Jim Rogers tells Bloomberg:
"Saudi Arabia has been lying about the reserves for decades. Saudi Arabia the last two times said they are going to increase production and they couldn't increase production. Don't fall for that. The reason oil is going up is the world is running out of known reserves of oil."
Rogers is very bullish on all commodities. Long-term he is going to be correct. In the short-term, the Fed QE2 has been a bust for the Fed, since the money they are pumping in is headed into excess reserves, and not into the economy.
There has been enough new money that was pumped in last year by the Fed to keep an inflation scare in the economy, which will push consumer prices higher this year. But because of the slowdown in money growth since the first of the year, there is likely to be a break downward in commodities and the stock market. This will eventually force Bernanke to junk his new tools and get serious about serious money printing, which will be very inflationary, but it looks like there will be a break first.
Here's the entire Rogers interview:
According to oil industry, there are 4T barrels of know oil reserves and that amount has gone up every year for the last 160 years...We have used just 1T barrels since day one. The world is not running out of oil...The con-artists who are heavily invested into raising oil prices are running out of oil. Oil prices are rising because 100s of millions of people are rising out of poverty and are demanding food and fuel.
ReplyDeleteis it possible for a common guy to invest in this index?
ReplyDeleteI like Jim Rogers, but he is an investor and is all about commodities. When the Saudis say they can bump up production it drives down oil pricing. This hurts Mr. Rogers (Commodity Investor), hence Rogers comes out telling everyone that the Saudis are running out of oil which drives prices higher. Who do you believe?
ReplyDeleteRogers gives good long-term general advice (rather easy at this point)but leaves out the kind of specifics you need to actually make profitable investments.
ReplyDeleteFaber is better that way, maybe because he's politically savvier (or better connected?).
Personally, "guru" investment advice should be avoided like the plague. Some of them are likely to be fronts for financial/government interests of various sorts.
I suppose their paying subscribers get better advice..at least, I hope they do.
Bottom line - they are all selling their portfolios at some level and should insert a disclaimer to that effect...
Commodity investment is not for the faint of heart, even if you have an "expert" that has designed a futures tracking fund with the "optimum ROI" index composition.
ReplyDeleteFACT: I bought into Rogers Raw Materials Fund at the end of 2005.
RESULTS: The fund went up 52 percent at its peak in July 2008, at which point in dropped 60% to its trough in January 2009. The fund went down 43.14 percent in 2008. It went up 24.99 percent in 2009 and 16.74 percent in 2010.
BOTTOMLINE: After five years as an investor in the fund it is returned 4.04 percent annually. During the same time period 2006-2010, the S&P went up 5.16 percent. So the Rogers raw materials fund HAS NOT beaten the S&P in the past five years. The fund is up over 5 percent (yeah, gold, silver, and oil!) so far in 2011. I am now above water on the investment. But there are a lot of "financial gurus" out there selling expensive newsletters and front-loaded funds - just be careful, my fellow readers!