[martin]

I just found these lectures by investor Jim Rogers from when he taught at Columbia Business School. He talks on how investing works, how to find stocks, analysing companies to make gains in the stock market, types of company reports, supply & demand, and looking at company spreadsheets. The students pitch their ideas of stocks to invest and their decisions are questioned.

http://www.youtube.com/watch?v=wKD3k-oX09g

http://www.youtube.com/watch?v=KHDTFPA6P5k

http://www.youtube.com/watch?v=J2-mpbNN1Tg

Here is an extraction from Rogers recent book ‘Street Smarts’:

I am going to teach this course as if you were working for me. I am the head of research, the head of investments, at a fund, and you are going to be my analysts. I am going to give you companies to analyze, and I will teach you how to do it.” I told them how I went about analyzing companies. I gave them spreadsheets. I had the chairmen of a couple of large corporations come in, and in each case, I would sit and question the chairman as though I were a portfolio manager, an analyst, visiting him at his office, asking all the same questions I would ask if I were trying to figure out whether to invest in his company. Then I would throw it open to the students to ask questions. The assignment, after that, was to write a page, a single page—I would not accept anything longer, and I would not accept it if it were late—on what the student would do relative to that company’s stock: buy it, sell it, sell it short, or do nothing. After a few weeks of this, I had each student choose an industry to analyze—his or her choice, as long as I approved it. Say you were a student in my class and chose to be an airline analyst. We would have a dialogue in front of everybody else in the class, in which you would tell me what you thought. You would tell me how I could best make money in that industry, whether I should buy Delta, short Southwest, whatever your research told you. Everybody, I think, had three rounds. And that is the way the class worked.

[martin]

These answers make so much sense; they definitely answer what Keynesian Robert Skidelsky said in response to the objection that resources that are allocated by central planners or governments rather than by the market are sure to be wasted:

“Well it’s a short-run/long-run thing, isn’t it? The fact is that the efficiency of allocation is the long-run engine of growth. In the short-run when you have lots of unemployed resources, it doesn’t matter whether they’re allocated that efficiently. You’ve just got to get the level of activity up. That is the most important thing. And I’m afraid it’s what the government believes today. They say oh no, we can’t have government spending because it misallocates resources. I mean it makes growth less fast than it would be. But that’s a very, very unimportant question in the short-run because actually what you need in the short-run is all the resources to be used.”

[martin]

http://www.youtube.com/playlist?list=PLE703F7D85BC7615F

[martin]

I see what you mean. I thought quantitative easing was inflation, but saying it under a different name.

But surely the Bank of England is lying about not using QE (despite what their balance sheet says) because the government is still running a huge deficit and the Bank of England must be monetising this deficit? Or is it actually the case that the market alone is financing this deficit, and when finally the market stops, the Bank of England (as the “Lender of Last Resort”) will once again buy government debt (resume the QE program)?

It’s just that I don’t believe the Bank of England when it says it isn’t using QE.

[martin]

Thanks Jeff and Torq.

[martin]

… so I guess with that said about currencies and thermometers – back to my initial question – surely there is no way that Karl Marx (of all people) could have thought of this?

[martin]

Rogers basically said, “Capital wants to earn a return; just like labor want to earn a return; land wants to earn a return.”

And in the sense that he was saying, “Figure out the money and you’ll figure out what’s really going on”, I now believe he was saying it in the sense (just as he explained in his book ‘Adventure Capitalist’) that a currency is like a thermometer:

“In most places around the world, the currency is like a thermometer. It may not tell you what is going on, but it tells you that something is going on. You know a country is falling apart when even the government and its own citizens will not accept its own currency; then you know a country is really in trouble. One of the ways to take the temperature of a country and its currency is to visit the local black market in currency (one exists wherever there are exchange controls) because it’s one quick and sure way for an investor to find out what’s going on in a country. The price of the currency is to the prudent investor what an X-ray is to an experienced radiologist.”

[martin]

Rothbard and Hayek

[martin]

I as well would like to connect with some UK based Austrians. I’m aware of the Adam Smith Institute and the Institute of Economic Affairs (but I’m concluding that this institute is more of a Monetarist and Supply-Side institute; it has pretty much abandoned its Hayekian roots in my view).

[martin]

Thank you for replying Jeff.
He only says it in a video, and I think he was saying it in the context of capital. Here is the link to the website, the video is in RealPlayer, and what he says can be found at 16:50
http://www.vpro.nl/programma/dnw/afleveringen/2360667/

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