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Pricing Existential Risk

Just because there is no hedge for Armageddon doesn't mean that investors should ignore existential risk. Continued bullishness in the face of a heightened risk of nuclear war suggests that stock markets may now be in an apocalypse-denial bubble.

NEW YORK – Since the start of Russia’s invasion of Ukraine, much has been written about the increased risk of nuclear annihilation and its impact (or lack thereof) on stock-market valuations. But, leaving aside the issue of whether stocks are overpriced or underpriced, an equally pertinent question is whether existential risk can be ignored entirely from a financial perspective.

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