Simon Wolfe

International law, advocacy and geopolitics. Founder and Managing Partner @MarlowGlobal.

[Javier Blas @JavierBlas]

UAExit

[Simon Wolfe @SimonWolfe]

Why did the opening of the straight of Hormuz cause the collapse in the Figma share price?

Asking for a friend

[Simon Wolfe @SimonWolfe]

Either way, the ball is coming over the net thick and fast - it’s time to think about how you might destroy it before, well, it destroys you.

[Simon Wolfe @SimonWolfe]

Fifth, in chaos there is opportunity. In times of seismic shift, those who are able to see the wood for the trees quickly will no doubt find the arbitrage or the alpha quicker than others. A very good and recent geopolitical example of this is the UAE’s push to sign CEPAs with countries across the global south (effectively bilateral investment+ treaties). Foreseeing a crack in the global trade order, their pre-emptive move to secure bilateral trade agreements will enable them to grow at a much faster rate than those clinging onto the old system (which as of ‘Liberation Day’ has been absolutely nuked). This applies to companies as much to governments - they might ask themselves: Where is our leverage in our supply chain? What are our strengths to bring to negotiations? What should we invest in that everyone else is running away from?
Sixth, do more cardio so you can get to the ball faster (that might just be a tennis one).

[Simon Wolfe @SimonWolfe]

Fourth, it doesn’t always return to normal. We tend to analyse “disruption” as being cyclical, the idea that after a market crash it will return to just the way it was before, or that people will protest about unemployment when the numbers are bad, or that what’s politically incorrect today will be correct again tomorrow. What this forgets is that true disruption shifts cycles to a different playing field. Trump’s recent moves on trade are certainly accelerating immediate economic pain (I write this piece on what has been termed “Orange Monday”) but it’s part of a wider economic and societal shift around the wealth gap, sovereignty, the transcendence of technology including AI that’s characterised by some including the Disruptive Futures Institute as a ‘metaruption’ which the World Economic Forum in its recent report explained “Metaruptionscause widespread, self-perpetuating effects that extend beyond their initial disruptions. As early changes spill over, impacts combine, propagate, and modify other elements within the system. Imagining the interplay of metaruptions is a creative endeavour, not a number-crunching exercise.”

[Simon Wolfe @SimonWolfe]

Third, meet the market where it’s at. If the (geo)political and economic forces against you are of a short-term or specific nature, then find a way to survive the short-term risk whilst protecting the long-term value. Extractives companies make this mistake all the time - when faced with issues around local communities that are of an immediate nature (or at least issues that are seen to be immediate to the people that actually live there) the company as a first move almost always shouts to the rooftops about the economic impact that their mine has, and the huge amount of tax they pay. The affected communities don’t feel this (if they even think about it). The companies don’t meet their market where it’s at. The communities don’t hear what they have to say, and the companies aren’t listening (see above).

[Simon Wolfe @SimonWolfe]

I spend a lot of time thinking about two things: tennis and (geo)politics. So, if this analogy appears unnatural to you then please indulge/pity a man who sits a barely respectable 17th in his very very local tennis ranking having capitulated in his last game in a flurry of bad shots and worse language.

[Simon Wolfe @SimonWolfe]

Second,insisting on scenario planning. If the risk is uncertain, then the outcome is necessarily uncertain. That means that we need to think about not just one possible outcome, but several. And we need to think about not just the first-order repercussions of those outcomes, but the second and third order effects (i.e. what events could happen if one of those scenarios happen). This is not necessarily an expensive exercise, but it does involve more than a process-driven approach. It involves critical thinking, imagination and listening which benefits from the experience of an adviser who has seen these scenarios play out. Forgive another tennis analogy - it means watching the ball as it comes over the net.

[Simon Wolfe @SimonWolfe]

First, it means framing uncertainty appropriately so that you can deal with the most pressing or potentially damaging risks. Here it’s important to distinguish between risk (predictable parameters), uncertainty (known events with incalculable probabilities), and deep uncertainty (unknown variables hindering predictability). By going through this process, limited budgets can be appropriately allocated.

[Simon Wolfe @SimonWolfe]

Instead of pursuing a fixation on mapping historical trends and attempting to dress up art as science, advisers should help clients build agile strategic thinking capacity in their management of uncertainty. This could involve a few things.

[Simon Wolfe @SimonWolfe]

By taking this approach, a business can build resilience for their assets and operations whilst remaining agile when dealing with political and geopolitical uncertainty. So how can an adviser help to achieve the necessary level of preparation without blowing the client’s budget?

[Simon Wolfe @SimonWolfe]

Preparation beats prediction every time. Instead of mitigating risk through prediction, a business is better served by developing systematic thinking that factors in deep uncertainty, so you can handle whatever comes over the net. Which doesn’t mean to say that you will hit every ball back - just that you will hit enough back to win the match.

[Simon Wolfe @SimonWolfe]

Some analysts will tell you otherwise. They might develop an algorithm to analyse every shot that player has made in the last 10 years and based on that predict what the next shot will be. They will put it on a fancy java-scripted dashboard and give you a highly likely prediction that the next shot will be a top-spin monster to your backhand. But what about the wind that day? What about the argument that player had with their significant other the previous evening causing them to lose concentration? There is a myriad of factors that could affect that shot. The Australian Future Fund’s Position Paper - Geopolitics: The Bedrock of the new Investment Order put it best when it recommended that “…We believe that when grappling with geopolitics, investors should focus much less on perfecting the measuring phase and instead focus much more on both the monitoring and managing phases…”

[Simon Wolfe @SimonWolfe]

To my mind, helping clients prepare for political and geopolitical risk is a lot like preparing to hit the ball in front of you. Today’s (geo)political landscape is one of deep uncertainty. From the escalating trade war, political shifts to nationalism, hard conflict, sabre rattling, demonstrations, misinformation, cyber-attacks and more, it’s almost impossible to know what is coming over the net.

[Harvard Law School Program on Corporate Governance @HarvardCorpGov]

De-risking Litigation Exposure: Conflict Management as an Integral Part of Business Administration, https://t.co/gdXa7vuxnr #corpgov @FTIConsulting

[Simon Wolfe @SimonWolfe]

Clearly a rebuke on the ANC. But likely won’t be enough from early results.

[Ranga.🇿🇼 @RangaMberi]

“Let me stop you right there…”

Caribbean nation Guyana is booming after discovering oil. BBC’s Stephen Sackur puts it to President @presidentaligy; lobbyists say oil is bad for the climate.

Dude wasn’t having it. Mans was ready!

[Simon Wolfe @SimonWolfe]

Washington and Beijing are squaring off over TikTok. For me, the real story lies elsewhere. When it comes to the future of technology, our attention should really be on the geopolitical swing states.

Countries like the UAE are quietly mobilising vast sums of money to develop AI. They have the capital—and the energy—to become AI heavyweights. If they succeed, we will see a major realignment of the global power structure. New players will be able to project influence on a level previously enjoyed by the Great Powers alone.

I share my thoughts on this below and would welcome your comments.

#ArtificialIntelligence #AI #Tech #Geopolitics #UAE

https://t.co/dkMzGJyjLP

[Simon Wolfe @SimonWolfe]

Klopp retired himself this week because he knew we were about to retire him #ARSLIV #coyg

[Simon Wolfe @SimonWolfe]

@daddyhope As I say to my children - shoes off the table!