Gain a Global Investor's Vantage Point

September 16, 2008
Stewart H.Welch III, CFP, AEP

Physician's Money Digest, August15 2003, Volume 10, Issue 15

Adventure Capitalist

Guinness Book

Investment Biker

Recently I visited with noted internationalfinancier and author, JimRogers, who was in town promoting hisnew book, (RandomHouse; 2003). I first met Jim in 1994, whenI interviewed him after he had completedhis record, winning theworld tour on a motorcycle that culminatedin his best-selling book to date,(Random House; 1994).

ROUND THE WORLD

Guinness Book

In his new book, Jim writes about hisrecently completed world tour—this time,in a customized Mercedes convertiblewith his travel companion and now wife,Paige. The trip covered a total of 152,000miles across an astonishing 116 countries,setting another record.This world tour was anything but a picnic,and included crossing the war zone ofAngola and Manipur in eastern India.

When asked to what he attributedtheir successful passage through dangerousterritories, he said, "Three things.First, there was my yellow automobile.These people had never seen a yellow car.Second, my wife Paige has striking blueeyes. They had never seen someone withblue eyes. And third, we took Polaroid picturesof them. Most had never seen a pictureof themselves. In essence, theythought we were from another planet."

Our conversation then turned to investments.Jim felt that the world tour gavehim unique insight into the financialstrengths and weaknesses of the countrieshe visited, as well as the public companiesdomiciled in those countries. I was anxiousto get Jim's world view and outlook forthe future of the various countries that hevisited as compared to the United States.Jim says that the United Kingdom dominatedthe 19th century, while the 20thcentury has seen US domination.

FINANCIAL POWER SHIFT

What about the present? He believesthat China will dominate the 21st century."They claim to be Communist, but in reality,they are world-class entrepreneurs,"he says. I tend to agree with this statement.I have a close friend who owns asuccessful furniture manufacturing company.In order to be competitive, a numberof years ago, he established a plant inMexico. Over the past few years, he hasshifted the bulk of his manufacturing toChina because of lower labor costs. In fact,he says when his Chinese contact quoteshim finished goods pricing, there is no lineitem expense for labor at all. Chinese businessmensimply quote the costs of rawmaterials, shipping, plus their profit. Iexpect the trend for American manufacturersto lose jobs to China not only tocontinue, but to accelerate.

When asked about his outlook for theUS stock market, Jim said, "I expect the USstock market to deliver low returns overthe next several years. The United States isthe world's largest debtor nation. Its corporateprofits, which peaked in 1998, arefar from seeing a strong recovery." Myown view is that the people of our countryhave the intellectual skills to makewhatever adjustments are needed toremain competitive in an emerging globaleconomy. It will be important, however, torecognize the significant role that othercountries are playing.

His answer:

My final question for Jim was, "Whatis the best investment advice you canoffer our physician-readers right now?""Buy my book." Spoken likea true entrepreneur, Jim.

Stewart H. Welch III is founder

of the Welch Group, LLC, which specializes in providing

fee-only wealth management services to affluent retirees and health care professionals

throughout the United States.Mr.Welch has been recognized by Medical Economics,

Money,Mutual Funds Magazine and Worth as 1 of the top financial advisors in the country.

He is the coauthor of J.K. Lasser's New Rules for Estate and Tax Planning (John Wiley &

Sons; 2001). He welcomes questions or comments at 800-709-7100, or visit www.welchgroup.com. This article was reprinted with permission from the Birmingham Post Herald.