The stock is dead, long live commodities – and China | FT Alphaville

The stock is dead, long live commodities – and China

Quantum Fund co-founder and investment guru Jim Rogers believes the bull market for stock and bond markets is over, and investors should get into commodities, reports

Stocks and bonds might be passé, but there is a long-term bull market in commodities which could extend to 2022, said Rogers, in a keynote speech at the Credit Suisse Asian Investment Conference on Thursday.

Rogers compared the returns on his commodity fund index from its debut in August 1998 – up 243 per cent – with the S&P 500 over the same period, which had only risen 43 per cent. Whenever commodities are in the ascendant, stocks and bonds decline, he said.

He reckoned the big bull market for bonds in the 1980s and 1990s peaked out in 2003 and “has been in the process of making a big top ever since”.

“So I would urge all of you to go home and sell all your bonds. I know some of you are bond managers – I would go home and look for another job,” he told the audience.

Rogers also deplored a widespread ignorance of China’s ascent. “It is amazing how many people do not understand the rise of China – China is the next great country in the world,” he said. “I know they tell you that they call themselves communists in China – but I tell you they are among the world’s best capitalists right now.”

“If you see problems in China – get on the phone and buy as much of it as you can,” he urged, adding, “[China is] something we need to understand because it is going to affect demand for lots of things and change the world as we know it.”

Demand from China in particular has fuelled the growing demand for commodities, particularly oil, but Rogers said current levels of demand were “just the beginning.” China’s per capita consumption of oil was just one fourteenth of that of the US and one tenth that of South Korea and Japan, Rogers said.