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Weekend reading: Better to be a farmer than a banker, says Jim Rogers

Weekend reading

Good reads from around the Web.

The best article I read this week was 6 Harsh Truths That Will Make You A Better Person on Cracked.com.

It’s full of swearing and aimed at under-sexed 20-something males. You’ll either love it or hate it. I wish I’d written it.

I also really enjoyed a podcast interview on The Motley Fool with ex-hedge fund manager Jim Rogers – particularly his career advice for kids thinking of getting rich in The City:

Jim Rogers: We’ve had long periods in history when the financial types were the masters of the universe, followed by long periods when the producers of real goods were the masters, and then followed again by the financial types.

I was a student at Oxford once upon a time, and when I was at Oxford in the Sixties, my professors used to say to me, what’s wrong with you? Why are you so interested in the stock market? It’s not relevant to anything, including the world economy or the English economy, and they just thought I was very peculiar, and I was, I guess.

So in the Fifties, Sixties and Seventies, Wall Street and the City of London were backwaters, serious backwaters. A big day on the New York Stock Exchange when I first went there in the mid-Sixties was three million shares. I mean, nowadays three million shares is not even one trade – that’s an odd lot, almost. So then we had the big bull market, and now every kid at Oxford wants to start a hedge fund in his dorm room – it’s totally changed.

But those days are ending, as far as I’m concerned. Finance now has huge competition. In 1958, America graduated 5,000 MBAs; the rest of the world graduated none. Now last year, America produced a couple of hundred thousand MBAs; the rest of the world, tens of thousands more. So you have staggering competition now which you didn’t have before. You have huge leverage, I mean all the financial institutions are very, very leveraged now, and you have governments all over the world coming down hard against financial types. Nobody likes us any more – taxes, regulations, controls.

At the same time, in America, the average age of farmers is 58. In the UK, the highest rate of suicide is in agriculture, because it’s a terrible business. The average age of farmers in Japan is 66; in Australia, it’s 58. I can go on and on.

In America, more kids study public relations than study agriculture, so the farmers are all dying and retiring, there are no young people going into the business. Farming’s been a terrible business for 30 years; finance has been the height for 30 years.

It doesn’t take much for me anyway to figure out, I’d rather be a farmer than an investment banker in 2018.

Is he right? Who knows, but it’s a provocative line of thinking.

I have my doubts that the financial sector has been squished down to size, but Rogers has an admirable habit of being ready to invert the status quo. And unless most of the new billions being born are going to eat algae grown in vats (they might) then we certainly need to grow a lot more food.

In his book Adventure Capitalist, Rogers writes: “While I have never patronized a prostitute, I know that one can learn more about a country from speaking to the madam of a brothel or a black marketeer than from meeting a foreign minister.”

That’s the spirit! As I always say, most people are going to come a-cropper trying to invest actively, and will be far better off in passive funds. But if you’re going to get neck deep in the markets you’d better enjoy it – it could be an expensive hobby, after all – and Rogers clearly relishes it.

I would certainly take anything he – or any other pundit – says with a wheelbarrow of salt. (See this old article from Fortune for more).

However it’s surely better than listening to this guy.

Merry Christmas to all our readers, whether you’re passive, active, old, young, rich or poor, or like me a bit of all of the above!

From the blogs

Making good use of the things that we find…

Passive investing

Active investing

Other articles

Product of the week: Emergency! You forgot someone’s present! There’s still time to email them a digital Christmas gift card from Amazon. Everyone likes money.

Mainstream media money

Note: Some links are to Google search results – these enable you to click through to read without you being a paid subscriber.

