For Jim Rogers, who co-founded the Quantum Fund with George Soros 43 years ago, Republican Donald Trump's win in the US presidential election would mean that investors would most likely pile on to real assets, such as oil and agriculture, at least until clarity emerges on his economic policies.
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In addition, Rogers told S&P Global Platts in an interview Thursday that hopes of a possible improvement in US-Russia relations during Trump's tenure would most likely prompt investors to look at buying assets in Russia, where a lot of lucrative deals are available.
"It's time for real assets. Oil and agriculture as investments should do well," said Rogers, who also created the Rogers International Commodities Index in 1996/97. "Trump is friendly towards Russia. Russia is a very cheap market -- probably the best place that I see right now on the horizon to invest."
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While Trump has given few concrete details about his energy plans, his statements during the campaign indicate he would likely adopt policies that attempt to expand fossil fuel production, ease regulations on industry and roll back President Barack Obama's clean air policies. Trump's possible efforts to end incentives for alternative energy development would boost near-term demand for fossil fuels.
In addition, analysts in Russia and the US expect a Trump administration to take a softer approach, potentially easing sanctions the Obama administration leveled against Russia in 2014 over its involvement in the Ukraine conflict.
Global financial markets were roiled Wednesday when Trump edged past Hillary Clinton in the race to the White House, pulling down equities and the US dollar, with analysts saying that the result had taken the markets by surprise.
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Rogers said that he saw upside for crude oil from the current levels over the next two to three years.
"Oil is making a complicated bottom at this moment and over the next two to three years, it can only go higher. If Trump does what he says, it should be good for the oil market overall."
ICE Brent crude futures, which have risen by around 65% from as low as $27.74/b in January, were trading at $45.74/b for front-month January contract at 0723 GMT on Friday, while the NYMEX December light sweet crude contract was changing hands at $44.49/b.
METALS AND AGRICULTURE
Rogers said that he remains bullish on agriculture as he expects demand for food to continue to grow as disposable incomes grow. "The overall fundamentals for agriculture are extremely strong and I don't see a huge downside for the market over the longer term."
Three-month copper on the London Metal Exchange was trading at $5,601/mt at 0730 GMT Friday, up $188/mt from Thursday's close. The industrial metal traded above $10,000/mt in 2011.
"Metals are already down a lot over the past years. I would be more interested in buying base metals. People would eventually need assets for infrastructure. People are not keen to buy bonds. During a period of uncertainty, there will be currency depreciation," he added.
Global investment banking firm Jefferies has predicted that the US steel industry would "stand out as a unique beneficiary of a Trump presidency" and that protectionism will significantly rise.
Commenting on the safe-haven status of gold, Rogers said that while the yellow metal was unlikely to surge in the immediate future, it would be a very good investment over the longer term.
"Gold prices at current levels provide a buying opportunity. It will eventually skyrocket as people lose confidence in paper money and in governments. I see gold prices at much higher levels over the next two or three, or maybe four years."
Spot gold was trading at $1,262.59/oz at 0737 GMT on Friday. It had risen more than 4% on Wednesday when initial results showed Trump was leading, posting one of the sharpest single-day gains since June when the market had risen even sharply when Britain decided to leave the European Union.
Rogers said that Trump's trade policies on China would be very closely watched as it could have implications for the global commodities markets.
Trump has said he would create an "American Desk" in the Department of Commerce to "protect the economic interests of the American worker and the national interests of the United States."
"If tariffs come, as Trump has said, it could lead to some bitter trade wars. China's main customers are anyway suffering now because of slowing growth. Tariffs could make things worse," Rogers said.
"At least until his policies becomes clear, investors will be playing safe. My view is that some segments of the Chinese economy will do well, but some segments will suffer."
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