Tag Archives: Ray Dalio

Why Some Of The World’s Biggest Funds Are Getting Slammed

Why Some Of The World’s Biggest Funds Are Getting Slammed

Over the last several weeks Wall Street has learned a powerful and painful lesson: Sometimes nothing is safe. 

Call them what you want to — Top Dogs, Smart Money, Heavyweights — these are the kings, and their castles are crumbling.

Funds that looked bulletproof are getting smoked.

Ray Dalio’s famous ‘All Weather’ fund is down 8% for the year. The top performer of 2012 is down 5.66% for the year as of last week.

Market gurus may try to make what’s happening sound complicated, but it’s really not. In fact, what’s going on can be explained in two big market and investing themes. The first theme is the overall effect of the Federal Reserve’s change in policy and what it’s doing to risk across asset classes. The second theme is an age-old debate about how people should structure their investments in general.

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Hedge Fund Founder Says Bonds Are ‘Quite Close to Cash Under the Bed’

What’s a better investment — U.S. bonds or the underside of your mattress? Ray Dalio wonders if it’s the latter.

Dalio founded the hedge fund Bridgewater Associates. He tells the Council on Foreign Relations: “You are quite close to cash under the bed being better than Treasurys. Because essentially you know you’re going to get it back if it’s under the bed.”

The rate on the 10-year Treasury note is about 1.7 percent. Earlier this summer, it scraped to its lowest on record, under 1.4 percent.

Dalio says the risk of super-low returns is that buyers of Treasurys, including foreign governments that finance U.S. government deficits, will go elsewhere as soon as a reasonable alternative emerges.

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World’s Most Powerful Hedge Fund Manager Tells Investors How They Should Set Up Their Portfolios

Hedge fund god Ray Dalio, who runs Bridgewater Associates, is widely considered to be the most successful hedge fund manager in the world.  He recently sat down with CNBC’s Maria Bartiromo to discuss a variety of topics at the Council on Foreign Relations and he had some advice for the average investor.

During the hour-long discussion, Bartiromo asked Dalio about portfolio allocation in terms of gold versus equity versus real estate and other asset classes.

Reported by Julia La Roche, here’s his advice that we’ve transcribed: (emphasis ours)

First, Dalio explains what you need to think about when setting up a portfolio.  The key here is asset allocation.

“So I think I’m going to answer it in the following way that I think that is the right way for people to look at it. It’s the way I look at it. I think that the first thing is you should have a strategic asset allocation mix that assumes that you don’t know what the future is going to hold.  And I think most people should…”

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Ray Dalio Buys More Emerging Markets and Other New Stocks

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…

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Wahlberg, Wintour, Matt And Kim, Lasry, Pruzan: Scene

Billionaire Marc Lasry, Avenue Capital Chairman, co-founder and CEO, was the guest of Bloomberg TV’s Stephanie Ruhle on “Market Makers” today. Marc Lasry has $13 billion in assets under management.

Marc Lasry doesn’t think Europe will blow up. He sees several opportunities to invest in Europe. Click on the link to watch the video.

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Hedge Fund Manager James Chanos on His Big Short Position in China

“Shorting is not a criminal trial. It doesn’t have to be beyond a reasonable doubt. There just has to be a preponderance of evidence.” — James Chanos, February 2011 interview

“We certainly weren’t the first on this idea,” Chanos tells me at his offices in April of 2011 about the biggest short position of his life: The People’s Republic of China. Chanos first spoke publicly about his grand stake in China over a year and a half ago on CNBC’s Squawk Box in December 2009. “Right now, we’re as bearish on China as we’ve ever been,” he says. He followed that with a presentation at St. Hilda’s College, Oxford in January 2010, “The China Syndrome: Warning signs ahead for the global economy.

Chanos argued that China, fearing a sharp slowdown from the financial crisis, pumped credit into asset growth — mainly real estate but new roads and high-speed rail, too. There were “classic pockets of overheating, of overindulgence” he said in his presentation. Fixed asset investments as a percentage of China’s gross domestic product (GDP) were exceeding 50 percent — a “sh-a chén bào” (sandstorm) of money, he said. The stimulus was massive: $586 billion, or 14 percent of GDP (the U.S. package was $787 billion, or 6 percent of GDP). With state-owned enterprises controlling 50 percent of industrial assets, and not being driven by the need to make profits, and local party officials dictating the real estate development process, large-scale capital projects were growing “sillier by the day,” including rising industrial and manufacturing overcapacity. There were empty cities, such as Ordos, and lonely malls, such as the New South China Mall. News reports showed new buildings toppling from shoddy construction. It was the latest chapter in China’s history of credit-fueled booms and busts. China was “letting a thousand Dubais bloom,” he quipped. “Go to Dubai and see what happened. It was… what I call the ‘Edifice complex.'”

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Ackman Sends Wake-Up Call To Sleepy Canada Boardrooms

William Ackmans triumph at Canadian Pacific Railway Ltd. (CP) may echo across boardrooms far from the railroad’s Calgary headquarters.

In a Canadian corporate culture long resistant to activist shareholders, the U.S. hedge-fund manager sounded a rousing wake-up call by ousting a chairman, a chief executive officer and four directors, said Karl Moore, professor of business strategy at McGill University in Montreal.

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