuntilthedeadlineforpayingtuitionrolledaround.Bythattime,Ihadalreadydevelopedabasicapproachtoinvesting;animportantpartofthatwasdevelopingaglobalperspective.

Nowadaysyoucanhardlypickupabusinesspublicationwithoutseeingareferenceto“BRICs,”apopularacronymintheworldofinvesting.BRICsreferstoathesiscurrentlypopularwithinvestorsandpoliticiansthatBrazil,Russia,India,andChinaaredestinedtobetheworld’sleadingeconomiesbytheyear2050,andthereforearerifewithinvestmentopportunities.I’lltellyouabitmoreaboutwhatIthinkabouteachofthesecountries,butthelargerpointistheimportanceoffocusinginvestmentstrategiesongrowingeconomiesabroad.

Asanyonewhohasmetmeknows,myexperienceandtimespenttravelingleadsmetofeelbullishaboutBrazilandChina,bearishaboutRussia,andskepticalaboutIndia.

The situation in Brazil will improve significantly over the next fifteen years, as thecountry increasesproductionofcommoditiessuchassugarand ironore.Sugar,amajorexport,happenstobetherawmaterialnotjustofcandybutalsoofethanol,whichrightnowisconsideredtobeanattractivealternativeenergysourcetocrudeoil.AlthoughI’mbullish about these commoditymarkets, I amneutral aboutBrazil’s stockmarket at themomentanditscurrency,thereal.

Next up for discussion: Russia. Why my skepticism of that country? Despite itsabundantnaturalresources,thefundamentals,orbasiceconomicconditions,simplyaren’tthere. The capitalism that now exists in Russia is outlaw capitalism.What’s more, theUSSRhas broken up into fifteen countries already andwill continue to splinter into asmany as fifty or one hundred countries in the not-too-distant future. There were 124ethnic,linguistic,andreligiousgroupsintheland,andfewofthemarehappybeingpartofarepublicdictatedtobytheoldUnionofSovietSocialistRepublics.

Inreality,Russiaisstillanunderdevelopednation,muchbetterthanwhenIfirstvisitedin1966,butstillnotfirstworld.Iwastherein1990,justastheUSSRwasonthevergeofdissolving,andagainin1999,withyourmother.WeheardbombsexplodingwhiledininginMoscow as Putin’s forces were consolidating power. The country is plagued by farmorebombingsandassassinationsthanisreportedintheWesternmedia.Ipredictthatthecurrent violence will escalate to an eventual catastrophe. President Vladimir Putin(presently incognitoasprimeminister)maycontrolMoscowandSt.Petersburg,butnotmuchelse,whiletheRussianMafiaexertsastrangleholdelsewhere.Aninvestorcanprofitthere,butonlyifhe’sincahootswiththecriminalelement.IfheoperatesoutsidetheMob,moneytroublesmaybetheleastofhisworries.ManyforeigncompanieshavelearnedbynowthattheRussianswill takeassetsawaywhenevertheylike,eitherbytaxationorbybrute force.Actually, the situation inRussia is one of the reasonswhy I am so bullishaboutcommodities:Thereissimplynowaythatwecanexpectanincreasedsupplyofrawmaterialsfromthereanytimesoon.

More bad news from the Russian front: Parts of Russia itself are straining to gainindependence, as are parts of other former Soviet republics. TheUkraine, for example,couldsplitatanytime.Somewilldisagreewithme,butIalwayspointtotheexampleofChechnya, a small republic, about the sizeofConnecticut, in southernRussia.TheRedArmyhasbeentryingtocontrolChechnya’spopulationofonlyoneandahalfmillionforaboutfifteenyears,withlittlesuccess.Whatmoredoyouneedtoknow?ThereisnoRedArmyanymore—certainlynotonethatcanholdtogetherthecountry’svastexpanses.

But wait? Isn’t capitalism making inroads in Russia, just like in China? Sorry, butthere’sahugedifferencebetweenthetwo.UnlikeChina,Russiadoesn’tutilizeitscapitalefficiently.Productivitylevelsarelow,sincethecountrytriestocompeteusingthesameinfrastructure and factories built under Communist rule, with few upgrades and littlemodification. Furthermore, whereas Chinese citizens who study or live overseas bringback capital and know-how, Russians who leave rarely return to contribute to thecountry’srehabilitation.

As for India, I have observed firsthand its stifling bureaucracy, and its lack ofinfrastructure, especiallywhen compared toChina.The country’s national highway is atwo-lane road that was built decades ago and is now full of potholes, not to mentiontraffic,wagons,animals,pedestrians,dryingvegetables,carts,breakdowns,andeverythingelseunderthesun.Ihadtopurchasemultiplecellphonestherewhileonourtrip,becauseeachwasusableonlyincertainareasofIndia.Theonlybusinesstobeprivatizedbetween1991and2001wasabakery.Thesituation isslowly improving,but it isoftenonestepbackwardforeverystepforward.Asaresult,IsimplyamnotmotivatedtobuyintoIndia.ButasI’vestressed,don’tjusttakeitfromme!KeepaneyeonIndia.IfIamwrong,anditreallydoeschange,itcouldbeagreatopportunity—forinvestorsand,mostofall,forthepeopleofIndia.

BEOPENTOPEOPLEWHOAREDIFFERENT,WHETHERATHOMEORABROAD.

Demopolis, thenameof the townwhere Igrewup,means“cityof thepeople.”Butbackthen,peopleofcolorweren’tincluded.LikemostotherplacesinAlabamaandacrosstheSouth,Demopoliswas segregated.Therewas thewhite part of town, and theblackpart.Whichalsohappenedtobethepoorsection.

Ihavetoadmit,inmyearlyyears,Ididn’tthinkabouttheinjusticeofthistoomuch.Itwas justhowthingswere.Wedidn’tknowanythingdifferent. In fact,myfamilyhardlyknewanyblackpeople at all, and Ihadnot a singleblack friend.Butonce I becameateenager, in themid-1950s, Istarted tosee thingsdifferently.MyUncleChink’sgeneralstore happened to be in the black part of Demopolis. One day I was handing outadvertisingleafletswhenIobservedsomethingI’dneverseenbefore:AJapanesewomanwaslivingin theblacksectionsolelybecauseshehadmarriedanAfrican-AmericanGI.Had she married a white U.S. soldier, of course, she could have lived anywhere shewanted. Shewould have been exactly the same person yetwould have had an entirelydifferent life. That’s when I started to realize that there had to be something seriouslywrongwithasystemthatkeptpeopleapartbasedonthecoloroftheirskin.

Fiftyyearslater,I’mseeingadisturbingtrendinAmerica.Fearofterrorismandangerover the struggling economy have fueled what I sense to be a growing sentiment ofisolationismandxenophobiaamongsomeofourleadersandcitizens.WeshouldcloseofftheUnitedStates,theysay,toforeignideas,capital,products,and—predictably—people.Othercountriesare starting to followsuit.Now, theworldhasprosperedmightily sincetheendofWorldWarII,whenweintheWestvowednottocloseourselvesofffromtherestoftheworld,ashappenedinthe1930swithdisastrousresults.WhileNaziGermanysystematicallyinvadedCzechoslovakia,thenPoland,thenFrance,thenRussia,aspartofitsgrandplantoconquerEurope,awar-wearyAmericaresisteditsEuropeanallies’pleastojointheirfight.BythetimetheUnitedStatesdidfinallyenterthewartwoyearsafterithad begun, and only after Japan’s surprise attack on PearlHarbor, hermilitarywas nomatchfortheGermanandJapanesewarmachines,whichhadspentthepreviousdecaderatcheting up for battle. Unfortunately, too few of us today understand the lessons ofhistory;theresultswillnotbeprettyifwerepeattheisolationistpoliciesofthe1930s.

After World War II, the world vowed never again to allow the protectionism and“beggerthyneighbor”policiesthathadledtotheDepressionandworldwar.TheGeneralAgreementonTariffsandTrade (GATT)wassigned,opening tradeandfinancial flows.Theworld has had several decades of unprecedented growth and expansion as a result.The WTO has succeeded GATT in attempting to continue the spread of trade andprosperity.

ThepeoplewhodesignedGATTarealldeadandfewnowreadorunderstandhistory.Protectionismand isolationismare risingagain.Manynationsaresaying,“If theUnitedStates can do it, so can we.” Difficult economic times often give birth to dangerouspolicies, and may again. Remember that history “rhymes” and be attentive; economic

problems and war have recurred throughout history, so prepare yourself in case thesetendenciespersist.Youmayhavetomovetoneutralcountrieswhilemakinginvestmentsthatcouldbenefitfromturmoil,suchasrealassetsandfreelyconvertiblecurrencies.

