Economy Hot Take: Jim Rogers

A friend on Twitter shared a video featuring investing legend Jim Rogers. I quickly proceeded to mock Jim’s pink bow tie. Never bias the messenger with the message. And Jim’s message is an important one. I’ve written some highlights, and posted the full video.

“There’s an old saying in the commodity business; the cure for high prices is high prices because high prices cut demand and bring in supply. Low prices are the cure for low prices. Because if prices are low for a long time, people buy more and stop producing.” according to Jim.

These cycles have been going on for hundreds of years.

“Commodities are the only asset class I see that’s still cheap.” Jim said. “Silver is down 45 from an all-time high, Sugar is down … 70 or 80 percent from it’s all-time high. Oil is down over 50 percent from it’s all-time high…”

Energy is still an important commodity. Nearly all energy comes from oil and natural gas. If you look at electric cars, you still need to produce the electricity, which needs to be made from something. Maybe solar? Maybe wind? But electric cars, for instance, use five times as much copper as conventional cars. The demand for oil may go down, but the demand for copper, lithium, and other things is going up.

“The next bear market is going to be a nightmare,” Jim says. “Is that some kind of huge observation, or is that just simple looking out the window? To me, it’s looking out the window. A simple statement.”

“It’s not a good time to be young. It’s a good time to be old.” according to Jim. “I say the next bear market is going to be the worst in my lifetime. I know what happened in 2008 and I know what’s happened since. How can it not be (worse)?”

“Attention is the new gold.” ~ J.P. O’Shaughnessy

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