245 of 254 people found the following review helpful
on December 30, 2004
Those who have listened to Jim Rogers speak in the past few years will find no real surprises in this book. He likes commodities, and he likes china. He is not quite so fond of india and dislikes russia. You only have to go back to his previous book adventure capitalist to get that message, where he went into much detail about the problems with both india and the central asian states and their particular brand of outlaw capitalism.
So the message to buy commodities is not new in this book, but in this book he gives you some basic information on commodites, nothing new here. In the middle of the book, however, he breaks the commodities down, and makes an individual case for each of them, based on fundamentals and history. This, in my opinion, is the strength of the book and what makes it worth the price.
78 of 81 people found the following review helpful
on February 3, 2005
I've been a fan of Jim Rogers for a long time. I've read his previous books (Investment Biker and Adventure Capitalist) as well as numerous articles and stories about him (Worth Magazine, Fortune, Barrons, etc). This book did not disappoint.
What I enjoy most about Rogers is the fact that's he's produced consistent results throughout his career. He made a fortune with George Soros in the 70's at the Quantum Fund (up 4,000% in the decade). He made huge calls about the crash of '87, the crash in the Nikkei, forecasts of emerging bull markets in Austria, Botswana, and numerous other countries. His move into commodities in 1998 was another great coup.
No investor is going to be perfect. No one will get it right 100% of the time (he's been overly bearish on the US since at least the early 90's). But I believe Rogers core philosophies will get you much further than anything else you hear in the mainstream media and by the talking heads on TV. They haven't made fortunes in the market for the past 30 years.
"Hot Commodities" is a good introductory guide to the world of commodity investing and more importantly, contrarian investing. Fortunes are made by thinking independently from the crowd, looking for opportunities that no one else sees and making sound, logical investment decisions. Rogers takes you down that thought process beautifully.
I knocked a star off because he could have discussed options and other ways of buying commodities in more depth. Some may see the book as a giant ad for his own commodities fund. More balance would have been nice.
All in all, some great insights from an investing legend.
208 of 228 people found the following review helpful
on January 29, 2005
Rogers wrote this book because he runs a commodies index and a fund to go with it. The book is poorly disguised advertising. With that said I believe Rogers is sincere in his beliefs. However, as usual there are several caveats. First, he quotes papers and research showing that investing in commodies in the past has been less risky and had better returns than equities or bonds. All of this research however ignores institutional risk associated with commodity investing. The fees are high, the market is sometimes manipulated, the investor virtually has to use a full service brokerage firm, and even Roger's mutual fund is available only through a broker and has high surrender charges. Second, although many money handlers like Rogers end up rich, it is almost never pointed out that the vast majority of their money is not made by their own fantastic investing but by charging high fees to their investors. Look at the fees on the Rogers fund. Good God. Third, the various commodity indexes that are out there are new. Gibson, in his book on asset allocation, took the Goldman Sachs index back to the good old days of the seventies not bothering to point out that the GMCI only dates back to 1992 and so this was essentially backtesting - a popular hobby even though there is much evidence to indicate this is not the way to go. There are good reasons to believe that the commodity bull market of today will not repeat the golden years of the seventies even though it is real enough. None of this even touches the fact that the average investor should only have 5 - 10% of his money (at the most) in commodities. Either high minimums on the funds or huge front and back end fees will keep everyman out. Nevertheless, Rogers is correct in his assertion that learning about commodities will help any investor look at the world in a different way, and, in the long run, teaching the investor the basics of understanding commodities is the real contribution of this book. Those looking for a commodity investing how to book will have to keep looking. He is pushing commodities indexing.
177 of 194 people found the following review helpful
on January 7, 2005
Jim Rogers wrote a very easy to read book.
If you are looking for hot tips as to what commodity to invest in do not waste your money buying this book. He does not offer any "hot" tips. I personally believe if any one person had "hot" tips to make tons of money, why would they tell other people? It does not make sense. Anyhow this book does not have any formulas, and actually the author points out that most technical analysis traders loose money, it is the people who write the book on technical analysis that make money.
The book however is well written, and makes basic arguements based on facts, namely suppy and demand. Jim Rogers as you can tell from his book is a fundamentalist. His arguements are clear and concise, and make perfect sense. You will not be disappointed in this book, and even if you are technical trader, you could still use many concepts in this book to help with your trading, or if you just want some information on the fundamental side.
This is one of the best books I have bought in a long time. It will sit with my arsenal of other books, so that I can use this to help make better judgements into what commodities to invest into.
He also makes some nice parallels with the stock market and commodities market.
You will not be disappointed, and the price is not bad at all.
28 of 28 people found the following review helpful
We are accustomed to reading headlines like the above in The Wall Street Journal and in the business sections of other publications. If you are like most people, you use the information to get a general sense of what future inflation might be . . . and go back to buying and selling stocks and bonds.
