Ray Dalio is the founder and co-chair of Bridgewater Associates, the world’s largest hedge fund.
Dalio is bullish on gold, predicting the metal to be a major investment asset ahead of a ‘paradigm shift’ within global markets.
The Wall Street mogul has made over $50 billion for his clients.
Ray Dalio warned of a “scary situation” ahead for the world economy, speaking in Saudi Arabia this week.
At the Future Investment Initiative, billed in the media as “Davos in the Desert,” Dalio’s misgivings added to a chorus of fear, uncertainty, and doubt:
“The technology and increasing use of artificial intelligence and increased productivity will also substantially increase the wealth gap, the job gap, the wealth and ideological conflicts within countries.”
Blackstone Group CEO Stephen Schwarzman piled on with worries about negative interest rates leaving central banks with nowhere left to go:
“Interest rates around the world are so low, I don’t know what I would do as a central banker. You certainly run out of effectiveness. I don’t even know how to run a financial institution. We will have a downturn, it will be challenging, and we will need a lot of fiscal stimulus.”
That’s an about-face for Schwarzman, who disagreed with Dalio’s same assessment in January. Apparently the round of Fed target rate cuts this year has changed the calculus for the Blackstone chief.
Ray Dalio’s Hedge Fund Gets Defensive
Markets can breathe a little sigh of relief. Ray Dalio’s remarks address the global economic outlook over the next decade, not any time in the next year. In September, he said there’s only a 25% chance of recession in the next 18 months. Those recession odds are in line with forecasts by JP Morgan, Goldman Sachs, and Morgan Stanley.
But his $150 billion hedge fund, Bridgewater Associates, is taking a defensive position against global macro threats to US equities. In a July LinkedIn post, Dalio pointed to gold as a safe haven from the coming “paradigm shift” in global markets. He’s putting his money where his mouth is. Bridgewater’s current SEC filings show the company shedding its equities ETFs, for instance, while clinging fast to its gold trust shares.
Meanwhile, Bridgewater is shoring up on Information Technology stocks like Alliance Data Systems and Intel Corporation. And although Ray Dalio bemoans the disruption of artificial intelligence, his hedge fund has been working on AI systems to replace hedge fund managers since 2015. In conclusion, “If you can’t beat them, join them.”
October 30, 2019 08:43