The Fat Tail: The Power of Political Knowledge for Strategic Investing.

• Author: Marshall, Jeffrey
• Position: Brief article - Book review

The Fat Tail: The Power of Political Knowledge for Strategic Investing. By Ian Bremmer and Preston Keat. Oxford University Press, 263 pages. $27.95.

The title is something of a misnomer: This isn't a book about investing, but about putting capital into countries after assessing political and economic risk. Political crises aren't rare, the authors write, and using statistical analysis, the "tail" events of extreme political instability are "not reassuringly thin but dangerously fat." Clearly, this is a message of real importance to global enterprises.

The messages crafted by the authors--both consultants with the Eurasia Group--should find a fertile environment. The economic world is reeling from a financial meltdown brought on in part by the inability to truly assess risk or to model its more extreme consequences, which have crippled major banks. And these woes have slammed highly developed nations--and not those ordinarily seen as investment risks.

The book covers the more predictable risk areas...