Has the Bull Market in Commodities Run Its Course?

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I have to admit: I’m something of a Jim Rogers fan. I’ve read all of his books. I watch every one of his appearances on TV, and I study his career and investments extremely closely.

In a world where talking heads and b-school economists blather on in flowery finance-speak that doesn’t make a lick of sense, Jim Rogers seems to always speak in a clear, simple and easy to understand manner.

He speaks the language of commodities.

And while I always do my own due-diligence, I put a lot of stock in what he says — sometimes literally.

Even though I know the commodity train is still running, sometimes it’s nice to put my ear to the tracks and hear Jim Rogers saying the bull-market is going to roll on — the same things I’ve independently verified for myself.

For instance, I hear lots of people saying that while commodities have had a nice run, the bull market in “stuff” is nearing its end. That begs the question: how long can a commodity bull market last?

It’s a valid and important question.

I’m a commodity investor, but not for sentimental reasons. As much as I value gold as a hedge against inflation, or oil’s ability to make my car go vroom — I invest in commodities for fundamental reasons — largely because I believe they are still cheap and undervalued from a historical perspective.

So, back to the question at hand. How long can a commodity run last?

Jim Rogers answers that very question in his 2004 book Hot Commodities. Specifically, he references a study by Legg Mason — which found that the average commodity bull-run lasts between 17 and 18 years. The study also revealed that every commodity bull market in the last 130 years has coincided with a bear market in stocks.

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Jim Rogers has taught finance at Columbia University’s business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website.

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