Nicolai Tangen lays out his strategy for outperforming the index, which he believes is to diverge from the crowd and be a contrarian.
Speaking at a Davos 2025 business interview, Nicolai Tangen, Chief Executive Officer of Norges Bank Investment Management, gave his latest tip for achieving better returns than the index.
The CEO of Norges Bank Investment Management heads the Norwegian oil fund, the largest sovereign wealth fund in the world, with $1.74 trillion in assets under management in 2024.
“The best thing to do is always to do the opposite of everybody else,” Tangen told Bloomberg in an interview at Davos.
If everybody underperforms, the probability of beating the index by following the crowd is remote.


“The best thing to do is always to do the opposite of everybody else”
NICOLAI TANGEN
What would a contrarian play look like today, as Nicolai Tangen lays out his strategy for outperforming the index?
“What will that be today? Well, if you were to do the opposite of everybody else, it would be to sell US tech stocks, buy China, sell private credit. Just buy stuff that is out of fashion,” he said.
Regarding undervalued Chinese assets, would that be electric cars?
“The EV industry in China continues to experience significant growth, with new EV sales surpassing 50% of total car sales for three consecutive months,” according to Anthony Sassine, senior investment strategist and head of Middle East and North Africa at KraneShares, an asset management firm.
Chinese EV manufacturers like BYD Company Ltd. (OTC: BYDDF), Zeekr Intelligent Technology Holding Ltd. (ZK) and Li Auto Inc. (LI) are leading the charge, with Nio Inc. (NIO) and XPeng Inc. (XPEV) also showing robust sales figures.

“The EV industry in China continues to experience significant growth”
ANTHONY SASSINE
Most Chinese EV manufacturers are selling at depressed prices.
Here are the seven best electric vehicles to buy, according to Money US News
Meanwhile, high-flying US tech stock valuations are sky-high
As noted in an early piece, Nicolai Tangen sees concentrated risk in the AI stock boom where real-life case studies of AI applications in business have failed to show profits.
After years of impressive gains, Nicolai Tangen noted earlier that the Magnificent 7 stocks could be a risk to your portfolio, bearing in mind that these stocks represent 30% of the S&P 500 Index’s market capitalization. Nicolai Tangen noted that Magnificent 7 stocks are historically heavyweights in benchmark equity indices, and their high correlations to one another are a risk for investors.
“The consensus view amongst top investors is that the bear market in top-tier collateral bonds, in other words, US treasuries, is likely to continue”
– Wealth Training Company
Sell Magnificent 7 stocks, Nicolai Tangen lays out his strategy for outperforming the index
According to Nicolai Tangen, selling bellwether tech stocks would be a contrarian play.
But, the CEO of the world’s largest fund, Nicolai Tangen, is not doing that, according to its half-year report.
US tech stocks feature prominently in Norges Bank Investment Management portfolio in 2024.
As of June last year, Norges Bank Investment Management owned 1.9 trillion Norwegian kroner in the Magnificent Seven stocks, or around $173 billion. Its sixth most exposed equity investments by value are all Magnificent Seven stocks, while it also owns a sizable $5.6 billion stake in Tesla. The oil fund opted to shed some of its stake in Meta last year.
Regarding selling private credit, bonds, and loans, selling these credit instruments is the consensus and not a contrarian play.
The consensus view amongst top investors is that the bear market in top-tier collateral bonds, in other words, US treasuries, is likely to continue.
The likes of Bond King Jeffrey Gundlach continue selling long-maturity bonds seeing ongoing maturity risk into 2025.
Gundlach is instead buying Treasury notes and bills with short maturity dates.
Moreover, as mentioned above Nicolai Tangen’s Norges Bank praised the performance of tech stocks, which grew by 27.9% in the first half of the year, in its half-year report.
Tech stocks account for a quarter of the company’s equity investments, in total.
“Norges Bank has a relatively small 385 billion Norwegian krone ($34 billion) stake in the country. Norges Bank’s most sizable investments in China include Tencent, Alibaba, and PDD” – Wealth Training Company
Nicolai Tangen lays out his strategy for outperforming the index, which is to diverge from the crowd, but he has not practised it to date
Nicolai Tangen admitted in his recent Davos 2025 interview
Taking a contrarian approach to investing meant accepting that your investing strategy could result in underperforming sometimes, leading to investors questioning your sanity.
Nicolai Tangen is not a lone voice in the wilderness warning about the risks of a potential tech bubble in popular US stocks, as other investors have also reiterated the same concentrated risks in US markets.
The Magnificent Seven stocks comprise around a third of the S&P 500 market capitalisation, while its profits accounted for three-quarters of the index earnings growth in 2024.
In November, Nicolai Tangen warned of unprecedented concentration risks in equity markets based on microchips following the Gen AI boom. Major Silicon Valley companies, including Nvidia, ASML and TSMC, are in this sector.
“The concentration is worrying. It means there is a risk in the stock market we have never seen before,” Nicolai Tangen said in November.
“So there are very few companies tied into them, and they are getting bigger and bigger and more and more important,” he added.
Regarding China, which he believes is undervalued, Norges Bank has a relatively small 385 billion Norwegian krone ($34 billion) stake in the country. Norges Bank’s most sizable investments in China include Tencent, Alibaba, and PDD.
Moreover, investments in these stocks rose by $4 billion in the first half of 2024.
In September 2023, Nicolai Tangen would close its Shanghai office, citing operational considerations that will not affect its investments in China. The office employed eight people in the Shanghai office.
Buying British assets, Nicolai Tangen lays out his strategy for outperforming the index
Nicolai Tangen’s Norges Bank Investment Management’s latest investment could have been driven by geopolitics and buying something out of fashion, British assets.
Nicolai Tangen’s Norges Bank Investment Management announced a joint partnership with the Duke of Westminster-owned Grosvenor for 175 properties in the exclusive London neighbourhood of Mayfair.
The agreement marks the most significant outside investment in Grosvernor’s 305-year history.