Commodities combined with Mandarin is the best recipe for a successful long-term career in financial services, says legendary investor Jim Rogers.
If you’re at an early stage in your financial services career, I have one piece of advice: go into commodities. There’s a gigantic need for commodities people and there’s a very limited supply of them. You can go into any business school in the world and they have plenty of courses about stocks and bonds, but they don’t have courses on commodities. Why go into the stock market when the supply of people is skyrocketing, but commodities can’t get enough staff? It’s a simple case of supply and demand.
So how can you learn about commodities? Research. There’s a lot to be said for just picking up a book or reading the internet – I never took a course in stock picking. Choose a subject – say cotton, zinc, or copper – and learn everything you can about it. When you get to interview you’ll then be able to dazzle them with everything you know.
Don’t be afraid to start low down the ladder – join a bank as an assistant to a commodities trader, or go and work on the trading desks of one of the commodities companies like Cargill or Exxon, which are hiring all the time. If you’re determined, it won’t take long for you to progress, I can assure you. Call any commodities investing firm in the world right now and they’ll tell you they’re desperate for good people and just can’t find them.
If you want to make yourself even more marketable, learn Mandarin at the same as you’re learning about commodities. If you can speak Chinese and you know about commodities – unless you’re a total dunce – you are going to be one of the most successful people in the world in the next 20 to 30 years.
What about hedge funds? Frankly, the world has 20,000 to 30,000 hedge funds and there are simply not that many smart 29 year olds. Right now, we have good markets, but in a bad market plenty of those hedge funds are going to blow up – and there’ll be a mess.
And what about private equity, which together with hedge funds is where most business school students want to go right now? Private equity is no longer a place where there’s easy money to be made; 20 or 30 years ago these guys were brilliant, but now everyone’s copying the process. You’ve got a lot of people who are overpaying and using excessive leverage.
In terms of location, I’d advise Asia – and if possible, Shanghai. Right now, the Asian countries are the huge creditor nations, and the US is the big debtor. If you want a 20 to 30 year career you want to be in one of the places that has the money, not one of those that’s going faster and faster into debt.
· Jim Rogers is an investment guru and co-founder of the legendary Quantum Fund with George Soros. Over a decade in which the S&P rose only 47%, the fund rose more than 4,200%.
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