We like to report strange stories of investors who are bullish on North Korea. They tend to take two forms: the “hope springs eternal” variety—those who should know better--and those who don’t have a clue. But it is important to repress the world-weary “what-the-hell-are-they-thinking?” response. The point is that the potential is in fact enormous; the problem—as a careful read of Jim Roger’s recent interview with Steve Forbes—is that the North Korean regime doesn’t yet see it. That is the real tragedy.
Rogers is an iconoclastic trader who founded the Quantum Fund with George Soros, retired to travel and around the world (writing Investment Biker: On the Road with Jim Rogers), and then came back to run a new fund (Rogers Global Resources Equity Index). He has a reputation for focusing on commodities and currencies over equities, and clearly is not averse to risk-taking; the full interview at Forbes can be found here.
Caveat emptor. The Ron Paul-backer is not adverse to expressing his opinions forcefully: among his more provocative utterings over the past year were that Federal Reserve chair Ben Bernanke "does not understand economics" and advice to President Obama to resign before surging inflation and skyrocketing interest rates created "social unrest" in the United States. Rogers, who moved to Singapore so that his daughters could learn Chinese, doesn't restrict himself to commenting on the US. His take on the crisis currently engulfing Europe: "“Why should a good, honest German taxpayer, a guy who saved his money, suddenly get a bill from the German government saying you have got to pay for some Greeks sitting on the beach drinking Ouzo? That's absurd.”
So when the legendary Jim Rogers turns his sights to North Korea, well, we had to be there. The unfavorable comparison to Myanmar is instructive.
"Forbes: You going into Myanmar?
Rogers: I’m extremely optimistic. If I could put all of my money into Myanmar, I would. I cannot, because you and I are citizens of the land of the free. In the land of the free, we cannot invest in Myanmar. Everybody else can. The Japanese, everybody’s pouring into Myanmar, except all of us from the land of the free.
It is so exciting. It is like going to China in 1978; it’s exactly the same place. It might be more exciting, because it’s been such a disaster for 50 years and now they’re opening up. They’re right between India on the left, China on the right – huge natural resources, 60 million people, disciplined, hard work, educated. Oh my gosh, it’s such an exciting opportunity. But all you and I can do is I can read about it in Forbes. I can’t do anything.
Forbes: Where else are you doing things?
Rogers: Well, the other place that I see wildly exciting things is North Korea, but we can’t do anything there. There’s no market in North Korea either. But there’s going to be a merger soon of North and South Korea and that’s going to be a very, very exciting place. Then you’ll have a country of 75 million people, right on the border of China, huge labor pool, lots of natural resources in North Korea. They’re going to run circles around the Japanese. The reasons the Japanese don’t want it to happen is because they don’t want a huge new competitor. They got their own problems.
North Korea, I wish I could find – I’m looking for ways to invest. I have a couple of ways. But they’re not of great interest. These are the places that I find the most exciting. But as far as stocks, for the most part I’m short stocks. I don’t own many stocks in the world. I own commodities. I own currencies.