Eike Batista discussed the fundamentals driving Brazil's success story. Not only have 35 million people joined the middle class in the past decade, but he believes that recent oil discoveries will completely reshape Brazil (which is already energy independent). David Rubenstein seconded his enthusiasm, stating that China is in a class by itself because of its sheer size, but beyond China, Brazil is clearly the most attractive place to invest right now.
That kind of growth can't be replicated in the United States. GE's Jeffrey Immelt noted that when he became CEO, 30 percent of the firm's sales were from outside the U.S. But today that proportion is 60 percent.
Could the emerging market story be the next big bubble? Already there are signs of inflation and overheating. But as Rubenstein said, it's virtually impossible to be an investor and completely avoid bubbles. If you're not highly leveraged, you can ride things out. Diversification is the key. The U.S. is still a great place to invest, but it will no longer be so central to investors' portfolios.
In a world where black swan events are becoming regular occurrences, Immelt says the lesson for today's CEO is that you need to have more cash on hand to provide a buffer. He also felt that exports will be a key part of U.S. strategy for returning to growth - and it makes sense to follow Germany's playbook in terms of policy. But policymakers alone can't save the day. Immelt urged the corporate sector to "do less complaining about the government" and step up to the plate. It's time to reinvest in innovation and in our competitiveness, and business has a big role to play in that.