The following is the transcript of an interview that aired on PBS 
Friday, January 7, 2005 on the program "Wall $treet Week with FORTUNE"

JR = Jim Rogers 
Karen = Interviewer Karen Gibbs 

Karen: It used to be that investing in commodities was just for the super 
rich or the super foolish, but that may be changing. Tepid stock market 
returns the last few years have lots of people taking note of the fact that 
for nearly 50 years commodity futures have outperformed both stocks and bonds, 
and that is one reason intrepid global investor, Jim Rogers, continues putting 
his money into things such as soybeans and sugar. He says it's time to educate 
all investors. That's why he's written Hot Commodities, How Anyone Can Invest 
Profitably in the World's Best Market. Jim, why should commodities be a part 
of anyone's portfolio? 

JR: Does everybody know that you used to be on the commodities floors, that 
you used to be a commodity trader? 

Karen: [Laughing] Probably not. 

JR: I know. I want you to know, she's good at all of this. Well, you know 
Karen, as well as I do, that you can make a lot of money in commodities 
if you do your homework, and if you are careful, and if you invest properly. 
Karen, you know the study you yourself referred to showed that you would have 
made more money in commodities in the past 50 years than you would have made 
in stocks and bonds, and you would have done it with less risk, less volatility, 
and a better inflation hedge. You know that as well as I do. 

Karen: But the bad rep that commodity gets, of course, is that it's so risky. 
Horror stories abound. 

JR: Karen, you know, everybody has a brother-in-law who lost his shirt in either 
soybeans, or pork bellies, or something, and that's because he didn't know what 
he was doing, he hadn't done his homework, and he bought it on very thin margin. 
He didn't put out much money. But you can buy soybeans the same way you buy IBM. 
You can put up 50% or 100% of your money, and you don't have to take those wild 
trading risks - short-term trading risks. 

Karen: Well, we've already seen a really big move in a lot of raw material: Steel 
up 106% last year, and in fact, crude oil, lead, aluminum, copper, any of those 
industrials metals were up double digits. Is there any bang left in this buck? 

JR: Well, of course there is. There are going to be consolidations and corrections, 
and we are probably overdue for a consolidation in many commodities right now, but 
remember between 1982 and 2000 we had a huge bull market in stocks, but there were 
some enormous setbacks along the way. But anybody who recognized that it was a 
long-term bull market in stocks, made a fortune. That's what's happening in 
commodities. There will be some setbacks, there is going to be one this year, 
I think, a big one, but take advantage of it and buy more. Don't panic and dump. 
Buy more. 

Karen: How can an individual investor get in on it? Not everybody has the deep pockets 
that you do. 

JR: Read Hot Commodities. That's the way to do it. 

Karen: There you go. 

JR: No what they should do is do their homework. Everybody knows something about sugar. 
Everybody watching this show knows something about copper. So start doing your homework, 
find out the supply and demand. You can buy companies. You can buy futures, and futures 
are not nearly as dangerous as they're cracked up to be. I try to explain that in the book. 
The study you had mentioned, does the same thing. Do your homework and you can buy - or you 
can buy countries. Some countries are raw-material producing countries. Canada, for instance, 
is going to have a much better economy in the next decade than the U.S. Buy Canadian 
department stores. Buy Canadian restaurants. Find the countries or the companies that will 
benefit, and buy them if you don't want to buy the commodities themselves. 

Karen: Is there another way? Can you buy companies that either service or produce some of 
these commodities? 

JR: Well you can, but the Yale study to which you refer, demonstrated that if you had bought 
the commodities themselves, you would have made 300% more than buying the stocks. But if 
copper goes up, Phelps Dodge is probably going to go up. Phelps Dodge is a major copper producer. 
But with stocks you have to worry about management, balance sheets, unions, environmentalists, 
governments, stock market, lots of things. We all learned from Enron. It's not as simple as it 
looks. Copper is so dumb. If there is too much copper, it's going to go down, and if there is 
not enough copper, it's gonna go up. Copper doesn't know who Alan Greenspan is, and it doesn't 
care where the New York Stock Exchange is located. So copper is very simple. 

Karen: It's all about the supply and demand and balances then that we see globally. 

JR: That's exactly it. That's why we have a new bull market in commodities. In the 80's and 90's 
everybody was buying .com. Everybody was blah, blah, blah about stocks. Nobody was investing in 
productive capacity for commodities. There has been one lead mine open in the world in the last 
25 years. There has been no major oil discovery in over 35 years. Oil wells deplete. The production 
in Alaska is now in decline. Production in the North Sea is now in decline. England has been one 
of the great oil exporters of the world for 25 years. They are about to start importing oil. Karen, 
we are running out of this stuff. That's why we have a bull market. This is not rocket science. 
I'm not very smart. It's supply and demand, and it's simple history. 

Karen: And we are seeing a bull market. We did a chart, and figured if you put a thousand dollars 
in the RICI (Rogers International Commodity Index) and $1,000 in the S&P, where would we be. 
The RICI would have shown a gain of $1,403, while you would have lost about $110 in the S&P. 
So you do see better returns, but there is a risk element, correct? 

JR: Well every once in a while I do get it right, Karen. [Laughing] Not often, but sometimes I 
luck out, and I happened to get it right this time. Of course there's a risk element in everything. 
There are gonna be consolidations along the way, even if I'm right. If China has a hard landing this 
year, commodities will go down for a while, but there is a risk in everything. You think there's not 
a risk? Look at a chart of the NASDAQ for the past five years. Everybody watching this show knows 
what's happened to the NASDAQ and to Cisco, and a few other stocks. There's a risk in everything, 
including bonds. Listen, I wish it were easy getting rich, but it ain't easy getting rich. You know 
that. Everybody knows that. 

