Capital Allocators – Inside the Institutional Investment Industry Marko Papic – Geopolitical Alpha at Clocktower Group (Capital Allocators, EP.161)
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Oct 26, 2020 Marko Papic, Chief Strategist at Clocktower Group and author of Geopolitical Alpha, shares his unique take on the interplay between geopolitics and investment strategies. He critiques traditional political analysis and discusses how events like the upcoming U.S. Presidential election could affect markets. Marko highlights the evolving landscape of tech stocks amid U.S.-China relations and reveals new growth prospects in emerging markets like India and Africa, emphasizing the need for investment flexibility in an unpredictable world.
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The Importance of Political Analysis
- Political analysis will matter more now because the twin tailwinds of American hegemony and the Washington Consensus have eroded.
- These tailwinds masked geopolitical risks and allowed for over-professionalization in finance, which is no longer the case.
Constraints-Based Framework
- Focus on constraints, not preferences, when analyzing policymaker actions.
- Constraints are non-optional and drive preferences, making them more reliable indicators.
US Policy Constraints
- The biggest constraint on US policymakers is a frustrated median voter, leading to a shift away from laissez-faire economics.
- This suggests a pro-growth environment regardless of who wins the election, favoring fiscal policy over monetary policy.
