Dalio and Gundlach Say Emerging Markets are Risky

A host of concerns across the globe are raising red market flags for heavy-hitting investors such as Ray Dalio and Jeffrey Gundlach, says a recent Bloomberg article. Among the concerns; rising global turmoil and terrorist activity, valuations that “no longer compensate for potential flareups in North Korea and Venezuela,” and unpredictability on Wall Street. Emerging market shares are among the assets causing worry, given that they are yielding less that U.S. junk bonds for “only the third time in history,” the article says. According to the article, DoubleLine Capital CEO Gundlach’s believes traders should be “moving toward the exits” on […]

Master Investors Marks, Dalio & Gundlach Issue Cautionary Views on Markets

By John P. Reese — The waning days of August leave many parents looking forward to the start of school and many investors bracing for September, the month that is historically the worst of the calendar year for stocks. Add the increasing uncertainty coming out of Washington and stock valuations that look increasingly overheated, and it’s enough for a few prominent investors to warn that a pullback is probably on its way. That may not be a bad thing. The widely watched Dow Jones industrial average has hit more than two dozen record highs this year, blowing past 21,000 in […]

Dalio Says Global Economy Entering New Phase

Billionaire hedge fund investor Ray Dalio says the global economy is entering a new phase where “markets won’t get the same level of support from monetary policy makers,” according to a Bloomberg article from earlier this month. The chairman of Bridgewater Associates recently wrote that central bankers are shifting from the nine-year period of holding down interest rates and are giving clear signals that stimulus will be tapered. He notes the following: The Fed is “debating when in coming months to start shrinking its balance sheet” as it continues its “gradual campaign of raising rates”; European Central Bank officials have […]

Bridgewater’s Ray Dalio Offers Advice to the Everyman Investor

Ray Dalio, chairman of the world’s biggest hedge fund (Bridgewater Associates), recently shared his “best advice for the common investor” with Business Insider’s Henry Blodget. According to Dalio, the article says, most investors can’t compete with professionals and institutions that allocate huge sums of money each year in an effort to beat the market. Instead, argues Dalio, the common investor “should be building a diversified portfolio with assets that are balanced according to their risk rather than their dollar amounts.” Such a portfolio, says Dalio, should also be built to withstand different growth and inflation scenarios. Dalio recounted a portfolio […]

Ray Dalio Concerned About Rising Populism

In an effort to make sense of today’s political landscape, billionaire Ray Dalio recently published a paper examining the history of populism, according to a recent Bloomberg article. The paper concludes that “global populism will be an economic force more powerful than monetary and fiscal policies over the next year.” The founder of Bridgewater Associates argues that populism is now at its highest level since the late 1930s, and has created the Developed World Populism Index—a weighted index of “the share of votes received by anti-establishment parties or candidates in national elections for major developed countries since 1900.” According to […]

Mistakes from the Top Down

A couple of the investment world’s heavy-hitters have something to say about making mistakes. A fact of life which, according to a brief interview in Chief Investment Officer, is a “quality that unites the best-of-the-institutional-investing-best.” Ray Dalio, Co-CIO and Founder of Bridgewater Associates says “I’m a professional mistake-maker—one third of my trades are probably wrong.” Dalio say that humility comes from mess-ups and his philosophy is to find “the smartest people I know who disagree with me, and see the situation through their eyes.” His strategy is to uncover weaknesses and then confront them, an approach he nurtures in himself […]

Billionaire Ray Dalio Calls Himself a “Professional Mistake Maker”

It seems that being a billionaire doesn’t necessarily overshadow one’s humility. Ray Dalio runs Bridgewater Associates, the world’s biggest hedge fund, which he started in a two-bedroom apartment 40 years ago. According to a Forbe’s estimate, Dalio is worth around $15.6 billion, and his fund employs 1,500 people and manages about $150 billion in assets. In an interview with psychology professor Robert Kegan of Harvard University, however, the investment behemoth discussed how making mistakes and disagreement is part of his process. “Can we be straight with each other? Can we work it through? That’s the essence of it,” Dalio explains. […]

Tepper, Dalio, Gundlach on Opportunities and Risks in Today’s Market

Investment heavy weights, including David Tepper of Appaloosa Management and Ray Dalio of Bridgewater Associates recently shared their market insights with Forbes. Tepper’s view on the US market is that it trades at around fair value, but that it can “grind higher” barring any major outside event (i.e. a Brexit or something else). The most important thing facing investors right now, says Tepper, is the Federal Reserve. He believes the Fed will be very patient and let some inflation emerge before raising interests rates. William Conway, the billionaire co-founder and chief investment officer of the Carlyle Group, compares the US […]

Bridgewater’s Dalio Says the “Risk is Asymmetrical on the Downside”

Ray Dalio of Bridgewater Associates explained the long-term debt cycle affecting the market. “The problems at the end of the long-term debt cycle,” he said, “is that it is very hard for the Federal Reserve or central banks to ease monetary policy.” He observed that the effect of quantitative easing is, ultimately, to lower the spread (or return) because it drives asset prices up and lowers the yield so, “for example, you have about a 2% bond yield.” He continued: “That means that monetary policy makes it more difficult to have credit growth or . . .monetary growth.” Further, Dalio […]

Bridgewater’s Dalio: 2015 May Be Like 1937 for the Market

  A recent Wall Street Journal piece notes that hedge-fund manager Ray Dalio and others have discussed potentially significant parallels between 1937 and 2015.  Dalio, in a March letter earlier this year, identified the following comparable timeline: Debt limits reached at “the bubble top” in 1929 and in 2007; Interest rates fall to zero in 1931 and 2008; Money printing begins a “beautiful deleveraging” in 1933 and 2009; Stocks and “risky assets” rally in 1933-36 and 2009-14, during which the economy improves through cyclical recovery; and The central bank tightens, producing a “self-reinforcing downturn” in 1937 and, maybe, 2015. Others […]

Bridgewater's Dalio Worries about Fed's Effectiveness in Next Downturn

Ray Dalio, the founder of one of the world’s largest hedge funds, believes that monetary policy going forward will be less effective than in the past. He says that the Federal Reserve is overly focused on the short-term debt cycle and he predicts lower assets class returns going forward — somewhere in the 3-4% range over the next 10 years. “What scares me, or what worries me, is what the next downturn in the economy looks like, with asset prices where they are and a lesser ability of central banks to ease monetary policy,” he says. Watch the full Bloomberg […]

Bridgewater’s Dalio Worries about Fed’s Effectiveness in Next Downturn

Ray Dalio, the founder of one of the world’s largest hedge funds, believes that monetary policy going forward will be less effective than in the past. He says that the Federal Reserve is overly focused on the short-term debt cycle and he predicts lower assets class returns going forward — somewhere in the 3-4% range over the next 10 years. “What scares me, or what worries me, is what the next downturn in the economy looks like, with asset prices where they are and a lesser ability of central banks to ease monetary policy,” he says. Watch the full Bloomberg […]

Dalio Sees Significant QE Before Significant Rate Hike

Hedge fund guru Ray Dalio says he expects the Federal Reserve to make a significant quantitative easing move before it makes a significant interest rate hike. “To be clear, we are not saying that we don’t believe that there will be a tightening before there is an easing,” Dalio writes in a recent post on his LinkedIn page (h/t MarketWatch). “We are saying that we believe that there will be a big easing before a big tightening. We don’t consider a 25-50 basis point tightening to be a big tightening. Rather, it would be tied with the smallest tightening ever.” […]