Predictably Unpredictable

Geopolitical shocks always feel dramatic. Elections surprise, conflicts escalate, alliances wobble. Markets initially react the same way every time:

Fear, risk assets fall, safe havens rise, and investors scramble to price the unknown.

But the reaction itself is almost routine.

Capital rotates temporarily to safety, policymakers move to calm markets, and within weeks investors begin adjusting to the new reality. The shock may be unpredictable — the response rarely is.

Donald Trump introduced a new flavour of political uncertainty. Abrupt announcements, aggressive rhetoric, and policy-by-tweet created the sense that the normal rules of geopolitical signalling had broken down.

Yet over time, markets began to recognize the pattern.

Shock. Volatility. Negotiation. Compromise.

What looked chaotic often turned out to be a negotiating tactic based on an opaque but evolving plan. Once portfolio managers understood that rhythm, the “unpredictability” became something they could predict and price.

Importantly, the underlying policy environment remained broadly supportive of markets. Tax cuts, deregulation and pro-growth fiscal policy acted as a counterweight to political noise. It created opportunity for those who recognised it.

So, while the style was new, the outcome was familiar.

The politics were unpredictable.

But the markets learned that even unpredictability could become predictable.

On the back of predictable, our favoured portfolio management buy the value keep the good and sell the overvalued, not revelatory just small repositioning and they follow the plan not the crowd. 👍🏼

We are watching this in real time as I write, and it means future profit as and when things stabilise. Different but the same.

From the desk of Andy Brooks.