From MarketWatch yesterday:

New York-based asset manager Van Eck Global today launched the Market Vectors-RVE Hard Assets Producers exchange-traded fund (HAP) on the American Stock Exchange(R)–the first and only global hard assets ETF.

HAP seeks to replicate, before fees and expenses, the price and yield performance of The Rogers(TM)-Van Eck Hard Assets Producers Index (RVEI), which many view as the definitive global benchmark for commodity equities. Jim Rogers, the well-known international investor and a co-founder of the Quantum Fund, is chairman of the RVE Index Committee, and was actively involved in the construction of the index in partnership with S-Network Global Indexes, LLC.

HAP provides “one-stop shopping” for the global hard assets industry because its underlying index is comprehensive in construction, covering 321 companies in 40 countries and 6 sectors at end-August. The index includes the world’s largest and most prominent publicly traded companies that are engaged in the production and distribution of hard assets and related products and services, and captures more than 90% of the industry’s global stock market capitalization. The sectors covered include energy, agriculture, base metals, precious metals, forest products and water and renewable energy (solar and wind). RVEI is the first commodities equities index to include water and renewable energy—increasingly important natural resources–and utilizes consumption-based weights that afford balanced exposure among the 6 sectors.

The index is pure-play in its focus, including only those companies that derive at least 50% of their revenues from the applicable commodity sector. The sole exception is water, where constituents must generate at least 25% of their revenues from that industry.

“The RogersTM-Van Eck Hard Assets Producers Index is designed to provide a reliable, comprehensive benchmark for measuring the performance of the global hard assets industry, which is central to the world economy since it accounts for approximately 14% of global GDP,” said Rogers.

“The Market Vectors-RVE Hard Assets Producers ETF is the first to provide comprehensive exposure to the dynamics of the global commodities business in a single fund,” said Jan van Eck, Principal at Van Eck Global. “We think investors will find it attractive as a way to participate in this huge and growing segment of the market.”

Source:

“Van Eck Launches First and Only Global Hard Assets ETF”
MarketWatch, September 3, 2008

CNBC interviewed legendary oil investor T. Boone Pickens, Jr., yesterday down at the NYMEX. CNBC’s Melissa Francis asked the CEO of BP Capital about the direction of crude oil in coming days:

CNBC: Where do you think we’re going from here? Are we going to hit $100 or are we going to go below $100?
PICKENS: I don’t think we’ll go below $100. I think they’ll start to support it, is what will happen, and they’ll cut production. They like it, they, OPEC, likes it up here. It’s fun. You know, their revenues this year will be one-trillion two-hundred fifty billion dollars.
CNBC: You think they’re going to cut and defend $100 on September 9? You think they’ll cut production?
PICKENS: Yeah, I do, I do. I think they will.

You can view the 4 minute 55 second interview here.

Source:

T. Boone Pickens, Jr., Interview
CNBC, September 2, 2008

Marc Faber, known as “Dr. Doom” by the media, appeared on Bloomberg Television this morning from Bangkok and shared his short-term outlook for stocks and commodities. The editor of The Gloom Boom & Doom Report told Bloomberg viewers:

Global Economy:

For everyone, business is down. And in the U.S., if the statistics were compiled properly, the economy would be in recession also. The same in Europe. I travel extensively around the world. Compared to a year ago, all businesses are down.

Stocks:

I can see that stocks can rally because of psychological reasons. They’ve been oversold.

Crude Oil:

The oil price coming down is precisely a symptom of economic weakness. Not a symptom of strength.

Airlines:

Maybe there is a recovery going. I think one, in investing money, you should not look only at your personal experience. You can buy stocks of companies that are of poor quality. If they’re low enough, they can rebound. It’s like now the financial stocks. They have been hit very hard. Maybe they stabilize around this level and maybe they even rebound by 30 to 40 percent. I don’t think that they’re attractive from a longer-term perspective. I don’t think that stocks are attractive in real terms from a longer-term perspective. But I think that they can rebound somewhat.

U.S. Economy:

We have a tightening of global liquidity, and that tightening comes essentially from a diminishing U.S. trade and current account deficit. And I think that if the oil price continues to go down, as I think it’s very likely in the near-term for the next three to six months, as well as other commodities, then the trade and current account deficit of the U.S. could decline more than is perceived. And that would strengthen the dollar further, and in my opinion, if there is a contraction in consumption in the U.S., it is not a disaster for the U.S. because they don’t produce much anymore, but it would be very bad for the producing countries, the manufacturing centers of the world, that are mostly emerging economies.

