Ray Dalio, the founder of Bridgewater Associates, extensively shared his investing insights and life lessons for stock market investors in an interview with ET Now. Popularly known as Steve Jobs of the investing world, Ray Dalio said that an investor needs to bet against consensus to generate wealth. “We ran our calculations and we do not care what the rest of the world thinks. You know, one of the big problems of the world in investing is that there is a such a consensus that everybody believes something to be true. When everybody believes something to be true in the markets it is priced into the markets and so you have to think independently to be effective,” he said. He further shared, “to be a successful investor, one needs to be an ‘independent thinker.’” Talking about the global economy, he maintained both India and China are important for global growth and can’t be ignored at any cost. He added that the US no longer remains to be the only driver of growth for the entire world, like earlier.
On Equity Valuations
Talking about equity valuations, the author of book ‘Principles: Life & Work’ said that equity multiples may appear high at the moment, but they are not risky. He said that equities are not expensive considering current bond rates. Ray Dalio believes that there is a chance at present of all assets peaking with each other.His observation on stock markets advises him that the markets will always follow a cycle of phases i.e. ‘Boom or Burst.’
On India
Ray Dalio said believes India has a population of intelligent people at attractive cost. “Bureaucracy in India is reducing after implementation of changes,” he observed. The investment guru projected Indian economy to see the highest growth of the next 10 years.
On Global Interest Rates
He said that the US Central Bank has been pumping in liquidity since 2008. He also announced that Central banks are although moving towards tightening, but in a slow manner. Ray Dalio added, “ Global equity markets adjusting to interest rates in transition phases. Faster tightening of rates is equal to asset prices going down. Central Banks are pulling back liquidity to impact future returns.”