Jim Rogers says the investing game is simple these days. Rogers said this week, “I do believe I could count on one hand the number of times I’ve been presented with an investment opportunity that guarantees success no matter what direction the economy takes.” Rogers adds, “If the world economy gets better, I earn my money on commodities. If the global economy gets worse, then they will print more money and I will make money in commodities.”
Although we have featured comments by Rogers many times on the site, Jim Rogers, who ran money with Mr. George Soros way back when, is one of the few investors with an investment record that substantiates his expertise and provides answers supported by both the fundamentals as well as detailed research.
Put simply, according to Jim Rogers, CEO and Chairman of Rogers Holdings, we should invest in commodities.
Despite last Friday’s employment report only serving to emphasize the fragility of the current economic recovery, Rogers confidently told CNBC that regardless of market highs or lows, he intends to invest, and successfully I might add, in commodities. He asserted that we are in the throes of a lasting bull market largely determined by supply limitations and demand growth from emerging markets.
And for quite some time, this strategy has suited him well. Since the year that the successful investor founded the Rogers International Commodity Index, Rogers has been bullish on commodities, up 340% since 1998.
If one were to assess the Index, he might notice that 35% is weighted to oil.
To better understand the reasoning behind this heavy favoring of the commodity, Rogers wrote in his book, Hot Commodities, “No major oil field has been discovered in the world for more than 35 years… We spend more money looking every year and have far superior technology available than we did a few decades ago. Yet we haven’t found another super giant oil field despite decades of trying. The easy, cheap stuff was found long ago.”
Despite global market instability, Rogers stressed simplicity in his approach.
He is long commodities and owns multiple currencies; short long-dated American Treasuries and technology. He has one major domestic bank and invests in emerging markets.
Rogers’ short positions are in place as cushions if the global economy deteriorates.
Additionally, he believes the Federal Reserve and other central banks will continue to print cash, further shielding his investments.
By. David Moenning of Top Stock Portfolios