Hot Commodities
How Anyone Can Invest Profitably in the World's Best Market
Jim Rogers
- English
- ePUB (mobile friendly)
- Available on iOS & Android
Hot Commodities
How Anyone Can Invest Profitably in the World's Best Market
Jim Rogers
About This Book
The next bull market is here. It's not in stocks. It's not in bonds. It's in commodities - and some smart investors will be riding that bull to record returns in the next decade.
Before Jim Rogers hit the road to write his best-selling books Investment Biker and Adventure Capitalist, he was one of the world's most successful investors. He co-founded the Quantum Fund and made so much money that he never needed to work again. Yet despite his success, Rogers has never written a book of practical investment advice - until now.
In Hot Commodities, Rogers offers the low-down on the most lucrative markets for today and tomorrow. In late 1998, gliding under the radar, a bull market in commodities began. Rogers thinks it's going to continue for at least fifteen years - and he's put his money where his mouth is: In 1998, he started his own commodities index fund. It's up 165% since then, with more than $200 million invested, and it's the single-best performing index fund in the world in any asset class. Less risky than stocks and less sluggish than bonds, commodities are where the money is - and will be in the years ahead.
Rogers's strategies are simple and straightforward. You can start small - a few thousand dollars will suffice. It's all about putting your money into stuff you understand, the basic materials of everyday life, like copper, sugar, cotton, corn, or crude oil. Once you recognize the cyclical and historical trading patterns outlined here, you'll be on your way.
In language that is both colourful and accessible, Rogers explains why the world of commodity investing can be one of the simplest of all - and how commodities are the bases by which investors can value companies, markets, and whole economies. To be a truly great investor is to know something about commodities.
For small investors and high rollers alike, Hot Commodities is as good as gold... or lead, or aluminium, which are some of the commodities Rogers says could be as rewarding for investors.
Frequently asked questions
1
THE NEXT NEW THING ISâTHINGS
- Stocks. Most equities are overpriced on a historic basis; P/E (price-earnings) ratios for the Nasdaq are in the stratosphere. In fact, at every level of considerationâprice-earnings ratios, price-to-book ratios, dividend-yield ratiosâcorporate equities are all extremely expensive compared with past markets. Do you really think stocks will be able to soar from such exalted levels?
- Bonds. With interest rates lower than theyâve been in decades, the bond market is not about to make you richâespecially as rates go up. The yields on long-term government bonds are pathetic, while better-paying corporate bonds are expensive. And if your financial consultant advises you to buy bonds issued by the âgovernment-sponsoredâ mortgage agency Fannie Mae or Freddie Mac, hang up the phone. The White House, Congress, HUD, and federal regulators are all gunning for both agencies. Sitting on top of $7.3 trillion in home mortgages, Fannie and Freddie are scandals in the making. (N.B.: âGovernment-sponsoredâ does not mean âgovernment-backedâ; if either Freddie or Fannie goes down, Uncle Sam is not obliged to give you your money back.)
- Real Estate. Housing is already too expensive to be much of an investment, at least in those places where youâd be willing to live. (Youâve even missed the real-estate booms in the U.K., Spain, Australia, New Zealand, and other countries where prices have accelerated beyond their historical average rates of increase.) U.S. housing prices rose faster than the rate of inflation for more than eight years; home-equity values may be inflated by as much as 20 to 30 percent. In New York and Southern California, housing prices have doubled in the past five years. A massive speculative bubble in the U.S. housing market seems to be floating from coast to coast, and as it bursts (as bubbles always do) some serious pain is in store for the millions of Americans who have been borrowing against their home equity at record ratesâ$750 billion in 2003. The resulting loss in wealth could be between $2 trillion and $3 trillion, sparking an economic downturn reminiscent of the one that resulted when the dot-com stock bubble went kaboom. Even if the air stays in the real-estate market, prices are way too high for investors to make a lot of money.
- Currencies. The U.S. is already the worldâs largest debtor nationâwith more than $9 trillion in outstanding international IOUs, and increasing by $1 trillion every 15 months. For the past 20 years, we have been borrowing heavily in the worldâs financial markets to finance large trade deficitsânow about $700 billion a year (or 6 percent of GDP, the highest ever). Our interest payments to service those debts in 2005 alone totaled $350 billion. Thatâs roughly a billion dollars a day just to keep the dollar afloat. We are now living off other peopleâs money. With the White House in a race with the Federal Reserve to spend money faster than the Fed can print it, the dollar is shakier than ever. Foreign investors eyeing our balance sheets are beginning to see a banana republic emerging on our shores, and many have already bailed. (In the 12-month period between June 2003 and June 2004, net foreign investment in the U.S. was a negative $155 billion.) During past trade deficits, it was foreign investment that financed our standard of living; now itâs being paid for by foreign buyers of U.S. bondsâmainly Asian banks, including the Chineseâlooking to keep their own currencies under control. Should those lenders decide that they would rather not finance our profligate ways, the dollar will decline even more, interest rates will rise, and so will inflation. Foreigners have already begun to sell U.S. dollars. But to where do you run? The Swiss franc and the Japanese yen are stronger than the dollar, but those governments are also playing monetary monopoly, fiddling with the money supply and the interest rates to make their products more competitive. If you had changed your dollars for euros at the end of 2001 when the euro was worth 89 cents, in September 2006, your euros would have gone up to $1.27, a very nice 42 percent gain. But the euro, too, is a flawed currency long-term. If anyone has a fix on a great currency, let me know.