Tuesday, March 18, 2014

Commodities still in ongoing bull market

The bull market in stocks between 1982 and 2000 had many significant corrections. In 1987, stocks went down 40 to 80 percent. 1989, 1990, 1994, 1997, 1998 – these were several very significant corrections in the price of stocks.

Back then many people said: Aha! Now the bull market is over. Well, they were wrong. In my view, this is what’s happening in commodities. It’s a normal temporary correction, which happens in all markets. 

I do not see enough significant permanent new supply in almost anything, which can cause the end of the bull market [in commodities]. Rio Tinto and BHP Billiton and others have cut back substantially on their capital spending programs because they think they should not be bringing a lot of new [mining] supply on stream yet. 

So until we have significant permanent new supply, I don’t see the bull market coming to an end. 

The bull market will end, I assure you, it will end someday. But not yet.

Jim Rogers is a smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.