Ray Dalio’s latest fearmongering round

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azanon
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Re: Ray Dalio’s latest fearmongering round

Post by azanon » Mon Sep 17, 2018 7:24 am

My only complaint with his latest book, Big Debt Crisis, and discussion on the topic, is that I haven't heard him give us any sort of actionable advice. I tried to read the "Big Debt Crisis" and it quickly became too much for me - (I don't work in the finance industry). I want to ask him what Tony Robbins did, which is to say, what if we take your word for it and believe that you know what you're talking about. What are we supposed to do about it? Should we invest a certain way? Should we buy one of those shelters and get a lot of canned food?

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Re: Ray Dalio’s latest fearmongering round

Post by linenfort » Mon Sep 17, 2018 8:54 am

azanon wrote:
Mon Sep 17, 2018 7:24 am
My only complaint with his latest book, Big Debt Crisis, and discussion on the topic, is that I haven't heard him give us any sort of actionable advice.
...
Should we buy one of those shelters and get a lot of canned food?
I guess that's the point of his All Weather portfolio, and Harry Browne's which precedes it. To hold something like that, in theory at least, is a method of protection that doesn't send you scurrying in a particular direction just because you heard bad (or good news). Like Boglehead/Lazy portfolios, it is a stay-the-course portfolio.
bogleheads, don't knock state lotteries. They helped defund the mafia.

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Re: Ray Dalio’s latest fearmongering round

Post by JackoC » Mon Sep 17, 2018 10:09 am

azanon wrote:
Mon Sep 17, 2018 7:24 am
My only complaint with his latest book, Big Debt Crisis, and discussion on the topic, is that I haven't heard him give us any sort of actionable advice. I tried to read the "Big Debt Crisis" and it quickly became too much for me - (I don't work in the finance industry). I want to ask him what Tony Robbins did, which is to say, what if we take your word for it and believe that you know what you're talking about. What are we supposed to do about it? Should we invest a certain way? Should we buy one of those shelters and get a lot of canned food?
That's a fair point and consistent within itself. However, a lot of the previous commentary basically attacks Dalio from the other direction, comparing his statements to 'market calls' by other including much less credible (eg. Peter Schiff) prognosticators. 'Sell now!' Which is not what Dalio is saying.

Your issue is a valid concern but it goes with the territory. First one has to learn, think through and consider how close to reality is a diminuntion in the 'riskless' monicker for US govt debt, USD as a strong currency, US as a haven, etc. due to the US fiscal trend and the underlying problems of which it's a symptom. If a prognosticator just briefly says, 'well that safety is or will be diminished, believe you me it is' then spends most of the time suggesting tactical investment changes, *that's* what one should be skeptical about. Which makes it perhaps natural for people (who might not have read the linked piece and almost certainly not the book) to try to pin that on Dalio: 'OK let's see what other tactical calls by other people turned out not correct'. But that's not a valid refutation of his points: Dalio is not making a tactical call.

One has to decide oneself how valid the basic point is before progressing to what to do about it. But nothing about the point as stated suggests total societal breakdown in the US. Rather, a loss of 'riskless', strong USD, haven etc status. That would be significant. I admit that investing around this possibility is not easy. Likely in the cold hard world of the markets you have to take other risk or return hits, assuming and for as long as the current US status doesn't change, in order to hedge this risk (currencies and gold bounce around in normal times with no inherent expected return, etc). It's likely impractical to entirely hedge it. That doesn't mean the risk Dalio points to isn't real. Which again is the question I think one has to answer for oneself first.

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Re: Ray Dalio’s latest fearmongering round

Post by hdas » Thu Sep 20, 2018 8:35 am

Perhaps the title of the thread was too harsh, what he is saying is sensible, here's another interview:
Dalio: I think that there are two key parts of investing. There is, what is your strategic asset allocation? And then, there's moving around, there's tactical bets in alpha. And I think the average man should not try to make tactical bets to try to produce alpha because he's going to get it wrong.

Blodget: Alpha is better than average.

Dalio: Yeah, in other words to say, "Now's the time to buy. Now's the time to sell.

Blodget: Market timing.

Dalio: Market timing — Don't do that." The history of it is clear. I remember learning this. When Peter Lynch ran the Magellan fund and it was the best stock performing fund in all the stock market when the stock market was best, and the average investor lost money in it. And how is that possible? And the reason it's possible is when it was very hot and the advertisements were there, people bought. And when it was — had a period of bad performance, they got out and they got scared. And so, market timing is a very difficult thing. It's a very difficult thing for we, who put hundred of millions of dollars each year, and we have 1,600 people at Bridgewater.

It's a difficult game. And so, I would say that they should not try to play that game, that they should understand how to achieve balance and diversification, and operating. Now, how to do that is a conversation that's a longer conversation. Tony Robbins interviewed me about it and he made a very simple book at part of investing. It's described in there. But there's ways of achieving balance that doesn't cost you return and significantly reduces your risks. So I would recommend that they come to a balance portfolio, what we call an all-weather portfolio. But something that means that they're not exposed to any particular type of environment.

Blodget: And it's the same portfolio in inning seven of the debt cycle?

Dalio: That's right. If you're going to play the cycle, then realize that the time to buy is when there's blood in the streets, is the saying, okay? And then, you sell when everything is great and everybody's extrapolating the past and you're near the end of the cycle. Because as you come in, as your unemployment rate gets low and asset prices are high, and debts are being built up, and everyone's extrapolating the past, the past will not perform up to expectations. And that is the time to sell. But it's very difficult for people to step away from the crowd and to do that.

Blodget: And what do you watch to know that everyone is now excited and everyone's extrapolating into the future, and I'll give you an example, which is that two years ago, we talked lots of concerns then about the stock market and valuation. And you said, "Henry, relax. We're in the middle of the cycle." Now, you say, "We're in the seventh inning." What do I, as a normal person, look at to tell me, "Okay, it's one out in the ninth. Time to start transferring and getting ready for disaster."

Dalio: Okay, first of all, you look at how much slack is left in the cycle, okay? Where's the unemployment rate? Where's the capacity? What is the Central Bank doing? Is it tightening monetary policy or is it easing monetary policy, that's one. So, how much slack? Second, you look at how much debt has been used to finance those purchases, okay? Third, you look at the amount of sentiment, the euphoria. And fourth, I would say you can see the pricing of how much debt — how much growth is built into the pricing.

