General / Video Commentary

Fisher Investments' Founder, Ken Fisher, Discusses De-Globalization Fears

Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer Ken Fisher explains why geopolitical conflicts don’t necessarily lead to de-globalization, as many fear. Instead, Ken believes conflicts tend to drive what he calls “re-globalization”, where corporations shift trading patterns and adjust supply chains to increase safety and efficiency under the new circumstances.

Ken points to Russia’s energy exports as a recent example. Following Russia’s tragic invasion of Ukraine, many western nations sanctioned Russian exports—notably oil and gas. However, Russia has since found willing buyers elsewhere. Outside of a temporary spike in the early phase of the conflict, oil prices are back to pre-invasion levels as supply chains have shifted.

In general, Ken believes de-globalization fears tied to geopolitical tensions are often overstated. While conflicts inevitably impact markets to varying degrees, they rarely have the lasting market impact many fear because corporations gradually find ways to adapt and continue growing.



Title screen appears, “Fisher Investments' Founder, Ken Fisher, Discusses De-Globalization Fears.”

A man appears on the screen Wearing A navy suit, sitting in a backyard with a thick forest behind him.

He begins to speak.

A banner identifies him as Ken Fisher, Executive Chairmen and Co-Chief Investment Officer, Fisher Investments.

ken fisher doing hand gestures time to time explaining.


Ken Fisher: Lot of people increasingly are concerned about geopolitical tensions, whether it's in relation to the war in Ukraine tragic event that it is, concerns about China potentially invading Taiwan a concern for obvious reasons or other features like what goes on periodically popping off in either North Korea or the Middle East. Now, let me say that I'd have you think about that both in terms of the macro and the micro. At the macro level. I do not think that we're about to deglobalize. I don't think there's any actual sign of deglobalization the way some people talk about deglobalization as if America is going to have to be dependent on itself and Europe is going to have to be dependent, your land is going to have to be dependent on itself, et cetera, et cetera. Instead, I think what we've been experiencing is a re-globalization instead of a deglobalization. You take the Ukraine war, tragic though it is. I mean, all war is tragic. But when the Ukraine war started, led by the west, sanctions were imposed on Russian product for reasons that you understand fully, at the time, in February, there was huge concern that this would make the price of oil go through the roof because Russian oil was sanctioned, as I've told you before in some of these videos.

Ken Fisher: Over half the world's population, however, is not participating in the sanctions. And some of those economies are relatively broad with a lot of capability to both produce and distribute. And so Russian oil sold at a discount has flown heavily throughout those worlds away from the sanction. And oil prices today are no higher than they were when the war started, having gotten higher in the interim out of fear that's a re-globalization. A lot of it goes to China. China, the second biggest and very diverse economy can absorb a lot and redistribute it out to the world, goes to India for similar reasons. Smaller economy, but still a good sized one and fairly diverse and with water ports and the ability to distribute natural gas is a little trickier because of the pipeline features of natural gas as opposed to oil being transported mostly by ship.

Ken Fisher: But the fact that I'm wanting you to see here is just simply that's a re-globalization, not a deglobalization, People in a world sanctions are no tensions, are no will trade where they can and shy of actual war that would stop you on a global basis from being able to put a ship on the water and take it somewhere to distribute whatever it is that you have. That re-globalization works pretty well and pretty fast, little bit of what you'd think of otherwise in the current vernacular as supply chain problems until they get re-established.

Ken Fisher: The problems of our world are some of which I've talked about before in these videos and some of which I've not are real.No one in their right mind from the Western world or pretty much anyplace else is going to ever believe anything that Vladimir Putin says again as long as he's the head of state there, because what he's done is so abhorrent and inconsistent with things that he's said in years past.

Ken Fisher: At the same time, however, the bigger fear, and legitimately so, is about China, because Russia's economy is not that big, We've already proven to the west that Western military gear is hugely superior to Soviet military gear by any standard. Ukraine tragedy, though we have seen, doesn't have the economic import that, let's say, Taiwan does as a stronger, more important economy and more technologically advanced economy and exporter. And so, the Chinese concerns about Taiwan legitimately raise more fears. I just want to be real clear on this. That is something to worry about. I am not a defender of China in this regard, but China is in economic conflict with the United States. China is committed to building itself. China, therefore, in some ways, is an economic threat to the United States of America and to the Western world as a whole.

Ken Fisher: But I want you to think through a few things. China's fairly large military, albeit small compared to the United States military, is untested in terms of the technology of its equipment. You can speculate about how good it is, but you don't really know. It's never really been battle tested in scale at all. The Western world first saw a really good test of this with the Falkland Islands War. But then in conflict after conflict, whether it was Afghanistan, Iraq one, Iraq two, on and on and on, western gear up against Soviet gear, no contest. What happens with China? Well, I don't know. I really don't. Nor does anyone else, really. Just people that think they do. But that's also true of the leaders of the Chinese government who don't really know, and they can't really afford to try to do a hot conflict and learn that their gear isn't up to snuff compared to the Western gear and be taken down the way. Every time Soviet gear has gone against Western gear. The Soviets have failed in that regard. I want to point out that the basic premise of a lot of the people who fear a water invasion of Taiwan are themselves fearful of something. That's a dubious fear in this way. I just want you to think about this in conflict with the way you think about the Russians or Soviets before the Russians.

Ken Fisher: You don't actually have experiences of China doing foreign invasions. Yes, China supported the North Vietnamese in the Vietnamese war, but they didn't invade anybody. China doesn't actually have a history of hot invasion, so that's a cultural different thing. And we are, at this point, as we speak, coming up on the Bisenial Congress in China. If they were to do a hot conflict and fail, you probably in China would either get a meltdown or regime change, a point that this government is not about to want to undertake. I just make you think this through because most people do not. It's very unlikely that China really wants to do more than saber rattle, flex their muscle, try to intimidate America and the west. That's very different than actually engaging in a hot water conflict, which is nontrivial america's air power is so superior to anything known otherwise that it not impossible for them to succeed at that. But it would be risky and more costly than they think as long as America stands ready to protect Taiwan. And whether America is ready to stand and protect Taiwan or not is something they can't really know, and I don't believe they can take that risk. Could I be wrong? Yes. Could they be crazy? Yes. But unlikely. They've never been crazy before. And they don't have that conflict of invasion in their history. They don't have that part that has evidenced we China are going to invade that place whether we think we own it or not, the way the Russians do and have for a long time.

Ken Fisher: So, I just want you to think about that. I think we do not have deglobalization. I think we have re-globalization where businesses learn to trade, where they can trade most safely and best differently than they maybe did a few years earlier. And that's not a bad thing. It just keeps showing the flexibility of capitalism when confronted with problems. And I believe we'll be okay. Thank you very much for listening to me.


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A Series of disclosures appears on screen: “Investing is Securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice or a reflection of the performance of fisher investment or its clients. Nothing herein is intended to be a recommendation or a forecast of market conditions. Rather it is intended to illustrate a point. Current and future markets may differ significantly from those illustrated here. Not all past forecasts were, nor future forecasts may be, as accurate as those predicted herein.



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