Forget diversification.  Jim Rogers has identified the world’s next great investment opportunity, and in a recent interview the famed guru said he is willing to put all his considerable fortune there.

So where is the planet’s best place to commit cash?  According to Rogers, it’s the Democratic People’s Republic of Korea.  Yes, that’s the formal name of what the world knows more simply as North Korea.

Rogers has also been talking about farming as a terrific investment in recent days. As he said at the end of last month to Simon Jack on BBC Radio 4’s “Today” show, “If you want to make a lot of money in the future—which many people do—you should learn to drive a tractor.”

Combining both statements, you would think Rogers believes that the very best opportunity in the world’s No. 1 hotspot is agriculture. There are two problems if you try to put your money into a North Korean farm, however.  First, the DPRK, as North Koreans call their horrific state, is so primitive that most farming is done without mechanical devices.  If you want to till the land there, you will need an ox. Second, you are not permitted to invest in North Korean farms.[amazon asin=B000W93E1G&template=*lrc ad (right)]

In fact, it’s hard to invest in North Korea at all. The Pyongyang regime is wary of giving foreigners too much influence, so it severely limits what outsiders—especially non-Chinese—may buy or otherwise invest in.

Nonetheless, Rogers, who apparently believes in first-mover advantage, is worried that the Chinese and Russians will get too much of a head start. His idea is to get in on the ground floor, before unification of North and South Korea.  “What you’ll have is a country of 70 odd million people with cheap, educated, disciplined labor in the North, vast natural resources  . . . with a big capital pool and management capability in the South,” he says.  “It will be a powerhouse.”

Rogers is in fact looking at two North Korean sectors, resources and commodities, but Chinese companies have already sewed up mining with either investments in mines or long-term purchase contracts, gobbling up almost all the North’s anthracite—they ended up with $1.37 billion of such coal last year—and taking $294.1 million of the North’s iron ore.  They are also a sure bet to be the ones to exploit the North’s rare earth minerals as well.  Unfortunately for Jim, there is almost no way in for Americans at this point.

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The Best of Gordon G. Chang

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