Jim Rogers Hot on Commodities
Jim Rogers is the author of a book entitled Hot Commodities: How Anyone Can Invest Profitably in the World’s Best Market.Jim Rogers: "Well, it’s maybe because people don’t know so much about them If you ask a stockbroker, most of them say, Go away and leave me alone, because they don’t know anything about commodities. They fall back on the old tried-and-true answer that commodities are dangerous and people lose their shirts in commodities, which can be true, of course.
But I think it’s just essentially, people don’t know much about ‘em. The brokers don’t push them. The brokerage firms don’t.
Merrill Lynch doesn’t even have any registered brokers for commodities anymore. In 1998, Merrill Lynch made the strategic decision to leave the commodity business because it was a bad business.
They’re getting their toes back in now, but if you go into any Merrill Lynch office and say “I wanna buy copper,” you can’t do it. There’s nobody there to sell it to you, because they’re not registered. To be a commodity broker, you have to get registered, you have to go through that whole process.
Merrill Lynch made the strategic decision in 1998 to get out of the commodity business because it was a bad business. That, by the way, is the year I started my commodity index fund."
Jim Rogers: Well, there’s always something to cause supply-and-demand to get out of whack. And this time, the big demand is coming from China. Or an added element of demand is coming from China, so in that sense, yes.
But if you look back at the ’70s, of course, there were plenty of economies – Germany was booming, Japan was booming – there were plenty of new economies on the horizon, which were growing.
This time, of course, China’s so big and so obvious that everybody can focus on it. But something always causes supply-and-demand to be out of whack. That’s why we’ve had huge bull markets in the past, and huge bear markets.
Via Investment U