KEEPANOPENMINDANDBEAWORLDCITIZEN!

YouwerebornintoagenerationthatpollsterJohnZogbyhascalled“thefirstglobalcitizens.” Your peer group is more open-minded and more globally minded than anygeneration that preceded it. This is remarkable, and it will greatly expand yourpossibilitiesforpersonalandprofessionalhappiness.

Keepinganopenmindincludesneverclosingyourselftothepossibilitythatpeoplearedifferentfromwhatyoufirstimagined.Itisnatural,andoftenuseful,toformideasaboutpeoplebasedonthelimitedinformationwehavewhenwemeet,fromwhatweobserve,andthedetailstheyprovide.Butthere’saworldofdifferencebetweenknowingatypeandknowingaperson.Whenyou’vetraveledallovertheplanet,asIhave,andcommunicatewithpeoplefromothercultures,youcometounderstandthat,ultimately,veryfewhumanbeingsconformtothestereotypesimposeduponthem.And,forthemostpart,weallwantthesamethingsoutoflife.

In1960,whenIdecidedtoleaveDemopolisforYaleUniversity—intheNorth!—manyofmyneighborscouldnotunderstandwhyIwouldwanttodosuchathing.MostofthemhadneverbeenoutsideofAlabama,muchlesstheSouth.ButI’lltellyou,inadditiontoallofthefascinatingpeopleImetinNewHaven,Connecticut,andlaterinNewYorkCity,someof themost interestingpeople tomewereones I hadnot knownbefore frommyhometown. Everyone I met knew who I was, but I didn’t know them, because ofsegregation.

Understand this: If everyone sawhimself as a citizen of theworld rather than of histown,city,orcountry,theworldwouldbeamorepeaceful,betterplacewheresuccessinallformsisabundantandavailabletoall.That’snottosaythatwecan’tbepatrioticandloveourcountry.Butwemustalwaysbeopentothosewhoaredifferent,becausepeoplefromdifferentbackgroundshavemuchtoteachus,andviceversa.

WhenyourmotherandIweretravelingtheworld,weconstantlymetpeoplewhowereafraidofthosewhoweredifferent—beitreligion,language,ethnicity,orskincolor—untilthey interacted with them, and laughed and swapped stories. Wars are not started bygroups of people who know one another and suddenly decide to destroy one another.Twenty-year-oldspreferplaying,dancing,dining,drinking,ordebatingwithoneanotherandwilldosoifgiventheopportunity.Thishasbeentruethroughouthistory.Itisflawedpoliticians who inevitably fail the kids, appeal to their worst instincts, and have themkillingoneanotherneedlessly.

Asyougetolderandreadhistory,youwilllearnthatwarhasneverbeengoodforanynation, even the ones that “win.” If you are ever in a country that descends intowar, Isuggestyouleaveuntilitisover.Truthisalwaysthefirstcasualtyofwar,soyouneedtogetyourdistance.

Afamouspoetusedthisepitaphforhisson,whohadbeenkilledinthesenselessFirstWorldWar:

IfanyquestionwhywediedTellthem,becauseourfatherslied.

YourfatherandallofourforebearsinAmerica,forafewcenturiesnow,haveservedin

themilitary,butyoushouldnot.Breakthechainandliveawayfromwars.

My wish, as your father, is that you become a world citizen by your own will anddecision.SomedayIhopetoseeyoutakethatfirstboldstep.

Of all the adventures I have had in my life, you, my daughters, are the ultimateadventure.Youalreadyshowmeanewworld.Iffatherhoodenrichesone’stravels,Iamcertain that the reverse isalso true. I thinkofall the things that Ihavegained frommytravelsthatIwillnowbeabletogivetoyou.Icannotwaittoshowyouhowtodrive,howtoreadamap—thingsmyfathertaughtme.AfterEnglish,whatlanguageswillyoulearn?Frombirth,aChinesegovernesshas taughtyouMandarinandTangdynastypoemsandChinesecharacters.IhopetoaddSpanishtothemixsoon.

IthinkofalltheplacesthatIhaven’tbeen:theinteriorofBrazil,southernIndia,Eritrea,Iran,Israel.TheseandotherplacesIwillshowyou.YourmotherandIexploredmovingtoShanghai or Spain, and spending time in Punta del Este, Uruguay, or Cochabamba,Bolivia. Because I am so optimistic aboutAsia,we chose Singapore formany reasonsincludingabilingualculture,greateducation, theworld’sbesthealthcare,efficiency,etcetera, everything works. Japan has been the most successful country of the past fiftyyears,Chinaofthepastthirtyyears,andSingaporeofthepastfortyyears.Wehopeyouwillalwaysviewthewholeworldasyourhomeandnotbesohideboundthatyoulimityour horizons and possibilities. Be eager tomove if you see opportunities. Just as ourforebearsdid.WehopethatyouwillgrowuphereinSingapore,butwhoknows?WearealsoexploringahomeinVienna,Austria,sinceweloveitsomuch.Perhapsyouwillgrowupinoneof thoseotherplaces.OrmaybeIwillbuyarockingchairandsing“Ol’ManRiver,”rearingafamilywheremyfatherrearedhisinAmerica’sruralSouth.Isuspectmyfatherwouldhavelikedthat—and,inhiswisdom,mighthavewanteditallalong.

Yourgrandfatherdiedattheageofeighty-threein2001,beforeyouwereborn.Itisoneofmy regrets that youwill nevermeet him.You can see in his photos that hewas ofaverageheightandbuild,butyoucannotseehisintensity.Hewasasterndisciplinarian,andIwishIwasasdisciplinedwithyou.HemadesurethatmybrothersandIknewthatwe had to do what needed to be done. Slacking off or putting things off until later?Unheardofinourhouse.Asthemanagerofachemicalplant,hespentmany,manyhoursatwork.Allfiveofhissonsarehardworkers.

Dadalsomadesurethatweknewtosaveasmuchmoneyaspossiblebecausenothingwouldeverbegiventous.Hisfatherhaddiedyounginacoalmineheownedin1929,thenhismotherlostitallintheGreatDepressionofthe1930s.HewasarealsonoftheDepressionandrearedusaccordingly.Inowunderstandhowfocusedhewasonhisfivesonsandhowmuchhe sacrificed forus. I’m likehim inmany respects.For instance, Irarely bother to buy new clothes. I just like old clothes better, but now I wonder if Iinheritedthattraitfromhim,becausehewasalwaystryingtogiveusmore.

YourmotherandIalwaysworrythatwemightgiveyoutoomuchormakethingstoo

easyforyou,sincewedonotwanttospoilyou.Ifmyfatherwerestillalive,hewouldn’thavespoiledyouatall,buthewouldhavetriedtodowhateverhecouldforyou.

CHAPTER6

YourEducation,PartII:LearnPhilosophy;Learnto“Think”

PHILOSOPHYWILLTEACHYOUHOWTOTHINKFORYOURSELF.

Happy,youwereborninMay2003;BabyBee,inMarch2008.Althoughit’salittletooearlynow,Ihopethatyouwillstudyphilosophysomeday.Youmustlearntothinkataprofoundlevelifyouwanttounderstandyourselfandwhat’simportanttoyou.Youmustknowyourselfifyouwanttoaccomplishanythinginlife.Studyingphilosophyhashelpedmedojustthis.

I amnot talkingabout the complex logic that is characteristicofphilosophyand thatintimidatesmanypeople;Iamreferringtothesimpleartofthinkingforyourself.Somanyfolks today are caught up in conventional thinking, their intellectual processescircumscribed by such concepts as the state, culture, or religion. To think outside theestablished framework, to examine things independently—this is true philosophy.Studyingphilosophytrainsapersontoexamineeveryconceptandevery“fact.”

Studying philosophy atOxfordUniversitywas a struggle forme, because theywerealways askingme abstract questions—suchbasic things aswhether the sunwill alwaysrise in theeastordoesa treecrashinginanisolatedforestmakeasound.Frankly,backthenIjustdidnotseethepurposeofalotofit,butI’vesincecometounderstandtheneedto examine everything, no matter how accepted or proven. The ability to seek otherexplanationsandtothinkaroundcornerswillserveyouwell.

