Daily Speculations

Book Review: Adventure Capitalist, by Jim Rogers

Our CNBC Money column of June 12, 2003, reviewed Adventure Capitalist, a new book by Jim Rogers. Rogers is bullish on commodities (and has been for some time). We do not share his enthusiasm. Post-World War II inflation-adjusted returns on stocks and commodities indicate a long-term downward drift in commodities prices, and an upward drift in stocks. 

• Commodities vs. Stocks: Inflation-adjusted price graphs
• Commodities prices (annual high-low-open-close)
• Workout

Readers query Rogers:

Q. "I enjoyed your column on commodities - the data you presented leaves no doubt with respect to their performance vs. stocks. It is a pleasure to read such comprehensive and scholarly work. Please let me know what Jim Rogers' comments to you are and whether you have dampened his enthusiasm for  commodities."

Rogers: "I never said commodities went on forever. I specifically said they would have to be sold after a multi-year bull market just as has happened throughout history. In fact, I said one should sell when CNBC broadcasts from Chicago and/or when MLPFS reenters the commodity business. So your comparison with stocks over 100 years does not apply at all. Quite the contrary as I made clear."

Q. I have a question regarding Jimmy Rogers' quote in your 6/12 article:  "Returning home, he writes, he and his wife, Paige, were shocked at how much prices had gone up for ... telephone bills...."

Could Mr. Rogers please give me one example of hyperinflation in the telephone business?

Let me give you a couple of examples of deflation in the telephone business:

I can call from a Sprint PCS phone to a Sprint PCS phone for .000925 cents per minute. ($40 monthly fee - 30 days a month, 24 hours a day and 60 minutes per hour equal 43,200 minutes per month) cents per minute. One caveat, I just spoke with Sprint PCS and they said the prices will be going down again July 1 so by the time several people study this deflation will have occurred again.

In the business arena, last summer a hospital down the street dropped their long distance bill by approximately 60% to 70% by using Voice over IP.

My parents still use one of those prehistoric things; I believe it is called a landline. They pay 3.5 cents per minute long distance. Their bill was recently 20 cents per minute. That is an 82.5% price decrease.

Please tell Mr. Rogers he can use my spare Sprint PCS phone (it costs $1 per month) and we can talk about hyper-inflation in telephone pricing. We could also quantify the amazing benefits of mobile phones into the equation. Tell him it is on my dime, I mean on my .000925 cents.

Stephen S. Clark
Financial Advisor
Morgan Stanley
Corpus Christi, TX 78470

Rogers: The word "hyperinflation" is not from me or in my book. There are indeed some specific examples of phone call price decreases especially over the computer, but overall phone bills are up a good bit according to my personal and professional bills especially when one adds in all the extra fees which are now included.

But ignore me: The Wall St Journal has had at least two stories and studies about how phone bills are up noticeably since 1998 despite some "headline" price declines.