Legendary Fund Manager Highlight- RAY DALIO
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Dalio was born in New York City and attended C.W. Post College of Long Island University before receiving an MBA from Harvard Business School in 1973. Two years later Dalio launched Bridgewater.
In 2013, it was listed as the largest hedge fund in the world.[4][5] In 2020 Bloombergranked him the world's 79th-wealthiest person.[6] Dalio is the author of the 2017 book Principles: Life & Work, about corporate management and investment philosophy. It was featured on The New York Times bestseller list.[7][8]
Management practices at Ray Dalio's firm Bridgewater have come under new scrutiny. A veteran hedge fund reporter for The Wall Street Journal, Rob Copeland has published a nonfiction book "The Fund -- Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend" in 2023, detailing many of the psychological tactics used by Ray Dalio while running Bridgewater.[9]
Director of National Committee on United States-China Relations.[10]
Early life
Dalio was born in the Jackson Heights neighborhood of New York City's Queens Borough.[11] When he was 8, the family moved from Jackson Heights to Manhasset in Nassau County, New York. He is the son of a jazz musician, Marino Dallolio (1911–2002), who "played the clarinet and saxophone at Manhattan jazz clubs such as the Copacabana," and Ann, a homemaker.[11][12][13] As a child, Dalio had various odd jobs, including mowing lawns, shovelling snow, and a paper route.[14] He is of Italian descent. At age 12, he started caddying at The Links Golf Club, which was within walking distance of his childhood home. He caddied for many Wall Street professionals during his time there, including Wall Street veteran George Leib. Leib and his wife Isabelle invited Dalio to their Park Avenue apartment for family dinners and holiday gatherings.[15] The couple's son, a Wall Street trader, later gave Dalio a summer job at his trading firm. He began investing at age 12, when he bought shares of Northeast Airlines for $300 and tripled his investment after the airline merged with another company.[16] By the time he reached Herricks High School, he had built up an investment portfolio of several thousand dollars.[17] He received a bachelor's degree in finance from Long Island University (C.W. Post College) and an MBA from Harvard Business School in 1973.[16][18]
Investment career
College
Dalio had trouble finding a college in which to enroll. He finally applied and got into C.W. Post College, a campus of Long Island University. He continued to buy and sell stocks in college, but became attracted to something new: commodity futures. Commodity futures had low borrowing requirements at the time, and Dalio knew he could profit more handsomely than with simple stocks. At the same time, he was beginning to enjoy school. With more freedom given to him, he took up Transcendental Meditation, which he still practices to this day.[19]
Graduate school
After graduating from C.W. Post College, Dalio had a free summer. He took a job as a clerk on the New York Stock Exchange. While there, he witnessed Nixon's decision to take the United States off of the gold standard in response to rising inflation. Stock prices on the exchange rose, on average, 33% the following day.[17] These events set in motion the Great Inflation of the 1970s. The combination of easy money policy and abandonment of fiscal discipline sent prices soaring.[20] The next summer, after his first year at Harvard, Dalio and his friends created the company that later became Bridgewater Associates. It started off as a small entity, and its goal was to trade commodities. But they lacked experience and the venture yielded little fruit.[17] Although the original Bridgewater failed, Dalio later used the name to start what would become the largest hedge fund in history.[21]
Professional start
After graduating from Harvard, Dalio married and started a family. He moved to Wilton, Connecticut, where he lived and traded out of a converted barn.[11] Dalio then worked on the floor of the New York Stock Exchange and traded commodity futures.[16] He later worked as the Director of Commodities at Dominick & Dominick LLC.[22] In 1974, he became a futures trader and broker at Shearson Hayden Stone, a securities firm[16] run by Sandy Weil, who later became famous for building up Citigroup. At the firm, Dalio's job was to advise cattle ranchers, grain producers, and other farmers on how to hedge risks, primarily with futures.[23] But he was largely dissatisfied with Shearson Hayden Stone's hierarchical structure, which reminded him of primary education. He longed for the more freedom-based lifestyle of college. At one point, he paid a stripper to drop her clothes in front of a crowd at the annual convention of the California Food and Grain Growers' Association.[23] His creative ways of blowing off steam continued, and exploded on New Year's Eve in 1974 after he went out drinking with some colleagues, including his boss. After a disagreement with his superior, a drunk Dalio punched him in the face. Soon afterwards, he was let go from his job at Shearson Hayden Stone.[23]
