Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market Paperback – March 27, 2007

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.

This book is just what I need to understand the critical important that commodities have in society. His experiences in China are fun to read about. This book is giving me the confidence to devote a portion of my portfolios to 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.

This book is great for anyone who is not familiarized with trading commodities. The book explains very well the rationale for investing in commodities, explains different ways to do it, the lingo associated with it and provides insights into some of the major commodities with great examples of supply-demand imbalances throughout different points in time.The philosophy of "value investing" is followed closely by Rogers throughout the entire book, it is not a book for people interested in speculating in commodities or technical approaches. It's a book with fundamentals. The book will provide a fair starting point to invest in commodities, and will guide you to sources of information where you will have to do your own analysis. The book provides many answers but it also provides you with many questions.I fully recommend this book, but warn you that it will not tell you where to put your money, it will provide you with the basics and point you in the direction of where you have to do your own homework.