The bull market in stocks between 1982 and 2000 had many significant corrections. In 1987, stocks went down 40 to 80 percent. 1989, 1990, 1994, 1997, 1998 – these were several very significant corrections in the price of stocks.
Back then many people said: Aha! Now the bull market is over. Well, they were wrong. In my view, this is what’s happening in commodities. It’s a normal temporary correction, which happens in all markets.
I do not see enough significant permanent new supply in almost anything, which can cause the end of the bull market [in commodities]. Rio Tinto and BHP Billiton and others have cut back substantially on their capital spending programs because they think they should not be bringing a lot of new [mining] supply on stream yet.
So until we have significant permanent new supply, I don’t see the bull market coming to an end.
The bull market will end, I assure you, it will end someday. But not yet.
Jim Rogers is a smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.
