Rogers Commodity Index: Price of Stuff Holds Up Pretty Well

I exchanged a few emails with Jim Rogers the other day, he knows what he is talking about in terms of government policy and the potential for making things worse.

Here is the Rogers commodity index, it has taken a beating with the recent demand destruction and commodity bubble burst.

Yes, it has been a wild ride, but compared with other paper based assets, the index hasn't fallen that far. I am still perplexed why anybody chases the yield available on U.S. treasuries. 30 Year strips did extremely well last year, but that was last year's bet.

Liquidity and lack of other options isn't a responsible or reasonable answer. Think about how stupid that could sound if the yield on 10 year notes goes to just 6%? The pay:skill parity between astrologer and fund manager is seriously out of whack. You gentle reader can determine how the spread should narrow.

For the quants out there, the single day auto-correlation trade no longer works on the time series, but longer time horizons may be interesting.

Comments

[B. Ray:]

Any ETF related to Rogers Commodity Index?

Mar 08 10:47 AM

[EconoMarcus:]

B. Ray: I only know the ETNs: RJI, RJA, RJN, RJZ. And the Powershares-ETFs DBC, DBA, DBE have outperformed their Rogers-ETN peers. Only RJZ seems to perform better than its Powershares peer(s).

Here's the link to SAs list of commodity ETFs and ETNs:
seekingalpha.com/artic...

Mar 08 11:20 AM

[chBum:]

take a look at HAP...it's his, but I think it's fairly new. It's been trading between the high 19's and it's gone about as high as 24...it's very near it's recent lows now.


On Mar 08 10:47 AM B. Ray wrote:

> Any ETF related to Rogers Commodity Index?

Mar 08 02:48 PM

[chBum:]

I just checked out HAP again...it's the Jim Roger's/ VanEck commodity ETF...fairly new. It's near it's recent lows.


On Mar 08 10:47 AM B. Ray wrote:

> Any ETF related to Rogers Commodity Index?

Mar 08 02:55 PM

[St Alphonso:]

I think there is still a huge downside risk to commodities, as this recession/depression seems to be getting worse. There has always been a huge global population that would like to have stuff, but I think Mr. Rogers fails to understand that most of the world is used to doing without unlike Americans who squeal at the slightest inconvenience. If things don't looks so good, demand from the rest of the world will collapse. Japan and China will continue to prop up their businesses, banks and markets in the short run, but the markets are too large for governments alone to support long term.

Just look at other depressions and serious downturns and see how commodities reacted. Last year they tired to prop up oil prices, but ultimately the markets prevailed and prices collapsed. In the little sub games of chicken, markets can be distorted but ultimately markets will prevail. It's still a huge risk, and commodities don't pay interest, do they??? You have to time them precisely. Who can do that with all the BS we get for information???

Mar 08 06:56 PM