Performance issue 16 - January 2015

Article

Performance Magazine - Issue 16

Investment Management - January 2015

Asymmetry is a word that is becoming increasingly popular, or at least one that one hears to a greater extent in debate, or reads in magazine and newspaper articles. Furthermore, at a time when geopolitical tensions are once again beginning to figure large in projections as to the direction and health of the global economy, the term, asymmetry, appears in many contexts. It is found in theatres of conflict, with the current situation in Iraq and Syria, or Ukraine, to quote two very disparate examples; there it refers to apparent disproportionate strengths and how they may at times yield unexpected results.

It appears in comparative economies, where one bloc may be teetering on the edge of deflation, whilst other areas may be facing currency imbalance induced inflation. Demographically, it perfectly describes the different growth dynamics fuelling supply side economics. Basically, although not necessarily the first point of reference, asymmetry is a constant in world affairs and everyday life. What is less appreciated is that asymmetry in itself is neither good nor bad, but a driver like many others. As each set of problems arise, there is a natural tendency to consider them to be common, and unique; yet the world is constantly confronted with concomitant and opposite problems at the same time.

There is, despite what logic and experience may suggest, a temptation at each new challenge to set out in search of the ‘philosopher’s stone’, to seek a panacea for all evils; some would find this in planned economies, some would seek it in ultra-liberalism, some would turn to specific authors such as Keynes or Hayek. It is perhaps Keynes and Hayek who, with a sad shake of the head, would point in the true direction in which to focus. That is the experience and interaction of the present context. And that means asymmetry.

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