Commodities trading companies are extremely low margin companies right now because there was a 20 year bear market. But that will change. They will have an extremely high cash flow in the future, which is why commodities trading has long been one of the top Jim Rogers investment ideas.
The best way to invest in commodities is to buy commodities. If you try to buy commodity stocks, then you have to be an extremely good stock picker. History has shown that buying commodities themselves have yielded 300% more than commodity stocks. Because of this, the Jim Rogers investment strategy has always been to buy the commodities themselves or indexes of commodities in order to profit.
In A Bull in China, Jim Rogers surveyed the Chinese situation and industries that will do well in the future. If you are interested in a particular industry, then there is a good list of companies in that book that you can then look into. One industry that has seen a large Jim Rogers investment recently is airlines. He is currently invested in Chinese airlines. This has been a bad industry with a lot of bankruptcies. This is typically a sign that we are at the bottom of a cycle. Airlines aren’t going away unless you think that everyone is going to start taking the bus. If and when the airlines start making money again, they are going to make a huge amount of money.
Another industry that will be one of the greatest of our time is agriculture. Many countries have water problems, so water treatment is another great industry. Asia tourism will also be a big industry as more people begin traveling over there. You can invest in anything as long as it is cheap. It could be a stock or a commodity or a country’s currency. All of the “small cap”, “emerging market”, “growth index” and other such jargon are just marketing tools invented by Wall Street bankers over the past few decades. If you want to be able to match the impressive Jim Rogers investment track record, you would do well to ignore these distinctions and just focus on finding any asset that will be high yielding.
