What Do Asymmetric Risks Look Like?


source: Société Générale

My view:

Major European Bank Société Générale, sees global growth risks skewed to the downside, with upside surprise few and of smaller impact.

While we agree with their overall assessment, suggesting that downside risks are black swans is misleading.  By definition, a black swan is a risk event that is not generally foreseen.  The risks the bank note are generally acknowledged in analyst circles at least.

A true black swan would be a 911-like event or sudden onset banking liquidity crisis.

Regardless, we are of the view that the best hedge against this type of risk profile is gold metal, and some of the larger cap gold stocks.

We also note that fundamental shifts in the alignment of gold prices compared to currencies, and, at the same time, a strongly bullish alignment of moving averages for both the metal and many of the stocks.  While a small gold pullback is presently underway, buying in the very near future is likely to be very rewarding in our view.


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