Ray Dalio Interview

[no_free_lunch]

14 hours ago, Sweet said:

I don’t know about Ray.  I’ll listen if he is taking about finance but he goes into changing world orders and all that other stuff that he can’t possibly know or predict.

He reminds me of some of my profs when I was in school.  You leave the lecture feeling both intimidated and inspired and yet with no idea what you just learned.   I don't  care how much money he has I think he is full of it.

[Sweet]

1 hour ago, no_free_lunch said:

He reminds me of some of my profs when I was in school.  You leave the lecture feeling both intimidated and inspired and yet with no idea what you just learned.   I don't  care how much money he has I think he is full of it.

Same, I also think he is full of it. 

[changegonnacome]

On 7/15/2023 at 8:21 PM, TwoCitiesCapital said:

That type of diversification and downside protection is probably very valuable and helpful to some - even if you end up underperforming the top asset class of the decade in hindsight. 

 

Yep good assessment - hedge funds can successfully have large AUMs that underperform all the time vs. SPY or other benchmarks......the question is whether you are selling an investment product that is supposed to be correlated or uncorrelated.....absolute return or something else.....the simplistic view is always what one would have made if they put their whole portfolio with Bridgewater or <insert> fund manager.......but sophisticated institutional & international investment houses.....are attempting to put large clumps of capital into diversified and inversely correlated sub-managers to achieve some higher level portfolio diversification aim.....lots of bridgewaters solutions for these guys are some form of diversification AWAY from SPY.

 

Macro hedge funds do this too.......short shops also....as an institution/family office you dont give 100% of your money to Jim Chanos and hope he outperforms the SPY....he wont....you give him 2% of your AUM....& when SPY is down 20%...he's up and your portfolio has a smoother ride.....he's selling something akin to insurance.

 

The reality is someone like Bill Ackman/Pershing...is what people think of as 'normal' hedge fund......he's predominantly long, US large cap...and he says that by picking superiorly he'll out perform SPY......you go to Ackman to outperform SPY.......you go to Bridgewater et al for something else than simple outperformance....thats not the job to be done so to speak.

[UK]

9 hours ago, Sweet said:

Same, I also think he is full of it. 

 

11 hours ago, no_free_lunch said:

He reminds me of some of my profs when I was in school.  You leave the lecture feeling both intimidated and inspired and yet with no idea what you just learned.   I don't  care how much money he has I think he is full of it.

 

A word one could use for this: mindfuck.

[dealraker]

Somehow very average types like me can simply invest money over time in a somewhat hopefully logical manner based on what thus far seems to be a successful "value/growth" model - which tends to do the mostly upwards-to-the-right on the charts...but not blast-off-to-Mars and such.  We types watch the superstars come and go, fantastic years and terrible ones, but the theme is incredibly consistent and that is if you have a good year or good period then anything you say is sucked up my all the fast go-go types as world truths.

 

Do you guys ever think a man like Dalio can't help himself and he just says in what I'd call "make-it-up" mode really crazy, maybe even stupid stuff, just to see how well it circulates?  

 

All people, especially men, seek status, tell stories, and above all we imitate.  

[Gmthebeau]

19 minutes ago, dealraker said:

Somehow very average types like me can simply invest money over time in a somewhat hopefully logical manner based on what thus far seems to be a successful "value/growth" model - which tends to do the mostly upwards-to-the-right on the charts...but not blast-off-to-Mars and such.  We types watch the superstars come and go, fantastic years and terrible ones, but the theme is incredibly consistent and that is if you have a good year or good period then anything you say is sucked up my all the fast go-go types as world truths.

 

Do you guys ever think a man like Dalio can't help himself and he just says in what I'd call "make-it-up" mode really crazy, maybe even stupid stuff, just to see how well it circulates?  

 

All people, especially men, seek status, tell stories, and above all we imitate.  

 

Agree, Dalio is just trying to remain relevant in some way.  He has been dead wrong in virtually everything he says for a really long time.  Bill Gross is another billionaire trying to remain relevant.  He rode a massive bond bull market to fame, had nothing to do with skill.

