An interview and Q&A with billionaire hedge fund manager Ray Dalio. Ray covers topics relating to inflation,deleveraging and the Economic Machine. The conversation covers Europe and what Ray thinks of it and the USA’s economy. This interviews gives an insight into Ray Dalio’s theories on economical issues and his approach to macro investing.
Ray Dalio Warns “Certain Investors Will Be Shocked”
Q3 2016 hedge fund letters
0:36 The Economic Machine
14:33 Your approach to investing?
15:21 What did you see in 2007?
23:08 Will Greece leave Europe?
23:54 What is going to happen in Europe in the next 2 years?
27:19 Are you worried about debt in USA?
33:48 Are the markets right?
37:32 Can the fed continue printing money today?
40:06 Start of Q&A
40:14 Risk of deflation?
43:15 Is the price of gold a constraint to the Fed?
47:23 How much exposure do you want to gold/equities/Real estate?
51:57 What happens if the fiscal response fails?
57:35 Will there be a recession in 2013?
1:00:33 If the USA goes to war with Iran, how do you think it will affect oil prices?
1:01:59 Worried about China?
1:04:50 Your view of the USA economy?
1:05:58 Biggest worry right now?
Dalio Watching End Of Debt Supercycle Play Out In Real Time
MODERATOR: Even this huge financial crisis that we all suffered in 2008 — in some sense, you were expecting some disrupter to the market.
DALIO: So I don’t — yeah. I’m just saying that if you understand how the economic machine works, it just works like a machine. There are cause-effect relationships. And through these experiences, there’s such a thing as a deleveraging. There’s a deleveraging. How do deleveragings work? And I think the problem of most people is that they encounter their experiences for the first time. First time it happens to them in their life, their — that’s their frame of reference. But those same things have happened many, many times throughout history, right?
So the issue of a deleveraging — there’s a bubble, and you know a bubble when you see a bubble. OK, how do you define a bubble? So maybe I should explain a little bit, what I think of —
MODERATOR: I love it.
DALIO: I could just take a few minutes and take — to describe what a deleveraging — what — you know, what a cycle works like, OK? And it’s — and it’s very basic. So —
MODERATOR: Did you know we were in a bubble in the housing market in 2008, 2007? You saw things that sort of disrupted your model. We’re talking to one of the most successful hedge fund managers on the planet, if not the most successful. You have been able to navigate hugely difficult waters. Take us back to 2007. What did you see — tell us about your model and your approach to investing when things really started to turn ugly.