Founding of Bridgewater Associates
Despite his aggressive behavior, numerous clients at Shearson Hayden Stone retained their trust in Dalio, and continued to allow him to manage their money. With this capital, he was able to scrape together the beginnings of his asset management fund.[17] In 1975, he founded Bridgewater Associates out of his two-bedroom New York City apartment.[24]Bridgewater started out as a wealth advisory firm, in which capacity it served numerous corporate clients, mostly retained from Dalio's job at Shearson Hayden Stone.[17] The main areas in which Dalio advised were currencies and interest rates. The company began publishing a paid subscription research report, Daily Observations, in which it analyzed global market trends.[25] Dalio's big break came when McDonald's signed on as a client of his firm. Bridgewater then began to grow rapidly. The firm signed on larger clients, including the pension funds for the World Bank and Eastman Kodak.[7] In 1981, the firm opened an office in Westport, Connecticut, which was where Ray and his wife wanted to start a family.[17] Dalio started to become well-known outside of Wall Street after turning a profit from the 1987 stock market crash. The next year, he appeared on an Oprah Winfrey Show episode titled "Do Foreigners Own America?"[7] In 1991, he launched Bridgewater's flagship strategy, "Pure Alpha", a reference to the Greek letter that, in Wall Street terminology, represents the surcharge a money manager can earn above a particular market benchmark, such as the NASDAQ.[26] In 1996, Dalio launched All Weather, a fund that pioneered a steady, low-risk strategy that later became known as risk parity.[7]
Rise to prominence
7Bridgewater Associates became the world's largest hedge fund in 2005.[24] From 1991 to 2005, it lost money in only three calendar years, and never more than 4%. During the same period, the S&P 500 also had three down years, including a negative return of 22.1% in 2002.[27] The fund grew in size by using the standard hedge fund model, which takes a 2% management fee of assets and 20% of yearly profits accrued from using an investment system.[28] By 2005, Dalio was managing money for extremely large entities, including the $196 billion California Public Employees' Retirement System (CalPERS), the $27 billion Pennsylvania State Employees' Retirement System| (Penn SERS or SERS), Melbourne-based National Australia Bank Ltd. and the pension fund of Hartford, Connecticut-based United Technologies Corp.[27] In 2007, Bridgewater suggested there might be a global financial crisis,[11] and in 2008 Dalio published "How the Economic Machine Works: A Template for Understanding What is Happening Now", an essay assessing the potential of various economies by various criteria.[29] The firm's total assets under management increased to $50 billion in 2007 (up from $33 billion seven years earlier).[30]
According to a 2007 article in Barron's magazine, "nobody was better prepared for the global market crash" than Bridgewater's clients and subscribers to its Daily Observations. The company "began sounding alarms...in the spring of 2007 about the dangers of excessive financial leverage."[31] Researchers at the firm examined the public records of most of the world's largest financial entities and discovered that estimated future liabilities related to bad debts totalled $839 billion. When Dalio met with U.S. Treasury Department staff and other White House economic advisors in December, these findings were disclosed but were largely ignored.[11]Due to this research, Bridgewater's Pure Alpha fund avoided much of the 2008 stock market implosion for its investors.[32] In 2008, a disastrous year for many of Bridgewater's rivals, the firm's flagship Pure Alpha fund rose in value by 9.5% after accounting for fees.[11]Dalio did this by anticipating that the Federal Reserve would be forced to print a lot of money to revive the economy. He went long on Treasury bonds, shorted the dollar, and bought gold and other commodities.[11] During his 2008 presidential campaign, John McCainpaid a visit to the firm and spoke to staff.[33] The next year was not as bright. In 2009, when economic growth was higher than expected and the Dow Jones Industrial Average increased by 19%, the company's Pure Alpha fund reportedly earned just 2% to 4%. All siting below-
WSJ,-
Ray has written one of the top business books of all time which I suggest- One I read or listen at least once a year is called principles. Ray Dalio is legend, if you want me to create you. A portoflio like this guy would make DM me.
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