Get Rich: Read China’s Five-Year Plan

05/18/2011 9:00 am EST

Focus: GLOBAL

Jim Rogers

Author, Street Smarts: Adventures on the Road and in the Markets

This article was excerpted from Jim Rogers’ presentation at the inaugural World MoneyShow Shanghai in April. It is part of a special series featuring Rogers’ unique insights into China’s economic growth, how you can profit, and where you should invest.

One thing I have learned over 45 years of investing is that if you watch governments, it’s a good way to learn ways to make money. By that, I mean when a government decides there’s a problem in the economy or in the country, it will put a lot of money, a lot of effort, and a lot of incentives into that area to encourage solutions to the problem.

[The Chinese Government] just published a five-year plan. If I were you, I would get that out and do some studying, because whatever your government decides to do, they’re going to probably make a lot of people rich in those sectors.

Figure it out. This is not brain surgery. It’s not that difficult to do. Figure out what your government wants to happen in your economy and invest. Find companies in that sector, in those sectors, and invest.

Invest in Raw Materials
I have mentioned investing opportunities in raw materials, producers of raw materials, and by owning commodities themselves. There are three wonderful commodities exchanges in China. It’s easy to buy and sell on those exchanges now.

Invest in Tourism
I also happen to agree that tourism is going to be one of the great industries of the 21st century in China. It already has been.

As you all know, Chinese tourism has been booming for several years. Obviously not all companies participate, but if you find the right companies, Chinese tourism is going to be one of the best places to invest for the next 20 years.

There are 1.3 billion Chinese. For 300 years or so, there was not much travel by the Chinese, but now it’s easy to get passports, it’s easy to take money out of the country, and it’s easier to travel both within China and outside of China. This is going to continue to be a great area.

Invest in Water Treatment, Farming
Other areas where I’ve invested in China and where I hope to find more opportunities:

Water treatment, for instance. You have serious water problems in China. By the way, many countries in the world now have serious water problems.

Your government is spending huge amounts of money to solve those water problems. Find the right companies, and you will probably make a great deal of money.

Agriculture. In my view, farming is going to be one of the great industries of the next 20 years. I suspect most of you do not want to become farmers—but I’m telling you, it’s going to be a great industry.

Farm prices are going to go up a lot in the next ten years, and farmers who have been suffering for 30 years all over the world are now going to be extremely prosperous and make a lot of money.

Probably some of you or your children want to get MBAs. I’m telling you, that’s a mistake. Do not get an MBA. If you did get an MBA, you made a mistake. I’m sorry. I’m sorry.

So, find yourself a profession where you produce real goods, whether it’s farming, mining, or timber, oil, or coal. The people that produce real goods are going to make the money in the future. Or buy shares in those companies, because they’re going to be huge fortunes made in those areas going forward.

I happen to agree about education. I own some education stocks. I own water stocks. I own shares in the Chinese airlines. I mentioned tourism. I own a lot of shares in that sort of thing going on in China.

I plan to get out the new five-year plan and study it more carefully, because I know there are going to be great opportunities by watching what your government does going forward.

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