The Hindu Business Line : `Will not sell any commodity despite the fall'

Commodities have been extremely volatile over the past one-week. Copper, aluminium, and zinc have all cracked under heavy speculative trading. On Wednesday, prices rebounded sharply, but only for a while, before slipping once again.

Investment Guru Jim Rogers says all markets have big reactions and consolidations and it may be so with commodities as well, but he is not in favour of selling commodities, even if they correct 30-40 per cent.

Mr Rogers says that copper and zinc were overdue for correction. In his opinion, commodities may have peaked for the moment but will not stay that way for a decade. China is the only emerging market that Mr Rogers is invested in.

Excerpts from a CNBC-TV18 exclusive interview with Mr Jim Rogers:

Was the crack we saw in commodities only a technical crack or is it the beginning of a downturn?

All markets have reactions and consolidations even within the context of the bull market. In the 1970s, gold went up 600 per cent and then it went down 50 per cent over a two-year period only to turn around and go up another 800 per cent. So there may be big reactions and we may be overdue for one.

Although I don't have a clue, I am not selling any commodities, even if they go down 30-40 per cent because they will be going back up later.

Will all commodities go back up because some people are saying that industrial base metals may not reach the tops again?

I can see that copper and zinc and few things have gone straight up for a few months and they are certainly overdue for a correction. But one has to know that nobody has opened any mines in years and all the existing mines are depleted.

In Asia, India and China are growing. Some of these people may have to come up with lots of new mines very quickly because the world is running short of this stuff over the next decade. Although copper is touching new highs, it is still far below its all-time high adjusted for inflation and so is zinc, lead and others.

You and others have pointed out that historically, commodity bull runs have lasted 15-20 years and we are only in the 6th or 7th of this bull run. But has it ever happened before that commodities, stock markets, real-estate all of them have gone up together; is this a change?

Real-estate everywhere hasn't been going up. It is certainly not going up in the US. Nor is it going up everywhere in India. It is going up only in some sections. Although we have seen stocks and commodities going up, one must remember that the commodity bull market started in early 1999, and commodities are up 300 per cent and stocks as measured in the west are only up 20-30 per cent in that period of time. Stocks and commodities have not been acting together. Although in the last 1-2 years, people think they have, but in the last two-three years in the US, the stocks are essentially flat. If one measures the averages, commodities have been going through the roof. Certainly in India, stocks have been going through the roof. But India is a special case.

You are a legendary commodity investor but are you looking at emerging equity markets at all?

The only emerging market that I have invested in the past few months is China. That is because the Chinese market went down for several years. Other than China I am not investing in other emerging markets.

What is the call on the dollar?

Sell it. Do not own the dollar, it is a terribly flawed currency. We are going to see the demise of the US dollar currency in the next decade or so.

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