Salient to Investors:

Jim Rogers says:

  • Avoid gold mining stocks because miners face stiff competition, and there are now many easier ways to own gold – coins, ETFs, ETNs, futures.
  • Gold will bottom in 2014 or 2015 because eventually prices below the cost of production will cause tightness in supply and push prices higher, but commodities can stay below the cost of production for years and it takes a long time for people to believe they have to close their mines, which is expensive.
  • All the people saying the commodities super cycle is over never saw the bull market coming.  Bull markets climb a wall of worry and we certainly have a wall of worry and skepticism, which is good. In 1987, 1989, 1990, 1994, 1997, and 1998 stocks collapsed and everybody was convinced their bull market was over – but it was not.
  • There are no major sources of new supply coming on stream. Most commodities don’t have massive new supply yet. Agriculture inventories are the lowest in 40 years because consumption keeps rising faster than production. There is not enough new supply to cause the bull market to end other than a temporary consolidation.
  • Most bull markets have lasted for nearly a couple of decades or more. If economies slow down, Bernanke and his friends are going to print a lot more money – the wrong thing to do but all they know how to do.

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