Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market

This is an engaging introduction to a topic that even many experienced investors find intimidating. In what may be a seminal report on the subject from the Yale School of Management's Center for International Finance, "Facts and Fantasies About Commodity Futures" [Gorton, Rouwenhorst: 2004] academia gives support to Jim Rogers' real world experience as a commodities investor. The conclusions: Returns on commodities have often been better on a risk adjusted basis than stocks and bonds. Commodities have historically done well when these more traditional investments have suffered and so offer investors seeking to diversify their portfolios a solid alternative. The greatest returns come from investing in commodity futures rather than stocks of companies that produce those same commodities. Notably, commodities have performed well during periods of inflation.Rogers believes the current bull market in commodities began in 1998 and based on precedent should run 17-18 years until 2015. At the heart of the commodity cycle is a supply-demand dynamic that impacts many natural assets differently. Rogers gives readers an introduction to the pricing drivers for oil, gold, sugar, lead and coffee.Chapter 5 deals with the voracious demand for commodities coming out of China. Chapter 6 "Goodbye, Cheap Oil" looks at the world supply of oil and alternative sources of energy. Both chapters have the potential to alter the reader's investment perspective.Some takeaway nuggets: China is consuming half the world's cement. No major oil field has been discovered in thirty-five years. The U.S. foreign trade imbalance is growing by a trillion dollars every two years. Asians save almost 40 percent of their income (versus 2 percent in the U.S.).Readers of HOT COMMODITIES will not likely gain the confidence needed to invest in sugar futures, etc. They will have a better appreciation for including commodities in a well diversified portfolio. Unfortunately there are few mutual funds that focus on commodities. What is still needed in this reader's opinion is an ETF (exchange traded fund) that tracks a broad-based commodity index.

If you are a contrarian and long-term investor then this is a great guide for the commodities markets. Perhaps the biggest myth about commodities investing is that it has to be very risky. This misconception generally stems from traders being overleveraged (can require as little as 5% margin). Some commodities are also quite sensitive to factors such as weather and political developments. You need to know your market, buy cheap/sell high and not be overleveraged. A Yale study has shown that commodity returns are less volatile than S&P 500 returns in the past six decades. Again, I think leverage is the huge culprit.The major asset of this book is learning how Rogers approaches his analysis process, which essentially deals with the most fundamental law of economics: supply/demand. The factors affecting each commodity can be subjective although production and global demand (especially China) are the main forces. Historical prices and inflation also play a role.Roger's provides an interesting analysis of China and it's influence on global demand. He describes his bullishness on lead, sugar and coffee. To a smaller extent he also likes crude oil and gold. Considering this book was written before the major oil and gold run-up I doubt he would be as bullish on these two commodities now. This also extends to other commodities.

Going through Amazon or a local book store, the best selling investment books are always about stocks. Why is there a lack of literature on commodities? Commodities returns outpace inflation, are tangible assets, and prices can rise even when the economy is stuck in reverse.The investment community badgers people with the notion that commodities are risky investments and stock are the best. History shows, as well as this book, that both stocks are commodities have good and bad decades. It's naive to dismiss an entire investment category due to conventional, or biased, wisdom.In 'Hot Commodities' Jim Rogers lays his case for commodities not only being a great investment, but being especially timely now. Though he labels himself a 'terrible trader' and doesn't do well timing the market, he's had a great records over the years on cashing in on bigger, long-term trends.According to Rogers, starting in 1998, the world has entered a commodity bull market. This commodity cycle, as others in the past should run 15-20 years. Now that doesn't mean there won't be corrections. Certain commodities will peak earlier, and some later. Still, the thing to buy these days is.... THINGS.The first half of the book deals with the correlation between stocks and commodities (well worth reading), and how to get into the game. Rogers also lays down concrete evidence on how China will drive massive demand for lead, steel, and oil. The Chinese economy has grown at a feverish pace and will continue to do so because of market reforms that started in 1979.In the second half, we get a break down of supply and demand on 5 commodities (Oil, Gold, Lead, Sugar, and Coffee). Needless to say, he is bullish on those in the years ahead.Knowing little about commodities before reading, I left the book with a solid introductory education. Hot Commodities can serve as a great primer for anyone in or outside the market.

Livro excelente para entender a base do mundo das commodities.

Guide - 1 chapter on guide, rest are examples using it. Can be more informative, as which news outlets are best and where do you look. Jim seems to know a lot about the supply and demand, these aren’t shared on the news outlets. You can get them from the book he recommends annually however surely we can get a close estimate for free online ? - seems that the news outlets only share vague explanations of increases/decrease in supply/demand

I'm writting my review in english since i don't think there are many readers outside US that would read Jim Rogers (Not because he's a bad writer, but because he's not well known outside US) and people buying this book won't read it in spanish or any other language for that matter. This book is AMAZING, the perspective provided by Jim is new, specially for people outside the finance world. If you're looking for investment opportunities, this is not the book for you. In this book Jim gives you the tools for analyzing the worlds commodity market in terms of supply and demand (among other factors) so you can understand how to invest in them. Despite not being in a commodity bull market you can learn a lot about the international commodity trades and how they impact us in daily bases. And also spot opportunities in stocks, bonds or commodities by understanding the market. I would say this is a MUST read for everyone interested or inside the finance world. It does not only teach you about how commodities work, but also an understanding on how they can be the safest investment (OVER THE STOCK MARKET, BIG TIME) and the reasons described are quite difficult to argue.

Muy bueno y ameno. Imprescindible para el momento en el que estamos para invertir en materias primas

This is a must read for everyone who wants to understand how market determines price of the product and how knowledge can help you understand this. Very basic understanding and lots of common sense is enough to build a living for yourself. Book clearly says that remain far away from difficult financial models and stay closer to ground reality and we can see that how big shots could not even build a suitable index.