In other words, by comparing the yield on stocks and the yield on bonds, and you look at the pricing. You look at credit spreads and things like that. They paint the picture of the future, that's the discounted future. And if you look at that picture of the discounted future, and that picture is an extrapolation of what happened in the past to something that's unlikely to happen going forward, then you would know that prices are too high, and then you have to think about timing.
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

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hdas
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Re: Ray Dalio’s latest fearmongering round

Post by hdas » Mon Nov 19, 2018 3:55 pm

Another round of predictions

“We will have low returns going forward for a long time”

Let us remember:

a. He runs 2 enormous funds. One going for alpha, one RiskParity.....so his exposure to stocks is low. 'i.e. talking his book'
b. His alpha fund has run cold lately

Image

The jungle wants the market down badly. Stay the course :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

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Re: Ray Dalio’s latest fearmongering round

Post by azanon » Mon Nov 19, 2018 4:29 pm

hdas wrote:
Mon Nov 19, 2018 3:55 pm
Another round of predictions

“We will have low returns going forward for a long time”
Sounds like something Bogle said recently, on more than one occasion. I can get a source if its necessary, maybe even a video. More specifically, it comes up every time he discusses the formula he uses (Future Market Returns = Dividend Yield + Earnings Growth +/- Change in P/E Ratio), and the last few times I've heard him plug in current estimates, the conclusion is essentially low returns going forward.

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Re: Ray Dalio’s latest fearmongering round

Post by hdas » Thu Jan 03, 2019 8:54 am

Mr. Dalio has written a lengthy post detailing his process to understand the current environment. I think it's excellent all around.

A precis:

- 3 big forces that interact to drive market and economic conditions over time. They are 1) productivity growth, 2) the short-term debt cycle (which typically takes about 5-10 years), and 3) the long-term debt cycle (which typically takes about 50-75 years). These forces have effects over internal/external geopolitics which in turn have a reflexive effect on markets and economy.

- Lately productivity growth in developed countries has been relatively slow and is more concentrated in a shrinking percentage of the population and in the area of automation that reduces the need for workers. These changes have significantly changed the labor markets, widened the gaps between the “haves” and the “have nots.

- Understand the cycles: it is common to see strong economies being accompanied by falling stock and other asset prices, which is curious to people who wonder why stocks go down when the economic and profit growth is strong.

- Typically at this phase of the short-term debt cycle (which is where we are now), the prices of the hottest stocks and other equity-like assets that do well when growth is strong (e.g., private equity and real estate) decline and corporate credit spreads and credit risks start to rise. Typically, that happens in the areas that have had the biggest debt growth, especially if that happens in the largely unregulated shadow banking system (i.e., the non-bank lending system). In the last cycle, it was in the mortgage debt market. In this cycle, it has been in corporate and government debt markets.

- In terms of long term cycle the period that we are now in looks a lot like 1937.

- The proximity to the end of the Long Term Cycle can be measured by a) the proximity of interest rates to zero and b) the amount of remaining capacity of central banks to print money and buy assets and the capacity of these assets to rise in price.

- The limitation in the ability to print money and make purchases typically comes about when a) asset prices rise to levels that lower the expected returns of these assets relative to the expected return of cash, b) central banks have bought such a large percentage of what there was to sell that buying more is difficult, or c) political obstacles stand in the way of buying more. We call the power of central banks to stimulate money and credit growth in these ways “the amount of fuel in the tank.” Right now, the world’s major central banks have the least fuel in their tanks since the late 1930s so are now in the later stages of the long-term debt cycle.

** I skipped over the important 'Politics' part, in order to comply with Forum regulations.
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

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Re: Ray Dalio’s latest fearmongering round

Post by boglerdude » Fri Jan 04, 2019 3:57 am

Why are the debt cycles 5-10 years and 50-75 years

And is that true in all countries

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Re: Ray Dalio’s latest fearmongering round

Post by hdas » Fri Jan 04, 2019 7:30 am

boglerdude wrote:
Fri Jan 04, 2019 3:57 am
Why are the debt cycles 5-10 years and 50-75 years

And is that true in all countries
Good question, I believe it’s mostly an observation of the historical record. H :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

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Re: Ray Dalio’s latest fearmongering round

Post by long_gamma » Mon Jan 07, 2019 5:50 am

AlphaLess wrote:
Sat Sep 15, 2018 2:13 pm
Another alpha-less, fear-mongering, snake oil salesperson trying to remain relevant.
Bridgewater’s Pure Alpha fund posts nearly 15 percent gain in 2018
https://www.cnbc.com/2019/01/07/bridgew ... -2018.html

Bridgewater, founded by Ray Dalio, has about $160 billion in assets under management and trades across 150 different markets, of which it seeks minimal correlation.

The firm has operated the Pure Alpha strategy for nearly three decades and has generated an average annual net return of about 12 percent per year, with three years of losses over that time frame, according to the person with knowledge of the matter.
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

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Re: Ray Dalio’s latest fearmongering round

Post by hdas » Mon Jan 07, 2019 8:45 am

long_gamma wrote:
Mon Jan 07, 2019 5:50 am

Bridgewater’s Pure Alpha fund posts nearly 15 percent gain in 2018
https://www.cnbc.com/2019/01/07/bridgew ... -2018.html
Very nice!!. Thanks for posting...I heard Dalio in an interview saying that the Alpha fund has been closed to new investors and Its mostly prop funds, but I can’t find a reference...Cheers :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

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Re: Ray Dalio’s latest fearmongering round

Post by DrGoogle2017 » Mon Jan 07, 2019 11:58 am

Coato wrote:
Thu Sep 13, 2018 12:04 pm
I think fear mongering implies some sort of outcome that benefits the mongerer. For instance when Peter Schiff gets on the radio and predicts all sorts of meltdowns only gold can buttress against and then mentions Schiff gold. This just seems like someone that is pessimistic about the trajectory of our decision making.
This guy is a well known joke though.

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Re: Ray Dalio’s latest fearmongering round

Post by boglerdude » Tue Jan 08, 2019 1:11 am

> The firm has operated the Pure Alpha strategy for nearly three decades and has generated an average annual net return of about 12 percent per year

Does this tell us anything? Maybe they had dozens of funds/strategies that failed over that time frame

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Re: Ray Dalio’s latest fearmongering round

Post by Spinola » Tue Jan 08, 2019 1:30 am

The Dalio All-weather portfolio maybe makes sense for someone with millions who wants to preserve capital and not necessarily see huge growth with significant risk. Someone with only hundreds of thousands is better served by a Boglehead 3 fund portfolio. Backtesting says so. The collective wisdom here says so. Aside from that, Dalio comes across as a used car salesman type. He doesn't "emit" trustworthiness IMHO.

