I'm a political scientist. So are most of us here at Eurasia Group.
I finished my Ph.D. 10 years ago. The ultimate career plan of all my classmates was to become an academic, whether at a university or a think tank. As a professional political scientist, that's what you aspired to do. If that didn't appeal—or the academy decided it didn't want you—you eventually found a job doing something else, anything else, and left your diploma at home.
My plan was more flexible. My youth was misspent reading the Economist and playing Risk, and so I was hooked on international affairs. I didn't have any compelling job offers out of college, and a doctorate on a topic of my choosing sounded like a good next step. At the very least, my family thought a Stanford Ph.D. wouldn't close any doors. I spent a couple of years there as an academic for good measure and then decided I wanted to start my own shop. The only problem was, I really wanted to continue being a political scientist.
The idea behind Eurasia Group was to make political science—the study of politics—relevant to the markets. Our tag line is "defining the business of politics." That's really what we do. We try to explain how politics affect the markets.
In 1998, when I started the firm, you had to convince people why that mattered. Not everyone: Energy companies were investing billions of dollars in inherently unstable places, and they had been caught out too many times to ignore the impact of a sudden change of legislation or regime. But most people in the private sector didn't think about politics when they were making investments.
Back then, it was me and a cubicle. A few months later, there were two of us (still one cubicle). Then three. I didn't know much about starting a business, so I didn't write a business plan. Instead, I took the $25,000 I had saved from a couple of years as an academic and several consulting projects and bought myself a couple of computers and some letterhead (designed by my brother Rob).
A political scientist in the private sector is bound to make some mistakes. As the company grew, we made more than our share, some of them pretty funny: Doing the corporate books in Microsoft Word, with a calculator; individually faxing 3,000 invitations to an event—two of us, until about 4 in the morning. I almost cried when I learned there was an automated program that faxed for you.
Over the first few years, our growth was gradual. Then came Sept. 11. And suddenly everyone recognized that politics affected the markets. Afghanistan, Iraq, North Korea, Iran, and a host of other countries were making headlines daily. Whether you were investing in the U.S. stock market or buying bonds in Indonesia, political risk became a central part of the equation.
Today Eurasia Group has 40 employees in New York, a small office in London, and a few hundred stringers around the world. We have 140 or so clients—investment banks, multinationals, and so forth. We're making fewer mistakes, most of them reasonably small. (I hope!)
And it's Monday.
Monday mornings start early.
Today I flew in from out of town, a red-eye from the West Coast (the thought dawns on me that I should wait to post any photos that include me for a day when I've had more then three hours of fitful sleep—so you'll see my back is turned in this one), so there was already a meaningful buzz on the floor by the time I arrived at 8. The day officially starts at 7:30, and the information flow when the analysts come together is intense—not frenetic, with shouting from desk to desk, like a trading floor or a newsroom, but marked by pockets of activity: the Latin Americanists talking over fiscal politics in Mexico, the Asia folk looking at tensions over China-Taiwan relations and a host of upcoming elections, the Eurasianists considering President Putin's recent moves against the so-called "oligarchs."
At the start of the day, most of the communication is within the firm. Our analysts get up to speed on their countries, talk with their teams, check their e-mails. We organize around regions—Americas, Europe/Eurasia, Middle East/Africa, and Asia—because in-country specialization (language, local contacts, and life experience) is critical to producing insightful research. Then it's time for our morning meeting, during which our "practice heads" (the analysts that manage our research) gather in the conference room to discuss our "take" on the global issues of the day. The business-development heads also attend so they can hear what's most relevant for our clients, and the London office phones in.
I take a moment to polish off a draft of a weekly written piece I send to our key clients, with my thoughts on whatever global issues seem most pressing. Then I step into the meeting to hear Simon Kitchen, one of the Middle East analysts, discussing Iraq. The media has been claiming the recent bombing of Irbil is al-Qaida related—our analysts strongly disagree and think we're looking at the beginnings of expanded sectarian conflict. Ironically, al-Qaida links would be better news, in the sense that they would represent isolated attacks from abroad and not a deterioration of relations on the ground. Our clients will want to hear from us on this issue—we'll go out with a quick written piece and calls.
If there's any disagreement, we need to have it out there so there is no inconsistency in what our analysts are saying. The rest of the meeting proceeds smoothly. There's a debate on Russia: Laurent Ruseckas, our Eurasia head, is unruffled over government efforts to pursue Roman Abramovich, a leading Russian businessman with vast holdings in energy and metals. Investors have been waiting for the "other shoe to drop" after the arrest of Russia's wealthiest man, Mikhail Khodorkovsky, and Laurent says this isn't it. I'm not so convinced and say that while Putin's other shoe may not have dropped, it looks like his foot is tapping. A discussion ensues, and we end up with a compromise—the action doesn't change much on the ground in Russia (Laurent's point) but will matter to the markets (mine).
If we hadn't been able to resolve it, the ultimate responsibility to do so lies with the practice head. That has the benefit of exculpating me from arbitrating for the world as a whole—though I arbitrate for U.S. foreign policy, which keeps me on my toes.
The meeting over, the world covered, we're ready to wade in—write the pieces, call the clients, field calls from the media, and everything else that gets our analysis into the hands of people who need it.