Julian Robertson Likes Norway!

Julian Robertson was a featured interview on CNBC and as usual he was very worth listening to. I think the most important takeaway was his repeated insistence that if the Chinese and Japanese reduce their purchases of US debt, let alone outright sales, the US would be in a world of hurt. Obviously this is an unknown variable but is clearly the risk. Despite Erin's responses to this line of thought there is nothing new about this. Even I've been talking about that for a while.

The extent to which our financial functioning has relied on foreign purchases of our debt should not be new to you. Additionally the amount of borrowing it takes now to create a dollar of GDP growth versus how much debt it used to take is also something you should be familiar with. These are crucial dynamics.

These looming issues have not prevented the S&P 500 from going up 60% from its March low but are the essence of why I have been writing about increased foreign exposure from the start of this site. It seems logical that these, and the other issues, will matter at some point and have to be reckoned with. Obviously this line of thinking has existed for a while so it could be a long time before it matters.

As opposed to guessing when this will occur I'd rather just slowly increase foreign exposure slowly over several years.

On a somewhat humorous (to me) note Robertson said the Norwegian kroner was his favorite currency. Erin said he had a very big bet on Norway, who knows what big is but Robertson cited all the things that every Norway bull has been talking about for years.

My exposure to Norway has been the same for several years now; Statoil (STO) and short term sovereign debt. Obviously anyone can buy a stock but the debt is a little trickier as minimum order size for foreign debt is $100,000 (I am able to buy all at once and allocate smaller positions into client accounts).

GlobalX has filed for a Norway ETF but who knows when that will come out. In the mean time there are some stocks besides STO to check out for anyone so inclined. In the materials sector there is Yara International (YARIY), in telecom there is Telenor (TELNY), a name I used to own for a few clients, in financials there is DNB Nor (DNBHY) and there is even an ADR for one of the fishery stocks Marine Harvest (MNHVY)--careful there though as neither Yahoo Finance or Pinksheet.com shows volume and Schwab did not have the ADR set up in its system for trading but ADRBNY has quote information so go figure. In tech there is Opera Software (OPESY) and there are others. To be clear I am just mentioning that these stocks exist not suggesting they be bought.

Each country can be looked at for stocks in this manner as a starting point for research. I have stuck with STO because it is by far the biggest company in that market, heavily involved it what the country is known for making it a good proxy. At some point though I will want to increase my exposure from the one name to include a second stock.