Expert Commodity Picks for 2009: Jim Rogers and Marc Faber 34 comments
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What a crappy year 2008 was for commodities! Will they rebound in 2009? If you believe, as I do, that we are in the middle of a secular bull market for commodities, then current prices represent a tremendous buying opportunity.
Jim Rogers has been saying it best lately - that you want to buy assets where the fundamentals are unimpaired. And the only asset class where the fundamentals are currently unimpaired is commodities - in fact, the fundamental story for many commodities has even improved since the financial crisis took hold, as there is a lot of supply coming off the market.
Jim is also fond of referencing the performance of commodities during the Great Depression, where they were the first asset class to turn up because there was no supply.
Since I agree with Jim's point of view, I decided to research specific commodity picks experts are making for 2009. My "expert" criteria is highly biased, based on the two people I've been following the closest during this commodity bull run - Jim Rogers and Marc Faber - because of their prescient calls and knack for spotting commodity trends before the herd.
Jim Rogers
- Likes agriculture and says prices are down due to forced selling, not fundamentals, which have actually improved. "Farmers can't get loans for fertilizer now."
- Also loves oil - says it has been crushed - its price is below the cost of production - he's been buying more, and believes it will roar back in a big way.
Marc Faber
- Says 2009 will be a "total disaster" for the global economy.
- Believes commodities have corrected within a bull market, and there are opportunities to be found there.
- Sees significant inflation coming as a result of the Fed's actions.
- He continues to like gold and gold miners - believes exploration companies are very depressed with respect to the price of physical gold.
- Oil at this level is becoming attractive, as are oil companies.
- Shares his specific picks at the 7:45 mark of this interview.
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This article has 34 comments:
I think I may have answered my own question. And if this is the clip you were referring to, that would explain why it was removed from Youtube...it's copyrighted material via Bloomberg.
Thus, I would rather buy oil which is finite and whose well production yield drops with each passing year.
Though now that farmers are unable to get loans for fertilizer due to the credit crunch, maybe this tips the scales in favor of a potential bad harvest.
Combine this fact with the extreme depressed prices of many agricultural products - sugar 80% below it's all-time high, cotton below it's price when the commodity bull run began, and some of these prices could do moonshots.
Well...after all...I guess they call it speculation for a reason!
I'm confident that coal will pay off in the long-run, especially with the China demand, however, I know it would be wise to add natural gas to my portfolio, and I'm waiting on the sidelines to buy Chesapeake Energy at a lower price(I'm hoping the DOW will go below 8500 in the next two weeks).
However, I am considering investing in the Russian natural gas company--Gazprom(OGZPY... which is a monopoly, but I'm not sure if investing in something the Russian Gov't partly owns would be a good idea...what do you guys think?
Incidently I find it amusing that Rogers and Faber pound the 'inflation is coming back' issue because of money creation but can't bring themselves to say the US stock market will benefit from such an occurance. There is no way all the dollars being created do not find their way into US financial assets. It won't just happen with commodities.
I admire your courage to invest during these fearful times. I believe you will do well. Stay diversified and stay with quality and you should be up nicely in a year. More in two years, IMO.
Good luck.
On Jan 05 12:45 AM Coal Monster wrote:
> I think commodity stocks are stupid cheap right now, so cheap I canceled
> my cd and invested all my money into the market and so far have bought
> Peabody Energy(BTU), Consol Energy(CNX), US Steel(X), and Dryships(DRYS).
>
>
> I'm confident that coal will pay off in the long-run, especially
> with the China demand, however, I know it would be wise to add natural
> gas to my portfolio, and I'm waiting on the sidelines to buy Chesapeake
> Energy at a lower price(I'm hoping the DOW will go below 8500 in
> the next two weeks).
>
> However, I am considering investing in the Russian natural gas company--Gazprom(OGZPY...
> which is a monopoly, but I'm not sure if investing in something the
> Russian Gov't partly owns would be a good idea...what do you guys
> think?
One needs to be careful on the opinions of public figures..
they have an interest in these investments and are in a way spokespersons.
So my heart agrees with them...but It's best to get multiple opinions, then
captain your own ship...things change from one year to the next, and last
year's star can become this year's dud...that said, I highly value both..
I also invested in Fannie Mae lol, I know it sounds stupid, but I wanted to try and take advantage of a company who is being backed by the Gov't, and I was about to invest in Citi Bank at $7, but when I saw FNM at $1.11 during Thanksgiving break, I'm like "oh wow, I can get a lot more shares if I go with Fannie," so I bought 800 shares at around a $1 and it's been down ever since!
