How Risk/Return Assessment is Misunderstood in Europe Today

In my market conversations with those seeking investments and those providing them, I see a concerning trend: the inability to assess risk and reward effectively.

Years of government intervention have created an expected safety net that ensures returns for both sides. This dynamic is not limited to one sector. Across industries, from private contracts and industrial investments to the Real Estate bubble. This trend diminishes our ability to value calculated risks. Today, even minimal risks are often deemed unacceptable. This reluctance is eroding the drivers of innovation and contributing to the decline of Europe’s industries and businesses. The reality is simple: No Risk = No Return.

I am not advocating for reckless behavior, but the current aversion to any risk is deeply troubling. If we do not shift our mindset, how will we foster the proactive leadership and dynamism needed to compete on a global stage? It is time to ask ourselves: Are we being too complacent? Let’s recalibrate our approach before it’s too late.

A visual guide to understanding how Risk, Potential of a successfull outcome, and Long-term value Generated are intrinsically connected. Risk taking is part of the equation!