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Re: Ray Dalio’s latest fearmongering round

Post by long_gamma » Tue Jan 08, 2019 7:24 am

Spinola wrote:
Tue Jan 08, 2019 1:30 am
Dalio comes across as a used car salesman type. He doesn't "emit" trustworthiness IMHO.
Care to provide evidence for your claim? Or is it time honored tradition to attack the active investor when results does not suit their perception?
Last edited by long_gamma on Tue Jan 08, 2019 7:46 am, edited 1 time in total.
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Re: Ray Dalio’s latest fearmongering round

Post by long_gamma » Tue Jan 08, 2019 7:45 am

boglerdude wrote:
Tue Jan 08, 2019 1:11 am
> The firm has operated the Pure Alpha strategy for nearly three decades and has generated an average annual net return of about 12 percent per year

Does this tell us anything? Maybe they had dozens of funds/strategies that failed over that time frame
His firm has Risk parity, All weather and two pure alpha funds from Institutional Investor article. It also recently launched (2018) china fund.
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

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Re: Ray Dalio’s latest fearmongering round

Post by marcopolo » Tue Jan 08, 2019 8:10 am

long_gamma wrote:
Mon Jan 07, 2019 5:50 am
AlphaLess wrote:
Sat Sep 15, 2018 2:13 pm
Another alpha-less, fear-mongering, snake oil salesperson trying to remain relevant.
Bridgewater’s Pure Alpha fund posts nearly 15 percent gain in 2018
https://www.cnbc.com/2019/01/07/bridgew ... -2018.html

Bridgewater, founded by Ray Dalio, has about $160 billion in assets under management and trades across 150 different markets, of which it seeks minimal correlation.

The firm has operated the Pure Alpha strategy for nearly three decades and has generated an average annual net return of about 12 percent per year, with three years of losses over that time frame, according to the person with knowledge of the matter.
It would have been helpful if you had told us that a year ago.
So, what strategy will beat the market by over 20% in 2019?
If you can tell us that now it us useful. Telling us a year from now after the race is finished is pretty easy, but kind of useless.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: Ray Dalio’s latest fearmongering round

Post by long_gamma » Tue Jan 08, 2019 8:30 am

marcopolo wrote:
Tue Jan 08, 2019 8:10 am
long_gamma wrote:
Mon Jan 07, 2019 5:50 am
AlphaLess wrote:
Sat Sep 15, 2018 2:13 pm
Another alpha-less, fear-mongering, snake oil salesperson trying to remain relevant.
Bridgewater’s Pure Alpha fund posts nearly 15 percent gain in 2018
https://www.cnbc.com/2019/01/07/bridgew ... -2018.html

Bridgewater, founded by Ray Dalio, has about $160 billion in assets under management and trades across 150 different markets, of which it seeks minimal correlation.

The firm has operated the Pure Alpha strategy for nearly three decades and has generated an average annual net return of about 12 percent per year, with three years of losses over that time frame, according to the person with knowledge of the matter.
It would have been helpful if you had told us that a year ago.
So, what strategy will beat the market by over 20% in 2019?
If you can tell us that now it us useful. Telling us a year from now after the race is finished is pretty easy, but kind of useless.
I was just reporting news and not in a prediction business. You don't even have to worry. His firm is not catered to bogleheads or any private investors. It is a institutional fund for pension funds and such.
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

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Re: Ray Dalio’s latest fearmongering round

Post by KlangFool » Tue Jan 08, 2019 9:01 am

Folks,

If you believe that inflation and interest rate will go up, why are you pre-paying your 30 years low-interest fixed rate mortgage?

From a personal finance standpoint,

1) Buy a reasonable price house to lower your housing expense. Then, you had hedged about 40% to 50% of inflation by fixing your housing expense.

2) Take 30 years fixed rate mortgage. Do not take ARM.

3) Do not take long bond. Invest in short or intermediate-term bond.

4) Buy some physical gold to protect against hyper-inflation.

KlangFool

P.S.: (1) to (4) is a reasonable strategy all the times.

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Re: Ray Dalio’s latest fearmongering round

Post by hdas » Tue Jan 08, 2019 9:37 am

boglerdude wrote:
Tue Jan 08, 2019 1:11 am
> The firm has operated the Pure Alpha strategy for nearly three decades and has generated an average annual net return of about 12 percent per year

Does this tell us anything? Maybe they had dozens of funds/strategies that failed over that time frame
Here’s some insight into what they are trying to do, from the horse’s mouth:
(3:43) Eric: They [the audience] want to know a bit more about your principles for investing. Can you give us a few good examples?

Dalio: Okay, an example would be, what I call the Holy Grail. If you get this, you will get all the riches in the universe. You’ll make a lot of money. That is, if you have fifteen or more good, uncorrelated return streams. That the math of that is such that if you go from one to two uncorrelated return streams. That you will reduce your risk by about eighty percent at about fifteen. And there’s a certain math to it. There’s a certain structure to it.

If I was to show you a chart, I could describe mathematically. So for example, if I had return streams that were sixty percent correlated, and I had a thousand of them, I would only reduce the risk by about fifteen percent. And after five or six, it’s limited.

So there’s a certain notion when approaching investing. What do I want? I need to have a certain structure. That can come in the form of alphas and betas. What is my risk neutral position? I’ll say everybody in the room, they say what should I invest in? They don’t start off, I think, with what is a neutral position. What represents a good neutral position, balance.

For example, does gold represent a part of my portfolio? What should, if I had no view, what should the concentration in dollars be? What is a structural beta portfolio? And then how do I take a deviation from that beta portfolio, which is the alpha, in order to add value. How do I do that in an uncorrelated way, so that I can then maximize my return to risk?

So in that first principle, what I’m saying is that if you follow that first principle and you get fifteen good, don’t have to be great, uncorrelated return streams, you’ll improve your return to your risk by a factor of five. That means five times the return for the same amount of risk. That’s just a principle, that’s a reality. Everybody would agree on the math of it. And then that will determine an action. So what am I going to do when I’m structuring my portfolio? That will influence the way I structure my portfolio to get what I want.

Eric: People say correlation among different asset classes is increasing, making the job of being a macro hedge fund manager harder. Is that true?

Dalio: No! I think that there is an intrinsic characteristic that determines the returns of asset classes. A very simple example would be if you knew that inflation was to come down by a certain amount, you multiply that times the duration of the bonds, and all things being equal it will carry over to the bond return. There is a certain structure that exists in asset classes.

There is no such thing as an intrinsic classic correlation. So the relationship between bonds and stocks for example, can either be positively correlated or negatively correlated, and both of them make sense if you know what determines the pricing of that asset class.

Bonds are always logical in that way. Stocks are always logical. But if you come into a time, for example, when economic uncertainty and volatility is greater, then they will be negatively correlated. If you are in a period of time where inflation uncertainty and volatility is greater, they will be positively correlated.