I'm hoping the stock goes up to at least $2 before they do the reverse split, if Fannie does a reverse split, I'm buying Gazprom and some mining stocks, right now I'm on the sidelines waiting to buy more "X" and "CHK"
On Jan 05 12:53 AM jepittman wrote:
> In my opinion getting into bed financially with the Russians can
> be hazardous to one's financial virginity. If you want exposure to
> Russia do it through a diversified emerging markets fund (such as
> EEM, an emerging markets ETF).
>
> I admire your courage to invest during these fearful times. I believe
> you will do well. Stay diversified and stay with quality and you
> should be up nicely in a year. More in two years, IMO.
>
> Good luck.
On Jan 05 12:46 AM jepittman wrote:
> Good farmers with good credit should have no trouble getting crop
> loans. There is a lot of very bad information out there concerning
> credit availability.
>
> Incidently I find it amusing that Rogers and Faber pound the 'inflation
> is coming back' issue because of money creation but can't bring themselves
> to say the US stock market will benefit from such an occurance. There
> is no way all the dollars being created do not find their way into
> US financial assets. It won't just happen with commodities.
>
>
>
On Jan 05 04:05 AM User 301156 wrote:
> what about base metals?
Those guys are managers who manage other peoples money, their business is not to make you reach, they are salesmen who sell their products (ideas) and use with this money media influence (what banquets Soros makes for media who cover his talk).
I promise you that they make money not from trading ( this way they lost all long ago) they make money from talking.
jegan ;-)
Anyone one know of any good sites to get info on the canadian dollar, Canadian govt policies etc?
I've found an ETF priced in CAD that's bear USD, so I'd I like to do some research to see how well the CAD will fare against USD in the future. Like most Rogers followers, I expect USD to plummet eventually, but I want to know if CAD will keep it's strength, and if so, will buy HDD (on TSX). Down around 40% from it's yearly high as USD has stegthened in recent weeks.
Playing the commod futures is a dicey business at best, and you need a very big bankroll to play the game, as Faber and Rogers do. I believe that if you are a believer in commods you should very closely watch for improvement in Chinas economy before going in hard. Rogers often says hes not a good market timer, i personally think hes a little early on this call.
Its been only 6 months since we saw record prices, it,s hard to believe that they will bounce back in another 6 or so. Faber picks gold on a doom and gloom call which again may be a bit early to tell. Both Rogers and Faber get my full attention, but i think they are a little short term bullish, maybe long term bullish should be the case.
On Jan 06 03:35 AM maxe wrote:
> Coming from Australia, where we rely heavily on commodities for our
> GDP and economy i do believe the fundamentals are good long term.
> But for the next 6 months to a year you would be best off waiting
> for commod stocks to bottom out and pick them off one by one.
>
>
> Playing the commod futures is a dicey business at best, and you need
> a very big bankroll to play the game, as Faber and Rogers do. I believe
> that if you are a believer in commods you should very closely watch
> for improvement in Chinas economy before going in hard. Rogers often
> says hes not a good market timer, i personally think hes a little
> early on this call.
>
> Its been only 6 months since we saw record prices, it,s hard to believe
> that they will bounce back in another 6 or so. Faber picks gold on
> a doom and gloom call which again may be a bit early to tell. Both
> Rogers and Faber get my full attention, but i think they are a little
> short term bullish, maybe long term bullish should be the case.
On Jan 05 12:45 AM Coal Monster wrote:
> I think commodity stocks are stupid cheap right now, so cheap I canceled
> my cd and invested all my money into the market and so far have bought
> Peabody Energy(BTU), Consol Energy(CNX), US Steel(X), and Dryships(DRYS).
>
>
> I'm confident that coal will pay off in the long-run, especially
> with the China demand, however, I know it would be wise to add natural
> gas to my portfolio, and I'm waiting on the sidelines to buy Chesapeake
> Energy at a lower price(I'm hoping the DOW will go below 8500 in
> the next two weeks).
>
> However, I am considering investing in the Russian natural gas company--Gazprom(OGZPY...
> which is a monopoly, but I'm not sure if investing in something the
> Russian Gov't partly owns would be a good idea...what do you guys
> think?
www.experienceiseveryt...
Very informative article!
What do you think is the best way to play the oil/commodty market ?
How about gold, ETF, Physical, or mining stocks?
Interested in you feed back?
The way to produce Natural Gas is cheaper and quicker. Demand is stuck in the U.S since it is hard to transport NG to China.
Inventory is at it highest and production capability is there went the price is right.
Don't get me wrong I got some HNU right now but I want to get a second view.