Watch the black-market exchange rate
He often said that at each border, the gap between the official and black-market exchange rates instantly shows how stressed a country’s economy is
Famous Traders · Global Macro
Jim Rogers
Jim Rogers / The investor who travelled the world to find opportunities
Co-founder of the Quantum Fund with George Soros, he made about 4,200% in about 7 years, then “retired” at 37 to ride a motorcycle around the world. This page lets you try Quantum-style compounding, read black-market exchange rates the way he did at borders, and see why commodity prices move in long cycles
PASSPORTADVENTURE CAPITALIST · USA
JR- Surname
- ROGERS
- Given names
- JAMES BEELAND JR.
- Date of birth
- 19 OCT 1942
- Place of birth
- BALTIMORE, USA
- Occupation
- INVESTOR · AUTHOR
Photo: Wikimedia Commons (Madrid 2010) · passport page details are illustrative
Born1942
Quantum 1973–80≈ 4,200%
Distance around the world405,000 km
Countries driven through116
THE FUND4,200%Quantum Fund return over 1973–1980, while the S&P rose about 47%
THE ROAD2 × GuinnessAround the world by motorcycle in 1990–92, and by car through 116 countries in 1999–2002
THE CALL1998Set up his own commodity index when hardly anyone cared about the market
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ProfileQuick facts
Full nameJames Beeland Rogers Jr.
Born19 October 1942 in Baltimore; grew up in Demopolis, Alabama
EducationHistory, Yale University (1964), and PPE, Balliol College, Oxford (1966)
FundCo-founded the Quantum Fund with George Soros in 1973
Best known forOver 1973–1980 the portfolio rose about 4,200%, while the S&P 500 rose about 47%
StyleGlobal Macro and commodities: buy what is cheap and ignored, then wait for the fundamentals to change
IndexFounded the Rogers International Commodity Index in 1998
TodayMoved to Singapore in Dec 2007. Author of several books, including Investment Biker and Hot Commodities
02
Early lifeFrom a small town in Alabama to Soros’s partner
Jim Rogers grew up in Demopolis, Alabama, and won scholarships to Yale and Oxford before starting on Wall Street. In 1970 he joined Arnhold and S. Bleichroeder, where he met George Soros
In 1973 the two left to set up their own fund, later known as the Quantum Fund. Rogers handled the in-depth research while Soros focused on trading. After about 7 outstanding years, he decided to leave the fund in 1980, at just 37
PASSPORT STAMPS · 1942–2007Tap each stamp to read the details
Born 19 Oct 1942 in Baltimore, Maryland, but grew up in the small town of Demopolis, Alabama
1 / 10
Jim Rogers’s thinkingI just wait until there is money lying in the corner, and all I have to do is go over and pick it up. I do nothing in the meantime
Paraphrased from his interview in Market Wizards (1989), not a direct quote
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Quantum 1973–1980Lab: if you had put money into Quantum in 1973
A return of about 4,200% means $1 became about $43, while the S&P turned $1 into about $1.47. Enter a starting amount in dollars, then slide through the years
Average annual return (Quantum)—
Average annual return (S&P)—
Quantum ahead by—
This lab uses the same average compound rate every year, based on the commonly reported totals (about 4,200% and 47%). Actual year-by-year results varied, fees and taxes aren’t deducted, and the S&P figure excludes dividends
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04
The roadAround the world twice: an investor’s odometer
After leaving Quantum he used travel as an economics classroom. Choose a trip to see how its distance compares with going around the world
ODOMETER · KM0
0Around the world
- Covered
- Recorded in a book
- Compared with the distance to the Moon
Based on Earth’s circumference of about 40,075 km and an average Earth–Moon distance of about 384,400 km. Trip distances are the commonly reported figures
What an investor looks at along the way
Border crossings reveal costs
The harder the crossing, the more paperwork and the more officials asking for bribes, the higher the cost of doing business. That’s information you won’t find in financial statements
See the real thing
He believes investors should see countries, markets and people with their own eyes, not just read reports at their desks
05
The street rateLab: read black-market rates like a traveller
At many borders, the rate people actually exchange at differs from the official rate. The wider the gap, the more pressure the authorities are trying to hold down. Choose an example or enter your own numbers
Gap (premium)—
Countries A, B and C are made-up figures. The thresholds are rough guides for learning, not official indicators. Unofficial currency exchange is illegal in many countries; this lab is only for reading signals
BOARDING PASS · FLIGHT 1TRSet off with lower costsTrade with XM account through 1TRADER and get up to 90% of the IB commission on every lot
GATE90%Check in ↗
1TRADER is a partner (IB) and earns a commission when you open an account through our link · % is the share of IB commission returned to you · How to get rebates
06
Hot commoditiesLab: why commodity prices move in long cycles
In Hot Commodities he explains that when prices stay low for a long time, nobody invests in new mines or production. When demand rises, supply can’t keep up, so prices rise for years. Try adjusting how long new production takes to come online
Made-up model · 40 yearsPrice index (start = 100)
Highest price—
Lowest price—
Number of upcycles—
A simple model: demand grows 2.5% a year, producers invest more when prices are high, and old capacity declines 3% a year. All figures are made up to explain the mechanism, not a forecast for gold or any commodity
