6 ms·

Norway's $1.7T Wealth Fund Reports $40B Tech-Driven Loss

34 points by impish9208 2y ago

jansan 2y ago
This clickbait would sound less dramatic if they put the relative loss of 0.6% into the headline, wouldn't it?
- jasonsb 2y ago
  It's actually over 2%. Still a nothingburger, but a slightly larger one.
nabla9 2y ago
Oh dear. 2.35% loss for a wealth fund with very long investment horizon.
impish9208 2y ago
https://archive.is/xOmBd https://archive.is/xOmBd
anonu 2y ago
This is a nothing loss in percent terms compared to the decline of tech over the last 2 months
loloquwowndueo 2y ago
From TFA: “lost 0.6%, or $40 billion, in the first three months of the year” Sure, my (scrappy) portfolio went down by more than that percentually, so it looks like this Norwegian fund didn’t even get hit that hard.
- ak_111 2y ago
  Good point, but I suggest if you think of this fund as basically the GDP of Norway than just another hedge fund, losing 0.6% in a quarter is slightly bigger deal than you make it. Like a G7 country's GDP contracting 2% in a year.
  - boxed 2y ago
    Isn't that what is happening with a lot of countries right now though?
    - consp 2y ago
      The only negative one is Mexico. GDP projections by the IMF [1] still are all in the green. The fastest droppers relative to size are China, Russia and the US but they still are net positive. (for now, next week who knows) [1] https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025 https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/wo...
      - loloquwowndueo 2y ago
        Note the Mexican government has expressed skepticism about the IMF’s projections : https://www.reuters.com/world/americas/mexicos-president-says-she-disagrees-with-imfs-negative-growth-forecast-2025-04-22/ https://www.reuters.com/world/americas/mexicos-president-say... And I for one tend to agree, I hardly think Mexico’s GDP will experience growth lower than Canada’s and Canada is projected to have some growth. Compare media and reports from both countries and you’ll see a lot more worry and impact in Canada than in Mexico.
  - IanCal 2y ago
    But it's nothing like GDP.
  - nabla9 2y ago
    Well no. GDP is an output variable, Assets are resource variable. If you own a forest. GDP is how much you cut the forest. Forest growth is growth of the assets. Norwegian wealth fund has similar time horizon as someone growing forest, several decades. Fluctuation in 6 quarters barely registers at the end.
ArtTimeInvestor 2y ago
Norway thinks they "own" some percentage of Apple, Microsoft, Tesla, etc. But is it really like that? If, in the future, Norway will not deliver enough value to the USA in some way to justify that the USA pays them part of the value generated by those companies, why would the USA continue to do so? Wouldn't the USA just make their companies stop paying dividends to Norway or void Norway's shares in some way? There are probably many ways in which a country can prevent value flowing to foreign investors. You might say "That would lead to a decline of foreign investments in the USA". True. But does the USA of the future care? If the "United States of AI" produces everything themselves, they might not care. They have a stronghold on ASML, TSMC is starting to build companies in the USA, they have Nvidia and all other GPU/TPU manufacturers, and they are investing big time into energy production. What can keep the USA from becoming completely superior via AI and then stopping to deliver anything to the rest of the world?
- ksec 2y ago
  >Wouldn't the USA just make their companies stop paying dividends to Norway or flat out void Norway's shares? What are you on about?
- digitalWestie 2y ago
  ... wat
- WinstonSmith84 2y ago
  Sounds like communism to me
- mgeorge001 2y ago
  jeez...lay off the toilet bowl crack
- nottorp 2y ago
  Good idea. If the US voids foreign property rights, then the rest of the world will have no problem with voiding US property rights in retaliation. Including, for example, the cash that a lot of US companies hold in Ireland to avoid US taxes? :) And ... any claim to ASML shares? ASML is a Dutch company in case your LLM forgot...
jagged-chisel 2y ago
> … in the first three months of the year What does the cycle look like here? Maybe Q1 is a lull in a statistic that affects this loss calculation. Maybe fluctuations of less than one percent are to be expected quarter to quarter.
snickmy 2y ago
I mean ... 0.6% against a massive tech sell off, feels a very well managed fund to me :D
madaxe_again 2y ago
It isn’t a loss until it’s realised - unless of course they have risk rules around the management of it that say if an asset declines x% you must sell.
Sol- 2y ago
Maybe a naive question, because presumably more money is always better, but I do wonder what the endgame with this Wealth Fund is. Obviously a country is not like an individual, so it's not like the whole country of Norway can "retire" once its wealth fund has reached a certain size, because people within the country still have to perform services for each other and therefore work. So there seems to be a limit in how much these trillions in assets abroad can benefit the welfare of the Norwegian people. This has always confused me a bit, but I'm not well-versed enough in economics to articulate it correctly. Probably the same must be true for most export-oriented economies, just that there the assets abroad are held by companies and individuals instead of a government fund.
- mnky9800n 2y ago
  It provides leverage for a country that otherwise only has wealth stored mostly in tradeable natural resources (natural gas, wood, and fish) and real estate. The sovereign wealth fund exists to maintain the wealth of the country in the case that they are no longer able to trade natural resources or their housing market crashes and people are unable to sell their real estate for a profit anymore. It allows for them to have time to reorient their economy towards something new instead of everyone going into poverty and getting stuck there.
  - glimshe 2y ago
    Does the country rely on people selling real estate for profit? One of the greatest illusions of our era is that real estate prices must always go up.
    - lifestyleguru 2y ago
      Across entire Europe real estate is the only investment vehicle without capital gains tax. Sometimes you have to hold the real estate for some years. The general consensus is real estate market owns you compensation for currency inflation and tenants own you mortgage payments. People become aggressive if someone starts tweaking with the system. That's also why the European companies with largest market cap produce crocodile leather belts, sunglasses, and software no one understands.
Ekaros 2y ago
So how big have the gains been? I take lot more than 40B? These valuations can't only keep growing to eternity.
howardfloyed 2y ago
[dead]

