Foreword by Steven Drobny vii Introduction xi Part One Scaffolding 1 Chapter 1 We’re Not in Kansas Anymore 3 Chapter 2 The Constraint Framework: Three Pillars 19 Chapter 3 The Wizards of Oz 44 Part Two The Constraints 69 Chapter 4 Politics 71 Chapter 5 The Economy and the Market 103 Chapter 6 Geopolitics 142 Chapter 7 Constitutional and Legal Constraints: The Constraint–Preference Hybrids 161 Chapter 8 The Time Constraint: When Preferences Run Down the Clock 174 Part Three Operationalization 201 Chapter 9 The Art of the Net Assessment 203 Chapter 10 Game Theory – It’s Not a Game! 235 Chapter 11 Geopolitical Alpha 245 Chapter 12 Conclusion 261 Acknowledgements 265 Bibliography 271 Index 279

Geopolitical Alpha Not long ago, financial markets danced and central bankers called the tune. Today, investors confront a discordant world transformed by political paradigm shifts. In Geopolitical Alpha, investment strategist Marko Papic shares his framework for making sense of the new macro landscape. By focusing on material constraints, investors can ignore the ephemeral and irrelevant, generating consistent alpha even in the face of extreme uncertainty. Geopolitical Alpha is the guide to the future for anyone interested in geopolitics, economics, and finance. "Above all else, Marko Papic is an astute strategist who understands that geopolitics is more important than ever for investors, as the world moves from unipolarity to multipolarity. The central message of his fascinating book is simple and compelling: never underestimate the influence of material constraints on policymakers."—John J. Mearsheimer, R. Wendell Harrison Distinguished Service Professor, University of Chicago; author, The Tragedy of Great Power Politics "In Geopolitical Alpha, Marko Papic provides a framework for thinking ahead of where we are and anticipating geostrategic events. Moreover, he does so in a prose that is as entertaining as it is informative."—H.R. McMaster, Lieutenant General (retd.), U.S. Army; Former White House National Security Adviser; author, Battlegrounds: The Fight to Defend the Free World "Geopolitical Alpha may do for macro-investing what Benjamin Graham's classic, Security Analysis, did for stock picking: provide a tool kit for generating excess returns by focusing on rigorous frameworks and clear-thinking outcomes, rather than breathless narratives driven by the media echo chamber and market whispers. Marko Papic blends a young person's ability for novel problem-solving with a veteran strategist's historical perspectives to create a smart, important work that will take its place on every serious investor's shelf."—Scott Bessent, Chief Investment Officer, Key Square Group "Geopolitical Alpha spells out the notion that all preferences are subject to constraints. This book will change how I look at some of my research on investments and make me consider my own biases and preferences."—Paula Volent, Chief Investment Officer, Bowdoin College "It is now clear that for the first time in our lifetimes geopolitics will be the biggest driver of markets and long run returns. To succeed in this new world, you need to understand geopolitics, and Marko is one of the best geopolitical strategists I know. If you want the best chance to achieve your return targets, read this book."—Raphael Arndt, CEO, Future Fund of Australia "Geopolitical Alpha is a fascinating, entertaining, and highly readable book. Marko Papic offers a distinctive and compelling take on the interplay between geopolitics and financial markets, with a clear intellectual framework to guide macro investment decisions."—Jeremy C. Stein, Moise Y. Safra Professor of Economics, Harvard University; former member of the Board of Governors, U.S. Federal Reserve