DOCURRENTWRITINGSONPHILOSOPHYHELPUSLEARNTOTHINK?

Toengageinphilosophicalthinkingandtoreadbooksonphilosophyarenotthesamethings. True, reading helps develop our ability to think, but more effort is required toreallysharpenthefaculty.

Here’sanexercise:Reflectonsituationswhereconventionalwisdomandcustomturnedouttobewrong.Takethetimetofindoutwhatactuallyhappened.Thiswillhelpyoutodevelopknowledgeandconfidence,sothatthenexttimeadecisionisrequired,youwillbeabletoconstructivelyanalyzetheassumptionofthemajority.

THETWOWAYSOFTHINKING.

Therearetwomethodsofexaminationthatareparticularlyusefulinallwalksoflife,includinginvesting.Oneistodrawconclusionsfromyourobservations,andtheotheristoproceedsolelyonthebasisoflogic.

Drawingaconclusionfromobservationsisverysimple.Whenyouexaminethehistoryof the stock market, for instance, you see that the bull alternates between stocks andcommodities. Historically, this has happened in cycles of fifteen to twenty-three years.Thecommoditiesmarketbecamebullishin1999,soIexpectthistrendtocontinue.Basedon historical precedent, the commodity bullmay run until sometime between 2014 and2022.

Now Iwill give you an illustration ofwhat itmeans to infer by logic alone. I can’tproveit,butIhavecomeupwithmyowntheoryabouttheinterplaybetweenstocksandcommodities.Takea lookatKellogg’s,whichboasts theworld’s largest share incereal.Cerealsaremadefromcommoditiessuchasrice,wheat,corn,andsugar.Whenthereisadownturn in the commoditiesmarket, the cost of these foodsdrops.Provided that saleslevelsaresustained,thecompany’snetprofitgoesup,whichinturnisreflectedinariseinitsshareprice.However,whenthepriceofcommoditiesrises,Kellogg’scannotreflectitscost increase in the price of its cereals immediately.Thiswill affect the company’s netprofit,anditsstockpricewillsufferasaconsequence.Companiesbenefitfromlowcostswhencommoditiesaresluggish,andwhencommoditypricesrise,profitsdropoff,takingstock priceswith them.As you can see, it is a goodmental exercise to figure out howcommoditiesandstocksareinverselycorrelated.

Two ways of thinking: The former is called induction (proceeding from a specificconclusion to more general observations), and the latter, deduction (proceeding fromgeneral evidence to a specific truth). Neither method is better than the other.What isimportantisthatyoutrainyourselftoapplyboth,sothatyoucanthinkinabalancedway.

DON’TNEGLECTTHEBEAR.

Whatisitthatmostinvestorsfailtoconsider?Mostlookforthebullandneglectthebear.Asaninvestor,Iamalwaysinsearchof“whatisbearish.”Whenpeoplearecrazedaboutanoverheatedmarketandareobliviousofotherinvestmentpossibilities,that’swhenIfindagooddeal.

Duringthestockbubbleof1998,whenmostpeopleignoredcommodities,Istartedupacommodityindex.Commoditieshadbeeninthedoldrumsforyears,sonoonehadmadeany money. Most people fled the field, and few young people even studied naturalresources. Fewer still went into farming or mining (MBAs were all the rage then,remember?), the end result being that we currently have a shortage of farmers andgeologists.Thatistrueinothercountriesaswell.Thesefactorsledtoamultiyeardeclineinproductivecapacity,whiledemandkeptrising.Thereturnsshowhowwellcommoditieshave done. The Rogers International Commodity Index, which I founded in 1998,quadrupledoverthenexttenyears,whiletheStandardandPoor’s500indexofstocksroseabout40percent.

CHAPTER7

YourEducation,PartIII:LearnHistory!

AMACROSCOPICVIEWOFTHEWORLDISWHATYOUNEED.

Iwantyoutostudyhistory.Iwantyoutounderstandthechangestakingplaceintheworldfromamacroscopicperspective;bythat,ImeanthatIwantyoutounderstandthebigpictureofhowtheworldworksandhasalwaysworked.Youwill learn thatwhat istruetodaymaynotbetrueintwentyyears,oreventen.In1910theBritishandGermanroyalfamilieswerethefastestoffriendsandallies.Fouryearslatertheircountrieswereembroiledinatotallysenselesswar.Examinetheworldatanyonepoint,andyouwillfindthattentotwentyyearslatermuchhadchanged.

Aninterestinhistory,politics,andeconomicswillhelpyouseehowoccurrencesinonecountryaffectothernationsaswell,economicallyandinotherways.Forinstance,asinglecountry’spoliticalturmoilcandriveupcommoditypricesaroundtheworld;thepriceofgoldinparticularwillusuallyrise.Afull-scalewarwilldriveupnotonlythepriceofgoldbutthepriceofmostothercommodities.

WHICHHISTORYBOOKTELLSUSTHETRUTH?

Historyismultifaceted.Therearehistoricalstudiesineconomicsandpolitics;thereishistory as examined and understood from the viewpoint of the United States, from aEuropean perspective, and from the outlook of various Asian, African, and SouthAmerican nations. Youwill learn thatmost history iswritten by victors so has a clearview.Aslongasthehistorianhasbeenrigorous,eachperspectivecanfillinapieceofthehistoricalpuzzle.You reallycannot saywhosehistory is themore important. Imagineafour-dimensional puzzle of theworld, and each of these different views of history is apieceofthepuzzle.Beforeyoucanplacethemproperly,though,youfirstmustgatherthepieces,andyoudothisbystudyingthemall.

CONNECTYOURKNOWLEDGEOFHISTORYWITHYOURTRAVEL.

I urge you, before you take your first overseas trip, to study the history of yourdestinations.Withoutthehistoricalcontext,youwillnotbeabletofullyunderstandmuchofwhatyouobserve.Youcanbeatouristandenjoythescenicsites,butunderstandingisafarricherexperience.Itdoesn’tmatterwhereyoustart.Chooseacountry,thengotheretoseethetruthforyourself.

HISTORYWILLSHOWYOUWHICHFORCESDRIVEMARKETS.

By cross-referencing historical eventswith long-term trends in themarket, youwillidentify thosedevelopments thataffectstockandcommodityprices. Inmycourse“Bulland Bear” at Columbia University, I instructed students to research major bullish andbearishmarketsofthepast,thenfigureoutwhichhistoricaleventshadcontributedtotheirrise and fall.Whatwas going on in theworldwhen prices skyrocketed or plummeted?Whydidthoseeventsserveasacatalyst?Lookingbackuponhistoryisaninvaluablewayto learn how to analyze trends.And better still, it teaches you how to anticipate futurechanges.

NOTHINGISREALLYNEW.

Historyrepeatsitselfinonewayoranother—oratleastrhymes,asMarkTwainsaid.Human beings have pretty much always been the same. Headlines are constantlyannouncing the innovative, the radical, and the groundbreaking. When something ispresented as novel or different, look to the past, and youwill always find a precedentthere.Butrememberthehistoricalcontext;don’texpectthingstobeidentical.Ageneralrule:Whatishappeningnowhashappenedbeforeandwillhappenagain.

By way of illustration, take the Internet revolution. Many people reacted as thoughsomething entirely new had emerged. The Net is but one of many technologicalinnovationstohavepresentedthemselvesoverhistory.Rememberthe“neweconomy”ofthe 1990s? Those with historical perspective can point to many such revolutions: therailroad,theclippership,airplanes,electricity,radio,telephone,television,thecomputer.Investmentsinallofthose“neweras,”atonetimeoranother,endedbadly.

AssoonasIheareveryonemakingclaimsforsomethingthatsupposedlyisinnovativeand unprecedented, I check whether the market is overheated and often pull out mycapital. Be extremely doubtful when you have people proclaiming, “It’s different thistime.”Historically,nothingemergesassoentirelydifferent;suchclaimsareindicativeofastateofmasshysteria.Isoldshortsharesinhightechnologybetween1999and2000,anditwasrightaroundthattimethatthecommodityindexIcreatedin1998startedtorise.

Again, studyhistoryverycarefully.Learnpreciselywhathappenedandwhatdidnot.Thiswillhelpyouunderstandwhatisabouttohappenintheworld.

CHAPTER8

YourEducation,PartIV:LearnLanguages(andMakeSureThatMandarin

IsOneofThem!)

MANDARINWILLBETHENEXTGLOBALLANGUAGE.

