Ray Dalio's Principles of Investment

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Doug Casey likes Emerging Markets (so does Ray Dalio):

 

Emerging markets…

Bridgewater Associates, the largest hedge fund on the planet, now has 60% of its portfolio invested in emerging markets (EM).

EMs are countries that are on their way to “developed” status but aren’t quite there yet. Think India, Thailand, Brazil, China.

Ray Dalio is the founder of Bridgewater. He’s one of the best and most respected investors of all time. According to DealBook, he’s crushed the performance of the S&P 500 by six percentage points per year over the last 20 years. He even made money during the financial crisis in 2008/9, when a lot of hedge funds went out of business.

Dalio built his amazing track record by buying what others are selling. Dalio has said:

To make money in the markets, you have to think independently and be humble. You have to be an independent thinker because you can’t make money agreeing with the consensus view, which is already embedded in the price.

Dalio has increased his bet on EMs in recent years. In 2012, he had 35% of Bridgewater’s portfolio invested in EMs. That number jumped to 58% last year. Now its 60%.

Dalio’s 60% bet on EMs is huge. It amounts to tens of billions of dollars. It takes serious conviction to invest that much money all in one place.

There’s a lot to like about EMs. About 80% of the people on earth live in EMs. EMs produce 50% of the world’s goods and services. Yet EM stock markets make up just 15% of the global stock market. In time, EM stocks will rise to close the big gap between what EMs produce and what their stock markets are worth.

But right now, EMs are unloved. As a group, EM stocks have gone nowhere for a decade. They’re the same price as when George W. Bush was president:

(from email)

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Ray Dalio Warns We May Be On A Path To "Dictatorships And Wars"

"There are times when politics becomes the most important driver... In some cases it led to democracies becoming dictatorships, and wars. I am not saying that we are on that path, but I am saying that it has to be watched out for because if it is in the works, it is a really big deal."

 

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A Hindenburg Omen is forming in the stock market. Should investors ignore it? MarketWatch

The Hindenburg Omen is materializing in the stock market, raising hackles among some market participants who closely watch for patterns that may portend ill for a stock market that has been knocking on the door to fresh highs.

Named after the German dirigible that notoriously exploded in 1937, the Hindenburg Omen is formulated to predict market crashes, or severe downturns, by synthesizing data, including 52-week highs and lows as well stock moving averages on the New York Stock Exchange. It was created by Jim Miekka, a blind mathematician, marksman and teacher, who died about four years ago. Miekka claimed that his indicator had been an accurate predictor of every market crash since 1987 on.

But as a number of market participants have noted, an appearance of the so-called Hindenburg Omen, hasn’t always resulted in an unraveling of the equity market.

A jump in the number of stocks hitting 52-week lows and highs on the New York Stock Exchange has been a key feature, among others, used to calculate the bearish pattern. Jason Goepfert, president of Sundial Capital Research, highlighted in a recent note cited by Bloomberg News that he has observed a clutch of such high/low moves on the NYSE and the Nasdaq, which can signal a degree of market indecision that can result in a broader market break down.

. . . McClellan told MarketWatch on Friday that he has seen a cluster of 7 Hindenburg instances, including on Friday (before the close), in which 52-week highs and 52-week lows were more than 2.8% of the total of advancers plus declining shares, one key feature of the omen (see chart below):

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Frank Holmes: Is It Time To Get Defensive As Ray Dalio Suggests?

Sep 14, 2018

Guest(s): Frank Holmes CEO, U.S. Global Investors

The economy is showing signs of slower growth, and now is the right time to switch to a defensive portfolio stance, this according to Frank Holmes, CEO of U.S. Global Investors. 
“Global PMIs have turned negative…and historically, that means the economy’s going to be weaker in exports in the next six months,” Holmes told Kitco News. 
Holmes noted that gold is still an important asset to add to a defensive portfolio. 
Quoting Ray Dalio, founder and co-chairman of Bridgewater Associates, Holmes said investors are at “risk” if they don’t own gold in their portfolio. On his own personal strategy, Holmes adheres to the “golden” rule of keeping at least 10% of his portfolio in gold. 
He added that in today’s environment short duration fixed income instruments, like short-term municipal bonds, are very attractive as defensive plays.

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Another good interview with Ray Dalio

Ray Dalio on the Economy, Pandemic, China's Rise: Full Interview

 

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MORE GOLD for Dalio!
largest new investment was SPY,  followed by SPDR gold & some other gold shares

Ray Dalio 5 NEW Investments

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WEALTH & the Crisis in Capitalism.   Really excellent interview here with a guy who is probably the world's most successful Hedge Fund manager: 

Ray Dalio's introspective look at financial world order, inequality and capitalism: Full interview >

Note:

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Ray Dalio: Recent Market "Rebellion" Shows Growing "Anger" And "Intolerance" In U.S.

“What concerns me more is the general anger -- and almost hate -- and the view of bringing people down that now is pervasive in almost all aspects of the country. That general desire to hurt one another,”

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Ray Dalio on 'shocking' tax changes: Could see new 'prohibitions' against gold, bitcoin

Anna Golubova Tuesday March 16, 2021

(Kitco News) With so much debt in the U.S., financial markets are entering a new paradigm, where we could see "shocking" tax changes that might involve prohibitions against capital movements to assets like gold, bitcoin, and other tax jurisdictions, said Bridgewater Associates founder Ray Dalio.

"Because I believe that we are in the late stage of this Big Debt Cycle … I believe cash is and will continue to be trash (i.e., have returns that are significantly negative relative to inflation) so it pays to a) borrow cash rather than to hold it as an asset and b) buy higher-returning, non-debt investment assets," Dalio wrote in a LinkedIn post.

Tax changes will play a massive role in dealing with the debt problem going forward, he elaborated. And more importantly, there might be restrictions in terms of where investors could move their capital.

"Policymakers who are short of money will raise taxes and won't like these capital movements out of debt assets and into other storehold of wealth assets and other tax domains so they could very well impose prohibitions against capital movements to other assets (e.g., gold, Bitcoin, etc.) and other locations. These tax changes could be more shocking than expected," the founder of the world's biggest hedge fund said.

Dalio's analysis is based on how things have worked in the past and what is happening with debt now.

"I am confident that tax changes will also play an important role in driving capital flows to different investment assets and different locations, and those movements will influence market movements," he said

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> https://www.kitco.com/news/2021-03-16/Ray-Dalio-on-shocking-tax-changes-Could-see-new-prohibitions-against-gold-bitcoin.html