0:09 spk_0
Welcome to a new episode of the opening bid unfiltered podcast. I’m Yahoo Finance executive editor Brian Sai. Like I always say, this is the podcast that will make you a smarter investor, period, and you’re definitely going to get smarter after this one. I wanna welcome in a very special guest, someone I’ve been following, uh, for several.Years, notably on LinkedIn where he posts lots of really amazing stuff. Nor just bank investment management CEO Nikolai Tanin, I should also note he’s also a fellow podcaster. Uh, the podcast is called In Good Company. Uh, Nikolai, good to see you.Likewise, um, for those not familiar of what you do at Norge Investment Bank, take us through, uh, through just a little bit. I think, you know, so many folks know that you oversee what the largest sovereign wealth fund in the world, you know, how did you, how did you get this position and, and take us inside of what this sovereign wealth fund does?
1:02 spk_1
Yeah, so when they found the oil in Norway in 1969, they decided to put it into a fund.Uh, in some countries they had spent the money, but in a way they decided to, to save it instead and so they kicked off the fund in in ’96 and it has grown to roughly $1.7 trillion and we invest globally. We own roughly 1.5% of all the listed equities in the world. We have a large bond portfolio and we own a lot of properties and uh renewable infrastructure, so that’swhat we do.
1:32 spk_0
The returns that you that the fund makes, where, where do they go?
1:35 spk_1
Well, they go into the state budget. So first of all, they, uh, they, we spend roughly 3% of the fund every year, and that accounts now for more than 20% of the Norwegian state budget. So it goes into, it kind of pays for one of 5, schools, hospitals, roads, that’s how it’s spent.
1:54 spk_0
Uh, I just want to bring that stat you mentioned right back up here, um, owns almost 1.5% of all shares, uh, in the world’s listed companies. I mean that’s a big responsibility.
2:05 spk_1
Yeah, it’s a big uh responsibility, um, but I would say we are helped by, uh by the minister of finance, which, uh, make a very good mandate for us which we follow. So we are relatively indexed there in, in what we do and then of course we are 700 people here, uh, working hard day in day out so it’s not, uh, my responsibility alone, thankfully.
2:26 spk_0
How did you get into the field of investment management?
2:30 spk_1
Oh, I, I just, I just love it, right? It’s, uh, I think it’s the most interesting job you can have because, uh, in investing, you have to be on top of the companies, what they make, uh, you know, psychology, geopolitics, uh, defense.Uh, all these kind of things and it changes just all the time and in particular now things are being turned upside down, uh, every so often and combined with huge changes in, in uh in geopolitics and technology development, I think just makes it the most interesting place you can be. How
3:01 spk_0
arethese changes, uh, or you know, geopolitical, uh.Things have certainly gone upside down. It’s been quite the past 6 or 7 months. How has that changed how you go about putting money to work?
3:13 spk_1
Well, they changed very little in terms of how we go about, and I think that’s the important thing, because when you are in a situation where things change so fast, very often doing little is the most difficult thing. And, um, I think this is an environment where it’s a huge a huge advantage to have a strict mandate and a very, very long time, time frame on, on what we do.
3:34 spk_0
You, um, I would imagine have a unique perspective on the United States, you know, here in the United States, uh, lots of conversation on, um, President Trump’s tax bill, what it might mean to deficits, and the general thinking is this is going to add big time to deficits, you know, from your perspective, how do you view the US economy?
3:54 spk_1
Yeah, we, we first of all, we never have a view on politics, OK? So, but what we do have a view on, of course, is um some of the effects of, of politics we do observe that um that the budget deficit is, is quite large. That’s not only the case in the US.But uh but across the world, right, we are at roughly $100 trillion according to IMF and the question is whether there will be a time where investors will certainly think, hey, we wanna hire a coupon for, for lending money to to these various governments and that’s potentially when we could see uh uh a kind of an uplift in interest rate levels uh
4:31 spk_0
generally. Does that change how you invest? and I bring that up because you, I, I view what you do is you’re you’re the ultimate long term investor.Um, you’re putting money to work today that you know will earn return 5, 1015, 20 years down the line, um, but if our debt levels in the US are going to go up, uh, pretty significantly off of already high levels, does that change how you think about businesses?