Peoplewhocanspeakorreadotherlanguageshaveagreatadvantageoverthosewhodon’t.Whenitcomestoinvesting,youcanresearchprimarysourcesandspeaktopeoplein their own language, increasing the likelihood of trust and candor. Just as important,therewillbetimesinyourlifewhenyouwillbeinsocialandprofessionalsituationswithpeoplefromothercultures.Your lifewillbeenriched immeasurably ifyoucandefy thestereotype thatAmericans don’t learn other languages and put yourself in a position tolearnfromyournewfriends.

Tohelpyousucceedinlifeaswellasinvesting,wegaveyouaheadstart.YouhaveaChinesegovernesswhocommunicateswithyouintheofficiallanguageofChina.AndasyoulearnMandarinfromher,youwilllearnEnglishfromus.(YoumustmasterEnglishtospeaktoyourfather;abouttheonlyexpressionheknowsinChineseis“coldbeer.”)Wemoved to Asia so that both of you could attend Chinese schools and useMandarin ineverydaylifewhileexperiencingbothAsianandWesterncultures.

ProbablythebestadviceIcangivetoanyone,anywhereintheworld,istohaveyourchildren and grandchildren learnMandarin. For their generation,Mandarin andEnglishwillbethemostimportantlanguagesintheworld.

CHAPTER9

ItIstheCenturyofChina

PAYATTENTIONTOTHEMAJORCHANGESTAKINGPLACEINTHEWORLDNOW.

The reason that you are learning Mandarin is because China is gaining economic,political, and cultural strength, and will become an even more significant playerinternationally.Youmustbeawareofsuchdevelopments,notonlyasaninvestorbutasaworld citizen. When we look back upon history, we know that Spain dominated thesixteenthcentury,whileFrancewasthemoreprosperouscountrytwohundredyearslater.The nineteenth century was the century of Great Britain. In the twentieth century, theUnitedStates rose to prominence.Well, the twenty-first centurybelongs toChina.Thisdevelopmentisunderwaynow,rightbeforeoureyes.Chinahashadrecurringperiodsofgreatness. Egypt was great once, Rome was great once, Great Britain was great once.Chinahasdoneitafewtimesandhasweathereddisastersafewtimes.Nowitisontheriseagainafterthreehundredyearsofdecline.

TheChinesearegenerallyconsideredCommunists,notcapitalists,buthowaccurateisthis?Historically, theChinesepeoplehavebeenamongthebestcapitalists in theworld.Many remember the form of capitalism that existed in China prior to Mao Tse-tung’srevolutionin1949,whichculminatedinthefoundingofthePeople’sRepublicofChina.Thosewhowould not give up on capitalism during the revolution fled toHongKong,Taiwan, America, and elsewhere, and cultivated their own economic prosperity. Theseoverseas ethnic Chinese have always been a valuable asset to China. They know thelanguageandpassitdowntolatergenerationsaswellasretaintiestootherChineseonthemainlandandaroundtheworld.TheyarealwaysreadywithcapitalandexpertisetoinvestbackinChinaasopportunitiesarise.ThebondhasalwaysbeensogreatthatChinagivespassportstothoseofChinesedescenteveniftheyhavebeenawayforafewgenerations.

There is a remarkabledifferencebetween theChina that I saw inmy first four visitsbetween1984and1990andtheChinathatIsawwhenItraveledtherein1999.Theeffortthat thecountryhasput into increasing itsproductivityhaspaidoff.China’sproductionlevels in home electrical appliances, cellular phones, and motorcycles have surpassedthoseoftheUnitedStates.Infact,China’scellphoneproductionisnowtopsintheworld.Thesearedevelopmentsthataninvestorcannotdismiss.

BUYCHINESESTOCKS,ANDBUYTHEFUTUREOFTHISCOUNTRY!

IownacoupleofdozenorsoChinesestocks,but Ididnotmakemyfirstpurchaseuntil1988.Thishappened ina rundownbuilding, then thehomeof theShanghaiStockExchange.Thebank-stockcertificaterepresentingthatinitialpurchasehangsframedonawall in our house. I don’t know by how much its value has increased, but I have nointentionofsellingitbecauseofitssentimentalvalue.

WhenIrevisitedShanghaiin1999,theshabbybuildinghadbeenreplacedbyabrand-newstructure.Iopenedupanaccountandcontinuedtoinvestmore.Atpresent,China’sgross national product (GNP) is growing in excess of 9 percent, and there is plenty ofpotentialforfurthergrowth.

Many famousAmerican investorswho rarely, if ever, invested abroad or invested inChinahavedoneso in thisdecadebecauseof theenormousgrowth.But ifyouwant tobuyChinese stocks, be prepared for the normal setbacks in theChinese economy. TheUnitedStatesunderwentmanyconsolidationsasitrosetopowerandglory,andChinawilltoo. When is the best time to sell? Probably not until after my lifetime, because theChineseeconomywillcontinuetogrow.SomysharesinChinamaybemygifttoyou.

AHARDLANDINGCANNOTBEAVOIDED!

BoththeChineseeconomyandChineserealestatearebecomingoverheated,withaninflation rate somewhere between 7 percent and 8 percent, according to independentbanks. Perhaps Chinese banks have made too many loans. Excessive investment hasresultedinahigherthannormaldefaultrate,whichusuallyhappensinperiodslikethis.Ithinkthatahardlandinginsomesectors,suchasrealestate,isinevitable.

TheChinesegovernmentandtheInternationalMonetaryFund(IMF)insist thatasoftlanding is possible, and the Chinese government restricted bank loans for awhile andrestrained the money supply, rightly to cool things off. Low interest rates have led tooverinvestment in real estate and certain manufacturing industries. These sectors aretakinganosedive.Otherfields,however,willprobablybeunaffected.

A Japanese investor once asked me when China was going to experience its hardlanding.Iexplainedthatthereisnotellingexactlywhenthatwillbeorhowsevereitwillbe.Iamnotatraderwithasuperiorsenseoftiming.Itcouldhappensoon,oritmaynothappenatall.Itismorelikelytooccurinspecificsectorssuchasrealestate,whilesomesectorswillnotbeaffected.Butwhoknows?Assoonasyouhearinthenewsaboutahardlanding in theChinese economy similar to those in1989and1994, consider it thebestopportunity to buy intoChinese stocks or commodities. I began buyingChinese sharesagainattheendof2005andinto2006,andagainin2008forthefirsttimesince1999.

CHINAEQUALSCOMMODITIES.

TheriseofChinabringswithitariseindemandforcommodities.China,withits1.3billionpeople,consumessteel,ironore,andsoy;itisthelargestconsumerofcopperintheworldandthesecondleadingconsumerofenergy,includingoil.Furthermore,thedemandis increasingyearly—monthly,even.Itwill takeat leastanother tenyearsbeforesupplymeets demand; in the interim, this imbalance will continue to drive up the price ofcommoditiesdespitethenormal,periodiccorrectionstoprices.

CHAPTER10

KnowThyselfbyUnderstandingYourWeaknessesandAcknowledging

YourMistakes

KNOWWHOYOUARE.

Ofcourseyouneedtobeawareofthecircumstancesthatsurroundyou,youneedtobeknowledgeableabouttheworld,youneedtoknowhistory.Butevenmoreimportant,youneedtoknowyourself.Lookatyourselfinthemirrorandaskwhatdrivesyou.Ifyoucanunderstand these thingsup front,youaremore likely tobeable tokeepyourhead inacrisis. Also observe how you react to mistakes, so that you can respond moreconstructivelythenexttimethingsgowrong.

For example, Iknownow that Ioften see thingswellbeforeothers and therefore actmuchtoosoon.SoIhavetriedtodisciplinemyselftowait.WhenIwasyounger,Inearlyalwaysgotsweptawaywhenstockswererisingamidmasshysteriaorwhenpeopleweredumping inpanic. I often joined in too. I have learned thatwhen I am frantic to join atrend,Imuststeelmyself todotheopposite.It isextremelydifficult tosay“buy”wheneveryoneelse issellingandIamdesperate to join in,butIhave learnedabitaboutmyownemotionsovertheyears.

Granted,weallmakemistakes.Theimportantthingaboutmakingerrorsinjudgmentistheabilitytoadmitthoseerrors.Ifyougrowintoadulthoodunabletoacknowledgeyourmistakes—inlife,aswellasininvesting—youwilllearnyourlessonsthehardway.Onlywhenyourecognizeyourmistakeswillyoubeabletomakethecorrectionsnecessarytoputyourselfontherightpath.