34 points by impish9208 2y ago

jansan 2y ago

This clickbait would sound less dramatic if they put the relative loss of 0.6% into the headline, wouldn't it?

jasonsb 2y ago
It's actually over 2%. Still a nothingburger, but a slightly larger one.

nabla9 2y ago

Oh dear. 2.35% loss for a wealth fund with very long investment horizon.

impish9208 2y ago

https://archive.is/xOmBd https://archive.is/xOmBd

anonu 2y ago

This is a nothing loss in percent terms compared to the decline of tech over the last 2 months

loloquwowndueo 2y ago

From TFA: “lost 0.6%, or $40 billion, in the first three months of the year” Sure, my (scrappy) portfolio went down by more than that percentually, so it looks like this Norwegian fund didn’t even get hit that hard.

ak_111 2y ago
Good point, but I suggest if you think of this fund as basically the GDP of Norway than just another hedge fund, losing 0.6% in a quarter is slightly bigger deal than you make it. Like a G7 country's GDP contracting 2% in a year.
- boxed 2y ago
  Isn't that what is happening with a lot of countries right now though?
  - consp 2y ago
    The only negative one is Mexico. GDP projections by the IMF [1] still are all in the green. The fastest droppers relative to size are China, Russia and the US but they still are net positive. (for now, next week who knows) [1] https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025 https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/wo...
    - loloquwowndueo 2y ago
      Note the Mexican government has expressed skepticism about the IMF’s projections : https://www.reuters.com/world/americas/mexicos-president-says-she-disagrees-with-imfs-negative-growth-forecast-2025-04-22/ https://www.reuters.com/world/americas/mexicos-president-say... And I for one tend to agree, I hardly think Mexico’s GDP will experience growth lower than Canada’s and Canada is projected to have some growth. Compare media and reports from both countries and you’ll see a lot more worry and impact in Canada than in Mexico.
- IanCal 2y ago
  But it's nothing like GDP.
- nabla9 2y ago
  Well no. GDP is an output variable, Assets are resource variable. If you own a forest. GDP is how much you cut the forest. Forest growth is growth of the assets. Norwegian wealth fund has similar time horizon as someone growing forest, several decades. Fluctuation in 6 quarters barely registers at the end.

