14 January 2026

At The Money: Better Results By NOT Investing with Dictators!

1Frameworks

6Insights

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Frameworks in this episode

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Freedom-Weighted Emerging Markets Selection

Weight investable countries by freedom and exclude the worst offenders

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Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Hot Take· 1

Hot Take12:41

Tolle Says Emerging-Markets Investing Is Not Neutral

Tolle frames capital allocation as an exercise of power rather than a neutral financial act. In her view, investors and asset managers either help enable authoritarian systems or direct money toward places promoting freedom.

Directing assets is a position of power
Global capital can enable authoritarianism
Freedom can spread as well as dictatorship
Allocation choices carry consequences beyond returns

“dictatorship and authoritarianism is in a globalized world is contagious, but so is freedom.”
Perth Tolle · 12:41

“in emerging markets investing, you know, there is no neutral”
Perth Tolle · 13:06

#capital allocation#freedom#authoritarianism#investment ethics

Explainer· 1

Explainer10:43

Why State Interests Can Undermine Chinese Shareholders

Tolle argues that Chinese companies must put state interests ahead of customers and outside investors. When business decisions are shaped by the need to satisfy government priorities, shareholders bear the cost of objectives that may conflict with their own interests.

Companies may need to prioritize the state
Government favor can compete with customer value
Foreign investors can subsidize state-directed objectives
Stakeholder interests may not come first

“these are companies that have to put state interests first.”
Perth Tolle · 10:47

“investors are subsidizing the cost of putting the state's interests first.”
Perth Tolle · 11:02

#china#shareholder risk#state control#governance

Story· 2

Story03:30

The Policy That Linked Governance to Markets for Tolle

Tolle connects her investment thesis to growing up in China and later comparing the Chinese, Hong Kong, and US markets. The one-child policy became her clearest example of how a country-level decision can reshape society and create long-lived economic consequences.

Tolle was born in Beijing and moved to the United States at nine
She later worked in Hong Kong
Comparing the three markets highlighted the effect of policy
The one-child policy illustrated a lasting demographic consequence

“saw that policies impacted the future of a society in the future of markets.”
Perth Tolle · 03:47

“that policy has caused the biggest demographic crisis in the world today”
Perth Tolle · 04:02

#china#governance#demographics#origin story

Story11:22

WeChat Shows How State Obligations Reach Company Data

Tolle uses Tencent's WeChat as an example of the conflict between corporate stakeholders and government demands. She says the government used the app to crack down on dissidents and a population identified unclearly by the transcript, while the company must provide data requested by the state.

Tencent operates WeChat
The government used the app in actions against dissidents and another population
The company must comply with government data demands
Commercial interests can become subordinate to state interests

“the government was using we chat to crack down on dissidents and on the weaker population.”
Perth Tolle · 11:33

“we Chat has to give all the data over to the government that they want”
Perth Tolle · 11:43

#wechat#tencent#surveillance#data risk

Takeaway· 2

Takeaway13:31

Russia's Collapse Exposed Risk the Market Had Not Priced

Tolle says Russia was a top-ten country holding in conventional emerging-markets indexes before its invasion of Ukraine. When its market went toward zero, investors discovered that autocracy risk had not been priced in despite the country's large benchmark weight.

Russia held a large conventional benchmark weight
The invasion triggered a near-total market loss for outside holders
Tolle says the outcome was not priced in
The episode treats the event as a wake-up call about autocracy risk

“when their market went to zero, no one saw that coming.”
Perth Tolle · 14:30

“This was definitely not something that was priced in at the time as a possibility.”
Perth Tolle · 14:33

#russia#ukraine#political risk#emerging markets

Takeaway15:17

Freer Emerging Markets Can Hide Outside the BRICS

Tolle argues that excluding autocracies does not leave investors short of opportunity. She points to Chile and Poland as liquid markets with growth potential that receive very small weights in conventional cap-weighted indexes because attention and capital cluster around the largest BRICS economies.

Autocracy exclusion does not eliminate emerging-market opportunity
Chile and Poland receive small conventional benchmark weights
Both can support scalable ETF exposure
Tolle links freer countries with future growth stories

“there's so many good opportunities in the emerging markets universe outside of autocracies.”
Perth Tolle · 15:41

“the freer countries are the places that have the best growth stories of the future”
Perth Tolle · 16:17

#chile#poland#brics#growth markets