Thursday, 1 November 2012

HOT COMMODITIES by Jim Rogers (copyright 2004, 2007)
How Anyone Can Invest Profitably in the World's Best Market

"The Indiana Jones of finance." - Time

"Jim Rogers offers a primer on what commodities are, the lingo and how to invest in them....The advice and insight are refreshing and enriching, seasoned with Rogers's own investing stories." - USA Today

In Hot Commodities, Jim Rogers provides the lowdown on the most lucrative markets for today and tomorrow. In late 1998, gliding under the radar, a bull market in commodities began. At the same time, Rogers started his own commodities index fund. It is now the single-best performing index fund in the world in any asset class. Less risky than stocks and less sluggish than bonds, commodities are where the money is - and will be in the years ahead.
Rogers's strategies are simple and straightforward. You can start small - a few thousand dollars will suffice. It's all about putting your money into stuff you understand: the basic materials of everyday life, from copper to sugar to cotton. Once you recognize the cyclical and historical trading pattern outlined here, you'll be on your way. For small investors and high rollers alike, Hot Commodities is as good as gold ... or lead, or aluminum, which are some of the commodities Rogers says could be just as rewarding for investors.

Contents

Introduction
1. The next new thing is - things
2. "But..."
3. Stepping up to commodities
4. Stepping into the commodities markets
5. Notes from the wild, wild East
6. Goodbye, cheap oil
7. Gold - mystique vs. fundamentals
8. A heavy metal with the potential to be a high flier
9. Searching for the next sugar high
10. Can coffee perk up ?
Conclusin
Appendix
Index

THE DOWNSIDE
"China is a fragile giant - at once emboldened by its economic growth and afraid of the consequences. Its top leaders are cautious ... it's asinine not to expect some measure of unrest and turmoil in China. Chinese officials are learning about regulating markets on the job .. But they are not infallible. ... I expect things to get out of control somewhere along the line as they did in 1989 and 1994, and if they do that will be the next buying opportunity for China and for commodities." (Rogers p.116)

THE UPSIDE OF THE DOWNSIDE
"China will stumble along the way, but those 1.3 billion-plus consumers aren't going away. The Chinese will be back saving their more than 30 percent and investing it. Millions of homegrown entrepreneurs will be looking for ways to get rich. ... The smart investor, however will be paying close attention for opportunities to cash in on China's excellent adventure in capitalism. For the time being, the best way is to buy commodities - and particularly during times of correction and consolidation." (Rogers p. 118-119)

The China ABCT ETF Fund has a Bullish Outlook for Gold:

- China needs to diversify from US dollar holdings as Quantitative Easing Program 3 (QE3) has begun under Federal Reserve Ben Bernanke.

- Eurodollars are under pressure and may breakup and depreciate as the "PIIGS" crisis is ongoing. Greece wishes to renegotiate its austerity terms while Germany says no. Spain does not want to ask for a bailout since it will also be dictated by German austerity measures.

- Countries around the world such as U.K. and Japan are printing money to gain a competitive export edge.

- The technical chart indicators for the SPDR Gold Trust ETF (GLD) are bullish for the last 5 years.

The (ABCT) Fund will look for a suitable consolidation entry point to go Long Gold in the GLD ETF Fund.

- The link below shows the 5 year GLD ETF chart

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=GLD&x=34&y=15&time=12&startdate=1%2F4%2F1999&enddate=10%2F23%2F2012&freq=2&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=9&uf=8&lf=4&lf2=1&lf3=16&type=4&style=320&size=2&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11

The China ABCT ETF Fund has a Neutral Outlook for the Chinese equities:

- Fundamentally, the Chinese GDP growth has slowed significantly , so much so that there are government programs to stimulate the economy again.

- The political situation is currently not resolved as China changes its leadership every 10 years.

- The technical chart indicators for the iShares Trust FTSE China 25 Index Fund (ETF) (FXI) are still neutral for the last 5 years.