Ray Dalio ( Bridgewater Associates )

[winston]

Ray Dalio: A Deleveraging Period for Ten Years or More

Ray Dalio is founder of what the New Yorker refers to as the world's largest hedge fund, Bridgewater Associates.

The 61-year-old Dalio, with a personal net worth estimated at about six billion dollars, is known for his ability to anticipate and adapt to troubling macroeconomic conditions while consistently outperforming other funds.

Right now, he's sensitive to the willingness of industrialized nations to forge ahead with stimulus, indebtedness, and opt for printing money amidst the backdrop of prolonged economic deleveraging that is likely to continue for ten years or more.

From the New Yorker: This spring, he told me that economic growth in the United States and Europe was set to slow again.

This was partly because some emergency policy measures, such as the Obama Administration's stimulus package, would soon come to an end; partly because of the chronic indebtedness that continues to weigh on these regions; and partly because China and other developing countries would be forced to take drastic policy actions to bring down inflation.

Now that the slowdown appears to have arrived, Dalio thinks it will be prolonged. We are still in a deleveraging period, he said. We will be in a deleveraging period for ten years or more.

Dalio believes that some heavily indebted countries, including the United States, will eventually opt for printing money as a way to deal with their debts, which will lead to a collapse in their currency and in their bond markets.

There hasn't been a case in history where they haven't eventually printed money and devalued their currency, he said. Other developed countries, particularly those tied to the euro and thus to the European Central Bank, don't have the option of printing money and are destined to undergo classic depressions, Dalio said.

The recent deal to avoid an immediate debt default by Greece didn't alter his pessimistic view. People concentrate on the particular thing of the moment, and they forget the larger underlying forces, he said. That's what got us into the debt crisis. It's just today, today.

As he describes above, Dalio expects money printing to bring about a collapse in [the] currency and in [the] bond markets of overextended nations, and specifically targets 2012 or 2013 for another extremely difficult economic period.

Source: The Trading Report

http://www.thetradingreport.com/2011/07 ... s-or-more/

[iam802]

Trying to find a place to file this..

Long article. I only find the last 2-3 paragraphs useful

==
Mastering the Machine
How Ray Dalio built the world’s richest and strangest hedge fund

Read more http://www.newyorker.com/reporting/2011 ... z1TqEY8SYQ

...

Rather than confronting these issues, Dalio, like all successful predators, is concentrating on the business at hand—the markets and the global economic outlook.

This spring, he told me that economic growth in the United States and Europe was set to slow again. This was partly because some emergency policy measures, such as the Obama Administration’s stimulus package, would soon come to an end; partly because of the chronic indebtedness that continues to weigh on these regions; and partly because China and other developing countries would be forced to take drastic policy actions to bring down inflation.

Now that the slowdown appears to have arrived, Dalio thinks it will be prolonged. “We are still in a deleveraging period,” he said. “We will be in a deleveraging period for ten years or more.”


Dalio believes that some heavily indebted countries, including the United States, will eventually opt for printing money as a way to deal with their debts, which will lead to a collapse in their currency and in their bond markets.

“There hasn’t been a case in history where they haven’t eventually printed money and devalued their currency,” he said. Other developed countries, particularly those tied to the euro and thus to the European Central Bank, don’t have the option of printing money and are destined to undergo “classic depressions,” Dalio said.

The recent deal to avoid an immediate debt default by Greece didn’t alter his pessimistic view. “People concentrate on the particular thing of the moment, and they forget the larger underlying forces,” he said. “That’s what got us into the debt crisis. It’s just today, today.”

Dalio’s assessment sounded alarmingly plausible. But when one plays the global financial markets a thorough economic analysis is only the first stage of the game. At least as important is getting the timing right. I asked Dalio when all this would start to come together. “I think late 2012 or early 2013 is going to be another very difficult period,” he said.


Read more http://www.newyorker.com/reporting/2011 ... z1TqEHbmcy

[LenaHuat]

Yes, I too think the late 2012 will be dangerous times - the Japanese will realize that they need to bring $$ home to Japan when the severity of Fukushimaya strikes the residents; the Chinese economy will face severe economic re-structuring issues, the Americans will have a new President that is crippled by military spending cuts......

[winston]

“I think late 2012 or early 2013 is going to be another very difficult period,” he said.

So many "experts" are worrying about another difficult period, so it may be quite safe for a while

I think Sir John Templeton mentioned before that Markets die on Euphoria ( not caution ).

[winston]

BRIDGEWATER REPORTEDLY UP 25%+ YTD – HOW DO THEY DO IT?
by Cullen Roche

FinAlternatives is reporting that Ray Dalio’s massive hedge fund, Pure Alpha II, is up 25%+ this year.

For those who aren’t familiar, that’s the world’s largest hedge fund at $122B steering itself to a smooth 25% YTD gain.

At first, this appears unfathomable. How can such a large fund steer itself around like a jet boat when it is in fact a battleship?