Passive investing

Active investing

  • Apple is the cheapest $500 billion company ever – Forbes
  • Hedge fund redemptions jump after lackluster year – Reuters
  • [No wonder…] Rich managers, poor clients – The Economist
  • Bill Ackman’s awesome Herbalife short slides – Business Insider

Other stuff worth reading

  • 2012 review: Pensions pain and promise [Search result]FT
  • 2012 review: Property is unmoved [Search result]FT
  • Savvy supermarket Christmas shoppers – Telegraph
  • Last minute Christmas gift bargains – Guardian
  • Careful: Saving for an emerging could be self-defeating – Forbes
  • With bonds, do we have another bubble on our hands? – Time
  • Harvests and farmland: Unyielding – The Economist
  • Exploration is in humanity’s genes – National Geographic

Read of the week: While we seasonally spend to excess, some kids in Africa are reading books for the first time. A few are using Kindles, which shortcuts the need for infrastructure to get books out to them. Read more at Amazon, and learn about the Worldreader charity helping to make it happen.

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{ 9 comments… add one }
  • 1 K.K. @ Living Debt Free Rocks! December 23, 2012, 5:45 am

    Thank you for the mention! Happy holidays 🙂

  • 2 ermine December 23, 2012, 1:38 pm

    That cracked.com article is awesome. And I’m going to set an alert for Glengarry Ross for when it comes round on TV.

    I’m not sure who or what hipsters are, but they obviously need sorting. The tragedy of the human condition is that this sort of advice is tough to take on board in your twenties, because you have spent a lot of time working out who you are, so you end up with the standard response of narcissism confronted with a greater power – quietly seethe and fantasize about discovering the higher power’s feet of clay.

    Must remember to look for the narcissism when I do that, too. Thank you – that made my day 😉

  • 3 Miserly Investor December 23, 2012, 1:55 pm

    Monevator,

    Thanks for another year of weekly round ups – I always find something interesting to read.

    Very best wishes for the festive season,
    MI

  • 4 The Investor December 23, 2012, 2:18 pm

    @ermine — Hipsters are the sort who live in Hackney (or probably more like Deptford nowadays) and have funny mustaches and don’t like bands after they release their first album and eat at places like this. I ate my last meal out there, too, and in my 20s I was perhaps on the fringes of hipster-ism, but I was too self-aware, too neurotic, and too money-conscious to be a true hipster. Think BBC creatives / young advertising types brought into Charlotte Street offices because they understand the power of Path and PinInterest (forget Facebook and Twitter — too mainstream) etc.

    @Miserly Investor — Cheers, you too.

    @KK — You’re welcome

  • 5 Financial Independence December 28, 2012, 11:35 am

    I think it is disproportinate now. Financial sector seems to get rewarded independenndtly of their performance and over inflated proportion of wealth created by others.

    I can understand this is happening in western europe where the manufacturing sector is gone and government need to make money somehow but in the USA?

    I think you would loose you interest in being a farmer – I know a few of them. It is a harsh life in their time off they are going to work elsewhere just to make the ends meet and provide for the family.
    The only time when farmer makes money – when he sells his farm.

  • 6 Davy Jones December 28, 2012, 6:57 pm

    If you have an interest in farming .. to me that would be the best reason to go into it , but doing something because you think your going to make a killing from it at some point in the future probably isn’t such a great idea.

  • 7 ermine December 28, 2012, 9:51 pm

    Blimey, what’s with the minimalist new look? Taking the warnings of a Spartan 2013 to heart? All the best for a great New Year!

  • 8 The Investor December 28, 2012, 10:29 pm

    @ermine — Yikes, thanks! It’s an occasional bug that pops up and I always appreciate a heads up as it’s totally annoying! Thanks, and happy new year!

  • 9 Passive Investor January 2, 2013, 11:07 pm

    Thanks Accumulator I was being dozy. The hsbc pacific ex Japan track a FTSE index (approx 26% Australia). Ishares SPXJ tracks MSCI (approx 60% Australia).

    I think I did know this once and preferred the more diversified HSBC fund. I guess there will be some mean regression in due course and HSBC / FTSE will out perform iShares / MSCI.

    Thanks as ever.

    Adrian

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