Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The US economy is no longer producing anything and the finance industry is completely saturated, presenting a unique opportunity for young people to study agriculture and mining, Jim Rogers told a crowd at a recent public appearance:
The event’s moderator began by quoting Rogers to himself:
“Scrap career plans for Wall Street or the City, London’s financial district, and study agriculture and mining instead. Power is shifting again from financial centres to the producers of real goods. The place to be is in commodities: raw materials and natural resources.”
After hearing the quotes, Rogers asked who had done the “homework” for the event, suggesting that they deserve a raise.
“We’ve had long periods in history when the financial types were in charge, then long periods when the producers of real goods were in charge, followed by the financial types again.”
“In 1958, there were 5,000 MBAs produced in America, none in the rest of the world. Last year there were 200,000 MBAs in the US and tens of thousands in the rest of the world. So there’s massive competition now in the financial area.”
“In the 50s, 60s and 70s, Wall Street was a backwater, for many historic reasons. But then we had a bull market. Everybody gets an MBA. There are hundreds of thousands of them out there.”
“Now financial companies – banks especially – are extremely leveraged, which means they have a lot of debt, which never happened in the old days. There were partnerships and the partners wouldn’t take on a lot of debt cause they knew they could go bankrupt.”
“So you’ve got huge debt, massive competition, and governments don’t like financial types anymore..they’re constantly passing laws and regulations and special taxes, blaming all their problems on you, me, us.”
Meanwhile, “the farmers are dying out..anybody in this room even know a farmer?”
“If any of you have got MBAs, I urge you to rush to try to turn it in for a farming degree if you can.”
9 Comments
Michael Allan McCrae
I have an MBA and a creative writing degree. I assume Rogers would just shake his head.
MINING.com Editors
I’m sure he’d think there’s hope for you yet 😉
Guest
Ok and what if you’re not young and not working in mining and agriculture?
KDM
I like this mans way of thinking,time for our world to get back to the basics,someone needs to produce the goods we need. Our world has become way to complicated with all the experts. Look at our politicians today,no ordinary Joe Bloe gets elected who has common sense you need some big fancy degree
LAMB
MBA’s will have to get retraining in Mining & Metallurgy – AND they need to be replaced as CEO’s and CFO’s.
Look at what has happened to Mining Companies that were run by MBS’s&Accountants – they are in trouble because the MBA’s do not understand MINING – they only study the bottom line and react to pressure from minority shareholders that in turn, know nothing about mining and the cycles we go through in this industry. When I was with BOLIDEN, Roland Widmark was President AND a MINER – knew how to run a Mining Company – then along came TRELLEBORG, got control of BOLIDEN, subsequently ran it into the ground. Now it is just a shadow of it’s former self that used to be Europes largest & most diversified mining company.
aspen pittman
Nice thoughts, but naive and slightly out of touch with the reality today;
Farming is big business today, the small farmer is gone, forced out by taxes and regulations and he is not coming back…sad to say. And, there is Government interference there too, as Big G pays mindless subsidies to not grow crops, or subsidized the switch over from edible corn to Bio fuel corn (which doubled the price of meat). The vast majority of US farm land is owned by large Agribiz concerns, which are owned by the Banksters, who control the Progressives in DC.
Same thing with the miners, Gold has been manipulated so low by the Banksters that it’s nearing the cost of getting it out of the ground so both the mining companys and their stocks are tanking. This will lead to more bankruptcies and more takeovers to consolidation until the industry will have 3-4 big players (again, all owned by the Banksters). Just as the Wildcat Oil men were forced out by the Banksters who took owned the Big Oil companies back in the 30s and 40s. Small independent oil companies are a distant memory.
It’s hard to find someplace that the Banksters, Big G and their Progressive Posses haven’t ruined. But it was a nice thought Jim…save it for Christmas.
RedRock
As an independent mining geologist and weekend farmer of our 100-year old family farm, the thoughts by Aspen Pittman are equally naive. Apparently he does not belong to either business, so suggest an end to the guessing at where your knowledge ends. There are no large agribusiness. companies in my county, just farmers, whose holdings are a bit larger than my grandfather who could make a living there in his time, with livestock and large garden. With crop prices stable, support from high-tech. seed, herbicides, and fertilizer, we make a fair profit. Our dependence on used equipment requires one be an expert mechanic. Most important is seeing first sprouts, expected in just a few more days now, and then harvest from your toil, is fulfilling.
Brad Hull
This is an interesting article given my position as an MBA student as well as an established professional in the horticulture industry. There are numerous opportunities in the United States as well as the North American markets. It will not be cultivating corn or in anyway competing with these large established “Agribusinesses” that have been referred in previous discussion. The market potential that I have witnessed is in developing technology that enables agriculturalists to work more effectively or efficiently. Currently my company imports nearly 50% of the technology needed to build high-tech greenhouses from other countries, mostly Holland.
The financial sector will have to play its part by opening up their wallets and recognizing these opportunities and supporting individuals with their agricultural plans. Currently it is relatively difficult to convince a bank or other investor for financial backing because there is a risks associated with these types of investments that is currently not understood.
Additionally, there is a large potential for horticulturalists to satisfy local niche markets that exist within this United States. These markets include organically certified foods, locally produced food, and possibly medical marijuana depending on which state you live in.
Alice
Comment from Aspen Pitman is very stupid or he has never lived on a farm….Because farmers markets and organic produce are such a hit, plus the legalization of hemp and cannibus, the small farmer is stronger than ever..and yes, there is such a thing as a farmer with a PHD…..me!