Both of those things are logical if you know how they behave. Therefore it’s that understanding, not a fixed notion that there should be a correlation. That fixed notion of a correlation doesn’t exist. There’s no such thing as correlation, there’s only the logical behavior of each of those two markets that then will determine its relationship.

When I say uncorrelated asset classes, what I’m really doing is not using the classic measure of correlation, like stocks and bonds are forty percent correlated. What I am instead really referring to is, do you know how they behave, and is it going to intrinsically behave alike or differently.
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

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Re: Ray Dalio’s latest fearmongering round

Post by 3-20Characters » Tue Jan 08, 2019 9:55 am

peterinjapan wrote:
Thu Sep 13, 2018 12:15 pm
I don't know a lot, but I know that Bogleheads get grouchy when you imply that their future returns will be impacted in any negative way in the near future.
I’d say that you know a whole lot because you just diagnosed my anxiety over the Internet. 😁

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Re: Ray Dalio’s latest fearmongering round

Post by JBTX » Tue Jan 08, 2019 10:00 am

Spinola wrote:
Tue Jan 08, 2019 1:30 am
The Dalio All-weather portfolio maybe makes sense for someone with millions who wants to preserve capital and not necessarily see huge growth with significant risk. Someone with only hundreds of thousands is better served by a Boglehead 3 fund portfolio. Backtesting says so. The collective wisdom here says so. Aside from that, Dalio comes across as a used car salesman type. He doesn't "emit" trustworthiness IMHO.
This is a puzzling statement. When I have seen him speak, he doesn't seem like he is a comfortable speaker. Not at all like a salesman. I enjoy what he has to say, and he has some good stuff on how the economy works. But from what I read, he probably does have some "secret sauce" that helps him generate alpha, but it isn't something that can be replicated by individual investors.

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Re: Ray Dalio’s latest fearmongering round

Post by munemaker » Tue Jan 08, 2019 10:08 am

AlphaLess wrote:
Sat Sep 15, 2018 2:13 pm
Another alpha-less, fear-mongering, snake oil salesperson trying to remain relevant.
If you are referring to Ray Dalio, then you know nothing about the man. He is very smart and principled.

Here some evidence that he is not what you say he is:

https://www.cnbc.com/2019/01/07/bridgew ... -2018.html

No, I don't have any money invested with Ray.
Last edited by munemaker on Tue Jan 08, 2019 10:26 am, edited 2 times in total.

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Re: Ray Dalio’s latest fearmongering round

Post by TheTimeLord » Tue Jan 08, 2019 10:09 am

hdas wrote:
Thu Sep 13, 2018 8:47 am
It’s interesting that some of his proposed bad scenarios are specially toxic to BogleHeads principles:

Bonds are for safety
No need for currency diversification away from dollar
It won’t just be a debt problem this time around, he said, but rather a story about unfunded pension and health-care obligations. To address that looming crisis, the U.S. will need to ramp up issuance of U.S. Treasuries.

We have to sell a lot of Treasury bonds, and we as Americans won’t be able to buy all those Treasury bonds,” Dalio said. That means foreign investors will have to step up. And they probably would, as long as the dollar remains strong. Otherwise, Treasury’s dollar-denominated interest payments to buyers in China, Europe and Japan will be worth less and less.

The Federal Reserve at that point will have to print more money to make up for the deficit, have to monetize more and that’ll cause a depreciation in the value of the dollar,” he said. Pressed by interviewer Erik Schatzker, he said, “You easily could have a 30 percent depreciation in the dollar through that period of time.

We have the privileged position of being able to borrow in our own currency because we have the world's leading reserve currency. We are risking that by our finances — in other words, borrowing too much
Here’s the link: https://www.bloomberg.com/view/articles ... -nightmare

Cheers :greedy
Based on this post what action do you recommend we BH take?
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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Re: Ray Dalio’s latest fearmongering round

Post by betablocker » Tue Jan 08, 2019 10:46 am

TheTimeLord wrote:
Tue Jan 08, 2019 10:09 am
hdas wrote:
Thu Sep 13, 2018 8:47 am
It’s interesting that some of his proposed bad scenarios are specially toxic to BogleHeads principles:

Bonds are for safety
No need for currency diversification away from dollar
It won’t just be a debt problem this time around, he said, but rather a story about unfunded pension and health-care obligations. To address that looming crisis, the U.S. will need to ramp up issuance of U.S. Treasuries.

We have to sell a lot of Treasury bonds, and we as Americans won’t be able to buy all those Treasury bonds,” Dalio said. That means foreign investors will have to step up. And they probably would, as long as the dollar remains strong. Otherwise, Treasury’s dollar-denominated interest payments to buyers in China, Europe and Japan will be worth less and less.

The Federal Reserve at that point will have to print more money to make up for the deficit, have to monetize more and that’ll cause a depreciation in the value of the dollar,” he said. Pressed by interviewer Erik Schatzker, he said, “You easily could have a 30 percent depreciation in the dollar through that period of time.

We have the privileged position of being able to borrow in our own currency because we have the world's leading reserve currency. We are risking that by our finances — in other words, borrowing too much
Here’s the link: https://www.bloomberg.com/view/articles ... -nightmare

Cheers :greedy
Based on this post what action do you recommend we BH take?
I've had a similar question and my translation is that real assets: commodities/gold will do better and then by extension emerging markets will do better because the dollar will weaken. He didn't exactly say that but it's what I read from him and GMO as well. There are two pieces of related logic behind that: we are reaching the end of a long cycle where interest rates were low, asset prices were inflated, and everyone piled up debt. That will reverse at some point. Second, fixed income and US equities have boomed for 10 year, eventually the trend will reverse. So that is an uninformed summary of the logic but as to what action you should take, I'd say having a portfolio that includes commodities and an overweight to emerging markets. Of course those are volatile asset classes and not for everyone. My personal opinion is to expose yourself to those through trend following.

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TheTimeLord
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Re: Ray Dalio’s latest fearmongering round

Post by TheTimeLord » Tue Jan 08, 2019 11:16 am

Agree with him or disagree with him Ray Dalio is not an ignorant man and uses a very unique culture within his hedge funds. Should you listen to him, that is a personal decision, personally I find posts like these to be either financial porn or graveyard whistling. But I find the constant ridiculing of intelligent people with which BH disagree to be distasteful and a bit of a turn off.

https://www.cnbc.com/2019/01/07/bridgew ... -2018.html
Bridgewater, the world’s largest hedge fund, posted returns for 2018 that not only outperformed benchmark indexes for various asset classes, but also many of its peers.

