How Norway spends its $882B global fund
101–110 of 159 posts
Re: How Norway spends its $882B global fund
#102As a Canadian I feel so cheated learning about Norway's Oil Fund. Our government hasn't hardly saved a dime of our Oil Income. We have been taking a small cut of the hundreds of thousands of barrels of oil we have been producing daily for the past 100+ years and spending it as fast as we possibly can. >Most of the oil companies exploring for oil in Alberta were of U.S. origin, and at its peak in 1973, over 78 per cen…
We have been taking a small cut of the hundreds of thousands of barrels of oil we have been producing daily for the past 100+ years and spending it as fast as we possibly can.
Right, but the money was spent on something tho'. So the question - and I don't know the answer - is whether having that thing, at the time, was worth more than having something else, in the future.
Re: How Norway spends its $882B global fund
#103A little over decade ago, when Norway's fund was called "the Petroleum Fund" and had "only" $147B, an article in Slate magazine explained what was special about it: "Norway has pursued a classically Scandinavian solution. It has viewed oil revenues as a temporary, collectively owned windfall that, instead of spurring consumption today, can be used to insulate the country from the storms of the global economy and prov…
It's kind of funny that the classically Scandinavian solution was mostly the work of an Iraqi geologist http://www.cbc.ca/radio/thesundayedition/the-public-god-foru...
I think similar ideas are found all over the world, but few countries outside of Northern Europe have the necessary political responsibility and lack of corruption to actually execute successfully on these ideas.
Re: How Norway spends its $882B global fund
#104Earlier quoted context omitted.
In general I've always agreed with this view. But I can't help but wonder how studies like this explain Berkshire Berkshire Hathaway.
Which is funny because BH have literally the opposite bet: http://longbets.org/362/ It seems a bit contradictory, but BH is a holding company versus a hedge fund.
It's not that contradictory. As long as the market for stock pickers overcharges, people can be good at it and a bad deal at the same time.
Re: How Norway spends its $882B global fund
#105Earlier quoted context omitted.
People have done it before. It has always turned out to be luck. Fantastic track record until they cease being lucky. So, cynicism and economic orthodoxy aside, that sounds like a really cool company. Has anyone tried just tossing a big dumb neural network on stock data and investigated whether it can make money? It sounds very obvious, but a quick googling returns little. But I guess the investment industry is prett…
Are you seriously asking if hedge funds that pay hundreds of thousands of dollars salary to top experts from all kinds of fields have investigated using machine learning?
Obviously someone has, but I want to know the results.
Re: How Norway spends its $882B global fund
#106Earlier quoted context omitted.
> 20-30-40% per annum, for over 20 years It is impossible, at least continuously. Nobody has ever managed to do that. You'd be lucky if you could beat the market by a few points on average over a 20 years time period. Compensation well for good performance does not make sense when you aren't penalized for losses.
Yeah, the oil fund averages just 0.25% above index, and that's without the extra cost of being actively managed factored in (although its huge size probably makes it impossible for it to be passively managed).
It's hard to beat the market when you're bigger than many markets.
Re: How Norway spends its $882B global fund
#107Earlier quoted context omitted.
> there are those out there who have an eye for value, and _can_ pick stocks. There's simply no evidence that is true at all. Every study of this issue says the exact opposite: there's no one out there who can pick stocks.
In general I've always agreed with this view. But I can't help but wonder how studies like this explain Berkshire Berkshire Hathaway.
Berkshire Hathaway did well to begin with, but Warren Buffet is able to get really good deals buying companies because he has a reputation as a good manager. Since he is easy to work with, founders sell cheaper.
Re: How Norway spends its $882B global fund
#108Earlier quoted context omitted.
Norway also has foreign debt of greater than $600B or 75% of the Global Fund.
Interesting. Why do they choose to keep this money in a sovereign wealth fund instead of choosing to pay off their debt?
Bonds and other Government debt tends to be very inexpensive to service. Unless a country's debt levels are extremely excessive, and assuming that it expects its economy to grow, then there isn't much reason to ever pay down debt, just keep servicing it through to maturity.
Remember that a country doesn't have to retire, so its debt is quite different than a household's.
Re: How Norway spends its $882B global fund
#109Earlier quoted context omitted.
>> "...impossible..." https://en.wikipedia.org/wiki/Renaissance_Technologies "...famed for one of the best records in investing history, returning more than 35 percent annualized over a 20-year span..."
People have done it before. It has always turned out to be luck. Fantastic track record until they cease being lucky. So, cynicism and economic orthodoxy aside, that sounds like a really cool company. Has anyone tried just tossing a big dumb neural network on stock data and investigated whether it can make money? It sounds very obvious, but a quick googling returns little. But I guess the investment industry is prett…
It turns out to be rather difficult, because in most setups you see in the stock market, the market goes up roughly half the time, and down roughly half the time.
Re: How Norway spends its $882B global fund
#110Earlier quoted context omitted.
The difference between $60k and $60M, for a fund nearly a trillion dollars large, is worth it if that person worth $60M can eek out even a few extra basis points in returns. Despite what many people believe, there are those out there who have an eye for value, and _can_ pick stocks.
> is worth it if that person worth $60M can eek out even a few extra basis points in returns [...] and no one else could/would have performed better for less than $60M.
That's not the point. The way compensation works, usually, is that you say, "if you do well, we'll pay you this much", where "this much" depends on how well the person does. You can't change your mind post-fact, "well, anyone could have done this well, so we won't actually pay you this much".