March 2011 - CNBC Interview
Ray Dalio of $58.9 billion hedge fund Bridgewater Associates gave a rare television interview yesterday on CNBC so we wanted to feature his comments on a myriad of topics. His Pure Alpha II fund returned 44.8% last year and is the largest hedge fund firm in America.
On the topic of US equities, Dalio said that they, "first are still comparatively cheap. But more importantly, the flows are beneficial to them because US equities benefit from currency depreciations. I think, as I say in 2012, the developed countries' currencies will devalue in relationship to the emerging countries' currencies."
So, it appears as though Dalio sees equities benefiting, at least in the near-term. The last time we saw Dalio's elongated comments on markets back in February 2009, he was claiming it would soon be the "buying opportunity of the century" and he was right.
His thoughts on weakening currencies are intriguing given that he also thinks gold is under-appreciated here. This is largely the thesis John Paulson's gold fund is predicated upon, so they share this viewpoint. Dalio thinks gold should garner at least a portion of your portfolio, at the very least for diversification and risk reduction purposes.
Dalio also had a good quote on the topic of thinking for yourself, saying, "in order to make money in the market you have to be an independent thinker. And I think also creative, you have to be willing to make mistakes. And so the process is that anybody in the company, if anything doesn't make sense to them, that they can bring up what doesn't make sense to them in a non-hierarchical way and look at whether it's true or not and what we should do about it. We particularly like looking at mistakes or weaknesses that we have in order to get stronger."
February 2009 - Barron's
We are in a multi-year depression [without the breadlines]. Debt needs to be extinguished. Banks will be nationalized. The USD will be devalued by printing more money.
Chinese investments will be attractive because of devaluation.
Bond markets will not sell-off yet.
Buys of the century in late 2009/2010