Karen: Oh yeah, that's why I work for a living. 

JR: [Laughing] That's why you left the Forward Exchange, right. 

Karen: [Laughing] That's true. Well, let's talk about China because you see that as a very big 
market, and I was thinking of trying in terms of cotton, talking earlier to you, like don't they 
export cotton? 

JR: Cotton - 10 years ago China exported cotton, yes. But now China imports cotton. China has been 
booming, and as China grows, or as the world grows, supplies get tighter, especially if nobody has 
been adding productive capacity. How many people called you in the last 20 years and said, "I want 
you to invest in a cotton plantation"? Nobody. They all wanted you to invest in a mutual fund. So 
there have been no new productive capacity added to cotton. Listen, 10 years ago China exported oil. 
Now they import oil. China is the second largest buyer of oil in the world right now, and 10 years ago 
they were exporting the stuff. As the world grows, and the supply goes down, prices go up. 

Karen: How long do you see this bull market for commodities running? 

JR: Historically bull markets in commodities have lasted from 15 to 23 years. They have averaged 18 
years. I don't know how long it will last, but according to history, that means this bull market will 
last until sometime between 2014 and 2022. I have no idea Karen, but based on history, we have at least 
another 10 to 18 years to go. 

Karen: With the move that we've already seen in some of the commodities, particularly the metals and 
energy, where do you see the value now? 

JR: Well you hit it. You picked the things that haven't gone up. That's the way any investor . . . 

Karen: Just as simple as that. 

JR: . . . even buy the things that are down. Sugar is 80% below its all-time high. You look at things 
like soybeans. Soybeans are 70% below their all-time high. You remember beans in the teens? [Laughing] 

Karen: I certainly do. 

JR: In the 70's people used to say, "Soybeans are going to the teens, to $13 - $14." 

Karen: That was the chant the rally cried on the floor. 

JR: Right. It never made it. It made it to $12.90. They never made it. 

Karen: That was close to the teens. 

JR: That was close. But soybeans, sugar, all of this stuff is way down. 

Karen: I remember 40 cents per pound sugar, and you couldn't find sugar in restaurants. 

JR: I remember - my brother bought me a five-pound bag of sugar as a dinner party present one time 
cause he couldn't get sugar, it was [unintelligible]. 

Karen: [Laughing] . . . forget the [unintelligible], yeah. 

JR: Yeah, he didn't bring any wine. He couldn't afford the wine either, sugar was better. No. That 
will happen again. I remember when sugar was 66 cents, and for your viewers who don't know, sugar 
is now nine cents. It's weighed in. But anyway, I'm not suggesting you buy sugar. I'm just saying 
that's where you look. You look at cotton. Cotton is 70% below its all-time high. Look at the 
agricultural product, at least that's what I'm doing. At this point in time, I'd rather buy 
agricultural products than metals or energy. 

Karen: I know very often bad news means profits for commodity investors, say a frost in Florida 
[unintelligible] the orange juice crop, or a drought in the midwest, and you have no beans or corn. 
We've just had a terrible Asian tsunami. Do you see any long-term economic impact from that? 

JR: I looked. I don't see any at all. I mean the people got wiped out, it's a horrible disaster, 
of course, but as far as the world economy, they weren't producers of many things. They weren't 
consumers of many things. I mean the tourism industry is being devastated mainly because the press 
is talking so much about the disaster that people aren't going there anymore, but apparently the 
hotels for the most part are okay. But to answer your question, no I don't see much. But you are 
right about - you know - a frost in Florida can make a lot of people rich. It can wipe out some 
people, but other people get rich, so you have to learn to think both ways. 

Karen: Jim, we know that commodity trading, or commodity investing is not for everyone. You have 
to have a certain suitability requirement [unintelligible], but there are ways for small investors 
to get in on natural resources and raw materials, and some of them are mutual funds. I know the 
PIMCO Commodity, Real Strategy Return Fund, that's one of them. Merrill Lynch has a commodity fund. 
J.P. Morgan Fleming, Investec, mutual funds like those. What's your thought? 

JR: Well, that is a way, there's no question. Be careful because most of the ones you mention actually 
would buy stocks of producers of raw materials rather than raw materials themselves, and the studies 
show you normally make more with the commodities. Now PIMCO does buy the commodities themselves, 
that is a viable option. But you have to remember, Karen, this is one reason I am so bullish on 
commodities, there are 30,000 stock mutual funds in the world. There are only three or four commodity 
mutual funds in the world. That's because nobody is investing in commodities yet. That's gonna change. 
Someday there will be hundreds or thousands of commodity mutual funds, and then it will be time to get 
out of commodities again and go back to stocks or bonds or something else. 

Karen: What protection or regulatory oversight do investors have when investing commodities, like 
if it is stocks, you have the SEC. 

JR: Commodity Futures Trading Commission, which oversees commodity trading. And from what I can 
tell, they've done a much better job than the SEC. We all know about the problems with the SEC in 
the past five years. You haven't heard any problems coming out of the commodity regulators in the 
past five years, so both are controlled, at least as far as Washington is concerned. 

Karen: But there were some problems. I can remember the Hunt Brothers trying to corner the silver 
market, and [unintelligible], and potatoes. 

JR: There have been some spectacular faults in the commodity business, but let me tell you about 
Enron. Let me tell you about WorldCom. I can tell you about some spectacular faults in everything 
including TV, believe it or not. 

Karen: No. [Laughing]. 

JR: Yes. 

Karen: Jim, it's always a pleasure. 

JR: Thank you.