Ray Dalio was the hedge fund world’s most successful investor in 2010 and 2011, with his $120 billion Bridgewater Associates LP. His firm invests based on his understanding of macroeconomic principles.
In his second-quarter letter , Dalio said he believed global equity markets were pricing in “fairly pessimistic” long-term earnings growth rates and the worst real earnings growth rate in 100 years, while companies still “retain plenty of ability to protect their operating margins and profitability by keeping labor costs down,” despite global financial conditions posing a headwind to top-line revenue growth. He also noted that the dividend yield of U.S. non-financial corporation is higher than U.S. government note yields for only the second time in the past 50 years, and companies had ample liquidity to cover their dividends.
Analyzed by GuruForce, these are Dalio’s biggest new stock purchases in the second quarter…
Posted in Economy, emerging market, Equity Markets, Hedge Funds
Tagged Bridgewater Associates, cliffs natural resources, dividends, emerging markets, equity markets, global equity, Google, gurufocus, Hedge Fund conference, Hedge Fund manager, Hedge Funds, honeywell international, MSCI China, Ray Dalio, stock portfolio, Stocks, undervalued stocks
The Wall Street Journal’s Greg Zuckerman reported that hedge fund manager John Paulson personally netted more than $5 billion in profits in 2010—likely the largest one-year haul in investing history, trumping the nearly $4 billion he made with his “short” bets against subprime mortgages in 2007.
Mr. Paulson’s take, described by investors and people close to investment firm Paulson & Co., shows how profits continue to pile up for elite hedge-fund managers. Appaloosa Management founder David Tepper and Bridgewater Associates chief Ray Dalio each personally made between $2 billion and $3 billion last year, according to investors and people familiar with the situation. James Simons, founder of Renaissance Technologies LLC, also produced profits in that range, say investors in his firm.
By comparison, Goldman Sachs Group Inc., Wall Street’s most profitable investment bank, paid all of its 36,000 employees a total of $8.35 billion last year. James Gorman, chief executive of 76-year-old investment bank Morgan Stanley, is expected to receive compensation of less than $15 million for 2010.
Mr. Paulson and his fellow managers seldom take much of their profits in cash. Some of the profits are so-called paper gains, which reflect the rising value of their firms’ holdings, and could erode if those investments sour. Other gains come from selling investments, and most of those are rolled back into their funds.
Mr. Paulson and the other top managers made winning bets on commodities, emerging-market companies, bank shares and U.S. Treasury bonds, among other investments. These moves, along with profitable picks by other funds, are part of the reason the hedge-fund industry is back on its feet after a rough stretch. Assets managed by hedge funds have grown to a near-record $1.92 trillion, up 20% over the past year. Assets jumped almost $150 billion in the fourth quarter alone, the largest quarterly growth on record, according to Hedge Fund Research, Inc.
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Posted in Commodities, Hedge Funds, Subprime mortgages
Tagged Appaloosa Management, Bridgewater Associates, David Tepper, Goldman Sachs Group Inc., James Simons, John Paulson, Paulson & Co., Ray Dalio, Renaissance Technologies LLC