Ray Dalio (August 1, 1949, Jackson Heights, New York City, New York, US). Net worth 16.8 billion USD (2017).

Ray Dalio is an American investor, hedge fund manager. He is known for his investment firm, Bridgewater Associates which he founded in 1975 out of his apartment. Bridgewater Associates is one of the world’s largest hedge funds with $160 billion in assets under management (as of October 2014).

But Dalio didn’t come from your archetypical finance investment background. His father was a professional Jazz musician who “played the clarinet and saxophone at Manhattan jazz clubs such as the Copacabana” and his mother was a homemaker.

At the early age of 12, his destiny as an investor was mapped out when Dalio invested $300 in an airline stock he bought for $300. Young Ray Dalio tripled his investment when the airline merged with another company.

Dalio has a bachelor’s degree in finance from Long Island University (CW Post) and an MBA from Harvard Business School, then started his career working as a trader on the floor of the New York Stock Exchange.

In 1974, he became a futures trader and broker at Shearson Hayden Stone and a year later he founded Bridgewater Associates.

In March 2017 Dalio announced that he would step down as co-CEO of Bridgewater.

Moreover, Jon Rubinstein, co-CEO of the fund, was announced to step down with Dalio but would retain an advisory role.

Founded Bridgewater Associates in 1975 out of his apartment…

now one of the world’s largest hedge funds with $160 billion in assets under management

INVESTMENT STYLE

Through Dalio’s published materials (Principles and How The Economic Machine Works) investors are able to get a peek into the mind of a true investor legend.

Dalio sheds light on the impact that credit has on the economic machine. For Dalio, understanding credit is fundamental for successful investing. Any time households, businesses, governments borrow they create a cycle – ”it sets into motion mechanical predictable series of events that will happen in the future” said Dalio.

Borrowing increases investment and consumption in the short term but in the long term the burden of servicing debt will have a negative impact on spending and investing, hence borrowing creates a cycle.

In “How The Economic Machine Work” Dalio explains that when economic growth is fueled by credit it creates economic cycles, whereas growth built on productivity is more sustainable. So credit is bad when it can’t be paid back and it is good when it efficiently allocates resources and creates more income.

Dalio quotes;
“My biggest advantage is that I know what I don’t know, then I know how to speak to people who might know a lot.. through that, I learn a lot and minimize my chances of harming myself because I don’t know.”

More than any other factor that has had any effect on my success has been meditation…it allows creativity and open-mindedness – Ray Dalio

LEARNING RESOURCES

Dalio forecasted the global financial credit squeeze of 2008 and the Great Recession that followed.

In 2011 Dalio published on his own account, a 123-page volume called Principles and it is here that investors get an insight into Dalio’s personal philosophy for investments and where he outlined his logic. Principles explain the investment analysis  Dalio uses and practical application through his hedge fund.

However, it was not until 2013 that Dalio began sharing his “investment secrets” and economic theories on YouTube via a 30-minute animated video which he narrates, called How The Economic Machine Works.

To date over 4 million people around the world have viewed the video which has been translated into Japanese, Chinese, Russian, Spanish, German, Italian and French.

Mistakes are where we learn because they produce pain – Ray Dalio

CONNECT WITH INVESTOR

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TRADING SOFTWARE

Dan Loeb targets Sony. Dan Loeb is an activist investor and founder of Third Point, which oversees about $14.5 billion in assets.

Last year the activist investor viewed Campbell soup as a bargain when Third point reported that the soup maker could fetch a takeover value of $52 to $58 per share.

A year later and the activist investor Dan Loeb targets Sony

Dan Loeb's activist hedge fund Third Point is raising an investment vehicle to generate between $500 million and $1 billion so it can continue to buy Sony shares, according to a recent report in Reuters.