[Sweet]

There is precisely no one who can predict macro calls with any degree of accuracy over a long period of time.  Burry got one thing right but has been wrong many times since.  Gross has been wrong for at least a decade.  Druckenmiller also wrong so many times I can’t count.  Gundlach, Hussman, Faber… all just wrong way more often than not.  Jim Cramer is at least an optimist and as a result has been directionally right in stocks for the last 15 years in-spite of all his other gaffs - kinda funny.

 

 

Edited October 5, 2023 by Sweet

[CorpRaider]

Agree.  I do not consume his stuff.

Edited October 5, 2023 by CorpRaider

[Spooky]

My problem with Ray is that he looks at the economic system like a machine where X -> Y when truly it is much more complex than that. Bridgewater got burned bigly with their big shift towards China in recent years.

[Spekulatius]

"Changing World Order" becomes much easier to understand if you just assume that he is talking his book.

I have "Principles" as a PDF somewhere and it's confusing and badly written. I never got past 20 pages.

[crs223]

Please list investors to follow who believe more-or-less that the US trajectory is poor (due to drunken sailor spending, deep seated political divisions, declining education, never ending war, etc).

 

Seems investors who share such sentiments are 1) alway wrong and 2) vilified (possible due to being wrong).

 

Are there any good ones who would not be roasted in this thread?

 

I’ll start: Charlie Munger

 

 

Edited October 5, 2023 by crs223

[Sweet]

52 minutes ago, crs223 said:

Please list investors to follow who believe more-or-less that the US trajectory is poor (due to drunken sailor spending, deep seated political divisions, declining education, never ending war, etc).

 

Seems investors who share such sentiments are 1) alway wrong and 2) vilified (possible due to being wrong).

 

Are there any good ones who would not be roasted in this thread?

 

I’ll start: Charlie Munger

 

 

Yes, those who stay within their lane and are humble enough to know that predicting macro is bloody hard.  So yes, Buffett, Munger, Marks etc

[Gregmal]

The other issue is that most of these guys are egomaniacs and even when you do get some turbulence just never know when to stop. We saw it all last year. Even after 20-30% drawdowns they just couldn’t help themselves and stocks were “still expensive” and whatnot. It’s just a passion for them. They love attention. They love the highs of getting that 1/20 call right where everyone goes wow these guys made a ton of money when everyone else lost their shirt. It’s just another equivalent of having your own art museum or putting your name on a building. A pursuit for those who’s egotistical satisfaction supersedes their desire for more money.

[crs223]

1 hour ago, Gregmal said:

They love the highs of getting that 1/20 call right

 

Drukenmiller admits (my interpretation) he must ignore his bearish inclinations if he wants to make money.

 

I don't (yet) subscribe to this idea that there are two kinds of people: those who believe the US is heading in the wrong direction and those who are right about investing.

 

Which is what prompts me to ask: are there any human beings on earth who think US is headed in the wrong direction, yet are still respected investors?  

[crs223]

1 hour ago, Sweet said:

Yes, those who stay within their lane and are humble enough to know that predicting macro is bloody hard.  So yes, Buffett, Munger, Marks etc

 

I don’t think Buffett believes the US is heading in the wrong direction (although he did recently bemoan taxation of buybacks).

[Spooky]

16 hours ago, crs223 said:

 

I don’t think Buffett believes the US is heading in the wrong direction (although he did recently bemoan taxation of buybacks).

 

He's always saying to never bet against America. One thing he said in a prior AGM is that he bets in 30 years there are more US companies on the list of biggest companies by market cap than Chinese companies.

[maplevalue]

Great discussion.

 

One thing I would say about Dalio is he tends to take a bit of a longer term view and highlights macro risks that are lower probability events. Hot war with China, some sort of political breakdown in the US, possible massive money printing in the next US recession. How many sell-side banks' research departments talk about these topics? These are things that are hard to forecast exactly, but worth having an understanding of when building a diversified portfolio.

 

I think his track record speaks for itself as to him being someone at least considering listening to.

[UK]

On 10/6/2023 at 12:40 AM, Gregmal said:

The other issue is that most of these guys are egomaniacs and even when you do get some turbulence just never know when to stop. We saw it all last year. Even after 20-30% drawdowns they just couldn’t help themselves and stocks were “still expensive” and whatnot. It’s just a passion for them. They love attention. They love the highs of getting that 1/20 call right where everyone goes wow these guys made a ton of money when everyone else lost their shirt. It’s just another equivalent of having your own art museum or putting your name on a building. A pursuit for those who’s egotistical satisfaction supersedes their desire for more money.

