COMMONWEALTH OPPORTUNITY CAPITAL is a young Los Angeles-based hedge fund that some other investors watch closely. One of its founders, Adam Fisher, 38, who is also its chief investment officer, has lots of experience in investing in property and private-equity deals around the world, including Asia. The other founder, Reagan Silber, 49, is a gaming, entertainment and telecom entrepreneur and an amateur card player who competes in the World Series of Poker. A former lawyer, Fisher navigates through the thicket of market expectations, government policy and corporate strategy, and then decides what it all means for asset prices. Fisher thinks Europe’s problems could spark another crisis — in fact, he’s been extremely cautious this year — but believes there are plenty of ways to make money there.

Says admirer Jeff Greene, the billionaire real-estate investor known for shorting subprime early: “He’s definitely on my list of somebody who could make it big.” To learn Fisher’s views, keep reading.

Barron’s: What do you do differently from some of your competitors?

Fisher: I didn’t sit on a prop[rietary trading] desk my whole life, I don’t come from a trader’s background, and Reagan Silber and I have bought and built businesses and invested in difficult markets. It took a John Paulson, who never traded a credit, to see the forest for the trees [during the housing bubble]. The most salient issue in the world today is debt. Real estate is a levered product: You can’t get good returns in property without leverage, and that’s a fact. So you have to get comfortable with it. You have basically gone through one of the biggest margin calls in the history of mankind. What the world is wrestling with is: What does debt mean for an economy, for margin of error, for asset prices?

I was in private equity or leveraged buyouts or real estate, and with levered assets, you had to ask yourself those questions all the time. In Europe now, virtually all policy prescriptions are devoted to dealing with debt.

Before getting into Europe, let’s talk about your overall investment themes.

There is a big variance of opinion. The markets are unhealthy when there is homogeneity. You have a whole bunch of people who are still very bearish, cynical and skeptical, particularly in the hedge-fund world. They acknowledge the issue of what happens when the monetary and fiscal stimulus goes away. You have deflationists, as well as inflationists, who believe the risk is that the velocity of money will increase too fast and that [the situation] will end in tears because the Fed will lose control of the monetary base. They believe the tears will come sooner rather than later, because once the stimulus measures are pulled, debt will reassert its pull on the market. And by the way, the emerging markets are just a levered bet on developed markets.

There are three buckets. One holds Japan and Europe, where the debt problems can overwhelm any good things that can happen. Both have reached the end of their loosening cycle, and euro-zone Europeans can’t even print debt in their own country’s currency.

The next bucket holds the guys with debt problems, but improving circumstances: the U.K. and the U.S. The U.K has worse demographic problems than the U.S. and a potentially hung parliament, but it has its own currency, can print debt and has longer durations than anywhere in the world, meaning it has a lot of flexibility. The U.S. has really good demographics for a developed market. Yes, it has some problems. But it did recapitalize its financial institutions, has a flexible labor market and a pretty good political system that can get things done, and if it turns a few dials on its entitlement programs, it can put itself in a pretty good position, solvency-wise.

The third bucket holds the emerging markets. The fact that the developed markets are doing so badly helps them, because money is flowing their way very aggressively, and they don’t have the debt or stock problems I refer to.

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