Survival And Prosperity

Jim Rogers Talks About Potential Investment Opportunities In Commodities, His Portfolio

I don’t like to buy things that are moving up. I like to buy things that are moving down… I don’t want to buy anything for a 5 to 10 percent move- that’s not the way I invest. Now, there are many short-term traders who make brilliant amounts of money as short-term traders and a 5 or 10 percent move up is great for them. It’s not my way of investing. I like to find things that are going to go up for many years and go up many many percentages.

-Investor Jim Rogers, on CNBC Awaaz (India) in early September

Legendary investor Jim Rogers recently appeared on the Indian financial news channel CNBC Awaaz. On their Market Leaders show, Rogers talked primarily about commodities, potential investment opportunities in hard assets, and what his portfolio looks like these days.

When asked if the commodities bully market is over, the Singapore-based investor who correctly predicted its beginning back in 1999 told viewers:

Oh no no no, not at all. It will be over eventually. It will be over someday. All bull markets have come to an end. But Gorica (spelling?), it will not come to an end until a lot of supply comes on-stream.

On the topic of supply, Rogers said:

I don’t expect world economic conditions to get better anytime soon. I would suspect that 2013 and 2014 will see worse economic conditions after the American election is over, and after the German election is over. I think you’ll see worse conditions. Which means, of course, that there’s not much supply. Now Gorica, if the world economy gets better, then obviously they are going to be shortages of commodities because we don’t have much supply. But, let’s assume I’m right, and the world economy doesn’t get better, then you’re going to have most governments printing a lot of money- that’s not good for the world. But unfortunately, that’s what politicians do. And when people debase currencies, when they print money, the way to protect yourself is to own real assets.

The creator of the Rogers International Commodities Index (RICI) back in 1998 said there were potential investment opportunities in agriculture, precious metals, and crude oil. On agriculture, Rogers said:

If I were an investor looking to invest in commodities, I would start by looking at the things that are most depressed…

Sugar, for instance, is 65 or 70 percent below it’s all-time high… You know, sugar is down 65 to 70 percent from where it was 38 years ago Gorica. That’s astonishing…

Cotton had a big run-up two or three years ago. Made all-time highs. It has come down sharply since then because people planted more cotton. But I would be optimistic about cotton because the prices are down dramatically from where they were. They still are not high enough to bring in lots of new production yet. The world economy has not collapsed yet. China is a net importer of cotton. So, I would be looking favorably at cotton. If someone were looking for a potential place for new investments in agriculture, I would suggest cotton as a place to start looking, because the prices are down from historic highs.

Regarding precious metals, the Chairman of Rogers Holdings repeated a lot of what he’s been saying lately about gold. Rogers said:

I own gold. I am not selling gold. Whenever gold goes down, I buy more. If it goes down a lot, I hope I’m smart enough to buy a lot more, because the price is going to go up much higher over the next decade. Gorica, politicians around the world are printing a lot of money. That’s the wrong thing to do but that’s what they’re doing. And whenever they print money, the way to protect yourself is to own gold, silver, platinum, palladium. Any precious item will protect you in periods like that.

The former investing partner of George Soros likes the prospects of silver more than gold. Rogers explained:

Well, of the two, if I had to buy one today, Gorica, I would buy silver… Silver is about 40 percent below its all-time high. Gold is about 10 or 15 percent below its all-time high. I usually prefer the things that are cheaper. I’m not buying either today, but if I were buying one today, Gorica, I would buy silver on a valuation basis. I own them both. I’m keen on both. Both will go much higher over the next decade. Silver, at the moment, happens to be the cheaper of the two.

The commodities guru sees crude oil going over $150 a barrel in the coming decade. Rogers told viewers:

If America goes to war with Iran, crude’s going to go to $200. If Spain goes bankrupt next month, or somebody, some big surprise occurs in the market, then crude could go to $80 or $70. Who knows where it would go with some sort of sudden bankruptcy. It depends on world conditions. When crude goes down, I buy more. If it goes up, I sit and watch, because I do know that crude is going to go over $150, over $200 a barrel- U.S. dollars a barrel- over the course of the decade…

But I own it, and I don’t plan to sell it for a long time to come.

Talking about his investment portfolio, Jim Rogers revealed:

I mainly am long commodities and long currencies. And I’m short stocks in my portfolio…

I happen to be very bullish on commodities. I think I know what I’m doing. I think that the big shortages are developing, as I said. Whether the economy gets better or doesn’t get better, I want to have my money in commodities.

Great interview.

“Market Leaders: Jim Rogers”
YouTube Video

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

Tags: cotton, cotton prices, crude oil, crude oil prices, gold, gold prices, Iran, Jim Rogers, palladium, platinum, silver, silver prices, Spain, sugar, sugar prices