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Fact checkFact check: truth and legend
Stories about famous investors often get exaggerated in the retelling. We sort each by the weight of the evidence
The Quantum Fund made about 4,200%
The commonly reported figure, including on Wikipedia, is that the portfolio rose about 4,200% over 1973–1980, compared with about 47% for the S&P. Full annual statements haven’t been published for every year
Guinness records for travelling around the world
Both the 1990–1992 motorcycle trip and the 1999–2002 car trip were recorded by Guinness World Records, as commonly reported
He predicted the commodity supercycle
He set up his index and talked about a commodity bull market from the late 1990s, which was followed by soaring prices in the 2000s. But being right about direction isn’t the same as knowing the exact timing, and he has been wrong at times
Moved to Singapore because he believes in Asia
He said in interviews that if you were smart in 1807 you moved to London, in 1907 to New York, and in 2007 to Asia. His family moved to Singapore in Dec 2007
Warned the next bear market will be the worst of his lifetime
He said this in Feb 2018 and has warned of crises many times. Such warnings have come both before real falls and during long continued rises, so they shouldn’t be used as timing signals
He is a short-term trader
The opposite: he often says he isn’t a trader but a long-term investor who buys when nobody cares and waits for the fundamentals to change. Some positions he held for years
He bought gold and never sold
He has said in many interviews that he holds gold and silver as assets, not to trade, but that doesn’t mean he never adjusts his portfolio
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08
LessonsLessons for Forex and gold traders
Your checklist
0/4
Buy cheap things with a catalyst
Cheap things can stay cheap for a long time, so he looks for both a low price and signs of positive change, such as a new policy or falling supply. Before buying gold or a currency pair, ask what will make the price turn
Watch the black-market rate
The gap between a currency’s official rate and the rate people really exchange at is a warning signal. If the gap keeps widening, the risk of devaluation rises
Supply can’t catch up easily
New mines and production take years, so commodity prices, including gold, move in long cycles. Big trends don’t end in a few weeks
Wait until the money is lying in front of you
An idea he often repeats: you don’t need to trade every day. Wait until the opportunity is clear before acting. Having no position is a position too
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Quiz5-question quiz
Question 1 / 5
Which fund did Jim Rogers co-found with George Soros?
They co-founded the Quantum Fund in 1973
Over 1973–1980, about how much did the Quantum portfolio grow?
About 4,200%, while the S&P rose about 47%
If the official rate is 100 but the black market trades at 130, what is the gap?
(130 − 100) ÷ 100 = 30%, a very wide gap that reflects stress on the currency
Why do commodity prices often move in long cycles?
Opening new mines or production takes a long time, so prices rise or fall for longer than people expect
In 2007, where did he move his family?
He moved to Singapore, believing the future lies in Asia
0/5
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Invest like RogersFollow in Jim Rogers’s footsteps: see the big picture, then wait for the moment
What you can use is seeing the big picture, finding cheap assets with a catalyst, and waiting patiently. Here are tools on 1TRADER that help
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Further readingFurther reading
- Investment BikerJim Rogers · 1994A record of his motorcycle trip around the world, mixing travel with spotting investment opportunities in each country
- Hot CommoditiesJim Rogers · 2004Explains why commodities move in long cycles and how to invest in them
- Market WizardsJack D. Schwager · 1989Includes an interview with Jim Rogers on waiting for opportunities and macro investing
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FAQFrequently asked questions
Who is Jim Rogers?
An American investor born in 1942 who co-founded the Quantum Fund with George Soros in 1973. Over 1973–1980 the portfolio rose about 4,200%. He then travelled around the world and wrote several books. He now lives in Singapore
Why did he travel around the world?
Besides loving adventure, he used travel to see each country’s economy with his own eyes, such as black-market exchange rates, how hard border crossings are and how people live, and used that in his investment decisions
What does the black-market exchange rate gap tell you?
If people are willing to exchange at a much worse rate than the official one, demand for foreign currency is higher than the authorities allow. It signals capital controls or a risk of a sharp currency fall
Why are commodity prices cyclical?
When prices are high, producers invest more, but new mines or production take years. By the time supply arrives, prices have already risen far, and when supply floods in, prices fall for a long time. So the cycles last years
How can his ideas be used with Forex and gold?
Look at the big picture before trading, find assets that are cheap and have a catalyst, watch for signs of currency stress, use small position sizes if you hold long, and be willing to wait until the opportunity is clear
Educational content, not investment advice. Return figures are publicly reported figures. The labs use made-up data and models. · risk disclosure · Forex glossary