Commodities:

The second half of 2008 of this year would not be favorable for commodity prices… As far as I’m concerned, we peaked out in commodity prices, and later on we will have to see whether it’s a longer-term peak or a short-term peak. But we don’t know yet.

You can view 9 minute 14 second Faber segment here.

Source:

Marc Faber Interview
Bloomberg, September 2, 2008

Jim Rogers appeared on CNBC early this morning and talked about a number of issues, including:

Possibility Of Recession

Recessions are like forest fires. Forest fires clean out the underbrush, they clean out things so that the forest can come out with a solid foundation and start with a new burst of growth. That’s what recessions are for. This is just like forest fires.

Keynesian-Type Stimulus Plan

Keynes has been pretty much disproven by most people, except maybe at CNBC…

Well, we will see what happens with this new stimulus package from Japan and from the United States. If you ask me, it’s the same mistake that America made in the seventies, they refused to let anybody fail, they kept propping things up with band-aids, and America had one of its worst decades its had in its 200 years of history. Likewise with the Japanese in the 1990s, they had their lost decade. I’m afraid we’re just extending things out, and we too, are going to have a lost decade.

U.S. Presidential Candidates

On Senator Barack Obama:

Well, he’s talking about spending a lot of money. Yes, I don’t consider that very good, going deeper into debt. The United States is already the largest debtor nation in the history of the world. I’m not sure that that’s going to solve anything.

On Senators Obama and McCain:

Neither one of these guys understand what’s going on. They don’t understand currency markets, economies, they don’t understand the world. You know, both of them will cause us more problems than they’re going to solve. If you happen to be friends with whoever wins, sure, you’re going to have a better time in the next four years. But the rest of us, the 300 million Americans, are all going to be worse off in the next four years. In fact, the world will be worse off.

Wall Street Bail Out

They’re bailing out Wall Street because all their friends are on Wall Street. When Ben Bernanke gets a phone call from the head of Lehman Brothers, he takes the call. But if some poor school teacher in Oklahoma calls Ben Bernanke, he doesn’t take the call. You know, he’s dealing with his friends on Wall Street, trying to save them, when in fact he should let them fail. And that would be a better solution. At least for 300 million Americans.

Letting Financial Institutions Fail

We’ve been having investment bankers go bankrupt for a few hundred years. Are you suddenly telling me that if investment banks on Wall Street go down the tubes, that the world’s going to come to an end? Listen now, a lot of 29-year-olds out there are driving Maseratis. Let them turn in their Maseratis. Let some of the rest of the people in America have a good time rather than people on Wall Street…

Fannie Mae, Freddie Mac Bailout

Why should the 300 million Americans take on the $6 trillion of debt that Fannie Mae and Freddie Mac incurred? We didn’t have anything to do with it. It’s not our responsibility that a bunch of incompetents and crooks went out and ran up $6 trillion of debt. Why should we pay for it? It’s bad enough when the incompetents and crooks in Congress run up huge debts. But when people who aren’t even elected run up debts, why should Americans have to pay off that debt?

Inflation

Inflation’s going to get worse.

Commodities

I have not sold any commodities, and I’ve bought some more agriculture recently.

Emerging Markets

The ones that are in businesses which will not be affected by recession are going to do fine. Agriculture farmers around the world are finally going to be a lot better off. Maybe in ten years we’ll have 29-year-old farmers driving Maseratis instead of 29-year-old stockbrokers riding around in Maseratis. If you’re in the right areas, you’re going to do fine. But everybody’s going to be affected when large economies go into recession…

I’ve sold out of nearly all emerging markets because they were very over-exploited in the last two or three years. So I don’t really own shares in any emerging markets except of course China and Taiwan, which I still own. But other than that, I’m basically out of emerging markets around the world. Too many people around the world are flying around looking for hot emerging markets. That’s not a time to be investing in them.

Europe

Taxes are much too high in Europe. Nobody wants to invest in Europe with a high tax rate.

You can watch the entire 13 minute 3 second segment here.

Source:

Jim Rogers Interview
CNBC, August 29, 2008

Legendary oil investor T. Boone Pickens, Jr., has a new forecast for the price of crude oil. According to CBS News yesterday:

In town for the Democratic convention to promote his “Pickens Plan” for alternative energy, billionaire oilman T. Boone Pickens predicted $200 a barrel oil within three years.

