The Dawn Of Wicked Asset Classes

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Stupidity is our destiny. – Acadian Asset Management

The painful experience of Greenlandic stamps

In my younger days (much younger), I collected stamps, more specifically stamps from Greenland. A well-meaning uncle had convinced me that there are so few Greenlandic stamps around that, over time, prices can only go up. Little did he realise that the arrival of the iPhone would dramatically reduce the appetite for spending long winter evenings with your stamp collection. Nor did he foresee the arrival of the digital era, where physical mail, thus the need for stamps, would virtually disappear, as it has in the Kingdom of Denmark (which we are supposed to call our country when talking about it in the context of Greenland or the Faroe Islands).

Now, my poor stamps collect dust in a safe. I still try to convince myself that, one day, they will turn into the homerun my uncle ‘promised’ me, but my conviction has all but gone. The other day, a client of mine asked me about wicked asset classes, which he defined as asset classes that don’t fit into one of the mainstream boxes (mostly cash, bonds, equities, property and gold). He asked me why they often perform the best in the latter stages of economic cycles, which is precisely where we are now, and I immediately thought of my stamps again. Maybe they are not wicked enough?

How wicked is wicked?

Now, the list of wicked asset classes is long – very long – but my client is right; the more obscure asset classes often (but not always) perform better after years of outstanding returns in mainstream asset classes, and it doesn’t stop there. They also tend to perform (relatively) well in years where mainstream asset classes stink.

Take for example 2022 which was an extraordinarily



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