PEOPLEAREEASILYCARRIEDAWAYBYMOBPSYCHOLOGY.

Even thosewho call themselves professionals are at times persuaded by themob. IrememberwhenIstartedfull-timeonWallStreetin1968,duringanotherperiodofmania,I shared an office with an older analyst because things were growing so fast thatcompaniescouldnotevengetmoreoffice space (a signof trouble, Inowknow). Iwasdiligentlyworkingoutsomenumbersonaspreadsheetwhenanexecutiverushedintotheofficetoseetheanalyst.WhenhesawwhatIwasdoing,heexclaimed,“Dopeoplestillwastetimeonthingslikethat?!”Iwasmortified,ofcourse,butthatexecutivewasoutofthebusinessjustafewmonthslaterwhenthatlittlebubblepopped.

Morerecently,anumberof“experts”lostalotofmoneyinthedot-comdebacle.Youcan imaginehowhard itwasforpeoplewhosawabubblecoming topickup thepapereveryday and realize that peoplewere getting rich (at least onpaper) all around them.MaybethisreallywasaNewEra,andtheoldrulesdidnotapply.Wheneverweenteraso-callednewera, folks start to ignoredecades-oldstandardsofvaluations for investmentsbecausetheybelievethegrowthwillbesodazzlingthatstockswilltradeatunbelievablepricesandthenwilltripleandquadrupleagain.Classicmeasureslikebookvalue,earningspershare,anddividendswillbeignoredandevenridiculed.

TheWallStreetJournalbeganreferringtotheNewEconomyinthelate1990sbecause,itclaimed,“thingshavechangedsomuch.”Companieswithnohistory,lowsales,andnoearnings went public on the stock exchanges and shot up in price. Thousands ofmultimillionaireswere created overnight. People projected huge growth in earnings foryearsintothefuture.Intheend,ofcourse,theoldrulesdidapply,andmanyfolkslearnedthis thehardway.TheWallStreetJournalwentback tousing lowercase letters the fewtimesitmentionedthe(ahem)neweconomy.Manycompaniescollapsedanddisappeared—justasalwayshashappenedafterallthe“neweras”inhistory.

Foranotherexample, lookat Japan. In2002and2003,most analysts andeconomistsdiscouraged investment in Japanese stocks, somegoingso faras toclaim that investorsshouldselleveryJapanesestocktheyownedandsomeevensuggestedthatJapaneseleaveJapan altogether. Suchmisguided advice was born of mob psychology; the gloom hadbecomesodeep-rootedthatnoteventheprofessionalscouldseethechangestakingplacebeforethem.

Japanhadenjoyedahugebubbleinthe1980s.Whenitburst,in1990,pricescollapsed,sendingtheeconomytumbling.Regrettably,thegovernmentandtheBankofJapankepttryingtohalt thenatural,cleansingeffectsof thisrecessionbyproppingupmanyof thecompaniesintrouble.Justasaforestfireservestoclearoutdeadwoodandunderbrushsothattheforestcanrenewitself,recessionshelptoensurehealthyfuturegrowth.InJapan,businessesthatshouldhavebeenliquidatedbecame“zombiecompanies,”surviving,albeitbarely, on the government’s artificial support. Everything was Band-Aided with quickfixes.Whilethisdelayedadecline,italsopostponedtheeconomy’srecovery.Acountrycan actually spendmoremoney trying to stave off a recession than the recession itself

mightcost.Moreover,mostdevelopednationsnowhavesafetynetsinplacetolimitthedamagefromarecession.

Japanstilltalksofthe1990sas“thelostdecade,”characterizedbynowashout,butnorecovery,either.(Bytheway,Americafollowedthesamerouteinthe1970s,andenduredamiserable decade until a newpolicy helped the country finally start over.Onewouldthink that centralbankerswould learn their lessons fromhistory, but, unfortunately, theUnited States is again repeating the same mistakes, and America may be in for anextendedperiodofdifficulteconomictimes.)Now,bearinmindthatlifetimeemploymentwith the same companyhadbeen a longstanding foundation of Japanese society.Whencompanies had to lay off workers in the nineties, an unprecedented development, thecountry practically fell into a national depression—reflected in low birth rates and adisturbinglyhighsuiciderate.

It took thirteen years of stagnation, but finally, around 2003, the Japanese economystartedtorebound.Sincethen,thestockmarkettherehasdoubled.

DONOTPANIC;LEARNTHEPSYCHOLOGY.

To be a successful investor, you really need to understand psychology as well ashistoryandphilosophy.Veryoftenemotionsdrivethemarketupordown.Rememberthateconomies and stock markets are two different things. As Paul Samuelson, the NobelPrize-winningeconomist,onceput it,“Thestockmarkethasanticipatednineof the lastfiverecessions.”China’seconomy,forexample,hasbeengrowingrapidlyforyearsnow,yet its stock market declined consistently for four years between 2001 and 2005. Thepublic, overreacting to positive or negative news reports, will buy or sell short at thewrongtime.Investorpsychologycanacceleratesuchtrendsinthemarket.

Anybodycan feelpanicky. Ihavepanickedanumberof timesand lostmoney in themarket.Aftertheoilshockof1978to1980,whenoilpricesdoubled,Iwatchedthepriceofoilcontinuetorise.Myresearchtoldmethat,withsupplyexceedingdemand,thepricewouldsoonfall,andsoIendedupsellingshort.Justthen,warbrokeoutbetweenIranandIraq, twoof theworld’s largest oil producers.With theworld concerned about possiblefutureoilshortages,pricesonlyshotupfurther.

Ihad toadmit theerror in judgment.Somecalled itbad luck,butno. Ididn’tdomyhomework.Ishouldhaveseentheconflictbetweenthesetwofoescoming.Someonehadto know that war was imminent. Huge military movements had to have occurred.Propagandamachineshadtohavebeenactivated.Muchlikeanovicetrader,Ithenhadtoscramble tobuyback theposition Ihadsold,andatahigherprice thanbefore.Theoilprice eventually fell, as I predicted itwould, butby then, itwas too late: I had alreadyclosedoutmyposition.

Inhindsight,Ishouldnothavepanicked.Ishouldhaverealizedthatthefundamentalsunderpinning theoil priceweren’t sound. I hadnot quite grasped the effect of themobmentalityatthetime,andasaresult,Imadeacostlymistake.Losingyourperspectiveinthemidstofmarketpanicisequivalenttolosingyourmoneyinthatmarket.

SELLINGHYSTERIA.

Forthemostpart,itisinshort-termtradesthatpricesaredrivenbyemotion.Mid-termandlong-terminvestmentsareusuallyinfluencedmorebythefundamentals.OrdinarilyIdonotusechartstotrade.Now,somepeopleinthemarketsusegraphsofpreviousstockor commoditymovements in order to predict future price movements. They are called“technicians” or “chartists.” They spend a lot of time poring over the historic pricemovementsand the formations theseshowon theirchartsasaway topredictwhatwillhappennext.Occasionally,Iwill turntothemasawaytoseewhathasbeenhappeningand to check facts if I sensemobhysteria or panic atwork.Charts sometimes reveal abeelinerise,anindicationthatpriceshaveincreasedfarbeyondactualvalue.Itmeansthatpeople have lost perspective. It shows the level of the hysteria. I know that priceswilleventuallyreturntotheappropriatelevel,soIsellshort.Youneedtobecareful,though,thatyouarenotsellingshortsimplybecausepricesarehigh.Neversellshortunlesspricesareastronomicallyexpensive,andyoudetectnegativechangecoming.

Recently,pendingevidenceofhysteriainthechartsforcertainstocksrelatedtohomebuilding,Isoldthemshort.WhatIwantyoutorememberisthatbubblesburstinthewakeof hysteria,while plummeting prices usually end in panic.You can see panic in fallingpriceswhen you see them collapsing straight downday after day for extended periods.Historically, long periods of selling have ended in “selling climaxes” when everyonefinally panics and dumps to get out of the market at any price no matter what thefundamental realitymight be. Large price declines across the board should attract yourattention.Agoodruleofthumbistosellduringtimesofmarkethysteriaandbuyduringtimesofpanic.Alwaysremembertobuylowandsellhigh.Itsoundssosimple,butitisextremelydifficult.Justkeepthisdictuminmindalways—especiallywhenyouremotionsaregettingthebestofyou.

CHAPTER11

RecognizeChangeandEmbraceIt

EVERYTHINGCHANGES.EVERYTHING.

