How long is the course?

6 chapters · 26 minutes · level: Advanced

Yes. The course is part of Phase 1 — AK1A's foundation education, which is free forever.

AKM1 · Macroeconomics

Geopolitics

Krig, sanktioner. Svenska bolag.

📖 6 chapters⏱ 26 min⚡ 220 XP⚖ Weight: —🏷 Macroeconomics

Why this variable is decisive

Geopolitiska händelser prissätts direkt i svenska räntor, oljepris och exportaktier — Rysslands invasion av Ukraina 2022 ökade europeiska energipriser med 300 procent och försvagade kronan med 10 procent på en månad. Sverige är som liten öppen ekonomi särskilt exponerat för handelsblockader, sanktioner och leveranskedjestörningar, vilket gör geopolitisk förståelse till en central investerarkompetens.

Course overview

11. The fundamentals — why this mattersGeopolitics affects markets through three channels — energy prices, trade blockades and currencies — and these…4 min
22. Practical applicationPractical geopolitical analysis means following the GPR index, conflict regions and Swedish companies' exposur…4 min
33. Common pitfallsCommon pitfalls in geopolitical analysis involve overweighting short-term events and extrapolating worst-case …4 min
44. AKM1 1.1 integrationIn AKM1 1.1, the GPR index is used as a macro filter that modifies V03 (revenue diversification) and V19 (capi…4 min
55. Case studiesThree case studies show how geopolitical events have been priced in on the Swedish stock exchange.4 min
66. MasteryMastery of geopolitical analysis requires an understanding of sanction mechanisms, currency channels and infor…4 min
Total26 min

Chapter	Focus	Time
1. 1. The fundamentals — why this matters	Geopolitics affects markets through three channels — energy prices, trade blockades and cu…	4 min
2. 2. Practical application	Practical geopolitical analysis means following the GPR index, conflict regions and Swedis…	4 min
3. 3. Common pitfalls	Common pitfalls in geopolitical analysis involve overweighting short-term events and extra…	4 min
4. 4. AKM1 1.1 integration	In AKM1 1.1, the GPR index is used as a macro filter that modifies V03 (revenue diversific…	4 min
5. 5. Case studies	Three case studies show how geopolitical events have been priced in on the Swedish stock e…	4 min
6. 6. Mastery	Mastery of geopolitical analysis requires an understanding of sanction mechanisms, currenc…	4 min
Total		26 min

Sample — the first two chapters

1. The fundamentals — why this matters

Chapter 1 of 6 · 4 min

Geopolitics affects markets through three channels — energy prices, trade blockades and currencies — and these channels are priced directly into Swedish export stocks, the krona and interest rates.

Geopolitical risk is defined as the probability and potential consequences of political events such as wars, revolutions, trade blockades and sanctions. The Geopolitical Risk Index (GPR), developed by Caldara and Iacoviello at the Federal Reserve in 2018, measures the frequency of geopolitical news in international media and is used by central banks and funds as input to risk models.

As a small open economy

As a small open economy, Sweden is particularly sensitive to geopolitical disruptions. Three channels are central: energy prices (we import 50 percent of our oil from Norway, but the price is set globally), supply chains (Ericsson, Volvo and Atlas Copco depend on Asian semiconductors and components), and currencies (the krona is a risk currency that falls in crises). Sweden also has 53 percent of GDP in exports, which makes the country extra sensitive to trade disruptions.

Swedish companies with large China exposure include Ericsson (15 percent of revenue)

Swedish companies with large China exposure include Ericsson (15 percent of revenue), Volvo Cars (20 percent), H&M (15 percent) and Atlas Copco (12 percent). These companies are directly affected by the China-US trade war, sanctions on Chinese technology and the Taiwan conflict. Ericsson's lower China revenue in 2022–2023 was partly caused by geopolitical tension around the 5G rollout.

Geopolitical events have different transmission mechanisms depending on type. War in oil-producing regions (the Middle East, Russia) immediately drives oil prices, which spills over into Swedish transport stocks and chemical companies.

◆

Trade wars (China-US, EU-Russia) drive inflation through tariffs and delivery re-routing, which squeezes margins in export companies.

For investors, geopolitical risk is both a risk and an opportunity. The defense industry (Saab, BAE Systems, Rheinmetall) has risen 200–500 percent since Russia's invasion in 2022, while Russia-exposed companies (Tethys Oil, Lundin Petroleum) lost heavily after sanctions.

◆

Identifying winners and losers in geopolitical crises is a central investor edge.

Next: 2. Practical application

2. Practical application

Chapter 2 of 6 · 4 min

Practical geopolitical analysis means following the GPR index, conflict regions and Swedish companies' exposure matrix.

10x Insight

The companies' own risk factors in the prospectus and annual report are a valuable source.

The GPR index is published monthly by the Federal Reserve and is freely available. Investors should follow three levels: the short-term index (monthly data reacting to current events), the long-term index (12-month rolling average) and the threat index, which measures actual military threats.

◆

All three rose sharply in February 2022 at Russia's invasion.

A more specific analysis is to build an exposure matrix for Swedish companies. The National Institute of Economic Research and the companies' own annual reports state revenue distribution per region. Ericsson has 35 percent of revenue in Asia (of which China 15 percent), Atlas Copco has 25 percent in Asia, and Volvo Cars has 30 percent in China. These figures are the starting point for calculating geopolitical exposure.

A third technique is to follow the US Entity List

A third technique is to follow the US Entity List, BIS regulations and EU sanctions regulations. When Huawei was placed on the Entity List in 2019, Ericsson immediately lost part of its 5G contracts — a warning that investors who followed the sanctions lists could have identified. SAMI (Swedish Aerospace and Military Industries) publishes industry data on the defense sector's geopolitical sensitivity.