The firm’s flagship Pure Alpha fund finished the year returning 14.6 percent net of fees, a person with knowledge of the matter said. The average hedge fund lost 2 percent in the year through November, according to Hedge Fund Research. Full-year numbers from HFR are expected this week.

Nearly every major asset class ended the year in the red, including the S&P 500, which declined almost 7 percent excluding dividends.

Bridgewater co-chief investment officer Bob Prince told the Financial Times in October that the economy was at an “inflection point where the economy is moving from hot to mediocre.”

Bridgewater, founded by Ray Dalio, has about $160 billion in assets under management and trades across 150 markets, of which it seeks minimal correlation.

The firm has operated the Pure Alpha strategy for nearly three decades and has generated an average annual net return of about 12 percent per year, with three years of losses over that time frame, according to the person with knowledge of the matter.
Last edited by TheTimeLord on Tue Jan 08, 2019 11:26 am, edited 2 times in total.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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Spinola
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Re: Ray Dalio’s latest fearmongering round

Post by Spinola » Tue Jan 08, 2019 11:19 am

JBTX wrote:
Tue Jan 08, 2019 10:00 am
Spinola wrote:
Tue Jan 08, 2019 1:30 am
The Dalio All-weather portfolio maybe makes sense for someone with millions who wants to preserve capital and not necessarily see huge growth with significant risk. Someone with only hundreds of thousands is better served by a Boglehead 3 fund portfolio. Backtesting says so. The collective wisdom here says so. Aside from that, Dalio comes across as a used car salesman type. He doesn't "emit" trustworthiness IMHO.
This is a puzzling statement. When I have seen him speak, he doesn't seem like he is a comfortable speaker. Not at all like a salesman. I enjoy what he has to say, and he has some good stuff on how the economy works. But from what I read, he probably does have some "secret sauce" that helps him generate alpha, but it isn't something that can be replicated by individual investors.
Just my personal, highly subjective opinion. He is probably a wonderful person, but sounds like an infomercial to me. :greedy

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hdas
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Re: Ray Dalio’s latest fearmongering round

Post by hdas » Tue Jan 08, 2019 11:22 am

TheTimeLord wrote:
Tue Jan 08, 2019 10:09 am
hdas wrote:
Thu Sep 13, 2018 8:47 am
It’s interesting that some of his proposed bad scenarios are specially toxic to BogleHeads principles:

Bonds are for safety
No need for currency diversification away from dollar
It won’t just be a debt problem this time around, he said, but rather a story about unfunded pension and health-care obligations. To address that looming crisis, the U.S. will need to ramp up issuance of U.S. Treasuries.

We have to sell a lot of Treasury bonds, and we as Americans won’t be able to buy all those Treasury bonds,” Dalio said. That means foreign investors will have to step up. And they probably would, as long as the dollar remains strong. Otherwise, Treasury’s dollar-denominated interest payments to buyers in China, Europe and Japan will be worth less and less.

The Federal Reserve at that point will have to print more money to make up for the deficit, have to monetize more and that’ll cause a depreciation in the value of the dollar,” he said. Pressed by interviewer Erik Schatzker, he said, “You easily could have a 30 percent depreciation in the dollar through that period of time.

We have the privileged position of being able to borrow in our own currency because we have the world's leading reserve currency. We are risking that by our finances — in other words, borrowing too much
Here’s the link: https://www.bloomberg.com/view/articles ... -nightmare

Cheers :greedy
Based on this post what action do you recommend we BH take?
1. Don't accept all the mantras repeated in this forum at face value.
2. Question all assumptions from all sources with proper evidence
3. Evaluate the role of currency diversification.
4. Evaluate the merits of foreign diversification in bonds
5. Understand the principles of Risk Parity

How about these for a start. :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

JBTX
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Re: Ray Dalio’s latest fearmongering round

Post by JBTX » Tue Jan 08, 2019 11:34 am

hdas wrote:
Tue Jan 08, 2019 11:22 am
TheTimeLord wrote:
Tue Jan 08, 2019 10:09 am
hdas wrote:
Thu Sep 13, 2018 8:47 am
It’s interesting that some of his proposed bad scenarios are specially toxic to BogleHeads principles:

Bonds are for safety
No need for currency diversification away from dollar
It won’t just be a debt problem this time around, he said, but rather a story about unfunded pension and health-care obligations. To address that looming crisis, the U.S. will need to ramp up issuance of U.S. Treasuries.

We have to sell a lot of Treasury bonds, and we as Americans won’t be able to buy all those Treasury bonds,” Dalio said. That means foreign investors will have to step up. And they probably would, as long as the dollar remains strong. Otherwise, Treasury’s dollar-denominated interest payments to buyers in China, Europe and Japan will be worth less and less.

The Federal Reserve at that point will have to print more money to make up for the deficit, have to monetize more and that’ll cause a depreciation in the value of the dollar,” he said. Pressed by interviewer Erik Schatzker, he said, “You easily could have a 30 percent depreciation in the dollar through that period of time.

We have the privileged position of being able to borrow in our own currency because we have the world's leading reserve currency. We are risking that by our finances — in other words, borrowing too much
Here’s the link: https://www.bloomberg.com/view/articles ... -nightmare

Cheers :greedy
Based on this post what action do you recommend we BH take?
1. Don't accept all the mantras repeated in this forum at face value.
2. Question all assumptions from all sources with proper evidence
3. Evaluate the role of currency diversification.
4. Evaluate the merits of foreign diversification in bonds
5. Understand the principles of Risk Parity

How about these for a start. :greedy
I generally agree with this. The scenario he is describing seems intuitive, but economies and markets havent always progressed along predictable lines. Bottom line one should probably look beyond recent US history (last 30 years) in terms of possible scenarios. There are scenarios where both US stocks and US bonds both go negative on a real basis.

KlangFool
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Re: Ray Dalio’s latest fearmongering round

Post by KlangFool » Tue Jan 08, 2019 11:59 am

Folks,

If you are worried enough about something, then, be prepared. Do something. If you are not worried enough to prepare for it, why waste your time talking about it.

KlangFool

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munemaker
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Re: Ray Dalio’s latest fearmongering round

Post by munemaker » Tue Jan 08, 2019 1:03 pm

KlangFool wrote:
Tue Jan 08, 2019 11:59 am
Folks,

If you are worried enough about something, then, be prepared. Do something.

KlangFool
But what should we do? Please tell us!

KlangFool
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Re: Ray Dalio’s latest fearmongering round

Post by KlangFool » Tue Jan 08, 2019 1:08 pm

munemaker wrote:
Tue Jan 08, 2019 1:03 pm
KlangFool wrote:
Tue Jan 08, 2019 11:59 am
Folks,

If you are worried enough about something, then, be prepared. Do something.

