Geopolitics At the Fore
As we write, the news coming across the wire is about an attack conducted by unknown actors which has killed more than a hundred Iranians gathered for a memorial at the grave of Qasem Soleimani — a prominent Iranian military leader who was himself killed in an airstrike authorized by President Trump in January, 2020. Soleimani had led Iran’s proxy war efforts in much of the Middle East, and intelligence considered him responsible for many American deaths and injuries in the Iraq theater in particular; in Syria, he was instrumental in the engagement of Russia on behalf of the Assad regime. Needless to say, to the Iranian regime, he was a hero of considerable stature, and this attack was clearly meant to wound Iran’s pride and provoke a response — which it certainly will.
The event and the media response to it show clearly the sharp contrast that already exists in many investors’ 2024 expectations: between positive macro fundamentals, on one side, and problematic geopolitics on the other. Since geopolitical concerns rarely pan out into enduring problems, it is likely that any political or geopolitical turbulence will afford investors a buying opportunity to participate in the year’s positive economic themes. In our view, real and longer-lasting problems for markets almost always come from financial and banking issues and not from geopolitics. Declines caused by political and geopolitical turmoil should be viewed as welcome opportunities for investors.