Tounderstandwhatislikelytohappeninthefuture,youhavetobeabletounderstandcurrenteventsandthechangespresentlyunderwayintheworld.Allsocialenvironmentstransformovertime.Somepeopleseesuchchangesasevidenceofasociety’sopeningup,othersasareflectionofitsclosingin.Regardlessofyourperspective,refusingtoacceptthe change is like swimming against the current of a thundering river. Try to resist theforce,andyouwillnotlastverylong.

NOONEHASDEFIEDTHEPRINCIPLEOFSUPPLYANDDEMANDANDSURVIVED.

In 1991 theworldwitnessed a significant change: the fall of theSovietUnion.ThetotalitarianstatewasunabletosustainitspoliticalframeworkbecauseofthefatalflawofCommunism,anideologypurposelydeaftothefundamentalprinciplethatyoucanfindonthefirstpageofanyeconomicstextbook:supplyanddemand.

ItisonlylogicalthatCommunismwouldfail.Allpricesfluctuateaccordingtosupplyanddemand.Therefore sustainingadistortedpricing structure for any lengthof time isimpossible, even if restricted to just one country. No government, no empire, has everdefied the principle of supply and demand and prevailed. In 1990, I traveled bymotorcycle through the cities of the SovietUnion.Gloom (and not just the perenniallygrayRussianskies)permeatedeverywhereIwent. I feltas thoughIwasactuallyseeingCommunismonthebrinkofcollapse.Twoyearslater,theUSSRdissolved.

CHANGECANBEACATALYST.

WhenIgiveadviceaboutinvesting,Ialwaysemphasizetheneedtorecognizechange.Successful investors manage to do this—in most cases buying stock, commodities,currencies, bonds, real estate, art, antiques, coins, stamps, collectibles, and so on atphenomenallycheapprices,puttingverylittlemoneyatrisk.

Butacheappricealoneisnotsufficientreasontoinvest.Ifsomethingisforevercheap,thenithasnorecognizedvalue,anditsstockmayverywellremainaworthlesspieceofpaper.Forabargain to soar inprice, therehas tobeacatalyst, and froman investmentperspective, that catalyst is change. Whatever the change may be, it must have asignificant impact within a country or an industry, and it must also be recognized assignificant externally within a few years. If the change is real, others will notice theimprovement, and priceswill rise to reflect the new circumstances.New investorswillcatchonandpricescanriseconsiderablyforyears.

DEALINGWITHCHANGE.

So how do you dealwith change? I am referring not to superficial changes, but tofundamentaltransformationsthathappenmaybeonceinthecourseofdecades.

When Iwas a child, immediately afterWorldWar II,Americawas the richest,mostpowerful country in theworld.Nowweare the largest debtor nation inhistory and areterriblyoverextended inmanyways.Whenmygrandfather returnedhome in1918afterhaving served as a fighter pilot inWorldWar I, the United Kingdomwas still widelyregarded as the richest,most powerful nation on earth, yet few saw the changes takingplace beneath the surface.Within just one generation, it lost its empire and became afinancialmess.

Willyouadapttothechangeshappeningaroundyou,orwillyouresistthechangesandlament the passing of “better days” long gone? I hope the former! Those who cannotadjust to change will be swept aside by it. Those who recognize change and reactaccordinglywillbenefit.

CHAPTER12

LooktotheFuture!

EVERYONEWOULDBEAMILLIONAIREIFHECOULDREADANEWSPAPERFROMTHEFUTURE.

WhenIwasinmylatetwenties,workingatNeuberger&Berman,asupervisorsaidtomewhilereadinghismorningpaper,“Whenthemarketopens,Jim,thereshouldbeonehundredthousandsharesofXCompanytobesoldatpriceY,soIwantyoutobuythosestocks.” True enough, when the market opened, there was a sell order for that exactnumber of shares and at almost the exact price that he had stipulated. Hewas able tofigureoutwhatwasabouttohappenjustbyreadingthenewspaperandsensingthemoodofthemarket.Tothisday,Iremainimpressed.

People who can observe events as they unfold will certainly acquire wealth. Aftertouringtheworldfrom1990to1992,Iwrotemyfirstbook,InvestmentBiker.RecentlyareporterremarkedtomehowmanyofthepredictionsImadeinthatbookhadcometrue,suchastheriseofnationalismandmilitantIslam.HowwasIabletoforeseethefuture?hewantedtoknow.Isimplydidwhatanexperiencedinvestordid:Ireadthenews.

Mymotorcycle journeycoincidedwiththeendof theColdWar, thestrugglebetweenCommunismandcapitalism.AsI traveledthroughtheCommunistbloc,Icouldseethatthe national boundaries the USSR had forced upon divergent ethnic groups wereunraveling. It seemed logical that without the political and ideological framework ofSovietCommunism,thesedifferentgroupswouldeventuallyinsistontheirownidentity,foundeduponethnicityor religionor language. I reached thisconclusionbywayofmylongstanding interest inhistoryandphilosophy.Only in thiscase, insteadofreading thenewspaper, I reliedonmyfirsthandobservationof thedevelopments in theseregionsastheyactuallyhappened.

MANYCOUNTRIESWILLCOMEAPART.

Ahundredyears fromnow, therewill probablybeanywherebetween threehundredandfourhundredsovereignnationsonthisearth,almosttwiceasmanyastherearenow.

TodaypeopletheworldoverdriveToyotas,dancetothemusicofthepopstardujour,anddineonMcDonald’sandChinesefood,butsuchchangeshavehadawearyingeffectoncertaingroupsofpeople.Suchpeopleareseekingalternatives, looking tohavemorecontrol over their lives.No longer restricted by the ideological framework forced uponthem by a totalitarian government, many are looking to religious, tribal, ethnic, andlinguisticaffiliationsthroughwhichtoexpresstheiridentities.Thiswilleventuallyresultinsubsequentredrawingsofnationalborders,andamorefragmented,complexworld.Theempiresandlargenation-statesthathavebuiltupoverthepastfewdecadesoftendonotwork and will come undone. This could be done peacefully, however, and does notnecessarilyinsurewar.Forexample,in1993CzechoslovakiasplitintotheCzechRepublicandSlovakiawithout bloodshed.Let us hope for the best going forward, since smaller,moreresponsivegovernmentswouldbebetterforusall.Unfortunately,historyshowsthatpoliticiansusuallybunglethings.

Predictions: Iraqwill ultimately divide according to religious sects into three or fourcountries.Canada,Russia,India,Brazil,andtheDemocraticRepublicoftheCongomayalsosplitup.Anunderstandingofhistoryandanastutereadingof thecurrentcourseofevents suggest that such developments are inevitable—and natural. Not one country inexistence today has had the same borders and government for as long as two hundredyears.Theworldwillcontinuechanging.

DONOTPLACEYOURBETONTHATWHICHISDYINGOUT.

Keepyour eye on the future.Donot cling to anything thatwill eventually cease toexist.Nomatterhowmuchtimeorenergyormoneyyouinvest init,oncesomethingisgone,itisgoneforever.

Several hundred years from now, there may be only thirty languages spoken in theworld.Manylanguageswill falloutofeffectiveuse inyour lifetime.Those likely tobespoken foranother severalhundredyears includeEnglish,Chinese, andSpanish. Ifyoureallywanttosucceedintheworld,gambleonwhatyouknowwillsurvive.

THEWOMEN’SERAISAPPROACHING!

Traditionally, women in Asia have been treated differently from men. In manycountries,agirl’sfamilyhadtopayadowrywhenshemarriedasafurtherinducementtofindherahusband.Likewomeneverywhere,Asianwomenhavelongsufferedalackofequalopportunityinsociety;theyhavebeentreatedunfairlyinpayandpromotionintheworkplace. But this is all going to change. In China, Korea, India, and other Asiancountries,wherethepriorityhasbeenplacedonthebirthofboys,girlsarenowinshortsupply.SoonthetypicalAsianmanwillexperiencegreatdifficultyinfindingawife.Forinstance, inSouthKorea, thereare120twenty-year-oldboysforevery100twenty-year-oldgirls,while inChina, thebirthrate is119boysforevery100girls.Asall thesegirlsbecomewomen,they’llbeabletodemandmorefreedom.Theramificationsfromthiswillbeenormous:Professions,education,politics,everythingwillchange.Iamsopleasedtohavetwodaughters!

PAYATTENTIONTOWHATEVERYBODYELSENEGLECTS.

