Ray Dalio Bridgewater Associates Style: Quantitative investor Location: Westport, Conn. Headquarters: Westport, Ct. Earnings: $3 Billion With $120 billion in assets,
Ray Dalio Bridgewater Associates Style: Quantitative investor Location: Westport, Conn. Headquarters: Westport, Ct. Earnings: $3 Billion With $120 billion in assets, Dalio’s Bridgewater Associates continued to post spectacular results in 2011 even as the average hedge fund lost money. With big bets on U.S. and German government bonds, Dalio’s funds produced returns in the 20% range in 2011. His methods are controversial and include videotaping meetings and encouraging brutal honesty among staffers. This tactic has paid off handsomely during the recent market turmoil. The son of a jazz musician, Dalio founded Bridgewater in his Manhattan apartment in 1975. At age 62, he is now trying to make sure the firm survives him, ceding more responsibility to senior staff and selling chunks to his employees and clients. Read More: http://www.hedgeho.com/ray-dalio-bridgewater-blackbox-revealed/ If there were a high philosopher of hedge funds, Ray Dalio would want to be that man. Prone to aphorisms such as “Bridgewater is a community in which our fates are intertwined” and “Money doesn’t bring happiness; the pursuit of excellence does.” Old Hand: “A truly brilliant quant, but his results have been mixed.” Hedge-Fund Investor: “Along with Simons, co-king of the quants.” Young Buck: “Steady but unspectacular; quietly built a money-management powerhouse.”
Trader: Seeks to exploit short-term volatility in the price of a security. The trader need not have an opinion on the merits of a company whose stock he trades, or the appropriateness of a particular exchange rate—just an opinion on the short-term direction of the securities.
Stock Picker: Differs from the trader in that stock pickers tend to analyze a company’s (or an industry’s or a country’s) fundamental business and make informed bets on their future direction. Tends to hold positions longer than a trader. Activist stock pickers try to personally intervene in company affairs. CEOs hate them.
Distressed Investor: Buys and sells the securities of companies in trouble, where there tends to be larger-than-usual differences of opinion over the relative merits of a stock or bond. Can also become an activist and attempt to take control of a company by buying a majority of its equity or, in bankruptcy, its debt.
Quantitative Investor: Generally relies on software-driven models that analyze historical trading patterns to inform current investment decisions, seek out price inefficiencies, or crunch financial-statement data in order to determine a theoretical price. It’s all numbers, no guts.