4:54 spk_1
Well, of course it helps to be the reserve currency of the world, right? So, um, the US is in a bit of a, a special situation here, but, um, but you never know where the, when the point is coming where, uh, you know, where, um.Investors suddenly decide that uh you know, the debt level is, is too high and, and we want a higher price.
5:15 spk_0
So you own close to close to 9000 stocks like why so many stocks?
5:23 spk_1
Um, we, we basically own the world and I think when you are such a large, uh, investment fund, you need to be widely diversified. And so what we have, we have, uh, a mandate which is, uh, telling us to be, to be widely invested. We are now roughly.Just under 55% invested in the states and the rest is in Europe and and the rest of the world. We got roughly 70% equities and 30% bonds and so I think um to be widely diversified and really long term is the way to to navigate uh these markets
5:53 spk_0
within the.Portfolio, uh, you do have a pretty large, um, bunch of holdings in, in tech and I, I go, I look on the on Yahoo Finance you can see you’re a top holder in some of the biggest names like Microsoft, uh, Alphabet, Meta, you name it. Why, why do you like tech?
6:10 spk_1
Well, we are, um, you know, when, when companies do well and get really, really big in terms of market capitalizations, we, we own automatically quite a lot of it, OK. So, uh, Microsoft is our biggest holding and that’s because it is a very, very large, uh, company. Now what we are seeing is that uh we have a bigger concentration level in the portfolio than we’ve had in the past. So now our top 10 holdings will account for 20% of the fund, which of course is uh.It’s a different type of risk than we’ve seen in the past, in particular because the largest holdings typically are all tech related, and, um, and, and so, so this type of factories we we for sure haven’t seen before.
6:50 spk_0
I I imagine uh and I don’t want to put words in your mouth, Nikolai, but you know this large concentration in tech names, this is a really strong bet I imagine on the future of AI impacting so many parts of the world.
7:05 spk_1
That’s true, and um.You know, we are, um, for sure, AI will have a huge impact on how we work. We are seeing it. We think we increased productivity by 15% last year by utilizing AI and everything we do. We think we can open up another 20% productivity gap this year by again, just, uh, uh, making sure that uh we get the message across from the top. We have ambassadors being trained in AI, uh, several times a week. We have a mandatory events across the firm.So we really kind of carpet bomb the organization with AI initiatives and it really works, you know, driving is driving productivity. We’re getting rid of some, um, boring tasks and, uh, it’s super interesting to see what, what it, what it does to us. Well, it makes you whether the whether the evaluations of the companies is, is more than discounting this, I think it’s very, verydifficult
7:55 spk_0
to
7:55 spk_1
say.
7:55 spk_0
Well, yeah, let me, let me lean into that because as an ultimate long-term investor, how do youIs it hard to identify when a stock might be overvalued? I mean, because theoretically you’re you’re holding for for years. So who, who am I to think that Microsoft is overvalued here in 30, 40 times earnings? Maybe it grows even faster.
8:16 spk_1
Well, I think you’re right. I think it’s very, very tough to know when things are overvalued. Um, I mean, generally speaking, I think it’s easier to see when something is undervalued. I think it’s easier to see panic. I think it’s more difficult to see euphoria and greed.And really know when um when to exit, uh, something that’s just a general observation I have after having been in the market for a long time.
8:41 spk_0
Are we seeing euphoria in markets today? Uh, markets around the world hitting records.
8:47 spk_1
Um, it’s a difficult one. I think we, we are seeing some signs of euphoria.Um, but whether that’s it, I think it’s very, very tough tosay.
8:58 spk_0
Why do you think investors are so optimistic?
