Hedge fund manager Jim Rogers says those with raw materials currently have the upper hand.
Several scrap companies combined to sponsor hedge fund manager, author and frequent financial commentator Jim Rogers as the guest speaker at the 2011 Bureau of International Recycling (BIR) World Recycling Congress’ Ferrous Division meeting.
During his presentation and as he answered questions from attendees afterward, Rogers made clear his opinion that producers of basic materials and holders of raw materials would play a pivotal role in the global economy in the next 10 years.
Although petroleum scarcity may be the most prominent example of why natural resources and raw materials markets will be bullish, Rogers said, “The supply of nearly all raw materials is declining at a time when demand is going up. It’s why raw materials are now in a bull market that will go on for some time.”
Speaking to his audience of metals recyclers, Rogers added, “You’re in the right place at the right time. You guys, everybody loves—they love what you do. You’re not evil financiers.”
Rogers noted that in the 1950s, ‘60s and ‘70s, manufacturers and raw materials companies were “in charge.” However, starting in the 1980s through 2008, “Wall Street was in charge—but that’s finished.”
He said he would urge young people today not to pursue an MBA but to “get a farming degree or a mining degree, or go to work on one of your trucks.”
China’s production and consumption of steel and other raw materials has been a major factor and will continue to be, said Rogers. He is not as optimistic about India developing along the same lines.
Rogers called India “an astonishing country to visit” but “as a place to invest, it’s a nightmare.” He cited as his concerns too much bureaucracy, too much debt and an overriding anti-capitalist sentiment in the nation.
The steel and ferrous scrap industries may be tied into a “raw materials bubble,” said Rogers, but it is not a bubble he sees popping until perhaps 2018 or 2020. “Please watch for signs of a bubble,” he told BIR attendees. “When you come to one of these meetings and everyone is talking about how smart they are, leave the room and sell.”
The 2011 BIR World Recycling Congress was May 23-25 in Singapore.