Jim Rogers: Stock Price Zero
on Monday, May 18, 2020Jim Rogers Money Quote saying that the value of goods is always assured, but stock prices fluctuate and drop on rumor and speculation. Jim Rogers said:
“Stock prices can go to zero. Commodities cannot. Unlike shares in a company commodities are real things that are always likely to be worth something to somebody” — Jim Rogers
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Jim Rogers is contrasting stocks and commodities as investments. He argues that while stock prices can potentially fall all the way to zero if a company goes bankrupt, commodities like metals, grains and livestock will likely always have some value to someone. Even if demand declines for a particular commodity, it typically won’t lose its entire worth.
Rogers is pointing out that commodities are tangible assets representing real, physical goods, whereas stocks represent ownership in a company that could fail. Therefore, commodities may be less risky investments than stocks since they are unlikely to become completely worthless in the way that shares of a bankrupt company would.