9:04 spk_1
Well, I think umInvestors are optimistic partly because of the prospects of what AI can do to productivity and what it can do in terms of holding price increases down by improving efficiency and now of course you also have, uh, you know, the uh the humanoid robots coming which will make sure that we are in a situation with, with excess supply of labor. So, you know, there are some positive uh long term uh scenarios here.You mentioned I think also it’s difficult to know where, where, what’s the alternative to having money in the stock market. There isn’t, you know, there isn’t any, you know, it’s not an easy answer to this,
9:45 spk_0
but you also own a, a good bit of real estate.
9:47 spk_1
Yeah, we do. And we have continued to add to real estate holdings. We have nearly 1000 properties around the world. We have big holdings in logistics. We own, uh, you know, quite a lot of property where you are sitting in the middle of, uh, Manhattan, uh, also in many European cities such as London and Paris.
10:06 spk_0
You mentioned at the top, you know, briefly, um, some of the things you look for when putting money to work, but you mentioned psychology how important is psychology, um, for you before putting more money in a in a stock?
10:19 spk_1
Well, I would say generally psychology is just uh uh super important and you have to identify these situations where uh where you are right and nobody agrees with you, right? And I think it’s very, very important to identify.Uh, you know, the level of panic where you wanna, where you wanna add to your holdings, and of course, the levels of euphoria where you wanna, where you want to take them off. So, uh, observing investor psychology is one of the most important things I do.
10:46 spk_0
Where outside of your holdings in techniqueli, where else are you uh concentrated in in terms of
10:52 spk_1
stocks? Well, well, we would have we would have a portfolio which reflects everything that goes on in the world, right? We have big holdings in the big consumer companies, we have holdings in the energy companies, we have big holdings in pharma. Uh, so, uh, we would be, uh, we would be in most places.
11:09 spk_0
Are you, I imagine, um, what’s your view on green technologies? Of course, Norway has been drilling for for decades, you know, how do you, do you have money to work in that space?
11:22 spk_1
Yeah, we do. We um we really believe in in some of the large integrated uh energy companies and we also have invested in renewable infrastructure uh in, in Europe and in the US Now we appreciate that, uh, these type of assets are not uh uh really in favor for the moment, which gives us a good opportunity to add our holdings there, so we think.We think we’ll get better returns in some of these projects than we than we got in the past.
11:49 spk_0
All right, hang with us, uh, Nikolai. We’re gonna go off for a very short break. We’ll be right back on opening bid unfilter.All right, welcome back to opening bid unfiltered here at the NASDAQ in Times Square. Having a fun chat here on all things stocks and investing with Norge Investment, uh, management COO, uh, Nikolai Tanjin. Uh, just a fascinating, I mean, he oversees the largest sovereign wealth fund in the world in Norway. Um, how do you, how do you spend your, your day, you know, given the responsibilities of your job, Nikolai, I imagine you’re, you’re always on the road.Um, but this job has to weigh on you. I mean, this is not like a normal portfolio management job or even a hedge fund manager like you were before.
12:33 spk_1
Yeah, no, I think this, I think I have the best job in the world. It’s just, uh, super interesting. I spent time on investing. I spent time with the teams here. I spent time on, on technology and where we’re going with that. I spent time on the organization, with the stakeholders. Uh, I meet with the CEOs, CEOs around the world. Um, so I just learned so much about, uh, what’s going on, you know.It’s uh I think it’s the ultimate job in asset management.
12:58 spk_0
When you, when you meet your fellow CEOs, the CEOs of the companies you own, what are those meetings like and and what do you ask them about?
13:07 spk_1
Well, I asked them about different things. I asked them about the industry which they’re in, what’s at the top of their mind in terms of topical things for their companies and their industries. I talked to them about the market positions and how you gain and lose market share in your business. Uh, but I also spend a lot of time on the corporate culture in the various companies because I think.In the long term, it’s so often the corporate culture which decides whether a company is going to be successful, you know, you have, you got two companies which it seemingly seem to be doing the right thing whether they both make, you know, sneakers or elevators or, you know, uh, beverages, and then one company is doing so much better than the other, and why is that? And it’s so often, you know, some of the kind of softer things in, in the corporate culture. So if you can identify some of those uh issues, that is just so interesting.
