Alternative asset classes fascinate me. James Altucher does a good job covering the space, and even has a book on the subject (but James, please hire a graphic designer for your next cover!). For example, I had no idea there was a closed-end fund that invests in cat bonds – HNW (Anyone that has launched a CEF, or has contacts that have, drop me an email as we are considering it.)
In a related note, I received my copy of the Journal of Alt Investments today, and lo and behold there was an article on stamps as an asset class. . .how long until the ETF? About half of the ETF “holes” have been filled from my post a few months ago, but there are still some areas not covered.
What are some other alternative asset classes investors have yet to consider? Looking out 10 years, what could be some other areas that become asset classes?
I have a great interest in following weather derivatives, or at least in knowing who has exposure to them. I have a non-trivial amount of hurricane exposure due to owning property in the New Orleans French Quarter.
Property casualty insurance rates are sky-high here. I am druelling over the possiblility of hedging some of my exposure in the financial markets, or at least not making the mistake of ‘doubling down’ by also having investments in entities with lots of hurricane risk (BRK)
Some problems with the hedge using CME futures or the like….
1. No exact substitute for my house vs. damage to the entire region.
2. No coverage for non-weather events such as fire/theft (can be solved with conventional insurance)
3. Notional amounts required to trade at good prices are much larger than I need.
Emissions credits are growing very fast. SO2 and NOx in the U.S. and CO2 in Europe are all heavily-traded. The credits somewhat mimic the power market, but still have some diversification benefit.
Short football scores!!
George, if you haven’t already you may want to take a look at WeatherBill