Review of Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market (Paperback)

Rogers wrote this book because he runs a commodies index and a fund to go with it.The book is poorly disguised advertising.With that said I believe Rogers is sincere in his beliefs.However, as usual there are several caveats.First, he quotes papers and research showing that investing in commodies in the past has been less risky and had better returns than equities or bonds.All of this research however ignores institutional risk associated with commodity investing.The fees are high, the market is sometimes manipulated, the investor virtually has to use a full service brokerage firm, and even Roger's mutual fund is available only through a broker and has high surrender charges.Second, although many money handlers like Rogers end up rich, it is almost never pointed out that the vast majority of their money is not made by their own fantastic investing but by charging high fees to their investors.Look at the fees on the Rogers fund.Good God.Third, the various commodity indexes that are out there are new.Gibson, in his book on asset allocation, took the Goldman Sachs index back to the good old days of the seventies not bothering to point out that the GMCI only dates back to 1992 and so this was essentially backtesting - a popular hobby even though there is much evidence to indicate this is not the way to go.There are good reasons to believe that the commodity bull market of today will not repeat the golden years of the seventies even though it is real enough.None of this even touches the fact that the average investor should only have 5 - 10% of his money (at the most) in commodities.Either high minimums on the funds or huge front and back end fees will keep everyman out.Nevertheless, Rogers is correct in his assertion that learning about commodities will help any investor look at the world in a different way, and, in the long run, teaching the investor the basics of understanding commodities is the real contribution of this book.Those looking for a commodity investing how to book will have to keep looking.He is pushing commodities indexing.



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