13:52 spk_0
Just given everybody that you’ve gotten to meet and the investments you have, uh, in the in the fund, is there a, is there a favorite CEO or two that you just really like that that you like hanging with and talking business?
14:07 spk_1
I like hanging with a lot of people, um, and for sure you wanna hang with a lot of different people because that’s how you learn and that’s how you educate yourself and that’s.That’s how you get new ideas, you know, so you wanna, you wanna meet with people who do different things from yourself and you also wanna want to speak with people who got a different opinion from your, from your own opinions. That’s the important thing.
14:28 spk_0
Is it tough to have conversations with fellow CEOs that maybe sometimes could be doing a better job?
14:36 spk_1
I think we all can do a better job, you know, I think.We all, uh, we all need to try to improve ourselves continuously. That’s, uh, that’s part of the game here.
14:47 spk_0
What made you start the podcast in good company?
14:50 spk_1
Yeah, you know what, we had, um, I thought, you know, we have, we have access to a lot of the CEOs because we have big ownership stakes in them. And instead of me just sitting there with the CEO and learning about the companies and what they’re doing, I thought, you know, hey, let’s share it with the Norwegian population and students and business leaders across the world.So we kicked it off as a pilot and it’s turned out to be now one of the leading business podcasts in the world, and we’ve had 125 episodes with.You know, the really the top leaders in the world, from Bill Gates to Elon Musk to the heads of the top banks, pharma companies, uh, you name it, it’s been just been incredibly interesting and we learned, we also learned so much that, uh, we are implementing in our own firm, you know, some of these leadership methods and methodologies which are very, very
15:35 spk_0
interesting. I had the opportunity, um, Nikolai, to talk to, uh, Bill Gates too on, on opening bid, and it was a fascinating conversation, talked about his childhood, but.You know his thoughts on semiconductors, you know, my big takeaway was it’s amazing how fast his brain works and how forward looking it is what’s, what was your takeaway from that shed?
15:55 spk_1
It’s a very humbling experience to talk to Bill Gates. I think, uh, what I love, uh, with Bill is just the way he learns, you know, the way he’s got dinners at home, put together people in various fields, uh, applies the same rigor and methodology he’s done to make money in order to give it away.Uh, I think it’s a real, he’s a real hero, of
16:17 spk_0
course. One person I haven’t been able to talk to that you got that I didn’t get in Ekola is uh Jack Dorsey. So thanks a lot for one upping me on that one. I mean, how is that, you know, he is, I mean, he hasn’t done much, he hasn’t talked a lot in recent years, but.I mean, in many respects he had not only laid the foundation for for X and social media and Twitter, but he’s also uh a big uh player in stablecoin and and crypto. Are you a big believer in crypto and and after that conversation like that, do if you weren’t a believer, do you become more of a believer?
16:46 spk_1
Well, it’s a very, very good question. So we, we do not have in our mandate to invest in crypto, so I, I probably haven’t done as much work as I should, um, but it’s a, it’s just a fascinating area where I need to dig more, you know, and get to learn more.
17:00 spk_0
Do you envision, do you think your fund will have a crypto component over the next few years?
17:06 spk_1
No,
17:06 spk_0
no. Too risky?
17:09 spk_1
Well, I just don’t, you know, the, uh, for the mandate to change, it needs to be, needs to go through the parliament there and through.White papers and so on. I think it’d be tough to see that the Norwegian politicians would, uh, like to put a lot of the funding into crypto. I, I’ll be very surprised.
17:24 spk_0
Do you view it? I, I know you’re still, you know, looking into crypto. I mean, do you view it as a, as a rival to the dollar?
17:31 spk_1
Uh, I, I don’t think I have, I, I haven’t got a very strong view on this.
