Bridgewater's Ray Dalio on His Principles & Investment Outlook ~ market folly

Monday, September 19, 2011

Bridgewater's Ray Dalio on His Principles & Investment Outlook

Bridgewater Associates' founder Ray Dalio was at the Bloomberg Markets 50 Summit recently and gave his thoughts on an array of topics. Bridgewater topped the list of the top 10 biggest hedge funds in 2010 and now manages an estimated $122 billion as the biggest hedge fund in the world.

Through the end of August, Bridgewater was up an astonishing 25.3%. How did they generate such outperformance? Dalio takes a diversified approach to investing, saying that "you're playing the role of the casino rather than the gambler in the casino, that's how you're going to make money I believe"

Bridgewater's August gains were at least somewhat attributed to their long positions in gold, Treasury bonds, and the Swiss franc.

It's clear that Bridgewater has been "long safety" and as the global macro hedge fund examines all asset classes around the globe on a daily basis.

Dalio is pessimistic overall, especially on the Eurozone. However, he does think the US is better positioned than Europe. Dalio also believes the Federal Reserve is the key to any equity rally: "if the markets are going to rally, and things are going to be good, it is going to be the Fed that will come in to save us." QE3 anyone?

Embedded below is Dalio's video interview (email readers click the link to come to the site to watch):

And if you can't listen to audio at work, here's the full transcript of the interview embedded below:

Dalio sparsely appears in the media, so those of you looking for more insight from the zen master himself, head to a rare interview with Dalio from earlier this year.

We'll end with one of our favorite all-time quotes from Ray Dalio: "Alpha is zero sum. In order to earn more than the market return, you have to take money from somebody else."

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