Geopolitics is shaking global markets, with the epicenter of the latest tremors coming from the Korean Peninsula. Fiery rhetoric out of Pyongyang is nothing new. But it is certainly novel coming from the Oval Office. After the strong runs in global equities, it is hardly surprising to see wholesale declines over the last week in benchmark stock indices from Northeast Asia to Europe to Wall Street. It’s also a welcome development for investors looking for better entry points on select stocks around the world.

“Equity valuations reflect the macro and stock specific outlook,” Thornburg’s Josh Rubin points out. “If the level of perceived stability is high, then in a low interest rate environment, equity valuations are likely to be higher. If the market perceives North Korea or other macro/political forces to be structurally increasing instability, then valuations are likely to be lower.”

Since the 1994 Agreed Framework to forestall North Korea’s quest for nuclear weapons, its march to just that objective has been steady. While it would be imprudent to fully discount a worse-case scenario, it would be equally unwise to base discrete investment decisions on the worst possible geopolitical event.

The Kim regime has time and again threatened to annihilate Seoul, a city of 10 million people that lies within range of the North’s vast array of heavy artillery and multiple rocket launchers. But it has never unleashed any such barrage on South Korea’s capital as such an attack would undoubtedly spell the end of the Kim dynasty. Retaliation by South Korea’s much more formidable military and its U.S. ally, which bases nearly 30,000 troops in South Korea, would be overwhelming. Why? Because South Korea spends 2.3% of its $1.411 trillion budget on defense. The $32.5 billion in the South’s defense spending is more than North Korea’s entire estimated $28 billion gross domestic product (for 2013 at the official exchange rate).

This isn’t to suggest that Kim Jong Un is a rational counterpart. But there is a credible corollary in the old U.S./U.S.S.R. arrangement of “Mutually Assured Destruction” (MAD) that so far seems to have played out on the Korean Peninsula for more than two decades. As for U.S. President Donald Trump, he appears to have adopted former President Richard Nixon’s “madman theory,” which undercuts the MAD doctrine, but may simply be a bid to pressure Kim and his allies in Beijing into slowing, if not stopping, the North’s development of nuclear-tipped long-range ballistic missiles.

So what should a valuation-sensitive, bottom-up investor make of all this? As we pointed out in a recent Emerging Views post, nearly two-fifths of the MSCI Korea Index is comprised of Samsung and Hynix, implying that absent an actual military conflict, the outlook for dynamic random access memory (DRAM) demand matters far more to those two South Korean stocks and the Kospi Index more generally than the latest saber-rattling. As Thornburg’s Josh Rubin points out, “if nothing happens and the market gets comfortable that stability will continue to reign, valuations will likely rebound.”

In this regard, it’s worth noting that Washington hasn’t ordered U.S. citizens to get out of South Korea or reinforced its troop levels in the country. On the flip side, China’s state-run Global Times warned that Beijing won’t come to Pyongyang’s aid if North Korea “launches missiles that threaten U.S. soil first and the U.S. retaliates.”