When you begin to understand the methodology behind Bridgewater’s approach you begin to see why this is possible.

http://pragcap.com/bridgewater-reported ... they-do-it

[winston]

You may want to watch the interview with Ray Dalio on Charlie Rose, Bloomberg.

Great thinker. Excellent Interview.

[winston]

Ray Dalio
From Wikipedia

Ray Dalio (born in 1949 in Jackson Heights, Queens, New York, United States[1]) is an American businessman and founder of Bridgewater Associates.


Early Life and Education

The son of a jazz musician, Dalio began investing at age 12 when he bought shares of Northeast Airlines for $300 and tripled his money when the airlines went through a merger.[2]

Dalio received a BA from Long Island University and an MBA from Harvard Business School. [2]


Career

After completing his education, Dalio worked on the floor of the New York Stock Exchange and began investing in commodity futures.[2] He was a Director of Commodities at Dominick & Dominick LLC [3]

In 1974, he spent a year trading futures as a Shearson Hayden Stone broker. [2] In 1975, he founded the investment management firm, Bridgewater Associates, and his investment advisory service began to attract pension funds worth millions of dollars. [2]


Personal

Dalio is a practitioner of the Transcendental Meditation technique and resides with his wife in Greenwich, CT.[4][5][2]

According to The New Yorker he is the 55th richest businessman in the world, with a net worth of US$6 billion as of 2011.[6]

http://en.wikipedia.org/wiki/Ray_Dalio

[winston]

SAC, Bridgewater Go Against Grain, Bet on Emerging Markets By Lindsey Bell

NEW YORK (TheStreet) -- Money managers had mixed views on trading strategies in the third quarter, especially when it came to gold. That's not the case with a developing trend: emerging markets.

Prominent hedge fund managers Steve Cohen of SAC Capital and Ray Dalio of Bridgewater Associates are turning to emerging-market ETFs to help improve their fund performance, according to a regulatory releases of their holdings.

When everyone else is becoming more concerned about the signs of slowing growth in emerging economies, these managers are turning more bullish, attracted by fast-growing economies and declining debt.

Bridgewater added to its second- and third-largest holdings, the Vanguard MSCI Emerging Markets ETF(VWO_) and the iShares MSCI Emerging Markets Index Fund(EEM_).

Each is designed to mimic equity-market performance in global emerging markets by investing in stocks located in countries such as Brazil, Russia, China, Korea and Taiwan.

Bridgewater originally invested in the two ETFs in 2009, but has aggressively been building his position in each over the past two quarters. Together they account for 25% of Bridgewater's portfolio.


http://www.thestreet.com/story/11311504 ... L_atb_html

[winston]

Ray Dalio Of Bridgewater Takes Dim View Of Economy By Jeff Harding

Bridgewater Associates, one of the world’s largest hedge funds at $125 billion run by the very unconventional Ray Dalio.has also taken a dim view of 2012.

Robert Prince, co-chief investment officer at Bridgewater, and his managers at the world’s biggest hedge fund firm are preparing for at least a decade of slow growth and high unemployment for the big developed economies.

Mr. Prince describes those economies—the U.S. and Europe, in particular—as “zombies” and says they will remain that way until they work through their mountains of debt.

“What you have is a picture of broken economic systems that are operating on life support,” Mr. Prince says. “We’re in a secular deleveraging that will probably take 15 to 20 years to work through and we’re just four years in.”

In Europe, “the debt crisis is [a] long ways from over,” he says. The economic and financial morass will mean interest rates in the U.S. and Europe will essentially be locked at zero for years. …

But for longer-term investors looking out over the next decade, he says, equities may be a good buy. There is even money to be made in U.S. Treasurys, despite interest rates near record lows, and gold is likely to resume its climb as central banks print money to bolster their economies. Mr. Prince says. …

Recent better-than-expected news on the U.S. economy is unlikely to be the start of a healthy expansion, he says. The uptick in economic growth has been fueled by a decline in the savings rate, which, without material income and employment gains, is unlikely to be sustainable as long-term credit growth also remains weak, he says.

The problem for the U.S, says Mr. Prince, is that it is on the wrong side of a long-term debt cycle.

The level of debt is still high among consumers. The problem real estate loans, commercial and residential, on the books of lenders, especially the local and regional banks, still need to be resolved. Commercial Mortgage-Backed Securities delinquencies are at a 22 year high. And 22.5% of all US homes are underwater.

It may also be the reason why Bridgewater believes, as do we, that the Fed will be forced to do QE3, which will cause a further devaluation of the dollar, will keep inflation on the positive side of the charts, will cause more capital destruction, and will allow smart investors to direct investments to Treasurys (US and elsewhere) and gold.

http://dailycapitalist.com/2012/01/04/r ... more-17063

[profittaker]

In-depth look at Deleveraging by Ray Dalio

www.scribd.com/doc/85144159/Bridgewater ... everagings