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December 12, 2006

Watch Jim Rogers Video On Hot Commodities

posted by MR WAVETHEORY at 12/12/2006 08:10:00 PM
Jim Rogers, one of the cofounders of the Quantum Fund with George Soros, gave a talk on 11/6/06 to a group of investors that I found interesting. He talks about commodities and the bull market. You can watch the video here. You may recall that Jim Rogers wrote Hot Commodities : How Anyone Can Invest Profitably in the World's Best Market . Below are my notes from the talk. I'm making them available in unedited form.




Notes from Jim Rogers 11/6/06 Talk

The Chinese are called Communists, but they are some of the best capitalists in the world.

When Chinese come to work, they ask not How many hours do I have to work. They want to know how many hours can I work.

I expect many real estate speculators in China to go bust, but when they go bust, pick up the phone and buy.

The single most important piece of advice for you: Teach them Chinese. My baby girl is perfectly fluent in Chinese. I got a nany who only speaks Chinese to her. People think she is native, until they see her.

US Dollar is and has been the medium of exchange.
1987 - creditor nation. Now, the US is the largest debtor. We owe the world $13 trillion dollars.

Foreign debts rising $1 trillion every 15 months.

America's enemies are trying to figure this out. Our friends are saying maybe these guys are out of control.

Figure out a way to prepare yourselves. When the pound sterling lost its status as the reserve currency of the world, especially for people with hard assets.

My little girl is an American. She has a bank account. It is not an American bank account. It is a Swiss bank account.

The bond market was in a big bull market 1981-2003. Sell all your bonds. Interest rates will be going up around the world for a very long time.

Stocks were in a big bull in the 80s and 90s. Stocks too have peaked. At best, in a big trading range. Stocks are expensive with any classic valuation method - P/E, P/B value. Stocks are expensive. Very leery of most stocks.

If you want to make lots of money, we have one now, commodities. Most people still can't spell commodities.

25 years ago, if you were to go to Madrid, Rome, and asked take me to the stock market, then they would ask you what is a stock market.

In the UK, in the world, commodities are the same. Nobody knows what is a commodity.

How long will it last? The shortest was 13 years. The longest. 18 years. 2013 and 2022. Always last a long time.

It's about supply and demand. 1980s, 1990s everyone was calling you to invest in hedge funds, nobody invested in lead mines, and productive capacity. One lead mine opened in the last 25 years. No gigantic oil field discovered since 35 years. UK exporting oil for 35 years. With decades, UK/Malaysia importing. China exported 10 years ago. Now importing. Oil fields deplete. Mines deplete.

1998 - opened commodities fund. Up 223% since then. When commodities do well, stocks do badly. When stocks do well, commodities do poorly. Big setback in commodities during 9/11.

World has plenty of stocks. Bankers are cranking them out everyday. You can't crank out a mine.

1979 - Saudi Oil was nationalized by Aramco
Westerner's last audit said they had 245 billion barrels of oil.
Today, they say they have 260 billion barrels of oil. Every year, the Saudis say they have 260 billion. It doesn't go up or go down. How can this be? 18 years in a row. Either you believe us or you don't. Something is wrong.

Baby girl doesn't own single stocks or bonds. Happy only owning commodities. Learn some Chinese. Get out of dollars. Buy all the commodities you can.

I own BHP Billiton. If you are really good at stocks, you will make much more money in stocks. If you know a natural gas company in Berlin will discover alot of gas, then you should buy it. Oil went up 10 times in Russia, some stocks did nothing. In eastern Europe, commodities outperformed stocks. Not everyone is good at stock picking.

Stocks +300% in 70s. Went down 40% in 87. Went up 700%.
Gold up 600%. 70s. After corrected, up 850%.
Won't all correct at the same time.

Uranium. Timber. Water.
Uranium = +600, 700, 800% in last few years. Chinese 25 nuclear plants in next 25 years.
Timber = Lumber for reasons.
Water = Solve water problems, will be world's richest person. Wars east of red sea over oil. Wars west of red sea over water. Northern China. Northern India. Disappeared because water disappeared. No futures market in water. Huge fortunes to be made in water.

My daughter owns silver and platinum. Her mother owns diamonds.

Unadjusted for inflation.
Prices of commodities below all time high.
Sugar 85% below all time high
Cotton 65
Coffee 60-70%

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