Legendary commodity investor and financial commentator Jim Rogers said that he would have bet on hygiene water, agricultural commodities and tourism as the best sectors to invest in India. Global crude prices may at the most touch a low of $70 per barrel, he predicted.
Being a fan of food and agriculture commodities, Rogers is fascinated about sugar and cotton as the best investment options even now. For the last 10 years he had been investing in them and says that they are expected to peak sometime in the next 10 years time. Among metals and minerals he is bullish on silver and zinc.
“Water will be the next biggest problem facing several parts of the world, including India. Besides, India is a must visit for anybody in the world for it is so diverse culturally,” Rogers said.
Rogers was addressing the press at an event to launch Birla Sun Life Mutual Fund’s first commodity-focused fund to open for subscription next Monday. He said the product was being launched at the right time to tap the market after the slack commodity months of September and October.
Explaining his fascination for agri-commodities, Rogers said the total land under food cultivation has not not go up over 150 years. Demand for bio-fuels is expected to affect land under food production, leading to higher food prices, he felt. In the case of oil, too, no significant reserves have been found in the last 40 years, Rogers said.
Against the backdrop of the US credit crisis, commodities are set to become a good investment option, he felt. Like lead which shot up 900 per cent even in a bear market phase — commodity cycles are not totally influenced by economic cycles. “Their crazy cycles are dependent mostly on demand and supply,” Rogers said.
“After a long spell of bear market, commodities markets have come into a bull phase. They are set to continue in this phase for 15-20 years now,” Rogers felt. “Dollar is not a major factor in commodity prices. Get out of dollar,” he advised.
Calling dollar a ‘terribly flawed currency’, Rogers said withdrawal of reserve money investment by several countries, including oil exporters, would bring out its weakness. Referring to the bailout package for Fannie Mae and Freddie Mac, he said, “Huge bonds issues are coming (for funding the package), so sell the bonds.”
He refused to hazard a guess on when the recession would be tided over. He said he has been betting on the Japanese yen for 10 years, and had been bearish on the dollar.