KlangFool
But what should we do? Please tell us!
munemaker,

Diversification. Be prepared for inflation, deflation, hyperinflation and so on.

A) Inflation

i) 30 years fixed rate mortgage on a reasonably priced house to fix your housing expense.

ii) Stock - US & International

B) Deflation

i) Keep 1 year of emergency fund in cash.

C) Hyperinflation

i) Physical gold and gold coins.

Balance. Do not put all your eggs into one basket.

KlangFool

johnsac
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Re: Ray Dalio’s latest fearmongering round

Post by johnsac » Tue Jan 08, 2019 1:43 pm

I'm a beginning investor, so I dont have the understanding you all do, but here is Dalio's linkedin post: "In reaction to a lot of press about us (Bridgewater) having made 14.6% in our flagship Pure Alpha fund last year when most investments and investment managers lost money, I’ve been asked for a lot of advice. I regret that I won’t be able to adequately provide it in this limited space (though I will eventually pass along the most important principles in my upcoming Economic & Investment Principles.) But I will pass along one important thought. If you are worried when the stock market goes down and happy when it goes up it probably indicates that your portfolio is unbalanced. If your income is also tied to how the economy does, you are doubly at risk because your portfolio can go down when your income is worst which is scary. Most people and companies are in that position and many make it even riskier by borrowing money to be in that position in an even bigger way. That’s what makes the financial rollercoaster ups and downs so big and dramatic. To me, the key is to not have any systematic biases by structuring your portfolios and your incomes so that they hedge each other and are in balance. Achieving good balance is the most important thing."

So to me, as a newbie, that begs the question, how do you structure your portfolio in the way he suggests as an average investor? The all-weather approach he shared in Tony Robbins book a few years ago? Does his position above contradict what Bogle advocates?

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hdas
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Re: Ray Dalio’s latest fearmongering round

Post by hdas » Tue Jan 08, 2019 1:49 pm

johnsac wrote:
Tue Jan 08, 2019 1:43 pm
I'm a beginning investor, so I dont have the understanding you all do, but here is Dalio's linkedin post: "In reaction to a lot of press about us (Bridgewater) having made 14.6% in our flagship Pure Alpha fund last year when most investments and investment managers lost money, I’ve been asked for a lot of advice. I regret that I won’t be able to adequately provide it in this limited space (though I will eventually pass along the most important principles in my upcoming Economic & Investment Principles.) But I will pass along one important thought. If you are worried when the stock market goes down and happy when it goes up it probably indicates that your portfolio is unbalanced. If your income is also tied to how the economy does, you are doubly at risk because your portfolio can go down when your income is worst which is scary. Most people and companies are in that position and many make it even riskier by borrowing money to be in that position in an even bigger way. That’s what makes the financial rollercoaster ups and downs so big and dramatic. To me, the key is to not have any systematic biases by structuring your portfolios and your incomes so that they hedge each other and are in balance. Achieving good balance is the most important thing."
Good post. You will be well served understanding the principle behind risk parity along with the traditional stock/bond split of most BH's. :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

azanon
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Re: Ray Dalio’s latest fearmongering round

Post by azanon » Tue Jan 08, 2019 1:59 pm

johnsac wrote:
Tue Jan 08, 2019 1:43 pm
So to me, as a newbie, that begs the question, how do you structure your portfolio in the way he suggests as an average investor? The all-weather approach he shared in Tony Robbins book a few years ago? Does his position above contradict what Bogle advocates?
Yes, by the all-weather suggestion he shared with Robbins. I also took at stab (with the help of others) at my own version of this portfolio using Bridgewater's "All Weather Story" as a starting point, in a separate thread on this forum.

Does it contradict with what Bogle advocates? This is an opinion, but I would say yes it contradicts more so than not. Bogle advocates equity-centric portfolios, I think particular given how much he speaks of the merits of the stock market. Specifically, Bogle has often stated 50-60% equities is a good starting point or moderate position for most people, whereas Dalio has cited the 50/50 specifically as an example of an unbalanced portfolio, because the risks are not balanced. Where the two agree is that both Dalio and Bogle are for passive investing for most people.

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munemaker
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Re: Ray Dalio’s latest fearmongering round

Post by munemaker » Tue Jan 08, 2019 2:35 pm

KlangFool wrote:
Tue Jan 08, 2019 1:08 pm
munemaker wrote:
Tue Jan 08, 2019 1:03 pm
KlangFool wrote:
Tue Jan 08, 2019 11:59 am
Folks,

If you are worried enough about something, then, be prepared. Do something.

KlangFool
But what should we do? Please tell us!
munemaker,

Diversification. Be prepared for inflation, deflation, hyperinflation and so on.

A) Inflation

i) 30 years fixed rate mortgage on a reasonably priced house to fix your housing expense.

ii) Stock - US & International

B) Deflation

i) Keep 1 year of emergency fund in cash.

C) Hyperinflation

i) Physical gold and gold coins.

Balance. Do not put all your eggs into one basket.

KlangFool
I am good on everything but the gold. I'll have a vault installed and buy some Krugerrands.

Image

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Spinola
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Re: Ray Dalio’s latest fearmongering round

Post by Spinola » Tue Jan 08, 2019 2:40 pm

long_gamma wrote:
Tue Jan 08, 2019 7:24 am
Spinola wrote:
Tue Jan 08, 2019 1:30 am
Dalio comes across as a used car salesman type. He doesn't "emit" trustworthiness IMHO.
Care to provide evidence for your claim? Or is it time honored tradition to attack the active investor when results does not suit their perception?
Just gut instinct. He may be as honest as the day is long and a fine human being, but sounds like an infomercial to me.

Patzer
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Re: Ray Dalio’s latest fearmongering round

Post by Patzer » Tue Jan 08, 2019 2:47 pm

In general, the ways to hedge different types of risks are:
Deflation Risk: Hedged with Cash and assets that produce Cash(Bonds)
Inflation Risk: Hedged with Stocks, with tangible assets(house, land, gold), non-USD Cash/Bonds
Hyperinflation/Systematic Failure Risk: Hedged with tangible assets(house, land, gold), non-USD Cash/Bonds, non-US stocks, foreign earnings of US-stocks
Falling Interest Rates: Bonds, Stocks
Rising Interest Rates: Cash, CDs(because you can break them if rates rise), Incoming Cash from Interest and Dividends

That said, I am currently 100% Equity, (70 US /20 International Developed/10 Emerging).

long_gamma
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Re: Ray Dalio’s latest fearmongering round

Post by long_gamma » Tue Jan 08, 2019 4:40 pm

Spinola wrote:
Tue Jan 08, 2019 2:40 pm
long_gamma wrote:
Tue Jan 08, 2019 7:24 am
Spinola wrote:
Tue Jan 08, 2019 1:30 am
Dalio comes across as a used car salesman type. He doesn't "emit" trustworthiness IMHO.
Care to provide evidence for your claim? Or is it time honored tradition to attack the active investor when results does not suit their perception?
Just gut instinct. He may be as honest as the day is long and a fine human being, but sounds like an infomercial to me.
You questioned the integrity of man, but when challenged you want to get away with wishy-washy statement like gut-instinct and infomercial. He doesn't even have retail product to sell.

