Yesterday I attended a conference with Jim Rogers, co-founder of the Quantum Fond (together with George Soros) in the seventies, founder of the Rogers Commodities Index, author of various books on commodities and one of the strongest advocates for commodity investments. He certainly has an exceptional investment record and even it is no guarantee for the future following a summary of his outlook for the decade(s) to come:
Currently he is very bullish for agricultural commodities. He predicts a huge shortage to come, since prices are depressed since years, no investments in more farmland have been undertaken and the silos are close to empty. He regards farmer as the big winners of the next decade. He would buy precious metals on dips and predicts that Gold will be double by end of the decade.
Future Role of Commodities
Not surprisingly he regards commodities as the best investment no matter how the economy will develop. In the case of a new boom the demand for commodities (and prices) will go through the roof because the supply site can not grow as fast. If the economy goes down he is certain that the governments around the world will continue to frantically print money. As a consequence the value of real assets such as commodities will increase.
Role of China:
He regards China as the upcoming economic and political superpower, however, pointed out that the GDP of china is still only 10% of the combined GDP of USA/Europe, so investors need patience. He thinks that the China acts strategically far smarter than the US, buying assets (mainly mines, oil/gas fields) all over the world while the US has only one focus: Printing money.
Relations USA and China
In his opinion China needs the US as much as vice versa. However, historically politicians of a superpower challenged by a growing challenger behave irrational so he foresees more frictions to come.
He never made good experiences with timing and has given-up on it. If he buys an asset he plans to hold it “forever”. He only will start to sell if everybody has commodities in his portfolio and people talk about pork bellies on the street. In his view commodities are far from a bubble and China (except real estate) as well. Main argument is that the actual exposure to these asset classes in the investor portfolios is still comparatively low.
BTW: Rogers moved to Singapore, because in his view Asia is on the development stage of the US at the beginning of the 20th century and he wants to be where the action and future is. So given his background and interests (of promoting his commodity index) no surprises, but he made quite a good case for his view.