Commodity investment guru Jim Rogers is unfazed by the downturn in commodity prices. Rogers? confidence in crude oil and gold remain bullish. The chairman of Singapore-based Rogers Holdings is also upbeat on select farm goods like sugar, cotton and coffee. The commodity boom, he feels, will go on for a few years.
Crude prices dropped 30% from the July-11 peak of $147.27 a barrel to $100 on Friday, and gold lost 27% in six months, trading at to $750 an ounce on Friday, a far cry from March 17?s record price of $1023.50.
But Rogers believes crude oil price will keep rising because of the demand-supply mismatch. ?I am still bullish on crude oil and gold?, he said.
?Crude oil will rise over the longer term as no major crude oil discovery has happened in the last 40 years. As far as gold is concerned, no new mines have recovered over the past decade and some mines are over 100 years old,? Rogers said, on the sidelines of Commodity Equities Fund launched by Birla Sun Life here on Friday.
Sugar and silver prices globally have corrected over 40% in the recent days. But sugar is still sweet to Rogers. ?I am bullish on opportunities in the agricultural commodities market. I am investing there now like in sugar and cotton. The bull market in commodities will continue to go on now for some years,? Rogers said. ?Commodities are safe to invest as they do not require any governance, there are no disclosures required,? he quipped.
Agricultural stocks are at 60-year lows and as far as demand is concerned, income levels are rising in some Asian countries. Current hot picks in the agri-commodities are sugar, coffee, zinc, cotton and silver, he said.
?Farmers in India and the US are going to be extremely rich. The 29-year, Maserati-driving stock market executives will be driving tractors for 29-year-old farmers in the next decade,? said the peripatetic guru, who also features in the Guinness Book of World Records for motorcycling for over 100,000 miles across six continents.
?I am going to try and buy a little bit of gold here in India. If gold continues to go down, I am smart enough to buy more gold. Price could go to $525 an ounce and could have a big correction,? he said.
?It is better to buy when commodities prices are going down rather than when they are going up but I have no idea whether this is the best time,? he said.
About the future movement of the US dollar, he said,?I am very pesimistic about the future movement of US dollar value.? Dollar will continue to deteroriate over the next two decades as many oil producing countries (especially Opec) have already started delinking from the dollar. The dollar is a terribly flawed currency and it has got terrible problems down the road, he added. He then reminded that less than a century ago the pound sterling was the standard global currency and now it had lost its prominence.