I am not just picking on you, but this forum which boasts "many road to Dublin" is very intolerant when it is not their chosen road.
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

azanon
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Location: Little Rock, AR

Re: Ray Dalio’s latest fearmongering round

Post by azanon » Tue Jan 08, 2019 4:52 pm

long_gamma wrote:
Tue Jan 08, 2019 4:40 pm
Spinola wrote:
Tue Jan 08, 2019 2:40 pm
long_gamma wrote:
Tue Jan 08, 2019 7:24 am
Spinola wrote:
Tue Jan 08, 2019 1:30 am
Dalio comes across as a used car salesman type. He doesn't "emit" trustworthiness IMHO.
Care to provide evidence for your claim? Or is it time honored tradition to attack the active investor when results does not suit their perception?
Just gut instinct. He may be as honest as the day is long and a fine human being, but sounds like an infomercial to me.
You questioned the integrity of man, but when challenged you want to get away with wishy-washy statement like gut-instinct and infomercial. He doesn't even have retail product to sell.

I am not just picking on you, but this forum which boasts "many road to Dublin" is very intolerant when it is not their chosen road.
I'm an obvious fan of Dalio, as a cursory search of my posts would prove. But that being said, for one to expect an open-arms reception to some of Dalio's ideas at Boglehead forums, is probably naive at best. The "many roads to Dublin" boast, if there ever was one, was most likely a reference to acceptance of multiple strategies, all of which though would be at least reasonably consistent with Boglehead philosophy.

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Spinola
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Re: Ray Dalio’s latest fearmongering round

Post by Spinola » Tue Jan 08, 2019 5:21 pm

long_gamma wrote:
Tue Jan 08, 2019 4:40 pm

You questioned the integrity of man, but when challenged you want to get away with wishy-washy statement like gut-instinct and infomercial. He doesn't even have retail product to sell.

I am not just picking on you, but this forum which boasts "many road to Dublin" is very intolerant when it is not their chosen road.
I apologize, perhaps I am too suspicious, but when it comes to money there are far too many people trying to separate us from it. I certainly have no intention of questioning his integrity, I'm just not buying the strategy. Doesn't mean it is wrong for someone else.. To each his own. Portfolio AAs are like hair styles. What works for you, might not work for me..
I value a variety of opinions and I appreciate various viewpoints. "None of of us are as dumb as all of us together " :mrgreen:

klaus14
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Re: Ray Dalio’s latest fearmongering round

Post by klaus14 » Wed Jan 09, 2019 12:24 am

azanon wrote:
Tue Jan 08, 2019 1:59 pm
johnsac wrote:
Tue Jan 08, 2019 1:43 pm
So to me, as a newbie, that begs the question, how do you structure your portfolio in the way he suggests as an average investor? The all-weather approach he shared in Tony Robbins book a few years ago? Does his position above contradict what Bogle advocates?
Yes, by the all-weather suggestion he shared with Robbins. I also took at stab (with the help of others) at my own version of this portfolio using Bridgewater's "All Weather Story" as a starting point, in a separate thread on this forum.

Does it contradict with what Bogle advocates? This is an opinion, but I would say yes it contradicts more so than not. Bogle advocates equity-centric portfolios, I think particular given how much he speaks of the merits of the stock market. Specifically, Bogle has often stated 50-60% equities is a good starting point or moderate position for most people, whereas Dalio has cited the 50/50 specifically as an example of an unbalanced portfolio, because the risks are not balanced. Where the two agree is that both Dalio and Bogle are for passive investing for most people.
Hi Azanon,
Can you share your current risk parity portfolio?
What do you think the main enhancements to a 3 fund BH portfolio? My understanding is that biggest enhancements would be
- Gold to hedge against currency devaluation
- Cash to hedge against recession.
Would you agree?

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Re: Ray Dalio’s latest fearmongering round

Post by azanon » Wed Jan 09, 2019 8:36 am

klaus14 wrote:
Wed Jan 09, 2019 12:24 am
azanon wrote:
Tue Jan 08, 2019 1:59 pm
johnsac wrote:
Tue Jan 08, 2019 1:43 pm
So to me, as a newbie, that begs the question, how do you structure your portfolio in the way he suggests as an average investor? The all-weather approach he shared in Tony Robbins book a few years ago? Does his position above contradict what Bogle advocates?
Yes, by the all-weather suggestion he shared with Robbins. I also took at stab (with the help of others) at my own version of this portfolio using Bridgewater's "All Weather Story" as a starting point, in a separate thread on this forum.

Does it contradict with what Bogle advocates? This is an opinion, but I would say yes it contradicts more so than not. Bogle advocates equity-centric portfolios, I think particular given how much he speaks of the merits of the stock market. Specifically, Bogle has often stated 50-60% equities is a good starting point or moderate position for most people, whereas Dalio has cited the 50/50 specifically as an example of an unbalanced portfolio, because the risks are not balanced. Where the two agree is that both Dalio and Bogle are for passive investing for most people.
Hi Azanon,
Can you share your current risk parity portfolio?
What do you think the main enhancements to a 3 fund BH portfolio? My understanding is that biggest enhancements would be
- Gold to hedge against currency devaluation
- Cash to hedge against recession.
Would you agree?
The final (living) portfolio is at the very bottom of the initial post here (rev. 9/5/2018): viewtopic.php?t=206028 ,and a nod to the help I received on that from others including one former Bridgewater employee.

I agree with you. But I don't want to detract from this thread so I'll leave it at that.

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Re: Ray Dalio’s latest fearmongering round

Post by Scooter57 » Wed Jan 09, 2019 9:30 am

Gold is a very poor hedge. It is taxed as a collectible and the trading costs are obscene. If we did get to where money was becoming worthless good luck on trying to keep yourself fed with shavings from your Krugerrands.

Arable land, a seed store, and a barn full of milkable animals would probably be the best investment for the kinds of extreme scenarios the people promoting gold like to fearmonger with. But to make that work you'd have to stop wasting all this time reading about investing and learn how to keep plants and animals alive.

