December 15, 2015 / Fortune Asia / Volume 172 / Number 8 / SPECIAL ISSUE / INVESTOR’S GUIDE 2016

features

INVESTOR’S GUIDE 2016

30 Choose smart. Buy cheap. And don’t let gloom and indecision trip you up. Here’s how to find the right investment strategy for you-for 2016 and beyond.

32 GOOD STOCKS FOR BAD TIMES
The world is rife with turmoil and volatility. But we’ve found 16 investments that offer a measure of stability in the midst of chaos.
By Jon Birger

40 WHERE DO WE GO FROM HERE?
The global economy may be growing, but that doesn’t mean smooth sailing for stocks and bonds in 2016. The experts in our annual roundtable see a potentially rocky year ahead. Here’s how they plan to profit from it-and you can too.

Interview by Joshua M. Brown

48 THE TECH EMPIRE BUILDER
Nikesh Arora helped Google become a profit machine. Now, as SoftBank’s CEO-in-waiting, he’s investing heavily in startups around the world. Can he turn the Japanese telecom giant into a tech Berkshire Hathaway?
By Erin Griffith

58 PRIVATE EQUITY’S PAPER TIGERS
These elite funds style themselves as the alpha predators of the investing jungle. But a close examination suggests their fees are the only things with bite.
By Roger Lowenstein

64 SEVEN THINGS YOU NEED TO KNOW ABOUT CHINA
China’s slowdown has big implications for investors, but it shouldn’t be the catastrophe that many have predicted. Here is what you need to know-and what Wall Street is getting wrong-about the world’s second-largest economy.
By Scott Cendrowski

70 THESE CANADIANS OWN YOUR TOWN
You may have never heard of the Ontario Teachers’ Pension Plan, but chances are it owns a big piece of your downtown-and your local shopping mall. How an under-the-radar investing team and its ”Canadian model” revolutionized the way pension funds manage their money.
By Chris Taylor

78 HOW TO FIGHT YOUR FEAR OF THE FED
Investors have been losing sleep over when and how much the Federal Reserve will raise interest rates. The good news is, some stocks and other assets could fare well no matter what the Fed does.
By Lauren Silva Laughlin

84 THE BATTLE FOR MILLENNIALS’ MONEY
Why a generation of young investors is flocking to Silicon Valley rather than Wall Street-and why hope is not lost for your grandfather’s brokerage.
By Jonathan Chew

90 HOW TO INVEST IN THE 21ST-CENTURY CORPORATION
New technologies are remaking companies in every industry. The best way to buy into this new class? Invest in the tech that powers it.
By Kia Kokalitcheva

94 TRADING ON TWEETS
Hedge funds are increasingly using services like Dataminr to gather lightning-quick intel on social media. Can Twitter really predict the stock market?
By Jen Wieczner

CLEAN TECH: SPECIAL REPORT

100 Silicon Valley’s New Power Player: China
Backed by Beijing, deep-pocketed, globe-trotting Chinese venture capitalists are buying up U.S. companies to power China’s emerging clean-tech revolution-and getting very rich in the process. How American technology is scaling up on the other side of the Pacific.
By Jeffrey Ball

108 A Biofuel Dream Gone Bad
Legendary venture capitalist Vinod Khosla backed a startup called KiOR as part of his push for green energy. Now KiOR is bankrupt, he and company executives are being sued for fraud, and Khosla’s big biofuel bet is looking increasingly questionable.
By Katie Fehrenbacher

117 The Best in Business 2015
There was a lot to love in a year that gave us the Apple Watch, a malaria vaccine, and a new Star Wars movie. But it wasn’t all Taylor Swift singles and 24-hour access to Egg McMuffins. Here, the highest highs and lowest lows of a remarkable year.
By the Fortune staff

departments

Macro

5 Closer Look
Japan’s economy has serious problems-they could soon become U.S. problems too.
By Chris Matthews

8 Catastrophes Inc.
The C-suite climate converts.
By Vivienne Walt

9 Cybercrime
Hostage negotiation goes digital.
By Robert Hackett

12 World’s Most Admired Companies
Warehouse retailer Costco has built a loyal base of customers with low prices-and happy workers with high wages.
By John Kell

13 Chartist
Commodities: Do their futures have a future?
By Nicolas Rapp and Geoffrey Smith

14 The 21st-Century Corporation
The benefit of baring it all: Why smart managers are opening the corporate kimono as never before.
By Geoff Colvin

Venture

16 How I Got Started

Mattress Firm co-founder Steve Fendrich nurtured a chain that now has 2,400 stores.

Interview by Dinah Eng

Passions & Perks

18 Shopping
As shopping tourism spreads, upscale designer outlets are becoming travel destinations.
By Geoffrey Smith

Tech

23 Location of Interest
Known for its key role in the birth of Skype, Tallinn, Estonia, remains a hotbed for tech entrepreneurs.
By Richard Morgan

24 Point Cloud
Valve Corp. changed how people purchased computer games. Now it plans on entering your living room.
By John Gaudiosi 25

25 Revivals
HP Inc. stakes its future on 3D printing with speedy systems that could cut manufacturing costs and undercut the competition.
By Andrew Zaleski

26 A Boom With a View
How to interpret the sudden unraveling of private tech company valuations.
By Erin Griffith

27 Aerospace
A new class of space startups is vying for a spot on the launchpad-and succeeding.
By Clay Dillow

28 The Big Think
You are what you read: What the debate over salt can teach leaders.
By Sandro Galea, MD, DrPH

124 BING!

ON THE COVER

GOLD BAR ILLUSTRATION ANTHONY VERDUCI

FRACTAL BACKGROUND ILLUSTRATION SINELAB

[IMAGES]

Our market roundtable (from left): Kate Warne of Edward Jones talks to Shawn Driscoll of T. Rowe Price and hedge fund notable James Chanos.
REED YOUNG

The new school of money managers: Robinhood co-founders Vlad Tenev (left) and Baiju Bhatt
WINNI WINTERMEYER

FENDRICH: MELISSA GOLDEN

ｩ Time Inc.