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We'll just have to see, won't we?

I feel very comfortable with the way they work (Undervalued, underanalyzed, impopular), their investment philosophy (value investor), low basic fees with higher compensation only as a result of higher returns, and so on. Just the fact that they seem to work to enrich their customers instead of fooling them and enriching themselves, rare for the industry, or that they work out of Stavanger instead of London/Oslo, away from the madness of the financial industry, is a good sign. Reminds me of Buffet staying in Omaha. I also read an interview with Stensrud, who seems to be a genuinely nice guy, inspite of having become very rich (€200-300 million).

One thing that might make Skagen feel pretty happy about the world economy is of course that they focus in individual companies, not the economy as a whole. Also their dislike of the financial industry and it's excesses makes the subprime mess look less important, maybe even a good, and definitely a deserved, thing. Something people around here might well identify with... ;)

Some Stensrud quotes from the interview.

The world would not become a worse place to live in if JP Morgan or Morgan Stanley disappeared. This is a healthy and long awaited correction.

The world lives on even if finance dies.

(As in several hundred millions of Asians waiting four housing, energy, infrastrucuture and welfare being extremely more fundamentally relevant than a ten million Americans not being able to pay the interest on their mortages.)

The USA will never become as strong as it earlier was. The USA used to be the worlds biggest democracy, the worlds greatest industrial power and had the worlds biggest oil industry. Today India is the worlds biggest democracy, China the worlds biggest industrial power and the USA is an oil importer.

By the way, they began working with Skagen 14 years ago. They have three funds. All have beaten the market every year. That's just not luck. The efficient market claptrap would have it be luck, but markets aren't efficient, they are insane.

I almost feel like I'm doing PR here for Skagen instead of talking about the world economy, but then so be it. It's fun. :)

The ten biggest holding of their second fund, Kon-Tiki, which is more focused on emerging markets, is below.

The biggest holding, Eletrobras, seems like a great investment. It's the big semi-state owned hydropower company. The power markets are being deregulated, and we all know what results that have on power prices and corporate profits. As a matter of fact, the dams themselves are worth three times as much as the market value of the entire company...

What they used to say of Petrobras...

They are now saying of Eletrobras...

Now this sounded awfully much like a sales pitch, and I'm sorry for that. But Eletrobras is being listed in New York in 2008, easy to invest in for ordinary people... I thought it would be a little selfish not to give you people a heads up.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sat Dec 22nd, 2007 at 11:15:44 PM EST
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