Most investors look only to strong markets. By 1998 my research indicated that acommodities era was approaching. At the time, very few people noticed that the longdownturn in the commoditiesmarket had severely limited supply.A reporter askedmewhatI thoughtwas thebestoptionforprivate investors. Ipushed thesugaron the tabletowardher, smiled, and said,“This is the best investment.Take it home.”The price ofsugarat the timewas5.5centsperpound.The reporterhad lookedatmeskeptically; Ismiledbackather.Sometimes,themoreridiculousaninvestmentsoundstootherpeople,thebetterthechancesthatitwillyieldaprofit.

Ifyouarelookingforsuccess,bequicktostartsomethingnew,somethingthatnooneelsehastried.Andifyouwanttoinvest,lookforthebearmarket.Manyhavefrequentlyprofitedbyinvestingwherenooneelsesawpotential—puttingmoney intocommoditiesin1998,forexample.Youcanberichifyouhavethecouragetobuysomethingwhileitisstillundertheradarofconventionalwisdom.

Incidentally,thepriceofsugareventuallytripled.ButI’llbetthatnicereportermissedheropportunitytomakesomeseriousmoney.

THEMORECERTAINSOMETHINGIS,THELESSLIKELYITISTOBEPROFITABLE.

A lot of people who attend my lectures ask me if one investment or another will“definitely” be profitable, orwhen exactly they should buy and sell.Whenever anyoneasksmewhethersomethingisasurebet,ItellthemhonestlythatIsimplydonotknow.Nothinginthisworldisabsolutelycertain,exceptmyloveforyou,mydaughters.Whenmanypeopleareabsolutelysureofsomething,youshouldbesuspicious.

DONOTTHINKINTERMSOFWHATYOUWISH.

Neveractuponwishfulthinking.Actwithoutcheckingthefacts,andchancesarethatyouwillbesweptawayalongwiththemob.Wheneveryouseepeopleactinginthesameway,itistimetoinvestigatesupplyanddemandobjectively.

Letmegiveyouanexample: In1980everybodywanted toowngold.Thepricehadskyrocketed to over $850 per troy ounce. But one could see that gold was beingoverproduced;afterall,asupplierisboundtoincreaseproductionforanythingthatrisesinprice.A lot of people bought gold at this inflated price, insisting that it was somehowdifferentfromothercommodities.Boy,weretheywrong.

Moregoldstartedtobemined,and,atthesametime,thedemandforthepreciousmetalscaledback. Infact,manyfolkswhoownedgold jewelrysold it torefinersformelting,whichfurtherincreasedthesupply.Bytheyear2000,thepriceofgoldhadsunktoabout$250anounce.Historyshowsthatmostbubblestakeyearsforrecovery,sothereisrarelyany reason to rush in after a period of mania. The exact same change in supply anddemandhappenedwithsilver,whichtumbledfrom$50in1980duringitsmaniatounder$4acoupleofdecadeslater.

Whenyouseesomanypeoplebeingunrealistic,stopandmakeanobjectiveassessmentof the supply-and-demandequation.Bearing inmind thisbasicprinciplewill bringyouthatmuchclosertosuccess.

KNOWWHENNOTTODOANYTHING.

Anytimethatyouthinkyou’vebecomeafinancialgenius—when,infact,yousimplyhavehadthegoodlucktoturnaprofit—itistimetositbackanddonothingforawhile.Ifyoustumbleuponsuccessinabullmarketanddecidethatyouaregifted,stoprightthere.Investingatthatpointisdangerous,becauseyouarestartingtothinklikeeverybodyelse.Waituntilthemobpsychologythatisinfluencingyousubsides.

CHAPTER13

LadyLuckSmilesonThoseWhoContinueinTheirEfforts

DOYOURHOMEWORK,ORYOUWILLENDUPWITHAGLASSBEAD.

Onceyoutakethatfirststeptowardyourdream,putyourfulleffortintoit.Doyourhomework. If you want to succeed, you must never neglect it. My most successfulinvestmentswere those inwhich I invested themost time andhardwork, collecting allavailableinformationandresearchingeverydetail.Ifyoudon’tunderstandsomething—Imeantrulyunderstandit—youwillneverbesuccessful.Likewise,ifyoumerelydabbleinanarea,youaregambling,notinvesting.

WhenyourmotherandIwerecircumnavigatingtheglobe,IboughtheradiamondfromsomesmugglersinNamibia,Africa.Theytoldmethatthediamondwasworth$70,000.Ibargained the price down to amere $500 because I thought the sellerswere desperate.Immediately upon seeing it, your mother pronounced that I had been taken. Later, inTanzania, I showedmypurchase toadiamond trader.He laughed,because itwasnotadiamondbutaglassbead.Ofcourse,Iknewthevalueofdiamonds,buttheirvalueisallIknew.Iwassuchanamateur thatIcouldnot tell thedifferencebetweenarealdiamondandafake!AllthistimeIhadbeenadvisingpeopletoinvestonlyinwhattheyknow,andhereI’dmadeacompletefoolofmyselfoverdiamonds.

Youhavetoknowwhatyouaredealingwithifyouwanttobesuccessful.Ifyoudonotknowhowtotellifadiamondisgenuine,youaregoingtoendupasIdid:withaglassbead. Looking back on it, I am glad that it was not the real thing. It was a relativelyinexpensive reminder for me to avoid investing in anything that I do not completelyunderstand!

THEARROGANTAREBLINDTOTHETRUTH.

Ifyouletvanityandself-importancetakeover,youwillloseallthatyouhaveachieved.Andfast.

YouneedonlylookattheUnitedStates.SomeAmericanshavenointerestintheworldyetbelievetheyarethecenterofit.TheyjustdonotunderstandwhytheUnitedStateshasceasedtobeascompetitiveasitoncewas.Theybelievethatdevaluingthecurrencyisthekey tosellingAmericanproducts.With thatkindof logic, there isnoway that theU.S.dollarcanremainstrongforverylong.

Throughout history, many countries have tried debasing their currency as a way torevive the economybymaking it a bitmore competitive. It has neverworked over thelongrunorevenintermediately.Itcanworkintheshortterm,butnotalways.Onlyqualityandserviceworkovertime.

Ignorance isbornof anoutsized senseof self-importance.Never letyourselfbecomearrogant.Studyhard.Themoreyoulearn,themoreyouwillrealizehowlittleyouknow—andarmedwiththishumility,youwillneverlosesightofthedistancethatseparatesself-confidenceandself-importance.

DONOTSTOPWHENYOUAREWORKINGTOWARDYOURDREAM.

While Iwas driving around theworldwith yourmother,my father became illwithcancerandeventuallypassedaway.ButIdidnotstopourjourneytoreturntomyfather’sside.Thatmightsoundselfishorcoldhearted.AndsoIwantyoutoknowwhyImadethischoice.Formetogoonaround-the-worldtripwasmyfather’sdreamaswellasmine.Heinsisted that I not cut the trip short for his sake.When his conditionworsened, it wasimportanttometotellhimhowproudofhimIwasandhowmuchIlovedhim.IphonedDadfrequentlyandwrotehimnumerousletters.ButIdidnotreturntotheUnitedStates.IstillcryaboutitwhenIrememberthosedaysandhiswishes.

Iwantyoutofulfillyourdreams.Thatismydreamtoo.Asyourfather,Iwishforyoualifetimeofhappinessandfulfillment.Iwantyoutopursue,withoutpause,whateveritisthat stirs your passion. Keepworking toward your dream, not someone else’s, and notmine, either. A lot of people try to live for others—their children, their spouses, theirparents,theirfriends—andindoingsotwistthemselvesintoknotsattemptingtomeettheiroftenoutsizedand/orunrealisticexpectations.Thatleaveslittlespaceforpersonalgrowthandprogress,andcreatesresentmentforlostopportunities.

Iwill always offer you advice aboutwhat I think you should do, but the decision isyours about whether or not to accept it! I do not want you to live your lives for me.BecauseIloveyou,Iencourageyoutobetruetoyourselves.Everyeffortthatyoumaketolivetothefullestonlydeepensmyaffectionforyou.Iamyourfather,butyouneedtosetyourowngoals,envisionyourownfutures,andfindyourownpaths.Iwilldomybestto help you avoidmistakes, but I know that youwill make some anyway. I would doanythingtopreventyoufromsufferingsetbacksorhurts;that’swhatfathersdo.(Imean,Istillcringeeverytimeoneofyouwincesduringavaccination.)WhatI’mtryingtosayisthatintheend,yoursuccessandhappinessareuptoyou!