 

Here you are: https://www.bloomberg.com/news/articles/2023-10-06/podcast-gmo-s-jeremy-grantham-says-no-one-should-invest-in-the-us

 

The co-founder of GMO LLC says that, while this reckoning recently took a break, it’s now back with a vengeance. Grantham joins this week’s episode of Merryn Talks Money to make the case that—as a result—no one should be invested in the US. In particular, he warns of the Russell 2000, with its high level of zombie companies and horrible debt levels. He calls it “the most vulnerable area” to rising rates. Grantham notes that pretty much everything else is risky, too. With yields at current levels, it would be mathematically reasonable to think the US market as whole could fall by 50%, he contends. There’s trouble ahead if the “magnificent seven,” the few companies that have been carrying the index this year, lose any part of their magic. As for housing, Grantham says that isn’t safe anywhere. Look at the numbers and you’ll see the same crash in action, he explains. The speed of that crash depends on local mortgage markets and borrowing cultures—but the dynamics are the same: rates up, prices down. “Global real estate is universally overpriced,” Grantham says. Just like “farms, forests and fine art.”

 

Fits your description perfectly:)?

 

I saw him on an interview recently, seems almost going maniac, while talking about various doom porn things:). Maybe it is age related, I do not think he was always like that: https://youtu.be/aanwMfrSjP0?si=N7MYX-pHPiMFxFCO

 

Watch from 1:38 min:)

 

Edited October 7, 2023 by UK

[Gregmal]

1 hour ago, UK said:

 

Here you are: https://www.bloomberg.com/news/articles/2023-10-06/podcast-gmo-s-jeremy-grantham-says-no-one-should-invest-in-the-us

 

The co-founder of GMO LLC says that, while this reckoning recently took a break, it’s now back with a vengeance. Grantham joins this week’s episode of Merryn Talks Money to make the case that—as a result—no one should be invested in the US. In particular, he warns of the Russell 2000, with its high level of zombie companies and horrible debt levels. He calls it “the most vulnerable area” to rising rates. Grantham notes that pretty much everything else is risky, too. With yields at current levels, it would be mathematically reasonable to think the US market as whole could fall by 50%, he contends. There’s trouble ahead if the “magnificent seven,” the few companies that have been carrying the index this year, lose any part of their magic. As for housing, Grantham says that isn’t safe anywhere. Look at the numbers and you’ll see the same crash in action, he explains. The speed of that crash depends on local mortgage markets and borrowing cultures—but the dynamics are the same: rates up, prices down. “Global real estate is universally overpriced,” Grantham says. Just like “farms, forests and fine art.”

 

Fits your description perfectly:)?

 

I saw him on an interview recently, seems almost going maniac, while talking about various doom porn things:). Maybe it is age related, I do not think he was always like that: https://youtu.be/aanwMfrSjP0?si=N7MYX-pHPiMFxFCO

 

Watch from 1:38 min:)

 

He’s a world class piece of shit. At your local pub, when you’ve been there too long, and sloppy/embarrassing yourself, they tell you to leave. On Wall Street they just keep giving you a podium. I mean where are all the gold bugs? Been hearing for the past decade, and especially the past 12-18 months about how obvious an investment it is. Totally wrong there too. 

[Spooky]

On 10/7/2023 at 3:34 PM, UK said:

 

Here you are: https://www.bloomberg.com/news/articles/2023-10-06/podcast-gmo-s-jeremy-grantham-says-no-one-should-invest-in-the-us

 

The co-founder of GMO LLC says that, while this reckoning recently took a break, it’s now back with a vengeance. Grantham joins this week’s episode of Merryn Talks Money to make the case that—as a result—no one should be invested in the US. In particular, he warns of the Russell 2000, with its high level of zombie companies and horrible debt levels. He calls it “the most vulnerable area” to rising rates. Grantham notes that pretty much everything else is risky, too. With yields at current levels, it would be mathematically reasonable to think the US market as whole could fall by 50%, he contends. There’s trouble ahead if the “magnificent seven,” the few companies that have been carrying the index this year, lose any part of their magic. As for housing, Grantham says that isn’t safe anywhere. Look at the numbers and you’ll see the same crash in action, he explains. The speed of that crash depends on local mortgage markets and borrowing cultures—but the dynamics are the same: rates up, prices down. “Global real estate is universally overpriced,” Grantham says. Just like “farms, forests and fine art.”

