In a recent development, Bridgewater Associates’ multibillionaire founder has relinquished leadership of the company he grew into the biggest hedge fund in the world, committing its future and $150 billion in assets to a younger generation of leaders with their own investing philosophies. He gave up his position as one of Bridgewater’s three co-chief investment officers on September 30 and surrendered all of his voting power to the board of directors.
Dalio tweeted, “Today is a very special day for me and Bridgewater Associates because I transitioned my control of Bridgewater to the next generation and I feel great about the people and “machine” now in control. This transition moment is the culmination of a 47-year journey”
Bridgewater Associates founder Ray Dalio has reportedly changed his views and no longer believes that “cash is trash” and that the short-term interest rate is “today about appropriate.” In a recent tweeter post, Dalio tweets – As John Maynard Keynes is credited with saying: “When the facts change, I change my mind. What do you do, sir?” Along these lines, the facts have changed and I’ve changed my mind about cash as an asset: I no longer think cash is trash.
He further tweets – At existing interest rates and with the Fed shrinking the balance sheet, it is now about neutral—neither a very good or very bad deal. In other words, the short-term interest rate is now about right.
In a LinkedIn note posted in September, Dalio, Founder, Co-Chief Investment Officer, and Member of the Bridgewater Board sounded murky on the economy and markets. The inflation rate, Dalio wrote, will stay significantly above what people and the Fed want it to be (while the year-over-year inflation rate will fall), that interest rates will go up, other markets will go down, and the economy will be weaker than expected.
Also Read: US Stock Market Today: Are the bulls staging a comeback on Wall Street?
He made it obvious that inflation is where it all begins before going on to discuss the connections between inflation, interest rates, markets, and economic growth and what that implies for the future. In the note, Dalio wrote that if the assumptions and estimates about inflation and real yields fall in place, he expects both long and short rates to be between 4.5 and 6 percent.
Back in September, his view was, “I estimate that a rise in rates from where they are to about 4.5 percent will produce about a 20 percent negative impact on equity prices.
Also Read: Ray Dalio changes mind, says he no longer thinks ‘Cash Is Trash’