The companies' own risk factors in the prospectus and annual report are a valuable source. Ericsson

The companies' own risk factors in the prospectus and annual report are a valuable source. Ericsson, ABB and Atlas Copco explicitly list geopolitical risks and exposures per region. Investors who read these often discover that the companies have more China exposure than the market prices.

For investors, it is also central to follow the Swedish government's national security reviews of foreign direct investments. When China tried to buy Transport Administration contracts in 2018, it was blocked, showing that geopolitical risk can also strike Swedish companies via government decisions.

◆

The insight is that geopolitics is not only an external risk but also a regulatory one.

Next: 3. Common pitfalls

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Three perspectives

Peter Lynch

Lynch var i ”One Up on Wall Street” (1989) skeptisk till att investera utifrån geopolitiska prognoser och menade att investerare bättre kunde identifiera bolag med prissättningsmakt som kunde hantera kostnadshöjningar. Han observerade dock att krig och kriser historiskt var köptillfällen för investerare med kontanter, eftersom marknaden ofta överreagerade.

Benjamin Graham

Graham såg geopolitiska kriser som svåra att förutse och menade i ”The Intelligent Investor” att den defensiva portföljen skulle vara diversifierad nog att klara 50-procentiga börsfall utan tvångsförsäljning. Hans metod krävde att geopolitisk risk kapades via geografisk spridning snarare än via prognoser.

AK1A's interpretation

I AKM1-metodiken används en geopolitisk riskindex (GPR) som en makrofiltervariabel som modifierar V03 (intäkts-diversifiering) och V19 (kapitalförbränning). Hög GPR triggar lägre tilldelning till Kina-exponerade bolag och högre vikt till försvars- och råvarubolag, vilket speglar hur institutionella riskmodeller faktiskt allokerar under kriser.

Exercises

Three exercises to anchor the variable — unfold each one for guidance.

Exercise 1. Explain in your own words: what does Geopolitics measure, and why does it carry — weight in AKM1?

Explain in your own words: what does Geopolitics measure, and why does it carry — weight in AKM1?

Guidance: Krig, sanktioner. Svenska bolag.

Exercise 2. Application: find one company where Geopolitics is strong — and one where it is weak. What separates them?

Application: find one company where Geopolitics is strong — and one where it is weak. What separates them?

Guidance: Guidance: see chapter 3 ("3. Common pitfalls").

Exercise 3. Reflection: how would your portfolio be affected if your largest holding failed precisely on Geopolitics?

Reflection: how would your portfolio be affected if your largest holding failed precisely on Geopolitics?

Guidance: Test it in My Portfolio (/min-portfolj) or discuss it in the lab.

Continue the curriculum

Interactive exercises, wave matrices and the AI tutor are found in the lab.

Open AK1A Research Lab See memberships

Related courses in Macroeconomics

Why this variable is decisive

Chapter

Focus

Time

1. 1. The fundamentals — why this matters

Geopolitics affects markets through three channels — energy prices, trade blockades and cu…

4 min

2. 2. Practical application

Practical geopolitical analysis means following the GPR index, conflict regions and Swedis…

4 min

3. 3. Common pitfalls

Common pitfalls in geopolitical analysis involve overweighting short-term events and extra…

4 min

4. 4. AKM1 1.1 integration

In AKM1 1.1, the GPR index is used as a macro filter that modifies V03 (revenue diversific…

4 min

5. 5. Case studies

Three case studies show how geopolitical events have been priced in on the Swedish stock e…

4 min

6. 6. Mastery

Mastery of geopolitical analysis requires an understanding of sanction mechanisms, currenc…

4 min

Total

26 min

Sample — the first two chapters

1. The fundamentals — why this matters

Chapter 1 of 6 · 4 min

As a small open economy

Swedish companies with large China exposure include Ericsson (15 percent of revenue)

◆

Trade wars (China-US, EU-Russia) drive inflation through tariffs and delivery re-routing, which squeezes margins in export companies.

◆

Identifying winners and losers in geopolitical crises is a central investor edge.

Next: 2. Practical application

2. Practical application

Chapter 2 of 6 · 4 min

Practical geopolitical analysis means following the GPR index, conflict regions and Swedish companies' exposure matrix.

10x Insight

The companies' own risk factors in the prospectus and annual report are a valuable source.

◆

All three rose sharply in February 2022 at Russia's invasion.

A third technique is to follow the US Entity List

The companies' own risk factors in the prospectus and annual report are a valuable source. Ericsson

◆

The insight is that geopolitics is not only an external risk but also a regulatory one.

Next: 3. Common pitfalls

Three perspectives

Peter Lynch

Benjamin Graham

AK1A's interpretation

Exercises

Three exercises to anchor the variable — unfold each one for guidance.

Exercise 1. Explain in your own words: what does Geopolitics measure, and why does it carry — weight in AKM1?

Explain in your own words: what does Geopolitics measure, and why does it carry — weight in AKM1?

Guidance: Krig, sanktioner. Svenska bolag.

Exercise 2. Application: find one company where Geopolitics is strong — and one where it is weak. What separates them?

Application: find one company where Geopolitics is strong — and one where it is weak. What separates them?

Guidance: Guidance: see chapter 3 ("3. Common pitfalls").

Exercise 3. Reflection: how would your portfolio be affected if your largest holding failed precisely on Geopolitics?

Reflection: how would your portfolio be affected if your largest holding failed precisely on Geopolitics?

Guidance: Test it in My Portfolio (/min-portfolj) or discuss it in the lab.