ArtTimeInvestor 2y ago

Norway thinks they "own" some percentage of Apple, Microsoft, Tesla, etc. But is it really like that? If, in the future, Norway will not deliver enough value to the USA in some way to justify that the USA pays them part of the value generated by those companies, why would the USA continue to do so? Wouldn't the USA just make their companies stop paying dividends to Norway or void Norway's shares in some way? There are probably many ways in which a country can prevent value flowing to foreign investors. You might say "That would lead to a decline of foreign investments in the USA". True. But does the USA of the future care? If the "United States of AI" produces everything themselves, they might not care. They have a stronghold on ASML, TSMC is starting to build companies in the USA, they have Nvidia and all other GPU/TPU manufacturers, and they are investing big time into energy production. What can keep the USA from becoming completely superior via AI and then stopping to deliver anything to the rest of the world?

ksec 2y ago
>Wouldn't the USA just make their companies stop paying dividends to Norway or flat out void Norway's shares? What are you on about?
digitalWestie 2y ago
... wat
WinstonSmith84 2y ago
Sounds like communism to me
mgeorge001 2y ago
jeez...lay off the toilet bowl crack
nottorp 2y ago
Good idea. If the US voids foreign property rights, then the rest of the world will have no problem with voiding US property rights in retaliation. Including, for example, the cash that a lot of US companies hold in Ireland to avoid US taxes? :) And ... any claim to ASML shares? ASML is a Dutch company in case your LLM forgot...

jagged-chisel 2y ago

> … in the first three months of the year What does the cycle look like here? Maybe Q1 is a lull in a statistic that affects this loss calculation. Maybe fluctuations of less than one percent are to be expected quarter to quarter.

snickmy 2y ago

I mean ... 0.6% against a massive tech sell off, feels a very well managed fund to me :D

madaxe_again 2y ago

It isn’t a loss until it’s realised - unless of course they have risk rules around the management of it that say if an asset declines x% you must sell.

Sol- 2y ago

Maybe a naive question, because presumably more money is always better, but I do wonder what the endgame with this Wealth Fund is. Obviously a country is not like an individual, so it's not like the whole country of Norway can "retire" once its wealth fund has reached a certain size, because people within the country still have to perform services for each other and therefore work. So there seems to be a limit in how much these trillions in assets abroad can benefit the welfare of the Norwegian people. This has always confused me a bit, but I'm not well-versed enough in economics to articulate it correctly. Probably the same must be true for most export-oriented economies, just that there the assets abroad are held by companies and individuals instead of a government fund.

mnky9800n 2y ago
It provides leverage for a country that otherwise only has wealth stored mostly in tradeable natural resources (natural gas, wood, and fish) and real estate. The sovereign wealth fund exists to maintain the wealth of the country in the case that they are no longer able to trade natural resources or their housing market crashes and people are unable to sell their real estate for a profit anymore. It allows for them to have time to reorient their economy towards something new instead of everyone going into poverty and getting stuck there.
- glimshe 2y ago
  Does the country rely on people selling real estate for profit? One of the greatest illusions of our era is that real estate prices must always go up.
  - lifestyleguru 2y ago
    Across entire Europe real estate is the only investment vehicle without capital gains tax. Sometimes you have to hold the real estate for some years. The general consensus is real estate market owns you compensation for currency inflation and tenants own you mortgage payments. People become aggressive if someone starts tweaking with the system. That's also why the European companies with largest market cap produce crocodile leather belts, sunglasses, and software no one understands.

Ekaros 2y ago

So how big have the gains been? I take lot more than 40B? These valuations can't only keep growing to eternity.

howardfloyed 2y ago

[dead]