“In two or three years, we’re going to be at $200 a barrel—could be $300 a barrel for oil,” Pickens said inside the “Big Tent,” a complex outside the Pepsi Center set up for bloggers. “And consequently, our economy is going to struggle and our security is just—it’s a disaster.”

In an earlier post, I noted that back on July 22, Pickens told U.S. lawmakers that oil prices would hit $300 a barrel in 10 years if the United States failed to reduce its dependence on foreign imports.

Source:

“T. Boone Pickens Predicts $200 A Barrel Oil”
CBS News, August 27, 2008

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Well-known investor Jim Rogers talked about the prospects for crude oil while in Malaysia this past weekend. Bloomberg’s Chan Tien Hin wrote:

Jim Rogers, who in April 2006 correctly forecast the oil price would reach $100 a barrel and gold $1,000 an ounce, said he expects oil to continue to increase over the next decade.

“Over the course of time, it’s a bull market,” the chairman of Rogers Holdings said today after an investor conference in Kuala Lumpur. While the oil price could fall to $75 or rise to $175, the market will continue to increase over the next 10 years, he said.

The Bloomberg reporter noted that according to Rogers last week, the decline in commodity prices from record highs were only a temporary reversal in a bull market that he predicts will last for several years.

Source:

“Jim Rogers Says Oil Price Rise to Continue for Decade (Update1)”
Chan Tien Hin
Bloomberg, August 23, 2008

Well-known commodities investor Jim Rogers is undeterred by the recent selloff in hard assets. Bloomberg’s Rattaphol Onsanit wrote this morning:

Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said a tumble in commodities from records represented a temporary reverse in a long-term rally.

“I don’t see that it’s the end of the bull market,” the chairman of Rogers Holdings, said in an interview in Bangkok before speaking at an investor conference later today. “Until either a lot of supply comes on stream or the economy collapses, the bull market will continue,” he said.

The co-founder of the legendary Quantum Fund added:

“I am contemplating whether it’s time to get involved in base metals again,” Rogers, 65, said today. “I haven’t bought any for awhile.”

Onsanit pointed out other areas Rogers felt may have potential. He wrote:

Rogers, who moved to Singapore after selling his New York townhouse last year, said he was still optimistic about agricultural commodities and China’s economy, favoring the tourism, education, infrastructure, and power generation sectors.

Beijing Opera

George Iype of India’s CommodityOnline.com shed some more light on Jim Rogers’ latest investment outlook. Iype wrote earlier today:

The high oil prices and the pull back in some commodity prices on recession fears have not dampened Rogers’ enthusiasm for resources investments. “I am very bullish on metals and precious metals. Crude oil price will continue to rise, because there is a major demand-supply mismatch. Those who blame speculators for high oil prices do not know how the Futures market and oil market operate. Rogers is also upbeat on agricultural commodities. “I am bullish on opportunities in the agricultural commodities market. I am investing there now. The secular bull market in commodities will continue to go on now for some years,” he adds.

Sources:

“Jim Rogers Says Commodities Will Rebound After Drop (Update1)”
Rattaphol Onsanit
Bloomberg, August 21, 2008

“Why Jim Rogers is bullish on commodities”
George Iype
CommodityOnline (India), August 21, 2008

Legendary emerging markets investor Mark Mobius, who oversees about $40 billion in emerging-market equities as executive chairman of Templeton Asset Management Ltd. in Singapore, spoke to Bloomberg yesterday from Ho Chi Minh City. From the interview:

BLOOMBERG: Why the slide in emerging markets? Is it overdone?
MOBIUS: I think it is. The market has come down a lot. In fact, in China, in the Asia market, it’s come down far more than that. So, we’ve seen a very, very big correction in many places around the world in emerging markets. And it seems to be overdone, but not necessarily over, because, you know, the sentiment is bad globally so that there’s a tendency for people to sell out, and stay out, until they see an about-face in the market.

Some notable excerpts from the interview included:

Commodities

I think that the demand for these commodities is going to continue at a pretty high level. Of course, much higher than there has been in the past, simply because of the demands from China, India, and these other countries that are growing at the paces I just mentioned. So I think it’s more of a correction, rather than a significant secular downturn in these markets and the commodity markets.

U.S. Dollar

BLOOMBERG: Would you not be particularly bullish on the dollar as well?
MOBIUS: No, I wouldn’t, given the propensity of the U.S. government to spend the way they’re spending and to have new ventures against Russia in Eastern Europe, and so forth and so on. I think, unless these policies change in a new administration, I don’t see how the U.S. dollar can keep at a strong level.