Youbothprobablywillmarrysomeday.ImadeacoupleofmistakesinthisareasoIknowhowdebilitatingthiscanbe.Ihadacteddespitemyowndoubtsandjudgment,soIactedfoolishly,atleastpartlybecauseIfeltitwastoolatetobackout.Yourmotherwassmarterinwhatisoftenthesinglemostimportantdecisioninaperson’slife.Beextremelycareful—evenreluctant—beforemarrying.Donotdoitifyouhaveanydoubtsatallevenifitmeanswalkingawayfromthealtaratthelastminute.YourmotherandIwillalwaysstandbyyou.

PASSTHISMESSAGEONTOYOURCHILD.

I really look forward to conveying to you lessons thatmyparents andgrandparentstaught me. I know that raising both of you will be the ultimate adventure of my life.Happy,whenyouwerestill inyourmother’swomb, Iboughtamapof theworldandaglobeforyou,alongwithapiggybank.Ofcourse,IhavedonethesameforBabyBee.Ihopethatsomedayyou’llsharewithyourownchildrenthewisdomthatyourmotherandIhaveimpartedtoyou.

Epilogue

Thedeviloflifeisalwaysinthedetails,soIthoughtI’dclosebygivingyouaseriesoflittlerulesthathaveguidedmewell.

Alwaysbuyqualityproducts.Theylastlongerandretainmorevalue.

Alwayseatbeforeyougogroceryshopping!Ifyou’rehungrywhenyougo,you’llendupbuyingmorefoodthanyouneed!

Anything that is a “must see,” “must try,” “must read,” should almost certainly beavoided,especiallyifitispopular.Usegoodmannersnomatterwhereyouareorwhomyoumeet.Theyareaneternalveritythatwillalwaysdistinguishyou.Besensitivetothemoresofeachsocietybecause“goodmanners”areoftendifferentinvariouscultures.

Beware of all politicians everywhere. They excelled at recess when they were inschoolbuthaveexcelledatlittlesince.

Neverasksomeonehowmuchmoneyheorshemakes,orhowmuchsomethingcosts.Never tell someone howmuch your things cost. Never discuss howmuch money youmakeorhave.Myparentsandgrandparentsingrainedthisinmebecauseitisostentatiousandpoormanners, at least forus.Proveyourselfbyyouractions rather thanby talkingabout money. There are many folks these days who love discussing their money andflashingitabout,butitisnotthewayIhopeyouwilllive.

Ifandwhenyouborrowmoney,payitbackontime,ifnotinadvance.Goodcreditisvital.Abadcreditrecordwillhauntyouforyears.

Asyougetolder,youwillhave todealwithboys. Iexpectalways tobegivingyouadviceandwarningyouaboutboys.Thebasicprinciple toremember is this:Theyneedyoumore thanyouneed them.Theywillmakeyoumillionsofpromises in their franticpursuitofyou.Take it fromsomeonewhoknows; I can tell the storiesbetter than theycan.Just ignore themandstay true toyourself.Useyourcommonsensewhenyoustarthearing absurd promises, compliments, and flattery.Do not follow a boy to a differentschool,city,orjob.Maketheboysfollowyou.

When you get older, remember that you will gain little from singles bars—thebartenderswilllearnandearnmorefromtheexperiencethanyouwill.

Bewary:Learnthatmanymenwholookoldenoughtobeyourfatherorgrandfatherdonotthinkofyouastheirdaughterorgranddaughter.

Do not get married until you are at least twenty-eight and know a bit more aboutyourselfandtheworld.

Itisvitallyimportanttomaintainboundariesbetweenworkandlife.Skipgoingoutfordrinkswiththegangafterworkeverynight.Youwillnoticethatthebossdoesnotdoit,

which isone reason thathe is theboss.Andwhilewearediscussing theboss:There israrely,ifever,anysoundreasonforyoutohaveadrinkwithhimorheralone,muchlessdinner.Andwhilewearediscussingdrinking,neverdrinkatabusinesslunch.Finally,andimportantly, avoid in-office romances. They usually end in personal and professionaldisasterforoneorbothparties.

Always use the toilet before you set out on a long drive ormake an appearance inpublic.

Learntotypeandtosew.Ineverdid,andIregretitoften,onbothcounts.

Learntodoasmucharithmeticandfiguresaspossibleinyourhead.Thismaysoundstrange, considering that calculators are everywhere, but you will have a leg up byunderstandingthenumbersbetterthanothers,whilealsonoticinganomaliesothersmiss.Besides,whatwilltheydowhenthey’velefttheircalculatorsathome?Thiswillbeahugeadvantageforyouasfewwillbeabletokeepupwithyou.

Finally, takecareofyourself! It’sdifficult tobesuccessful ifyouaren’thealthyandrested.Youknowhowyourmother is alwaysputting sunscreenonyou?She is exactlyright.

Learn tostaycalm—especially in timesofpressureor turmoil.Youwillmakemuchbetterdecisionspluseveryonewillsoonnoticeyouarecalmunderpressurewhenothersarenot.Ihavegottenbetter,butstillamahotheadtoooften—andalwaysregretitlater.

Alwaysbeearlyforappointments.Youwillbemuchmoreefficientwithyourtimeandwillmakeaverygoodimpressionsincemanyarrivelate—somerepeatedlylate.

Onceyoudoget toknowandunderstandyourself,rememberwhoyouare and staywithit.IstillgetcarriedawayattimesandactemotionallyordothingsatwhichIamnotgood. I always lookback and try to kickmyself into remembering Ineed tobe true tomyself.Forexample,Isometimesjumpintoaninvestmentwhenitismovinguponlytoremember later it was emotion overcoming my own self awareness. I always regret itwhenIdonotstaywithmyownbestabilities—whetherininvestingoranythingelse.

FormorewisdomandadvicefromJimRogers,

visitwww.jimrogers.com.

ABOUTTHEAUTHOR

BornonOctober19,1942,JIMROGERShadhisfirstjobatagefive,pickingupbottlesatbaseballgames.AftergrowingupinDemopolis,Alabama,hewonascholarshiptoYaleUniversity. Upon graduation, he attended Balliol College at the University of Oxford,whereheearnedhisfirstGuinnessrecordascoxswainoftherowingcrew.HecofoundedtheQuantumFund,aglobalinvestmentpartnership.Duringthe1970s,theportfoliogrew4,200percent,whiletheS&Proselessthan47percent.Rogersthendecidedtoretire—atagethirty-seven—buthedidnotremainidle.

Continuingtomanagehisownportfolio,RogersservedasaprofessoroffinanceattheColumbia University Graduate School of Business and as a moderator of TheDreyfusRoundtableonWCBS-TVandTheProfitMotiveonFNN.Atthesametime,helaidthegroundworkforhislifelongdream:anaround-the-worldmotorcycletripofmorethanonehundred thousandmilesacrosssixcontinents,his secondGuinness record.That journeybecamethesubjectofRogers’sfirstbook,InvestmentBiker(1994).

Rogers’sMillenniumAdventure1999-2002,histhirdGuinnessrecord,tookhimandhiswife,Paige,through116countries(andaboutfifteencivilwars)andover152,000miles.Hissecondbook,AdventureCapitalist,chronicledthatincrediblejourney.

HelivesinAsiawithhiswifeanddaughtersandisamediacommentatorandlecturerworldwide.

Hecanbereachedatwww.jimrogers.com.

AGifttoMyChildrenisacommonsenseguidetopersonalfinance.Inpracticaladvicebooks,asinlife,therearenoguarantees,and

readersarecautionedtorelyontheirownjudgmentabouttheirindividualcircumstancesandtoactaccordingly.

Copyright©2009byBeelandInterests,Inc.

Allrightsreserved.

PublishedintheUnitedStatesbyRandomHouse,

animprintofTheRandomHousePublishingGroup,adivisionofRandomHouse,Inc.,NewYork.

RANDOMHOUSEandcolophonareregistered

trademarksofRandomHouse,Inc.

LIBRARYOFCONGRESSCATALOGING-IN-PUBLICATIONDATA

Rogers,Jim

Agifttomychildren:afather’slessonsforlifeandinvesting/JimRogers.

p.cm.eISBN:978-1-58836-776-1

1.Investments.2Success.3Conductoflife.4Successinbusiness.I.Title.

HG4521.R6852009650.1—dc222008025207

www.atrandom.com

v3.0