Taking Stock In The Weather Ask Dave a weather question

Dave Thurlow, Host

 
Hi, I'm Dave Thurlow from the Mount Washington Observatory and this is The Weather Notebook. If you think predicting the weather is tricky, you should try predicting commodity markets. Well, Jim Roemer has managed to do both successfully. He was a TV meteorologist in the Midwest during the mid-80's, when someone suggested he use his knowledge of weather to invest in commodities....like coffee, corn, heating oil. Jim thought it was such a good idea that he entered a contest to determine if his weather foresight would be an asset:

http://www.investaweather.com/

JM: "I entered this contest with a couple thousand dollars, made 10 times my money in two weeks. The next thing I knew, I had people all over the world trying to raise money from me and I was the only meteorologist really in the world at that time back in the mid 80's that was actually handling other people's money and investing it in various commodities."

Although he had no business background, he started managing the money of small local farmers at first, and then eventually brokerage firms in commodity markets.

Now, the connection between weather and commodities isn't as strange as it might sound, because commodities react to weather events, such as drought and frost:

JM: "For example, 1993 we had one of the worst freezes in 20 or 30 years in South America and the price of coffee went up substantially. A $2,000 investment in an option, a call option in coffee could have yielded a person about $30-40,000 in two weeks."

But after being in the business for 10 years now, he has one piece of advice that everyone can use in whatever market they decide to invest in....don't risk more than you have in the bank, especially on the weather.

For more information about todays topic, be sure to visit our website at weathernotebook.org. Our show is underwritten by Subaru with major support provided by the National Science Foundation.