If you are looking for a light book on how to approach life, read A Gift to My Children by renowned maverick investor, and my former professor at Columbia Business School, Jim Rogers. Part Socratic, part Sachin Tendulkaresque, it talks about simple character traits: hard work, curiosity, independent thinking, self-assessment and adaptation. Your grandfather could have told you that; it’s just that Jim Rogers gives examples and anecdotes from the world of high finance, and hearing it from him gives a ring of hard-headed conviction, rather than touchy-feely pop psychology.
Someone once said: “Your character is your destiny.” Jim Rogers takes it from there. He starts by telling us about understanding ourselves and modulating our passions with our inner voice rather than from peer thinking and perceived social norms. He quotes American Olympic gold medal winner, Donna de Varona: “I always used to watch the other swimmers, but then I learned to ignore them and swim my own races.” He goes on to tell us not to confuse vocation with passion and how passion makes us not just more productive at work, but also happier and able to deal with ups and downs.
Rogers does not have too much respect for conventional wisdom. According to him, most conventional wisdom is an over-simplified extrapolation of recent events and it misses how the world is ever-changing. We see this every day: when the markets are going up, everyone thinks (sorry, the right word is: assumes) they will continue to do so, and everyone feels it’s the right time to make investments. When the markets fall, people mindlessly shun the very same investments that they chased during the peak. And the secret of folks like Warren Buffett or Jim Rogers or George Soros (with whom Rogers founded the Quantum Fund, before retiring at the age of thirty) is to distinguish between facts and mood. In other words, use their own common sense and endless ability to ask probing questions and seek answers (Socrates again) rather than just follow the mood set by the masses.
So, what do we need to succeed? Professor Rogers says we need to make the world our reference point. He means travel, not television. True perspectives only come from first-hand understanding. China remained a mystery to many who did not bother to understand it first hand. Rogers’ travel through China in the early ’90s showed him how its dynamism was being missed by the world. Most important to me was his statement: “You will realise that some things you thought were important, are of little consequence. What you wear, or who you know, or from where you originate, will mean less.”
He stresses that one of the most important things we can learn is how to think. This can come from studying philosophy, practising asking tough analytical questions, and co-relating logical analysis with empirical evidence. He is also a fan of history and the perspective it can provide, both on how things change abruptly and unpredictably, but if you take a long-enough perspective, many issues and cycles are predictable, because human nature is what drives world events, and human nature does not change. He is a big fan of learning foreign languages as a means of understanding the world. He is an even bigger fan of China (alas, he is sceptical about India), and the implications it will have from geopolitics to commodity prices to world currencies.
He asks us to reflect on our weaknesses and mistakes. Because that is the cheapest way to learn. We can learn by reflection, or by simple feedback, or we can wait for some debacle. He talks about how he consciously controls and harnesses some of his strengths and weaknesses. When you think about it, it is pretty easy. It is just that we never do it. He warns about wishful thinking and attributing causes to external events when the weakness might really lie in our action: the ball was not bowled right vs we batted wrong. He talks about change, how it is inevitable, how it throws up new opportunities, and how we can use it as a current to propel us forward rather than hinder us. Margaret Thatcher said it even more beautifully: “The wave is coming; we can ride it or be swept by it.”
He plays futurologist. Example: The world will have twice as many countries in a hundred years as that has been the nature of how human beings organise. History shows that borders are ever-shifting. Why will this stop now? Evidence of the past two decades is in front of us. He gives us a tip: Do not cling to pet beliefs if you want to see the future. More: If you want to make money, pay attention to what everyone neglects. And lastly, he talks about doing your homework, being objective, controlling arrogance and self-doubt, which can both distort rational thinking, and above all, “I always regret it when I do not stay with my own best abilities — whether in investing or anything else.” Amen to that.
The author is a Director of the Dalmia Group, and is both a businessman and an investor.
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A GIFT TO MY CHILDREN
A FATHER’S LESSONS FOR LIFE AND INVESTING
Jim Rogers
Random House
112 pages; $16
