Displaying items by tag: bridgewater
A huge institutional investor is poised to make a fortune if markets plunge. The biggest hedge fund in the world—Ray Dalio’s Bridgewater—has reportedly placed a $1 bn+ bet that stocks will tumble. Using Goldman Sachs and Morgan Stanley, the firm has been building up the bearish position for months. The bet wagers that stocks will fall sharply by March and will pay off if either the S&P 500 or the Euro Stoxx 50 moves lower. Bridgewater reportedly paid $1.5 bn for the options contracts, roughly 1% of their AUM.
FINSUM: This is a huge bet. Normally you could argue that this might just be a hedge, but the size of the position makes it seem much more like a gamble than a hedge.
Ray Dalio, one of the most famous hedge fund managers in the world, and the founder of the world’s largest hedge fund, Bridgewater, says that the world has lost its mind. The eccentric hedge fund founder recently published a blog post entitled “The World Has Gone Mad and the System Is Broken” in which he argues that zero rates, weak returns, and growing inequality are leading to something bad. What exactly that “bad” was remained unclear.
FINSUM: We agree that these are issues, but we are pretty tired of vague doom and gloom prognostications. We like a highly specific catalyst for such forecasts.
One of the biggest names on Wall Street is warning investors that a recession is coming. Ray Dalio, head of the world’s biggest hedge fund, says that we are likely in for a recession as the Fed has to navigate a tricky tightening cycle. Dalio says the economy is in a hard-to-navigate period of tightening rates that will be hard for the Fed to get right. Rates are likely to rise quickly, which could spark a recession. The view is a reversal for Dalio, who had been until very recently saying that it was foolish to be wary of the stock market.
FINSUM: Dalio’s calls from Davos just a few weeks ago look foolish now, but he does make a good point that this will be a tricky period for the Fed to navigate well.