What Investors Get Wrong About Trade Wars | Kai Wu

In this episode of Excess Returns, Kai Wu of Sparkline Capital returns to break down his latest research piece, Investing Amid Trade Wars. Using over two dozen insightful visuals, Kai explores how investors should think about global trade exposure in an era of rising tariffs, economic nationalism, and geopolitical uncertainty. He makes the case for staying invested in high-quality multinational companies—especially those rich in intangible assets—and offers four actionable ways to build more resilient global portfolios. Topics Covered:Why the market reaction to tariffs is both rational and potentially short-sightedThe long-term outperformance of global vs. domestic firmsHow to define and measure global trade exposure at the company levelReal-world trade shocks and what they reveal about investor behaviorThe four traits of resilient global firmsWhy intangible-heavy businesses are uniquely positioned to weather trade disruptionsInternational vs. U.S. multinationals: hidden value in non-U.S. stocksPractical suggestions for portfolio construction in a deglobalizing world