Translation of an article posted by HSS: 

Jan. 29. There is a meeting about mc faulds and the opportunities in London.

Last Sunday, in the The Sunday Times, was an interview with Ian Henderson, fund manager at JP Morgan Asset Management. He got a massive 261% return, over the last five years, with his commodityfund. We are only at the beginning of the commoditybull, he says.
 
Ian Henderson belongs to the so-called 200% club, fund managers and investors who have performed the past five years more than 200% yield progress. Note, 200% in 'five' years. There are others that made more returns over the past few years, but this is a so-called '5 year hurdle." In general, we assume long time if someone is able to obtain good returns, he may also be known as a good investor.

A long time is a minimum of three years, preferably at least five years.

I completely agree with that assertion. Someone may also book a 200% return, even for a day, by buying, for example just a deep-out-of-the-money call option from something that increases several tenths of percentages. Is it skill or luck? Probably the last. No, only those who can say that they have yielded dozens of percentages a year, belong among the elite group of super investors.

The 200% Club is very small, especially since we are talking here about actually real gained results in a portfolio or funds and not about paper portfolios from many advertising internet services or -gurus. The proposed returns of such paper portfolios can almost never been achieved.in practice. Often costs and slips are not at all taken in account or in insufficient extent. In addition there is a world of difference in giving a signal or advice and actually buying or selling. Here comes psychology and discipline looking around the corner.

Anyway, Ian Henderson runs the Natural Recources Fund and has in the past five years not only returned over 200% gains, but he did it also in each of the five separate years, that is 'top quartile '. That means that every single year his investment efficiency belonged to the top 25% best commodity investors. Every year in the top division of investment honor, another characteristic of a superinvestor. Henderson states, in the Sunday Times, that the commodityboom is still far from over. "We have had a bearmarket in commodities that has lasted for more than a decade now, for now we have only looked at a few years into a new bullmarket '.

Even stronger, Henderson expects that we are only at the beginning of what he called a new 'super cycle'. Those are very long cycles that can last for over a 100 to 150 years. He gives two main reasons for this. First the amount of many commodities can only increase in a very small and slowly way, and second the industrial revolution in China, which according to him will continue to last for a very long time. He finds the comparison with the internetbubble unfair. Internetcompanies made no real profit, a lot of mining and energy companies are still fundamentally undervalued.

I myself am also very positive in the long term on commodities. I wrote on this subject a column on May 3 this year. In addition to Ian Henderson, as I then wrote, there are many more well-known supporters of the commoditybull, as Martin Pring, David Fuller, Marc Faber and Jim Rogers, all independent thinkers and analysts, and not like Henderson tied to an assetmanagement fund. The Merrill Lynch World Mining fund I recommended has since then increased by 36.71%.

Finally, I summarize the four reasons I already gave in the past to remain invested succesfully in commodities (about 10% of offensive portfolios):

-- The price rise in commodities is caused by a structurally higher demand (especially China), in the absence of a possibility to extend the offer of commodities (exhaustion of raw materials). Although there is speculation, especially from hedge funds and mutual funds, this is a trend (high demand, limited supply) that can continue for years.

-- Almost everyone participated in the Internethype, even my neighbour's wife was trading into internetstocks. But by my knowledge she has never told me at this point how to invest in tin. So, there is still no question of a real commodity hype.

-- There is still a lot of money, standing by the sidelines (especially institutional investors) to be invested in commodities. Many investors want to participate in what of course, ultimately will become a new hype (but only over many years). Institutional investors want, in addition to the likely price increases in commodities, to invest because of the many diversification possibilities (commodities behave differently than shares or bonds).

-- There is growing interest in alternative energy (the demand for biofuels propels the demand for soft commodities, and uranium is becoming more expensive because more nuclear power plants are being built).