THE WOLF AND THE FOX
By Sébastien Cavernes, CIO Edmond de Rothschild Gestion (Monaco).
Wolves and foxes are both canines that share some common traits but have adopted very different survival strategies. While wolves usually belong to a pack and range over huge hunting grounds, foxes are more opportunistic and can adapt to different environments, including urban ones.
As the human population has expanded, natural habitat has been destroyed and the availability of large prey animals has declined, wolf populations have shrunk drastically in many regions. Meanwhile foxes, with their more flexible diet and lifestyle, have prospered, even in hostile environments like cities.
Looking at how these two species have evolved teaches us that the fundamental criterion for survival is the ability to adapt to a changing world. Those who cling to old models risk dying out; those who adapt survive and prosper.
A changing world is exactly what we must prepare for. Like the fox, portfolios are going to have to adapt.
As 2024 drew to a close, US artificial intelligence firms dominated the tech sector and the stock market. But things changed in the first quarter of 2025: the Magnificent Seven1 lost some of their shine. The seven famed companies, which together account for a big chunk of America’s flagship S&P 500 index, saw their share prices fall sharply.