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Re: Ray Dalio’s latest fearmongering round

Post by KlangFool » Wed Jan 09, 2019 9:46 am

Scooter57 wrote:
Wed Jan 09, 2019 9:30 am
Gold is a very poor hedge. It is taxed as a collectible and the trading costs are obscene. If we did get to where money was becoming worthless good luck on trying to keep yourself fed with shavings from your Krugerrands.

Arable land, a seed store, and a barn full of milkable animals would probably be the best investment for the kinds of extreme scenarios the people promoting gold like to fearmonger with. But to make that work you'd have to stop wasting all this time reading about investing and learn how to keep plants and animals alive.
Scooter57,

<< If we did get to where money was becoming worthless good luck on trying to keep yourself fed with shavings from your Krugerrands.>>

The goal would be to use the gold to get to somewhere else.

<<Arable land, a seed store, and a barn full of milkable animals would probably be the best investment for the kinds of extreme scenarios the people promoting gold like to fearmonger with.>>

Which does not work when it is no longer safe to be at that location. When the country is in social unrest, those places are a very tempting target.

Do you want to stay in Venezuela now? Or, use the gold to get out of the country?

KlangFool

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Re: Ray Dalio’s latest fearmongering round

Post by TomatoTomahto » Wed Jan 09, 2019 9:59 am

azanon wrote:
Tue Jan 08, 2019 4:52 pm
I'm an obvious fan of Dalio, as a cursory search of my posts would prove. But that being said, for one to expect an open-arms reception to some of Dalio's ideas at Boglehead forums, is probably naive at best. The "many roads to Dublin" boast, if there ever was one, was most likely a reference to acceptance of multiple strategies, all of which though would be at least reasonably consistent with Boglehead philosophy.
It would be quite shocking to have BHs, as a group, favor a hedge fund manager.
I know nothing of his investing thoughts and haven’t read any of his books. I do find the “radical transparency” at his firm troubling in its implementation; it’s cult like.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Location: Little Rock, AR

Re: Ray Dalio’s latest fearmongering round

Post by azanon » Wed Jan 09, 2019 10:11 am

TomatoTomahto wrote:
Wed Jan 09, 2019 9:59 am
azanon wrote:
Tue Jan 08, 2019 4:52 pm
I'm an obvious fan of Dalio, as a cursory search of my posts would prove. But that being said, for one to expect an open-arms reception to some of Dalio's ideas at Boglehead forums, is probably naive at best. The "many roads to Dublin" boast, if there ever was one, was most likely a reference to acceptance of multiple strategies, all of which though would be at least reasonably consistent with Boglehead philosophy.
It would be quite shocking to have BHs, as a group, favor a hedge fund manager.
I know nothing of his investing thoughts and haven’t read any of his books. I do find the “radical transparency” at his firm troubling in its implementation; it’s cult like.
Yeah, I agree per my quote. I didn't really care for Spinola's remarks either, but refrained from engaging him about it because I'm trying to be realistic, and I do know where I'm posting.

My take on his "radical transparency" is that it's a bit Utopian in a sense. Perhaps "improved humans" could all handle radical truth being said to them, and made public on a big screen among all of their workmates, and not be emotionally disturbed, hurt, or reactive to that, but until our species comes a long way, we're just not ready for that, as a collective whole. I agree that if we could all emotionally take that form of feedback, it probably would be an improvement.

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hdas
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Re: Ray Dalio’s latest fearmongering round

Post by hdas » Wed Jan 09, 2019 1:35 pm

azanon wrote:
Wed Jan 09, 2019 10:11 am
TomatoTomahto wrote:
Wed Jan 09, 2019 9:59 am
azanon wrote:
Tue Jan 08, 2019 4:52 pm
I'm an obvious fan of Dalio, as a cursory search of my posts would prove. But that being said, for one to expect an open-arms reception to some of Dalio's ideas at Boglehead forums, is probably naive at best. The "many roads to Dublin" boast, if there ever was one, was most likely a reference to acceptance of multiple strategies, all of which though would be at least reasonably consistent with Boglehead philosophy.
It would be quite shocking to have BHs, as a group, favor a hedge fund manager.
I know nothing of his investing thoughts and haven’t read any of his books. I do find the “radical transparency” at his firm troubling in its implementation; it’s cult like.
Yeah, I agree per my quote. I didn't really care for Spinola's remarks either, but refrained from engaging him about it because I'm trying to be realistic, and I do know where I'm posting.

My take on his "radical transparency" is that it's a bit Utopian in a sense. Perhaps "improved humans" could all handle radical truth being said to them, and made public on a big screen among all of their workmates, and not be emotionally disturbed, hurt, or reactive to that, but until our species comes a long way, we're just not ready for that, as a collective whole. I agree that if we could all emotionally take that form of feedback, it probably would be an improvement.
What do you make of BW's recent moves in China?.....I find it interesting and bullish for that market. :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

Scooter57
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Re: Ray Dalio’s latest fearmongering round

Post by Scooter57 » Wed Jan 09, 2019 4:47 pm

KlangFool wrote:
Wed Jan 09, 2019 9:46 am

<< If we did get to where money was becoming worthless good luck on trying to keep yourself fed with shavings from your Krugerrands.>>

The goal would be to use the gold to get to somewhere else.

<<Arable land, a seed store, and a barn full of milkable animals would probably be the best investment for the kinds of extreme scenarios the people promoting gold like to fearmonger with.>>

Which does not work when it is no longer safe to be at that location. When the country is in social unrest, those places are a very tempting target.

Do you want to stay in Venezuela now? Or, use the gold to get out of the country?

KlangFool
If we got to where it would be unsafe to be in that location, someone much bigger and better armed than you would relieve you of your physical gold before you could use it to flee the country.

Beyond which, if the US got to that point, what kind of shape do you think the rest of the world would be in?

Northern Flicker
Posts: 4138
Joined: Fri Apr 10, 2015 12:29 am
Location: Taking a break from Bogleheads

Re: Ray Dalio’s latest fearmongering round

Post by Northern Flicker » Thu Jan 10, 2019 4:30 pm

Big Dog wrote:
Thu Sep 13, 2018 8:58 am
maybe I'm a little dense this morning, but what unfunded pensions and health care liabilities is he talking about that would require federal intervention? (I get that many states are underfunded, but what does that have to do with US bonds?
I think he is just saying that the current tax regimen and asset levels of the Medicare trust funds leave future Medicare liabilities underfunded. Medicaid will cover increasing costs for assisted living and skill nursing facility given the aging population, and Social security is underfunded (to a significantly lesser extent). He believes these issues will lead to inflation and rising treasury rates.
Taking a break from Bogleheads.

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