In an entertaining and informative session at the Fiduciary Investors Symposium at Chicago Booth School of Business, the John P. Birkelund ’52 Professor in History and International Affairs at Princeton University, Stephen Kotkin, said geopolitical risk is largely priced in to markets.

“Geopolitical risk is about incompetence of decision makers, which is mostly an unknown and unpriceable. This remans the key variable,” he says.

“With game theory you try to guess what the others will do. We can’t predict China and can’t predict US actions. It’s unknowable.”

“We know nothing about Chinese decision making, the inner circle is very narrow and there are no spies,” he says.

“It is hard to imagine investors could change anything.”

Guiding investors through the geographical, military and political histories of Russia and China, Kotkin pointed out that China “has no California”, or west coast, which prohibits its activities.

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