How Norway spends its $882B global fund • Hacker News Board

Re: How Norway spends its $882B global fund

#151

Post by vidarh » Thu, Sep 22, 2016, 2:54 PM UTC

kristofferR wrote: post #8

charlesdm wrote: post #6

Earlier quoted context omitted.

$60m isn't exactly the real cost to the government, though? Assuming this asset manager is a Norwegian resident, he'll pay a ton of tax (income or corporate tax, VAT, stamp duty on property purchases, capital gains, etc etc) on that money, and eventually given enough time, most will just flow back to the government. The house always wins.. Also, it depends on how much he brings in. For example, there are US based ass…

The asset manager in question, Mattias Westman, wasn't Norwegian. > there are US based asset managers with private funds that generate 20-30-40% per annum, for over 20 years. That seems extremely dubious. Do you have any sources?

It's not controversial that there are funds with high returns over long periods. The problem is that there are also funds with high returns that suddenly nosedive, and new funds from people with high returns in the past that doesn't do well at all.

In other words: it's easy to pick the lottery numbers with hindsight.

Re: How Norway spends its $882B global fund

#152

Post by forgetsusername » Thu, Sep 22, 2016, 3:05 PM UTC

hjnilsson wrote: post #117

rer wrote: post #88

In the "Top of the World" graph in the article, there's a dip for Saudi Arabia. Does anyone know why?

Saudi Arabia significantly cut the oil price (which caused the global dip), and is since making up the difference by withdrawing from the oil fund. The long term goal here is not entirely clear, but it mostly seems like a way to hurt the Russian economy and the fracking industry.

>Saudi Arabia significantly cut the oil price (which caused the global dip)

Saudi Arabia can't cut the price of oil. They can increase or decrease their own (albeit large proportional) supply.

Re: How Norway spends its $882B global fund

#153

Post by dagss » Thu, Sep 22, 2016, 3:10 PM UTC

terda12 wrote: post #79

Visiting Norway, I always thought it is kind of a weird country. On one hand it's one of the richest countries in the world. On the other hand, I've seen so many young Norwegian women work hard cleaning toilets and hotel rooms. Such jobs would be considered "low rung" at in the US but in Norway they treat their low rung jobs as something to be proud of.

So who cleans the toilets in the USA? Old american men?

Re: How Norway spends its $882B global fund

#154

Post by cowsandmilk » Thu, Sep 22, 2016, 3:28 PM UTC

semi-extrinsic wrote: post #35

dogma1138 wrote: post #15

Earlier quoted context omitted.

Not bad, but not enough to cover the current levels of household debt in Norway, while a large portion of the debt is tied to mortgages the mortgage debt in the Norway have been increasing faster than income for quite a few years now. http://www.tradingeconomics.com/norway/households-debt-to-gd... This isn't a problem unique to Norway, Norway is just one of the biggest offenders, even in the Nordic countries there is…

When you say "140 year mortgage term", what exactly are you talking about? Effective term or something? Because the banks only offer a choice between 20, 25 and 30 year mortgage terms usually.

(a) in the 1990's, many banks did offer 50 year terms.

(b) sweden has a lot of interest-only mortgages. If you look at the rate they are being repaid, it represents a repayment period of 148 years.[1]

[1] http://www.fi.se/upload/43_Utredningar/20_Rapporter/2013/bol...

Re: How Norway spends its $882B global fund

#155

Post by zrail » Thu, Sep 22, 2016, 3:36 PM UTC

forgetsusername wrote: post #142

ktRolster wrote: post #107

Earlier quoted context omitted.

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.

> Since he is easy to work with, founders sell cheaper. This requires a source. Many of the companies he purchases are public companies. If they are selling "cheaper" because they like Mr. Buffet, there's a problem.

The important Berkshire acquisitions are entire companies, most of the time private. Sometimes they were public at one point but were taken private before BRK bought them. (ex: Duracell). Sometimes they were public at the point Berkshire bought them (ex: BNSF) but this seems to be the exception.[1]

The public stock acquisitions that they talk about on the 13-F are really a minority of Berkshire's activity, but sometimes he really does get a better price because he's willing and able to negotiate weird deals like the Bank of America warrants.

