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Jim Rogers: Commodities Bull Run Ahead

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October 22, 2008 – Comments (9)

Tuesday, October 21, 2008 11:53 AM

By: Greg Brown

Global crisis aside, commodities will roar again, and soon, says Jim Rogers, CEO of Rogers Holdings.

"We have had eight or nine periods of forced liquidation over the past 100 to 150 years wherein everything was liquidated without regard to fundamentals. This is such a period," Rogers told the Web site Commodity Online.

A slowdown in China and economic malaise in the United States and Europe have hit commodity prices short term, Roger says, but nothing about the basics of supply and demand have changed.

"Historically, the things which have come out best on the other side are things where the fundamental have been unimpaired. Commodities are the only thing I know with unimpaired fundamentals," Rogers said.

Speaking on CNBC, Rogers built on the forced liquidation theme, saying he was heavy in cash and buying currencies, including yen and Swiss francs, as well as more agricultural commodities.

"There's a liquidation phase going on, where everything is being liquidated. They're selling everything in sight," Rogers said.

"In a period like this, the way you make money coming out of it is to own the things where the fundamentals have not been impaired."

One theory among economists is that commodity prices are still at the beginning of a steep fall as the credit squeeze takes the world economy into a deep recession.

As usual, it’s all about time horizon.

"When you have a seven-year bull run, you are going to have more than a four-month correction, and we are just beginning our fourth month," Richard Feltes, senior vice president and director of commodity research at MF Global Research, told the International Herald Tribune.

"We have got more deflation coming in the housing sector, in capital assets, and it's going to continue in commodities as well."

True enough, but only if demand stalls in the emerging capitalist economies of Asia. China’s growth has slowed, but only to 9 percent, still an amazing rate of expansion.

"The underlying fundamentals of strong demand for energy, food, and industrial commodities will come back," Michael Lewis, global head of commodities research for Deutsche Bank, told the IHT.

© 2008 Newsmax. All rights reserved.

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9 Comments – Post Your Own

#1) On October 22, 2008 at 12:32 PM, TDRH (99.64) wrote:

So are they buying or selling?   Just kidding.   I agree, but the market does not reflect these positions.

Did you see the correction in the Reais for Brazil? (PBR)  I think it is oversold now, and have felt that way for some time.  Market does not agree.

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#2) On October 22, 2008 at 1:08 PM, GNUBEE (25.02) wrote:

My thoughts are in agreement, it's just a question of when

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#3) On October 22, 2008 at 1:19 PM, kdakota630 (29.57) wrote:

"Soon."  Didn't you catch that at the beginning?!?

LOL!

Just kidding.  I agree that it will be "soon", but it sure would be great to know with a little more specificity.

And I agree, TDRH.  It's starting to get frustrating.  It's a good thing I have 27 years before retirement.

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#4) On October 22, 2008 at 2:51 PM, XMFSinchiruna (27.47) wrote:

Commodity Investing the Jim Rogers Way

http://www.fool.com/investing/etf/2008/10/21/commodity-investing-the-jim-rogers-way.aspx

Hang in there Fools... you know these conditions can persist ad nauseum, but not ad infinitum.  :)

 My real-life portfolio is down 2/3... but I'm not concerned about anything other than a systemic failure of the financial system that could lead to bank holidays or asset seizures. :)

Someone very wise said today: "Pain is simply the period between two pleasures".

Extra points for anyone who can find the source.   :)

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#5) On October 22, 2008 at 3:28 PM, TMFCrocoStimpy (95.22) wrote:

Someone very wise said today: "Pain is simply the period between two pleasures".

Extra points for anyone who can find the source.   :)

Marquis DeSade?  Or would that be the other way around?  :)

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#6) On October 22, 2008 at 3:36 PM, TDRH (99.64) wrote:

kdakota, you are retiring at 57?

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#7) On October 22, 2008 at 7:31 PM, abitare (34.13) wrote:

FYI -

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#8) On October 22, 2008 at 8:30 PM, russiangambit (29.24) wrote:

Jim Juback is also calling for commodities boom in 2010. Hmm. Too bad I am not that patient.

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#9) On October 22, 2008 at 8:32 PM, kdakota630 (29.57) wrote:

Good clip.  Thanks AresFinancial.

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