The global economy may be recovering, but the talk at the World Economic Forum in Davos is all about the risks: from currency wars to political turmoil, inequality, digital woes, and environmental problems.
It's a horror to most humans, they are risk-averse. But Davos Man sees the flipside of risk: a huge opportunity to make money.
So if you need a tip, here's the view from Davos on which investments are hot, and which are not.
It's based on the annual "investment heatmap", developed in a two-hour workshop; this year the organisers asked the participants how investors could thrive on risk.
The teams were told to work on four scenarios:
- increasing scarcity of energy, food and water
- disruptions of infrastructure and supply chains
- cyber risks, and
- exchange rate volatilities.
We had 20 minutes to discuss the opportunities buried in one of these risk scenarios, develop an investment strategy, and agree a sales pitch for our fund.
"$1bn doesn't get you very far these days," sniffed one of the participants, partner in a large private equity firm.
And indeed, what's a billion among friends.
When I asked the man in charge of a large investment fund how much money he was looking after, he was somewhat vague: "$106bn, or maybe $112bn… we're just doing our audit to make sure."
In round two of the game we had to pretend that we were a sovereign wealth fund, state-run investment funds that hoard money (usually coming from commodities) for a rainy day, or for the day the oil runs out.
Again we were given $1bn to invest, and by putting this money into either the best investment strategies developed in the first round or gold or US Treasury bonds, we voted for the best risk-based investment.
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