Do the best and most unique things! CEO of the world's largest sovereign fund: Now is the time to sell U.S. tech stocks and buy into China!

When everyone rushes to the same door, real opportunities often lie on the other side.

On the 22nd, Nicolai Tangen, CEO of Norges Bank Investment Management (NBIM), which operates the world's largest sovereign wealth fund, stated at the World Economic Forum in Davos that investors should consider selling U.S. tech stocks and private credit while increasing investments in China if they are willing to go against the trend in the coming months.

"If you want to do something different, the choice now should be to sell U.S. tech stocks, buy into the Chinese market, reduce investments in private credit, and acquire some 'outdated' assets.

The best practice is always to do the opposite of others."

He also mentioned that artificial intelligence has earned NBIM a lot of money, although he is uncertain if Nvidia is a good stock to buy, but "it is certain that they have made good products."

Tangen: Contrarian Investing, Challenges and Opportunities Coexist

Tangen encourages his team to adopt a contrarian investment strategy. He stated that such decisions are very difficult because contrarian investors often have to endure a period of poor performance and are likely to face external skepticism.

When discussing the U.S. economic environment, Tangen believes that if Trump promotes tax cuts and deregulation, it will have a positive impact on U.S. companies.

He warned that tariff policies could have a negative impact on the European economy and also mentioned that the inflationary effects of policies could bring adverse effects in the long term.

"A tight labor market and tariffs will drive up costs, while high government debt may prompt investors to demand higher yields, leading to rising interest rates, which poses a threat to financial markets."

Tangen also noted that many market disturbances are unmodelable, such as financial crises, pandemics, and natural disasters, which occur from time to time.

"What usually derails the market often stems from these unpredictable external events. For example, the 2011 earthquake and tsunami in Japan."

Tangen: AI Performs Well, but Still Needs Observation

Regarding the hot field of artificial intelligence, Tangen acknowledged that AI has performed exceptionally well in recent years, bringing substantial returns to the fund, especially from large AI companies in the U.S.

He also shared an interesting example: when he asked NBIM employees before Christmas how much efficiency the new AI tools had brought them, the answer was an average improvement of 15%, which is quite a significant number. However, when asked if Nvidia is still a stock worth buying, Tangen stated "uncertain":

"But it is certain that they have made good products."

The Norwegian sovereign wealth fund is expected to announce its financial indicators for 2024 on January 29. Under Tangen's leadership, the company has taken a more proactive stance on environmental, social, and ESG issues. These efforts include disclosing voting intentions before the annual shareholder meeting and serving as a member of advisory committees for international standard-setting organizations. Despite such activities facing opposition from the U.S., Tangen emphasized that this focus will not change In the interview, 58-year-old Tangen did not hesitate to self-deprecate, emphasizing that as a successful investor, one should prioritize learning over money, and believes that determination and flexibility are key traits of excellent investors. He stated:

"When circumstances change, you must change your mind in a timely manner. This is extremely rare in investment management."