Norway’s Odin buying on market fears

Jarle Sjo, investment director at Norwegian boutique Odin, and manager of the Odin Norge, Odin Norden and Odin Aksje funds, has come out with a bullish statement on the opportunities presented by the stock market falls experienced on 24 August.

Apart from the consensus factors – fears of Chinese growth, concerns over the timing of a US Federal Reserve interest rate hike, and falling commodities prices – Sjo has also highlighted the seasonality factor: he wrote a note that market corrections tend to fall in August, September or October. For example, last year the Oslo market fell 12.5% in early October.

“So the question is about whether this is a correction or the start of an equity crash. Nobody knows the answer to that question, but we believe it is a correction. Equity crashes have historically occurred when the Oslo bourse is very expensive in relation to book values, such as in 1991, 1998, 2001 and 2008. Then the price/book on the Oslo bourse was well over 2x. Today the price/book is just 1.3x.”

“Even if China were to have weaker growth going forward there is a positive development in the US economy. Additionally there are positive signs in the European economy. Additionally the ECB has shown that it is willing to go far to counter any weakness in the eurozone. This is positive for both credit and equity markets.”

Sjo added that the job he and his colleagues perform has not changed because of events of recent days.  The search for good companies that can create value over time continues, with the idea that these qualities can help them outperform even when markets go through bad times.

“In Odin Norge we have had almost 10% of assets in cash in case we got a correction. This will be used in these days. We are buying while others are selling.”

Further views

Odin has also responded to the market falls by publishing a video outlining its views, including the opportunities it sees opening up as share prices fall.

The video can be viewed here in Norwegian:


Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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