Nordic Safe Havens

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The WSJ had this article yesterday about banks in Norway and Sweden becoming destinations for what amounts to scared Eurozone money looking for a safe place to park, or maybe hide is a better word.

We have owned a Norwegian stock, Norwegian sovereign debt and a Swedish stock for many years. We bought in for what I perceived, many years ago, as superior fundamental soundness from the top down. More often than not these holdings have done well, occasionally shooting the lights out but occasionally lagging too. As long term holds they have added value but for the last few years they have not done as well. A little over two years ago we added a Danish stock as well that started out very well and then has merely drifted higher.

Over the last three months these three stocks have outperformed the SPX meaningfully which hopefully will go on for quite a while. It might be because of the safehaven flight that the WSJ is talking about but I think the article is more of a short term catalyst compared to the stronger top down fundamentals that I believe continue to be part of the thesis.

When I write about investing for the long term this is what I have in mind. People who realize they are investing for the long term toward the goal of having enough money when they need it can take this kind of perspective as opposed to someone who must beat the market this quarter in order to stay in business. In thinking long term, obviously I believe I have been correct with the Nordics and of course believe that for the long term they will continue to do very well (or I'd sell them) but again this is a long term belief. When these stocks were lagging some they continued to pay great dividends and as mentioned above now they might be in for a period of outperformance, hopefully a long run of ourperformance.

I think that being able to take a long term view makes managing a portfolio much easier. In monitoring the names we own in the Nordic space over the years there have of course been ups and downs in the prices but no thesis-altering news. To the extent it can resonate that the share price of good companies can go down without changing the story, it becomes easier to hold on to the stock for the long term (repeated for emphasis).