Russia

We’ve been, and have been increasingly comfortable, with our investments in Russia. We’ve made an awful lot of money in Russia, both on the private equity side as well as the public side. And, things are getting better in Russia. I think the situation that we’re seeing with Georgia is an anomaly… I think that this will blow over and Russia will continue to be a very important place for us to be putting our money.

Brazil

Brazil, of course, is at the top of the list in terms of weighting in our funds at this time… But generally speaking, the banks are doing very well, very profitable. Petrobras, Vale do Rio Doce, extremely profitable companies.

India

The Indian market, finally for us value investors, has become more interesting, because of the downturn you just mentioned. So some of these companies are beginning to look quite attractive— some of the pharma companies, some of the software companies, and even some of the commodity companies, because you know India, has iron ore and produces a lot of steel. So, we’re looking at that more carefully, and we think they are good opportunities at this stage of the game. We were quite underweight in India for a long time because of the valuations.

Vietnam

The economy is thriving, and things are moving ahead… and we’re pretty optimistic about the longer-term future of the country.

You can listen to the 14 minute 26 second interview here.

Source:

Mark Mobius Interview
Bloomberg, August 20, 2008

Emerging markets veteran Mark Mobius doesn’t think the recent selloff in commodities is the end of a boom which started back in 1999. Pratima Desai for Reuters UK wrote last week:

“When you have a long-term uptrend, excesses build up along the way. We are witnessing a correction,” said Mark Mobius, executive chairman at Templeton Asset Management.

“Demand for commodities will remain at a high level in countries like China and India. If we see a serious worldwide recession, then we will see the end of the commodities boom.”

In fact, Dr. Mobius believes commodities may just be the global economy’s “saving grace.” Reuters Kevin Plumberg said on August 15:

Mark Mobius, executive chairman of Templeton Asset Management Ltd, said he believes consumer demand in emerging markets will ultimately be one of the factors keeping the global economy out of recession. Mobius is a value investor who has long touted the inherent strength of emerging markets.

“What we like are the consumer plays. As much as possible we are trying to get exposure to consumer-oriented sectors, whether that is consumer banking or retail,” he said in a phone interview from Turkey.

In addition to China, Mobius, who oversees some $40 billion in assets, likes the technology sectors in Taiwan, India and Korea. His firm has also cut down on its exposure to the commodities sector while increasing holdings in consumer-oriented sectors in South Africa and Turkey, where he said interest rate rises have brought share prices down to attractive levels.

Levent Financial District
Istanbul, Turkey

Sources:

“Commodity rout a blip”
Pratima Desai
Reuters (UK), August 15, 2008

“RPT-ANALYSIS China and co stand between world and ‘recession’”
Kevin Plumberg
Reuters, August 15, 2008

According to the mining investment news site Mineweb, billionaire investor and philanthropist George Soros was significantly active in the mining sector last quarter. Mineweb’s Dorothy Kosich wrote earlier today:

Über investor George Soros stocked up on potash mining shares during the second quarter, increased his Freeport-McMoRan Copper & Gold holdings by more than 1,600%, invested in the world’s largest uranium miner, Cameco, and dumped his holdings in Apex Silver, CVRD and Southern Copper.

Documents filed with the SEC revealed that among the gold companies in which Soros Fund Management maintained its holdings during the second quarter were AngloGold Ashanti, Barrick, and Newmont.

Soros Fund increased its holdings in Potash Corp. of Saskatchewan Inc. by 2568%… The fund also enhanced its Freeport-McMoRan Copper & Gold holdings by 1608%…

Among the fund’s new purchases was Canadian uranium miner Cameco… as well as CONSOL Energy Inc., the largest U.S. producer of high-Btu bituminous coal… The fund also initiated holdings in Intrepid Potash, the largest U.S. potash producer…

The Soros Fund reduced to its holdings in IAMGOLD Corp. by 23.3%… Soros reduced to his holdings in Alpha Natural Resources Inc., a Central Appalachian coal producer, by 46.95%…

Meanwhile, the fund sold out its holdings in the world’s largest iron miner, Brazil’s Vale (previously CVRD), as well as its holdings in U.S. silver producer Apex Silver Mines, and also in Southern Copper Corp.

Source:

“Soros increases potash and FCX holdings, drops Apex Silver, CVRD, Southern Copper”
Dorothy Kosich
Mineweb, August 19, 2008