Erling Thune and his team at Skandia Time Global have achieved remarkable returns of 1,485% since he took over the fund in 2009. What sets them apart is their focus on valuation rather than following specific themes like AI, as Thune explains, “the rule is that there is no rule.” Their flexible approach has led them to invest in a diverse range of companies, from American tech giants like Alphabet, Nvidia, and Microsoft to Nordic telecom companies like Ericsson and Nokia.
Thune’s background in the telecom industry has been instrumental in their success, particularly with investments in Ericsson and Nokia, which have contributed significantly to this year’s returns. Despite initial skepticism, Thune’s team saw the undervalued potential in these companies and positioned themselves for a comeback, which paid off handsomely.
While Alphabet has been a long-standing holding in the fund, Thune and his team made a bold move by divesting from the company briefly due to uncertainties surrounding Open AI’s language model Chat GPT. However, after assessing the competition and market dynamics, they quickly reevaluated their decision and reaffirmed their confidence in Alphabet’s future growth prospects.
Another key investment for the fund has been Nvidia, a company that Thune and his team spent considerable time analyzing. Despite concerns about the volatility of the AI industry, Thune remains cautiously optimistic about Nvidia’s prospects, noting potential risks associated with changes in AI technology trends.
One of the fund’s most successful short-term investments was in Nintendo, following the launch of the Switch console and the unexpected success of Pokémon Go. Thune’s ability to capitalize on market trends and identify favorable risk-reward opportunities has been a hallmark of his investment strategy.
Looking ahead, Thune sees potential in Match Group, highlighting the promising growth of their app Hinge amidst challenges from competitors like Instagram. While the stock has faced negativity and underperformance, Thune remains confident in Match Group’s long-term prospects, emphasizing their leading position in the dating app market.
In a market filled with hype and speculative investments, Thune maintains a disciplined and conservative approach, focusing on fundamentally sound companies with strong growth potential. While some sectors may be overvalued, Thune’s “boring but strong” portfolio reflects his commitment to long-term value creation and risk management in a volatile market environment.