 

Fits your description perfectly:)?

 

I saw him on an interview recently, seems almost going maniac, while talking about various doom porn things:). Maybe it is age related, I do not think he was always like that: https://youtu.be/aanwMfrSjP0?si=N7MYX-pHPiMFxFCO

 

Watch from 1:38 min:)

 

 

I can't get over the fact that Grantham said US capitalism / companies were "fat and happy" and the only thing working well was the US venture space. Meanwhile, that is where his super bubble turned out to be....

Edited October 8, 2023 by Spooky

[Gregmal]

1 hour ago, Spooky said:

 

I can't get over the fact that Grantham said US capitalism / companies were "fat and happy" and the only thing working well was the US venture space. Meanwhile, that is where his super bubble turned out to be....

Yup. Just like Kyle Bass saying short everything while going long Chargepoint post spac deal. 

[TwoCitiesCapital]

On 10/7/2023 at 11:39 AM, Gregmal said:

He’s a world class piece of shit. At your local pub, when you’ve been there too long, and sloppy/embarrassing yourself, they tell you to leave. On Wall Street they just keep giving you a podium. I mean where are all the gold bugs? Been hearing for the past decade, and especially the past 12-18 months about how obvious an investment it is. Totally wrong there too. 

 

I mean...the 5-year return for GLD isn't that far off from the 5-year return on SPY.

 

Relative to value stocks, small- and mid-cal, and int'l, GLD is kicking ass. Can we really say that a positive view towards gold is wrong if it's outperforming MOST global equities over a 5-year period?  

 

 

Edited October 8, 2023 by TwoCitiesCapital

[UK]

25 minutes ago, TwoCitiesCapital said:

 

I mean...the 5-year return for GLD isn't that far off from the 5-year return on SPY.

 

Relative to value stocks, small- and mid-cal, and int'l, GLD is kicking ass. Can we really say that a positive view towards gold is wrong if it's outperforming MOST global equities over a 5-year period?  

 

 

 

Since I am die hard Buffett follower on this subject (productive, non productive etc), I would say he is definitely wrong. Or even if he right in some period, it just is because of the wrong reasons:)

 

Btw, to be fair, Grantham was one of the few, who said to buy (Reinvesting When Terrified) in March 2009 and I think this was not a bad advise:). But generally they were allways to bearish or bearish to early and also made some crazy or wrong calls (on commodities, EM etc). They even made a right call on China's real estate, but if I remember correctly, it was 10 or more years ago:)
 

 

 

[ValueArb]

On 10/5/2023 at 5:25 AM, Sweet said:

There is precisely no one who can predict macro calls with any degree of accuracy over a long period of time.  Burry got one thing right but has been wrong many times since.  Gross has been wrong for at least a decade.  Druckenmiller also wrong so many times I can’t count.  Gundlach, Hussman, Faber… all just wrong way more often than not.  Jim Cramer is at least an optimist and as a result has been directionally right in stocks for the last 15 years in-spite of all his other gaffs - kinda funny.

 

 

 

I would argue Burry didn’t get even one macro call correct. His bet was based on analyzing the credit quality of borrowers  in mortgage trusts, observing riding default rates  and make a reasonable inference about what would happen when their ARMs reset. AFAIK he didn’t place any bets against thy banks, or for a recession, etc.

[Gregmal]

2 hours ago, TwoCitiesCapital said:

 

I mean...the 5-year return for GLD isn't that far off from the 5-year return on SPY.

 

Relative to value stocks, small- and mid-cal, and int'l, GLD is kicking ass. Can we really say that a positive view towards gold is wrong if it's outperforming MOST global equities over a 5-year period?  

 

 

Pretty much anything can occasionally have a decent “relative” stretch. I’ve followed gold my whole career and waited to really see the scenarios where it shines and it just doesn’t. Maybe you get a flare up with some war drama or temporary gov issue, but I think it’s largely a psychological investment and much of that has been displaced by other assets such as crypto.