Revisiting an old Commodities classic - "Hot Commodities" by Jim Rogers

Over the holidays I re-read Jim Rogers' classic "Hot Commodities" written back in 2004.

In this book, Jim had colorfully introduced the world of commodity investing as one of the simplest bases by which investors can value companies, markets, and whole economies. In particular, I re-read his predictions written in 2004 on his recommended hot commodities - oil, gold, lead, sugar and coffee - and on the ffect of China on these commodities. At the close of 2021, I have to take my hat off to Jim for being spot on and nailing every single call. Jim's book is available on amazon.

Dramatic shift in India's Oil import sources - from OPEC to non-OPEC

The world's third largest oil importer and consumer importing 85% of its crude, India continues to import crude from OPEC producers but a dramatic shift towards new non-OPEC sources seems to be under way as illustrated by these two charts from Reuters:

Back in October of 2021 India's Oil secretary had contemplated forming a group seeking to bring together state-run and private refiners to seek better volume based crude import deals. In November, India's crude imports reversed a declining trend to hit its highest level in 10 months. As reported by Platts, January through November 2021 saw India's oil product exports rise 3.2% on the year to 54.7 million mt, or 1.3 million b/d.

Government inaction causes investment to flee Indian infrastructure: Indian stock markets to implode in the near term

Silently Foreign Institutional Investor money is fleeing from investments in Indian infrastructure. The latest to exit from all India Infrastructure investments was the world's largest India dedicated infrastructure fund, UK based 3i India Infrastructure Fund."While the case for infrastructure development in India remains unaltered, private infrastructure investment in India has faced more political, market and macroeconomic challenges than we expected when we initially made our commitment to the India Fund in 2007," 3i said in a statement issued last Thursday. As of March 2013, the fund's India investments were valued at about 80% of their cost in dollar terms, 3i said.



This is the latest in a continuing saga of enthusiastic FIIs investing in India and then pulling out after facing bureaucracy and intransigence from government officials. As I have blogged before, near term outlook for the Indian economy continues to deteriorate and it is only a matter of time before the bubbly Indian stock market implodes.

India IT outsourcing industry may be spiraling downwards hurting India's GDP further

Changing US immigration legislation landscape, slowdown in capital spending on IT and competition from newer, cheaper sources of IT labor pool such as the Philippines and China is forcing the Indian IT outsourcing industry to metamorphosize into providing alternative models of outsourced services (see video). IT outsourcing has created more than 2 million jobs and in 2012 contributed 6.4% of India's GDP according to the National Association of Software and Services Companies, based in New Delhi. Already, IT outsourcing behemoths such as Infosys are being squeezed by revenue pressures and forced to try new strategies in an increasingly commoditised  market. Unless a new paradigm shift in IT outsourcing occurs, Indian IT outsources may spiral downwards further hurting India's weak growth prospects. Investors are strongly cautioned to diversify away from IT outsourcing linked equities and increase their exposure to US dollar denominated assets.