September 23, 2005     Notes from Conference given by Jim Rogers.  The conference was titled, "Hot Commodities."

 

The following are notes I took during a conference given at Fordham University, and presented by New York Society of Security Analysts (NYSSA).  Please understand that I do not necessarily agree with all that Jim said.  I do respect his views and have studied him for the better part of the last 20 years.

You can visit Jim's website at http://www.jimrogers.com/

 

1.    He quickly mentioned a theme that I have been investing in and focusing on for some time now.  Jim said, "key in on education." 

2.    Look into the future.  He feels there will be "wars over water."   Personally, I have been looking at Water companies for some time now, and have not seen any that I feel are worthy of investment.  I need to remind myself to continually look into water companies and infrastructure companies that focus on the cleansing and delivery of water.

3.    Jim mentioned that on his first trip around the world, that money was not easily interchangeable.  He would have to frequent the black markets and such.  On his recent trip, he was astonished as to how interchangeable money had become.  He mentioned that credit cards were taken almost everywhere.  He mentioned that he could speak with a banker as opposed to an individual in the "black market."  He mentioned that the class and philosophy  of people he met  in the "black markets", were typically far superior to most bankers.  He mentioned that the understanding of the pulse of the people the nation, as well as  the avoidance of bureaucracy was an advantage of visiting the black market in many underdeveloped nations.

4.    He mentioned that capitalism is alive in Russia.  He mentioned that it is a form of outlaw capitalism.  One needs to have an understanding of the Russian Mafia.

5.    He drove a Mercedes across the world.  He felt it was a universal car, which could be repaired in any land.

6.    He gave his view of how most other nations perceived Americans.  He was clear to delineate  the perceptions of the American people as opposed to the international perceptions of our Government.  With that said, he found that internationals felt about American people were words like, "ecstatic, excited, hospitable and that Americans were the single most popular people in the world."

7.    He claims that the typical person from China will save 35% of their income.  He said that Chinese people were striving to get ahead.

8.    Felt that China would have plenty of setbacks.  He mentioned that these setbacks would cause weakness and create a buying opportunity.  He mentioned that he is waiting for a hard landing by China and then anticipates a large investment in China.  He mentioned don't panic when this occurs.  He feels that there will be a "hard landing" in China real estate prices.  He again mentioned, "don't panic, BUY!"

9.    He mentioned that Mandarin Chinese would be the best 2nd language for our children to learn.

10.    He mentioned that the US Dollar has been the worlds' currency.  That he says, is changing.  He mentioned that the US has become the largest debtor nation.  He cited that we owe $8 Trillion in debt and that is increasing by $1 trillion every 15 months.  He said, "the arithmetic is terrifying."  He mentioned to read the Federal Reserve papers.  He says we are looking to debase the currency.  He was emphatic when he said, "get your money out of US Dollars now!"  He mentioned having a Swiss Bank account.

11.    He mentioned the following:

        a.     The US Bull Market of Stocks and Bonds is over. 

        b.     Bonds were in a secular 15 - 20 year bull market.  Now you should go short.

        c.    Stocks are still expensive based on a historic basis and fundamental basis.  Stocks should be in a trading range for the next 10 - 15 years.

        d.    A bull market in commodities and raw materials is in its infancy.

        e.    All markets are cyclical... there is a bull--->bear---->bull--->bear.....etc.  This cycle exists for centuries.  When one bull ends, another begins.

        f.    Invest in sugar plantations (not US subsidized) and lead mines.

        g.    There is no reporters or college courses in investing or operating commodity businesses.  He told the students in the audience from Fordham to transfer out and go to Texas A&M where they could learn about oil, which is a commodity.  He apologized to the Dean for that comment, but once again, told them to transfer.

        h.    The shortest bull market in commodities was 15 years.  The longest was 23 years.  The average is 18 years.  His guess is that the bull will continue through 2014 - 2022.

        i.    The Rogers Commodity Fund is an index fund.

        j.    Oil supply is in decline.  There will be and are now shortages everywhere.  Do not trust the numbers given to us.  He cited Saudi Arabia as making up numbers.  He hinted that he does not believe they have as much oil as they claim.

        k.    World has consumed more food than produced for the first time ever.

        l.    Gold:

                1.) A red hot commodity   

                2.) Least favorable commodity with supply and demand.

                3.) He owns gold

                4.) Lots of mystics in gold.

                5.) Everyone is looking for gold. No one is investing in lead and zinc.

        m.    Invest in stuff that China has to buy.  Such as, raw materials, crude oil, cotton, nickel.

        n.    He owns Windmills and Tar sands.

        o.    He has heard but not verified or researched that every bull market in raw materials has ended in war.

        p.    Recessions happen.  They happen all the time.  Thinks the consumer might cause this one.  This might cause a slowdown in commodities, which would make a buying opportunity.

        q.    Claims that lead has been taken out of gas and paint.  Demand and Supply have both collapsed.  I need to find out what lead is used for.

        r.    Sugar - Claims that US subsidized sugar is 2 - 3X more expensive than the rest of the world.  Claims that sugar has crashed 85% off of it's highs.  He says, "buy world sugar, not US."

        s.    Invest in commodities directly.  You don't have to worry about corporate governance, etc.  Invest in commodity based countries.  Canada is an alternative for those wanting to invest in North America.  Other nations to invest in include, Australia, New Zealand, Brazil and Argentina, to name a few.

        t.    Canadian dollar is the safest in the world.

        u.    Commodities to invest in would be, agriculture, Sugar, Orange Juice, Soy and Cotton.