17:36 spk_0
We, um, here in the US, Nikolai, there was, there was some talk earlier this year of the US creating its own sovereign wealth fund.Um, we haven’t heard much since from the Trump administration. What.How hard is it to create a sovereign wealth fund? Because I think here in the US and you know, we got this news and was thinking we’re gonna flip a switch and we’re gonna have a sovereign wealth fund, but it it doesn’t work that way.
18:00 spk_1
No, it doesn’t work that way that way necessarily. I would say, I mean, first of all you need to, to allocate capital to it, right? Um, I would say what has worked for us in Norway is uh one to have a very long term view on what we do. It’s has broad political anchoring it means that when you have a change in parliament or a government.You do not change the way we invest, right? That’s very important. We have a spending rule which means that you only take out 3% every year and then we have a huge transparency. I mean, we are the most transparent fund in the world. So I think these factors combined, um, have made this, uh, a successful uh uh kind of venture.
18:38 spk_0
I’m going to assume that the US will get a sovereign wealth fund. How disruptive would that be to to markets and, and not necessarily in a bad way, in a good way, because now you have the US with all of its capital, uh, a lot of it being pulled into this fund. I, I imagine it could, it could really drive up a lot of market values.
18:58 spk_1
Well, I think that depends on how you look at it and how they choose to invest the money, how.Uh, how concentrated they are, uh, and so on. I mean, the US stock market is massive. It’s just like huge. So for one fund to make such a big difference, I’ll be, I’ll be a bit surprised if it made a huge difference in.And market valuations,
19:22 spk_0
you know, in the last, uh, couple of minutes of the podcast, Nika, I always love to, uh, get some hot takes from our guests. Um, nothing prepared on this one just enjoying this conversation. I originally found I came across you, um, by getting, uh, by doing my research or due diligence on Tesla. Now you’re a you’re still a holder in Tesla, I imagine. Um, what are your thoughts on this company?Um, it seems that at least from my perspective, this stock is detached from the fundamentals and is being driven a lot by Elon and in his post, his, his back and forth with the president, and not necessarily on what they’re doing on autonomous, uh, and various other robots and making cars. How do you see it?
19:59 spk_1
Well, I think you’re right. I think there are a lot of uh elements which uh impact the share price of this company. I haven’t got a particular uh strong view either way. Uh, you know, Tesla was one of the first, uh, electric cars into, into the Norwegian market, and, uh, it was, you know, EVs have been heavily subsidized in in Norway and so.Uh, has a very, very high penetration here. Um, but in terms of a view on the, on the stock itself, I, I haven’t got a strongview.
20:27 spk_0
Do you view Tesla as more of a, a tech play or an auto play?
20:33 spk_1
I think it’s uh all the above. I think it’s uh, there are many factors impacting the evaluation of Tesla.
20:40 spk_0
Interesting.Have you made up with Elon now you guys voted against his pay package. You guys, are you friends now? You, you tight? You’re having dinner together. everything’s cool?
20:49 spk_1
I have not had dinner with, uh, with. I never met him in person. I had a podcast with him, which was very interesting, but I haven’t spoken with him since.
20:56 spk_0
Interesting. Um, do you, will those fences be mended? Are you trying to mend them or are you just leaving things where they are?
21:04 spk_1
We have no, uh, we, I don’t think we have anything unspoken, you know, we, uh, we had a great podcast. We, uh, you know, we meet with, um, uh, with management of, of Tesla and give a view, you know, they are professional, we are professional. I don’t think there’s anything, any problems there.
21:22 spk_0
Alright, we’re gonna leave it there, uh, really enjoy all of your work, uh, nor just, uh, Norjus Bank Investment Management CEO Nikolai Tanjin, and of course, uh, the host of the In Good Company podcast. I encourage you to listen to that podcast. Go back and watch those interviews with Elon and Jack Dorsey, uh, a lot of good, uh, interesting perspectives there. Nikolai, good to see you.Thank you very much. All right, that’s it for the latest opening bid unfiltered podcast here at the NASDAQ in Times Square. Uh, like I always say, please hit us with all those likes on social media and the podcast platforms and YouTube. I appreciate the feedback. It helps us get better. Talk to you soon.
