,413
eæ¡p*r$È*rrg
we're in the midstof a commoditiesboom-not a who sees bubble-insistsinvestorJim Rogers, the surgecontinuingfor e¡ghtto 14moreyears'
ast by JOnathan
R, Laing
au
\l/th rhepricesor oil and
indusfuialmetalsIike copper,ztneand nickel screaminghigher in recent 'Warren Buffett and Morgan Stanley'sSteve imonths,suchobserversas j Roachhaveproclaimedthat commoditymarketsare in ¿ bubbledestinedto i burst soon. of the'seventiesand ButJim Rogers,fabledhedge-fundmanager findssuchtalkridiculous.Indeed,hehas nowardentcommoditybull, beenpoundingthe drum for investingin commoditiesin recent yearsin numerousspeechesandmediainterviews,evenwriting Hot Com,m,od;ities,a bookpropitiouslypublishedin lateàffi4that predicteda comingprice boomin everythingfoomaluminumto nnc. Ba,v-rorts caughtup with Rogersonarecentrainymorningashe workedout ona stationarybike in the fourth-floorexerciseroomof his five-floormansionon NewYork'sUpperWestSide.Bloomberg Radio dronedin the backgroundas he talked while occasionally glancing at a laptop computer,perched precariously on the machine'shandlebars."How can anybod¡rsay that a bubblehas developedin commoditiesyet"-brief pant-'\Mith sagar 80Vo and corn and cottonlessthan half their below,silver 71%obelow all-timepricehighs?" hehuffed.'Youcart'thaveabubblewhenthe in recent mediahasontybegunto pay attentionto commodities
The sometimes animatedRogerscalls FedchiefBen Bemmtke"dn dmßteur of mørkeæ." with no knowiledge
',,iii:'i'1,, ìiìi.i:iiihit ¿ìl'i.i)r."\ieâl't l,'.i ¡iìsiiii,ei'r:r;i;. üil\i 0ír;\i i¡1 ih€ eàii'\r il:i,i'i r.)i.iì it!i-ip-;-lÉl'¡l {tcrruiicr,iifl' l)i.ii:-l þ¡rgli¡ ih¿,¡.fhas l;,¡er.i's l{i i"i;i: â:rd i¡'iii iilicÌ"i¡ i-ìee );'rÊl.ji¿tliltì{il:¿eüs {ri. r-'¿"rirm:ì'r..(,ri,'i:ri1:;.'ices ;i:aìie iiew highs. är;¡:n crr-lCe oil and
coÌrpel'has,ea lot'ig'1,,'zL.¡io go, er.-enijroilg,htìre¡' r,ç¡sr.¿1tt sei price i'ecoi'(Ì$." Hov; iong ',viii ¡¡u sur.ger.rm?Based on the pasi iongeviÇyof r:olrn:ocÌityJ:¡uilmarkels (F,ogel.smeniions oile.c that, l-r._v his reckoirilg, lasteclflcm ig06 to 'ig12"igBB to 1953¿nd 1968to i982), ihe cu:'r'entboom coulcllast eight io 14 more ;,iears.The coinmodities-bubblecrci¡¡d sccffs ¿'uthat, ju-st as skeptics did when Rogels pi'edicred ihe cu¡'rent krcc¡n.¿ fg1¡;yea.ïs ago ConTmratdntyiåå"Ece boüsfi$, says Rogers,are t¡'pically the produet oí years of unclerinvestmeniin new pi,oelucti¡¡e capacitJ¡-i¡'hether iü exploration fb¡ nev,' oil or metal cleirosits,coirsh"uctionof ¡reiv-qinejter.s ¿nd t"efîner'ies or planiin¡¿of ne'w ûrarlge cr iubbel' r_l¡ee-s-in I'esponse lcr lorv ¡.*'ices.Ivleanrvhile.iìernairclcreeps u1: a_11 buù u-nncticed un'uiì imbal¿.ncessr¡_d¡ie¡ril.erlil:t ancl prices surge.Pro¡:lucels-with the pcssibleerceirtionsof glail falrners anclealÍ,ierairchers-can't resiroirciqr_tjckly Ìrecariscot ihe iong iead times reql,ljre..lto fii.¡.anceancì build new cairacity'. Ûvel the ]¡eAIS, commo{ity pi'ices have i,erirj-eritc surge during periods u,hen ihe stock ancl L¡ondilarkets ha.r'elabored, exìribitir:g r,vhatmoder.nìroi'tr"oilctjieorists c¿Il non-correlation ¡,r,ith tÀe financíal raar¡s. For. instance, collriodities clicl-poclly during tire stock ma¡'kei boorls of ihe F"oaring 'Tn'enlies anci the post-1982buli malket, wirile outpacing stocks dwing ii:e Gi.eatDe¡:r-ession ¿Lirci the 'Seventies, Roger.snotes. F,eceutstädíesseeältc trolster.thisol¡sel'r¡aiion. Cne. -by supei'intendecl capicaÌ-goocls airal¡rsLlìar ly Eannisier, no\v of Stifel Nicoiaus, found titat over the ¡rasi l.3C¡ J¡eai:s,corrmodities anclstccks h¿iveal'uei'natedpelfbrmance ie¿cl.er,qhi;: in leguìaï c)/cles,aver.agingãbcur ig years. A 2004 siud;i b.r¡{}z"l'yGcrton of the Universlty of Porr:cr¡li¡rni¡
¡r'ri i.l' Çee¡'t
ROUV¡etrhCi:St OÍ the
Schi¡oi
yele
cí
li'cr.:o.Iul1.' Man;-lg;eilenttirat
