Commodities Bull Market is Still in Place: Rogers
Legendary investor Jim Rogers says the bull market in commodities is "still in place" and has a "long way to go."
"The best sector that I know in the world economy is going to continue to be commodities," Rogers told CNBC on Monday on the launch of the Rogers Global Resources Equity Index which tracks two hundred global resource companies.
"We have huge shortages of everything developing. The facts are we are running out of known reserves of everything and shortages are going to get worse." he said.
Rogers explained that despite worries about declining global demand, as long as "supply goes down faster than demand does, it's still a bull market."
"Lead has lost 35 percent of its demand in the past few decades. And yet lead has gone through the roof in the past few years, because the supply has gone down faster than the demand,' he highlighted.
Oil prices, he said, would continue to go higher because "nobody's discovered a major oil field in over 40 years."
"But we have to have higher oil prices or we're going to run out of oil," he added.
He also dismissed the notion that agricultural prices were in a bubble, if history was any guide. "Most agricultural prices are still extremely depressed on any kind of long-term basis. Sugar has gone up 600 percent in the past few years, sugar is still 50 percent below its all time high. Most agricultural products are unbelievably cheap on a long term basis." Click here for full interview.
One way Rogers recommends investors can participate in that uptrend is to invest in "commodity stocks rather than commodities themselves."
The Rogers Global Resources Equity Index fund focuses on the top companies in agriculture, mining, metals and energy sectors as well as those in the alternative energy space including solar, wind and hydro.
His criteria for picking which companies should go into the index was to look at the "best" and "most liquid companies" in the relevant sectors, he said.