Is the epic boom in commodities over?

  @FortuneMagazine September 19, 2013: 7:57 AM ET
INV07 jim rogers

Rogers in Singapore's Chinatown


It was one of the best calls in memory. Back in the late 1990s, when the world was in the thrall of the dotcom bubble, Jim Rogers foresaw a China-driven commodities boom. In the decade-plus since, hundreds of billions poured into the sector -- including to investment products from UBS, Merrill Lynch, and others based on his Rogers International Commodities Index -- to try to capitalize on the surging prices of oil, metals, and grains. But lately, with gold 20% below its high and miners cutting back on new projects, a growing chorus of Wall Street voices has begun to declare the boom over. Rogers, 70, disagrees. From Singapore, where he moved his family six years ago to be closer to the action in China, the onetime hedge fund partner of George Soros tells Fortune why he believes commodities can still go higher. Edited excerpts:

More and more people on Wall Street say the commodities boom is over. Is it?

That's a very good question. I have certainly noticed what you've noticed, and it's a good sign from my point of view. I've been around markets long enough to know that when everybody's on one side of the boat, it's probably not the right side to be on. During the long bull market in equities between 1982 and 2000, stocks collapsed in 1987 and they fell in '90, '94, '97, and '98. Every time, people said, "Well, the bull market's over." But the bull market was not over. And like most long bull markets, it eventually ended in a mania and a bubble.

So you don't think we've reached the mania stage yet with commodities?

I don't see enough supply having come onstream in most commodities to end the bull market. Agriculture inventories are near historical lows because the world has consumed more than it grows for a decade now. Many minerals companies have canceled capital-spending programs because they, too, have heard from Wall Street that the boom is over. I haven't seen a mania yet.

Join the Conversation
Sponsored by
Index Last Change % Change
Dow 16,507.31 -7.06 -0.04%
Nasdaq 4,134.02 -27.44 -0.66%
S&P 500 1,876.75 -2.80 -0.15%
Treasuries 2.69 -0.04 -1.47%
Data as of 3:14pm ET
Company Price Change % Change
Facebook Inc 61.92 -1.11 -1.75%
AT&T Inc 35.00 -1.29 -3.56%
Bank of America Corp... 16.35 0.06 0.37%
EMC Corp 25.91 -0.85 -3.18%
Verizon Communicatio... 47.50 -0.42 -0.88%
Data as of 2:59pm ET
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.28%4.26%
15 yr fixed3.30%3.30%
5/1 ARM3.35%3.30%
30 yr refi4.32%4.25%
15 yr refi3.35%3.29%
View rates in your area
Find personalized rates:
Rate data provided
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.