Friday, December 2, 2011

Investors Clinic: Jim Rogers on Metals and Other Commodities

As part of the Alternative Investing special report, CNBC is launching Investors Clinic – the place for investors to get tips about what's hot and what's not, how to diversify and how to get exposure to exotic or new asset classes.

The first in a series of interviews was commodities bull Jim Rogers, who shared his views on metals - especially precious metals – and other investment opportunities.

Rogers answered viewer questions during the on-air interview and in an e-mail interview with CNBC afterwards. Here is a selection of his answers:

Q: Will gold be the best and safest investment?

With gold hitting record after record high, many investors have been keen to get exposure but Rogers believes a correction is due.

"I suspect agriculture products would give better protection during the next several years although gold and silver will be good too – perhaps second best," Rogers said.

He predicted that gold would go through a correction - as the precious metal's price has risen for 11 years in a row - and investors could use this as an entry point.

If the price of gold goes to $1,200 per ounce, Rogers said he would get "extremely excited" about the metal and he would "probably get more interested" at $1,600.

Q: The best way to invest in gold: paper of physical gold?

Some analysts have said the rise in the price of gold may have partly to do with the proliferation of the so-called "paper gold" - exchange traded funds or ETFs using the precious metal as an underlying asset.

"The paper market in gold and precious metals can go both ways because it's a lot easier for people to sell their gold," Rogers said, adding that he owns "some of both."

"There's a lot more speculation now in the paper gold market as it's easier to buy and sell," he said.

Q: What about investing in copper?

In November, the price of copper fell around 8 percent and the metal is down more than 20 percent this year. It is the first annual fall in the price of copper since 2008. Some market watchers have dubbed copper "the poor man's gold."

"I own some copper, but I expect to make more, percentagewise, in agriculture and precious metals," Rogers said.

Q: And diamonds… are they really forever?

The world's biggest miner, BHP Billiton announced on Wednesday it was reviewing its diamond business and may sell the operation. But from an investor's point of view, diamonds are still a good option.

"I own diamonds and expect good things over the next several years," Rogers said. "I imagine things like rubies, sapphires, emeralds, and jade will do better percentagewise. I own them all."


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