Geopolitical Forecasting

The growing convergence story promises to alter our view of possible futures. There are a number of likely shifts that make Geopolitics a critical piece of the story. These shifts add to the high degree of uncertainty reflected in the current environment. In light of this, evaluating geopolitical implications and their influence on the future is growing in importance. But how? I just finished a book titled Geopolitical Alpha that offers a perspective on how to improve forecast accuracy in the geopolitical domain.

The era of geopolitical ignorance is over. The days when investors and corporate decision-makers could be successful without much understanding of politics will be a footnote in the annals of history.

Marko Papic – Geopolitical Alpha

The above quote from the book reinforces the point made earlier. There are several reasons behind the end of geopolitical ignorance – many of which are covered in the book. To help better understand the implications of geopolitics, author Marko Papic introduces his constraint framework. At the core of the framework is his belief that decision makers should focus on the material world of constraints, rather than the ephemeral word of policymaker preferences and beliefs.

The world of constraints is measurable and quantifiable whereas the world of preferences is not. It is the constraints that are ultimately predictive, actionable, and alpha-generating.

Marko Papic – Geopolitical Alpha

Forward-looking leaders will benefit from both the geopolitical perspective provided and the framework itself. I highly recommend it and have added it to my library. The Amazon abstract is provided below.

AMAZON ABSTRACT

Forecast geopolitics and markets with this clear and insightful resource

Geopolitical Alpha – An Investment Framework for Predicting the Future provides readers with an original and compelling approach to forecasting the future and beating the markets while doing so. Persuasively written by author, investment strategist, and geopolitical analyst Marko Papic, the book applies a novel framework for making sense of the cacophony of geopolitical risks with the eye towards generating investment-relevant insights.

Geopolitical Alpha posits that investors should ignore the media-hyped narratives, insights from “smoke-filled rooms,” and most of their political consultants and, instead, focus exclusively on the measurable, material constraints facing policymakers.  In the tug-of-war between policymaker preferences and their constraints, the latter always win out in the end. Papic uses a wealth of examples from the past decade to illustrate how one can use his constraint-framework to generate Geopolitical Alpha. In the process, the book discusses:

  • What paradigm shifts will drive investment returns over the next decade
  • Why investment and corporate professionals can no longer treat geopolitics as an exogenous risk
  • How to ignore the media and focus on what drives market narratives that generate returns

Perfect for investors, C-suite executives, and investment professionals, Geopolitical Alpha belongs on the shelf of anyone interested in the intersection of geopolitics, economics, and finance.

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