Jim Rogers has a different suggestion for you. Learn enough about the commodity markets so that you can consider whether they offer an appropriate alternative for investing some of your funds. His book, Hot Commodities, is designed to help you achieve that goal.
I found Hot Commodities to be an easy-to-understand introduction to the subject that will appeal most to those who know nothing. If you were alive during the commodity-driven inflation of the 1970s and 1980s, you will find this book to be a little too simple for you. But you will probably enjoy the book, nevertheless. Mr. Rogers has a straightforward, humble approach to his writing that will appeal to most.
Some may avoid this book because they don't want to use the tremendous margin that is available with commodities. That's a mistake. Mr. Rogers is suggesting a plain vanilla index-fund approach to owning a portfolio of commodities over the long term with no trading and no financial leverage. His point: During a commodity up-cycle, many commodities will rise by ten-fold. Hitting most of the rise over a 10-18 year period will provide returns that exceed what bonds and stocks usually provide.
In addition, he shows that commodities tend to be countercyclical to stock and bond returns so commodities can be a useful diversification for part of a portfolio. Interestingly, commodities have also been less volatile than stocks in the last 25 years or so.
Mr. Rogers also gives you basic information in case you want to consider more adventuresome versions of what he recommends (don't do it!).
The most interesting parts of the book are the ones where he explores the pivotal role that China and Brazil play in creating a commodities boom. He looks at economic growth in developing countries, oil, gold, lead, sugar and coffee in a little detail to give you a flavor of how to analyze supply and demand fundamentals for a given commodity.
Personally, I would have found the book to be a lot more valuable if it had had more detailed analysis in it . . . and suggestions for how to do your own homework.
But that's okay. I still learned from the book, and intend to consider doing some commodity index fund investing.
I recommend this book to anyone who wants to use index fund investing to beat the pros.
26 of 26 people found the following review helpful
on May 29, 2005
I thoroughly enjoyed Jim Rogers's new book "Hot Commodities." Having read his two previous books, "Investment Biker" and "Adventure Capitalist," better prepared me to appreciate his newest book.
If you are looking for technical analysis, this isn't the book for you. You best look elsewhere.
From his two prior books, we know that Jim looks at the bigger picture. He always likes to be a contrarian and views opportunities from a different vistas. In this book, it's no different. He dispels the notion that commodities are any more risky than equities. After having accomplished that feat, he then goes on to describe a few of his favored commodities. He walks through his logic in his somewhat folksy style. He doesn't bore you with mountains of data and information. Instead, he shows you what he looks at and how he arrives at his conclusions. In essence, he teaches you how to fish.
Now knowing how to fish, you can choose your own favorite commodities and begin researching those commodities. You'll note that most of his sources of information are readily accessible to the general population. He didn't rely on proprietary Bloomberg information. Instead, most came from common sources such as Barron's.
Jim also tried to instill in the reader a fascination with commodities. Once you follow commodities more closely, you'll have a better appreciation for investing and following world events. When you have your cereal in the morning, how is the price of commodities affecting the profits of Kellogg? How does the weather in Florida affect the price of your orange juice, or developments in Brazil affecting the price of your cup of joe? How do various political and other developments affect commodities, and how do those changes in commodities affect us?
I thoroughly enjoyed his latest book because a) it gave me his view on commodities and why he expects commodities to remain strong for an extended period, b) because it complemented his two previous books by showing us how international factors relate to commodities, and c) because his book will make me an overall better investor.
Great book! I encourage you to purchase all Jim's books.
45 of 49 people found the following review helpful
on January 15, 2005
Topline in this book is commodities will outperform equities in the next 20 years, therefore jump in this bandwagon if you want to outperform the equity market.
Style: He argues in the initial section as to why one should invest in commodities but provides limited guidelines on how to actually invest in them if you are small investor. The rest of the book is broken into individual commodities, e.g., oil, coffee, lead, gold, with an elongated appendix on each of the commodities. The outline for each chapter is Jim's personal experience, some high-level history of the commodity and then finally his prognostications on the future of the commodity.
1. China is hot, India is not
2. Gold is old, lead is hot
3. Coffee is due for its sunshine soon
4. Sugar is a better investment than oil near-term
5. Start reading Commodity Research Bureau's Commodity Handbook to understand demand/supply dynamics.
Conclusion: Please buy this book if you are bearish on the equities and want to outperform the S&P 500 index.
27 of 28 people found the following review helpful
on June 1, 2005
The world-renowned "Adventure Capitalist" Jim Rogers takes the reader through a real adventure in this book. An excellent introduction to the world of commodity investing, most readers will find a plethora of useful and interesting information. A nice bonus is the handy appendix listing brief descriptions of commodities and commodity indexes. It makes the book worth keeping as a reference.