Re: How Norway spends its $882B global fund

#156

Post by semi-extrinsic » Thu, Sep 22, 2016, 5:19 PM UTC

cowsandmilk wrote: post #154

semi-extrinsic wrote: post #35

Earlier quoted context omitted.

When you say "140 year mortgage term", what exactly are you talking about? Effective term or something? Because the banks only offer a choice between 20, 25 and 30 year mortgage terms usually.

(a) in the 1990's, many banks did offer 50 year terms. (b) sweden has a lot of interest-only mortgages. If you look at the rate they are being repaid, it represents a repayment period of 148 years.[1] [1] http://www.fi.se/upload/43_Utredningar/20_Rapporter/2013/bol...

Norway's been tightening the mortgage belt for years now. You can only borrow less than 85% of the purchase price of the house, excluding fees. That was set in 2012 IIRC. And now (from January 2017) there will be a complete ban on interest-only mortgages (even just for limited time periods), and a hard cap at total loan amount (including also student/car loan etc.) for each family not exceeding 5x total gross income.

Source: am planning to buy a new house, had a meeting with my bank man two weeks ago.

Re: How Norway spends its $882B global fund

#157

Post by charlesdm » Thu, Sep 22, 2016, 9:42 PM UTC

kristofferR wrote: post #116

FullMtlAlcoholc wrote: post #86

Earlier quoted context omitted.

If you're successfully managing nearly a trillion dollars, that's a bargain. There are CEO's who run billion dollar companies into the ground and receive more compensation than that!

The manager who received $60MM was managing assets worth $325MM. The fund has also started to become active in pushing for lower executive pay... http://www.bbc.com/news/business-36185925

But how large returns was he generating? You seem to feel strongly against asset managers being compensated well.. but IF he was delivering great returns, I don't really see the problem?

That said, $60MM per year for $325MM AuM does seem a lot.

Re: How Norway spends its $882B global fund

#158

Post by ricardonunez » Thu, Sep 22, 2016, 11:34 PM UTC

dogma1138 wrote: post #28

ricardonunez wrote: post #21

Earlier quoted context omitted.

Will that be the reason why Germany has one of the lowest home ownership rates?

Not the only reason, and most likely not the primary one. When adjusted for age Germany has a pretty solid house ownership rate. Germany is big and has a pretty mobile workforce, in many other countries you are considerably less likely to be moving every 2-5 years across large distances like you are in Germany. Overall the affordability of housing even when accounting for mortgages and required seed money is consider…

Thank you for explaining in detail. It's very interesting.

Re: How Norway spends its $882B global fund

#159

Post by Gustomaximus » Fri, Sep 23, 2016, 6:23 AM UTC

shiven wrote: post #140

Gustomaximus wrote: post #70

Earlier quoted context omitted.

I dont have pics, but insight. Typically these are funds exclusively for high net worth individuals. They are not advertised. They select who they let in and have limited pools of investment given they invest in areas/business that dont scale to trillion dollar levels type thing. They get to invest in business etc before the open market via their relationships which is I assume why they can get these returns. My sour…

So, by its very nature, investing based on access to privileged opportunities. Who's to say it is not based on leveraging privileged information too? In other words, a type of insider trading. Or market pre-loading . Guess public sentiment hasn't caught up to such practices, yet, so they can get away with it. What is the failure rate for such private funds? Obviously, we may never hear of their failures, just as we d…

> investing based on access to privileged opportunities

I feel you really taking a bias stance here without understanding the mechanics. Yes privilege exists, the same as you friend might tell you a job is opening before its open knowledge. But deals will be shopped about. The big difference is many deals cant reasonably go to the public market. Costs for listing regulations would be significant and unnecessary. Consider, you need to be called as a 'sophisticated' investor even to trade options. This is to protect the public from unscrupulous pyramid schemes and business that carries high knowledge levels to understand what your buying into. It's as much about protecting the public keeping some deals away from open markets as being 'privileged'.

> Obviously, we may never hear of their failures If your around this industry you hear plenty of both sides. Bigger ones go to public news like Madoff.