Books

The Fat Tail: The Power of Political Knowledge for Strategic Investing

  • Publisher: Oxford University Press, USA
  • Pub. Date: February 2009
  • ISBN-13: 9780195328554
  • Sales Rank: 114,772
  • 304pp

Synopsis

Civil wars, acts of terror, seizures of private industries--the world is a dangerous place for investors. Indeed, it is more dangerous today than ten or twenty years ago, because of the growing importance of emerging and frontier markets. Even many relatively passive or risk averse investors are exposed in places like Turkey, China, and Brazil. But while they recognize the importance of political risks, until now they have not the right tools to analyze, evaluate, and predict them.
This groundbreaking book is the first to both identify the wide range of political risks that global firms face and show investors how to effectively manage them. Written by two of the world's leading figures in political risk management, it explains that while the world remains exceedingly risky for businesses, it is by no means incomprehensible. Political risk is unpredictable, but it is easier to analyze and manage than most people think. Applying the lessons of world history, Bremmer and Keat survey a vast range of contemporary risky situations, from stable markets like the United States or Japan, where politically driven regulation can still dramatically effect business, to more precarious regions like Iran, China, Russia, Turkey, Mexico, and Brazil, where private property is less secure and energy politics sparks constant volatility. The book sheds light on a wide array of political risks--risks that stem from great power rivalries, terrorist groups, government takeover of private property, weak leaders and internal strife, and even the "black swans" that defy prediction. But more importantly, the authors provide a wealth of unique methods, tools, and concepts to help corporations, moneymanagers, and policy makers understand political risk, showing when and how political risk analysis works--and when it does not.
Authored by Ian Bremmer (author of the bestselling The J-Curve) and Preston Keat, the president and research director (respectively) of Eurasia Group, the world's largest political risk consultancy, The Fat Tail is an indispensable guide for anyone involved in the international economy, from major multinational corporations to small businesses simply trying to understand the risks that come with exports and imports.

Publishers Weekly

Bremmer and Keat, executives at Eurasia Group, explore how global political risks influence the business world in this cogently argued analysis. The book details key areas corporations must be wary of in order to survive in the new global economy including foreign laws and regulation, government changes, civil unrest, expropriation, terrorism and war. With excellent examples, the authors demonstrate how planning for such political developments may make or break a company. It's the difference between Morgan Stanley and the Bank of New York in the aftermath of the September 11 terrorist attacks. Both companies had large offices in or near the twin towers. Morgan Stanley had an emergency plan and the Bank of New York didn't; one suffered minor disruption and the other suffered extreme loss of business momentum. These persuasive case studies want for a clearer summary of how to actually implement plans that fortify companies in such situations. This is not a field guide but a sketch of the landscape, not a consulting session but an overview. It remains for the individual or corporation to take the initiative to further pursue the assessments needed to mitigate any risk. (Mar.)

Biography

Ian Bremmer is the President of Eurasia Group and author of the bestselling The J Curve: A New Way to Understand Why Nations Rise and Fall. He is a regular contributor to The International Herald Tribune and Contributing Editor for The National Interest.
Preston Keat is Director of Research at Eurasia Group, and a commentator on CNN, FoxNews, and CNBC.