The MacroTourist

The MacroTourist

Share this post

The MacroTourist
The MacroTourist
A TRADING TALE AS OLD AS TIME
Copy link
Facebook
Email
Notes
More
User's avatar
Discover more from The MacroTourist
The almost daily email about markets from Kevin Muir.
Over 35,000 subscribers
Already have an account? Sign in

A TRADING TALE AS OLD AS TIME

The 'tourist recounts one of his favourite trading tales from Norway

Kevin Muir's avatar
Kevin Muir
May 17, 2017
2

Share this post

The MacroTourist
The MacroTourist
A TRADING TALE AS OLD AS TIME
Copy link
Facebook
Email
Notes
More
Share

We all know Buffett's line about sitting around the poker table, but too often, we fail to apply it in our day-to-day trading or investing. It's easy to fall for the latest story sweeping Wall Street without thinking about the next move, or who the narrative benefits. I am by no means immune.

The other day, one of my astute new readers sent me a note that showed a keen understanding of how markets really work. He didn't bother with the headline news, but had already calculated the next move. Like a grand chess master, he wasn't worried about the obvious noise right in front of him. Instead, he had accepted that portion of the story, and figured out what that meant for the markets further out in time.

It reminded me so much of one of my favourite stories about trading, I had to share it with you. For those who know me well, they will have heard me tell this tale before, so I apologize in advance. This fable was recounted to me by another trader at my old shop, and I could never verify its legitimacy, but I take refuge in the old line that one should never let the truth get in the way of a good story...

In the mid 1960s, Norway was a regular Scandinavian country, subsisting on an economy centered around agriculture, timber, and fishing. Life was good, but by no means out of the ordinary (apart from all you-can-eat-cod buffets).

Then in the summer of 1969, while the rest of the world was focusing on hippy love, a Norwegian off-shore oil driller named the Ocean Viking struck oil in the North Sea. In the next six months, before the decade concluded, it became obvious Norway was sitting on a massive oil resource.

There was a mad scramble to buy off-shore drilling rights. Money poured in, chasing the untold wealth that would be created. Oil company share prices exploded higher. Visions of riches filled the minds of investors. It could be described as the original DotCom boom, only this time with oil companies. The Norwegian government auctioned off the remaining oil drilling blocks for massive amounts. After all, the market realized Norway was about to become a world leading oil producer.

Into this frenzy, most traders focused on buying companies which would best benefit from this massive wealth creation. However, the market had discounted this new information, and before long, the excitement had created an environment where it was difficult for companies to meet heightened expectations.

And this is where the hero of our story enters. This wise sage sized up the situation, and instead of chasing the headline news, spent some time thinking about how this transformational discovery would affect the Norwegian economy. Practically overnight, Norway had created a raft of millionaires that had been lucky enough to get in early (back then, a million meant something).

Realizing the big money had already been made, and that the market had taken Norwegian energy asset prices to levels that were more gambles than investments, our patient investor focused on the second order trade.

He thought about what all this new found wealth would mean for Norway. And he concluded that once these millionaires became less focused on oil, and more interested in spending some of their new wealth, they would want to buy things. Of course they would buy real estate, maybe some flashy cars, and most definitely some yachts, but they would also buy art.

The art market is a funny thing. There are the renown artists that transcend all countries. Think about Picasso or Monet. That is an international market. But when it comes to smaller countries like Canada, Australia or Norway, the art market is dominated by locals. Few outside of Canada know about the Group of Seven, but there are a couple of dozen wealthy Canadians who compete to own these iconic painters. The prices of these art pieces are directly correlated to the wealth of these elite few.

The Group of Seven and the Art Gallery of Ontario: Past, Present and Future  | Art Gallery of Ontario

And our Norwegian investor realized that the same thing would happen in his country. Instead of trying to compete in buying oil companies, he quietly started accumulating a large position in Norwegian art. He bought all the best pieces while everyone else focused on the headline news about the latest oil find.

Theodor Kittelsen (1857-1914), ‘Kvitebjørn king Valemon’, 1912, mixed media, 670 x 498 cm, signed and dated. Photo © Grev Wedels Plass Auksjoner

Of course, in the coming years, the Norwegian art market exploded higher as these new found millionaires competed with each other to own the best of the best. And our shrewd investor was there to show them an offer. After all, by this time, news about Norway's unbelievably strong art market was all over the papers, and our investor was already thinking about the next trade.

Trading is a tough game. You are competing against some incredibly smart people. I have not figured out the formula, but I do know that chasing the obvious headline news is not the answer. I try to always keep my mysterious Norwegian trader's tale in the back of my mind, and ask myself, what would he do?

Thanks for reading,
Kevin Muir
the MacroTourist


Subscribe to The MacroTourist

By Kevin Muir · Thousands of paid subscribers
The almost daily email about markets from Kevin Muir.
Mathinvariant's avatar
2 Likes
2

Share this post

The MacroTourist
The MacroTourist
A TRADING TALE AS OLD AS TIME
Copy link
Facebook
Email
Notes
More
Share

Discussion about this post

User's avatar
THE ELEPHANT SITS WHEREVER IT WANTS
The value over growth outperformance is set to accelerate from here
Apr 18, 2022 â€¢ 
Kevin Muir
82

Share this post

The MacroTourist
The MacroTourist
THE ELEPHANT SITS WHEREVER IT WANTS
Copy link
Facebook
Email
Notes
More
41
NO NEW SUPPLY. PERIOD.
Why crude oil and energy companies are now the 'tourist's biggest positions
May 28, 2021 â€¢ 
Kevin Muir
70

Share this post

The MacroTourist
The MacroTourist
NO NEW SUPPLY. PERIOD.
Copy link
Facebook
Email
Notes
More
39
MOVING FROM THE LEDGER TO THE REAL WORLD
The 'tourist straps in with a big gold call
Mar 15, 2022 â€¢ 
Kevin Muir
67

Share this post

The MacroTourist
The MacroTourist
MOVING FROM THE LEDGER TO THE REAL WORLD
Copy link
Facebook
Email
Notes
More
57

Ready for more?

© 2025 Kevin Muir
Privacy ∙ Terms ∙ Collection notice
Start writingGet the app
Substack is the home for great culture

Share

Copy link
Facebook
Email
Notes
More

Create your profile

User's avatar

Only paid subscribers can comment on this post

Already a paid subscriber? Sign in

Check your email

For your security, we need to re-authenticate you.

Click the link we sent to , or click here to sign in.