Recent Gross Domestic Product data out of China and Singapore has ignited new arguments from both bulls and bears. But how much credence do successful macro investors give to GDP numbers? Depends on the investor.
One of the world’s most successful macro investors, Jim Rogers, doesn’t use GDP as a major variable in his investing framework. When I asked him why, he offered these four reasons:
Jim Rogers: I do not pay attention to that sort of thing for the following reasons:
- The numbers are backward looking;
- They are always revised;
- Every government has different methodologies; and,
- Most governments have no clue so they just make up the numbers.
So, next time someone on Wall Street tries to persuade you to make investments solely on the “big” GDP data, keep Jim’s wisdom in mind.
Jim Rogers is one of the world’s top investors and author of A Gift to My Children: A Father’s Lessons for Life and Investing.
(This post previously appeared on Wall Street Cheat sheet)
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