Rogers does an excellent job presenting his reasons for a commodity bull market in the upcoming years and he presents various ways to profit from it - everything from picking the right stocks to investing in the commodities futures markets. He earns credibility by basing statements on his own observations as a commodity trader, unlike other books that use some egghead's mathematical projections as a premise.
The later chapters go into detail over the most popular commodities (i.e. oil, gold, sugar, coffee). Here he presents interesting historical information and explains what factors drive the prices of these items. He also discusses the most recent news affecting supply and demand. After finishing those brief chapters, it definitely leaves the reader hungry for more on other commodities.
Investor beware! While Jim does make a convincing case for a commodity bull market, do not be too hasty in making a move. I feel at times he is overly optimistic, especially when he touts his own Rogers Commodity Index fund. He also downplays the dangers involved in the volatile futures markets.
Despite these cautions, Hot Commodities is an excellent read for staying informed of today's changing global market conditions. I recommend it to all investors.
97 of 114 people found the following review helpful
on February 3, 2005
As someone who opened a commodity account in 2003, I must warn people that its is *not* a myth that you have a rare chance of losing your shirt like the book states.
Yes, One the one hand, commodities are simple, there are no accounting issues, neferoius managers, stock float issues, ponsei schemes etc..
But they are VERY RISKY things to manage. Lets go through what occurs - you read the book, with no information on futures, you open a broker account, you buy a futures contract, typically for between $50,000-$100,000 worth of whatever. This is done on margin - you are being charged interest on the loan as long as you hold it!
And - If you do not sell that contract before whats know as the 'last trading day' which varies from contract to contract you have to take delivery of say the 40,000 barrels of oil the contract is for! Fancy having that in your garden?
If you buy a long dated contract, to help get around this, you will find that you there is usually little 'open interest' which basically means that there is not much of a market, sellers and buyers setting prices, and prices are not reflective of reality.
Also, with any long dated contract, you will have to pay a premuim which differs from the 'spot' price, related to the feds cash interest rate. The further out you go, the more this premuim cost is, even if the market is liquid enough to absorb a longer dated contract. Say you bought a contract for Gold delivered 6 months out, Spot would be $400/Oz while the futures contract would add in this 'time' premuim - say $410/oz. So gold has to rise by OVER this amount before you break even.
Obvoiusly, you are also on margin with the broker, so have to pay him interest on your debt during the time you are holding it!
What you find is contracts are freqently rolled over, because of open interest reasons, which means that lots of people start selling well *before* 'last trading day', because they do not want delivery, and, as open interest starts to dry up on that contract, you too will have to move to the next month. You have to monitor your positions constantly and have a deep knowledge of that market to know exactly when datewise etc.. to roll over. For instance - You cannot 'get ill' with an online broker and not tell them that you do not want delivery, but would like to be rolled.
There are so many ways to get stuffed, its not something Rodgers can cover in his book. Which is why the book points to his fund really.
As you can see, its not exactly easy, worry free stuff. And then you have to know the market - every commodity market has supply and demand factors which relate to the economic/industrial climate, weather patterns, exchange rates etc...
It's so fraught with risk - you really DO have to know whatyou are doing, that you will be using a full service broker if you have any sense, and you still have to stock lashings of research (your valuable time) up on the individual market for the commodity. Supply and demand determines price, and technical traders can be caught out by the fundementals, you have to have a knowledge of both and a feeling of where you think it may go.
Its NO WAY like a choice between paper assets like stocks and bonds and raw materials. If you thought there was going to be a massive long run demand on a shrinking supply of commodity assets then, the stocks which own the such producing assets make more sense than the commodities.
Jim Rodgers has some interesting ideas about the times we live in, and he may be correct about the market becoming like the 1970s for the 13 or so years of the 18 in his thoery we have left to run since the market crashed in 2000. But a commodity broker is not the way to go for someone who like to sleep easy at night. As I see the Fed tigthening lots of commodities are falling back. Come real interest rates, many 'bandwagons' like Gold will plummet.
17 of 17 people found the following review helpful
on January 27, 2005
In 1976 when I wrote my book, Energy Forecast to 1990, I should have, first, listened to Rogers. I was only half-right. Saleswise, the book was a clunker, deservedly so.Quick overview of Hot Commodities:Regarding China, right on. The world balance of trade seems to pivot off China these days. Their worldwide trade clout is awesome, and growing. To me, reading most of his other predictions, too, are like reading tomorrow's newspaper today. Overall, he seems to stress, wisely, that humble recognition of your own ignorance is the logical first-step essential to good commodities trading (something I learned the hard way). He then goes on to fill in the blank spots with some truly wise counsel.On the negative side: no worthwhile amount of space is given to commodities options, which is the small commodities investor's best friend--no worries about taking shipment, getting stuck, or mired with the actual goods--only paperwork transactions. I would have thought that a nod in this direction--particularly in selling put and call options, rather than buying--would have made this a superb "overview" book indeed.