How much is a country worth? £700bn?

January 21, 2026

Did you read our email last year on how much a country and a canal are worth? Here’s a link if you didn’t.

I’m pleased to say that The Telegraph has put a value of £700bn on Greenland!  But are their journalists valuation specialists?!

With everything that is in the news right now, it seems to be a good time to share a few thoughts on why BIG issues impact on even the smallest companies.

Cutting to the chase, if a valuation relies on quoted comparables, in principle (and if you believe in efficient markets theory) the mathematics conducted in the valuation exercise should encompass the impacts of geopolitical factors, on the basis that the market has already captured those risks and opportunities in pricing the basket of quoteds.

Of course the question is always whether the basket of comparables is large enough, and relevant enough, for the application of the thesis in any PARTICULAR valuation exercise to be unchallengeable. And there lies the rub. We know there simply aren’t sufficient quoted companies performing enough different trading activities that you can rely on quoted comparables without question.

This is especially true where the basket includes comparables operating in different jurisdictions to those where the company being valued is trading, as different stock markets apply different premia to certain sectors.

Other ways of capturing geopolitical factors mathematically would be to use inflation, interest rates and betas in a judicious manner. In these instances, perfecting the argument to support the approach will be super important if the valuation is going to be defensible. I would be looking for some sort of research paper that validated the approach, if I were to double down on using these very generic factors to address only the indirectly correlated risks and opportunities a company under valuation is facing.

We are increasingly using probability-based methodologies as a way to address the big swings in valuation a company could face in the future, due to events beyond its control.

In one instance we asked the company owners how much they would sell for. At £x (call it market price) they said no way, at £x+10% they said no way, at £x+50% they said hang on, maybe and at £x+100% they said certainly.

Then we looked at the probability of a buyer paying those prices. At £x definitely, at £x+10% probably, at £x+50% they said unlikely and at £x+100% they said don’t be stupid.

This gave us a series of results where we could apply the maths and produce a highly defensible valuation number.

Back to geopolitics. When we value companies, we think it is essential to have an understanding of how to not only price risk and opportunity, but also relative risk and relative opportunity. For example, if the whole world were to exit US treasuries to buy gold, even a small private company might see the impact on its own valuation, even if the why is not immediately obvious because it isn’t a bond trading company or a gold miner.

In summary, if you have a client who wants a valuation that covers much more than just one base, gives a really detailed report which explains in plain English WHY the number is the number and shows that it has been prepared by someone who clearly cares about the commercial and strategic issues that really matter day-to-day and year-to-year, give us a call.