Ray Dalio is one of the brightest investment minds of our time. His decades of experience have created an extraordinary reservoir of knowledge, and I continue to learn from his insights as I refine my own thinking on markets, risk, and investing.
I still remember a conversation with a senior banker who seemed genuinely surprised that I closely followed Ray Dalio’s work. I smiled and told her, “I’m actually more surprised that you thought I did not know who Ray Dalio is.” After three decades in the investment industry, learning from the best is not optional, it is part of the job.
Yes, Ray Dalio is a dedicated, long-time meditator who has often credited meditation as the single greatest contributor to his success. He has practiced Transcendental Meditation (TM) since 1969, well before founding Bridgewater Associates and continues to meditate for 20 minutes twice a day.
Here is one of Ray Dalio’s latest articles that caught my attention.
Here is a section:
All markets are affected in big ways by global macro forces. The most important decision you have to make is what asset allocation you have or how much in stocks, bonds, commodities, real estate, gold, etc. and where to have these things. That is a macro decision. The big moves in the value of your portfolio come from the relative shifts in the values of asset classes which are driven by macro forces.
With an understanding of global macro, you can know how to structure a balanced portfolio which will allow you to make tactical movements between asset classes much better than without it. All other types of investing are focused on just one asset class in a specialized area that goes through big cyclical waves of good and bad times that for long-only investors take their portfolio values up and down in ways that are beyond their controls.
In contrast, by being a global macro long-short investor who can invest in different liquid markets (stocks, bonds, gold, and other markets) in all countries from either the long side or the short side allows you to move into to what is good from the long side or bad from short side, which allows you to bet on practically anything and make money in any type of environment.
So, by being a global macro long-short investor, there is no excuse for not making money other than one’s own bad decision making.
If you do not understand the big changes that are going on in the world, you cannot adequately understand the full range of risks and opportunities that you need to understand to be successful over the long run.
To close yourself to understanding the opportunities and risks that come from abroad and are reflected in their markets (which you can invest in) lowers your opportunities and increases your risks.