Fisheries have been in long term decline in near-western waters. Look at Grand Banks in Newfoundland - one of the richest fishing grounds in the world for 400 years, and now ... nothing.I think that inflation may be the answer.
Is the difference simply real v nominal returns?
(I agree dividends would make a huge difference. Over 20 years, we could reasonably expect that total dividends were half of returns).
The Dow Jones went over 1000 in 1966, I believe, and did not do so again until 1981 (?) But we look at Total Return, and Real Return. The nominal return is just not interesting in a period of high inflation.
1000 Norwegian krone in Jan 1978 was only worth 209.21 in
Jan 1949 krone.
https://www.ssb.no/en/kalkulatorer/priskalkulator
This would mean even a bit more than a 78% loss in real currency
in the Oslo total market index over that 30 years, not counting dividends. Perhaps the article, which I could not read, explained
this, but context matters.
I still have trouble believing that the aggregate of publicly held businesses in an entire nation which are losing money for their owners/ stockholders is not replaced by businesses which
do make money (in dividends and real terms).
One possible explanation is that
Norway was an occupied country during WW2.
In 1948, they would still have been rebuilding/retooling their
industries. With a long view, the country's businesses may
have been building for the future rather than for more short term
goals. Foreign investment may have gone elsewhere, dropping the
Norwegian stock market,but not the underlying businesses, if
Norwegians supported their own businesses through a shared
sense of loyalty to the nation in the post war period.
30 years is a long time, but other countries do not hold the same
short term view that the US does.
Norway does have a higher per capital GDP than the US does, so it must be doing something right.
That's why the big Russian, Chinese etc fleets are going to Antarctica to fish, now.
But that would have been from the 1970s, I think.
I think what happened is Norway had a small and peripheral resource-based economy. It also was (is) a highly social-democratic state. In the postwar years that tended to lead to large government deficits and inflation. Think Australia, Britain, New Zealand, Italy -- but not Germany.
Then, in the late 1960s, the North Sea oil and gas was discovered. From then, it's been in a relative economic boom ever since. Marred by a very bad property and banking bubble bust and crash in the early 1990s. But, fundamentally.
The good news is that Norway, unlike say Britain or Alberta, has saved a large fraction of its oil & gas largesse - the Norwegian Sovereign Wealth Fund is set aside for future generations of Norwegians (I think it has a withdrawal rate of about 3% pa).
Statistics: Posted by Valuethinker — Sun Mar 09, 2025 3:17 am — Replies 102 — Views 10141