Jim Rogers Has Been Right About Commodities for 9 Years
Posted on | October 11, 2009 | No Comments
Jim Rogers created the Rogers International Commodity Index in 1998. The index was created to represent the value of a basket of commodities that were used in the global economy including agricultural products, energy products and precious and base metals. In 1998 almost everyone was jumping on the “dot com” bubble and felt there was no reason to invest in commodities. As Mr. Rogers likes to point out himself, he was about two years to early when predicting the bottom. Around March of 2000 stocks topped and commodities bottomed.
Since stocks topped in March of 2000 with the S&P hitting an all time high of 1527 commodities have soared. Precious and base metals have seen healthy gains with gold being up 276% while silver and copper are up 250% and 252% respectively. The energy industry saw huge gain in the mid 2000′s but still remain much higher than in March of 2000. Crude Oil is up 167% while heating oil is up over 137%. Even after a huge drop even Natural Gas has seen gains being up over 61%.
While many analysts feel that investing in stocks is a much better decision than investing in commodities the numbers prove otherwise. Since March of 2000 if you were invested in the broad index of the S&P 500 you would have lost almost 30% of your investment while commodities soared. Every time Jim Rogers is on a financial network he points these numbers out and feels that nothing has fundamentally changed to force commodities. lower. The only reason commodities dropped recently is because of forced liquidation during the financial crisis.
When the global economy recovers commodities are going to provide the greatest gains because it takes commodities to rebuild. Unfortunately most analysts will never believe this and will continue to laugh at the likes of Jim Rogers and Peter Schiff but in the long run they will get the last laugh when their portfolios show gains of several hundred percent until the end of the commodities bull market which is not likely to end until at least 2014.
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Author: Jesse Wojdylo
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