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“The Fund” is in brief an absolute tear-down of each, the legendary Macro Hedge Fund Bridgewater and its equally well-known founder Ray Dalio. There’s an outdated saying that you just don’ need to know the way the sausage is made and on this case that is greater than becoming to what occurred behind the scenes at Bridgewater.
I’ve to confess that I by no means cared that a lot about Bridgewater (*) and that I discovered Dalio at all times very unusual when he was talking, however that he was such a Psychopath as it’s described within the guide is kind of a shock.
Apparently, Dalio to start with of his carreer wanted a very long time earlier than he obtained something off the bottom. His preliminary fame got here that he was one of many usal Perma Bears, predicting everlasting doom in his newsletters till he lastly might say in a nasty 12 months that he predicted it. He additionally appeared to have married very wealthy and one way or the other then obtained his fund going.
Inititally, he additionally appeared to have some actually good years which earned him the fame and introduced in belongings, however over time je turned a horrible psychopath who terrorized everybody together with his “ideas”. His fixation on these “ideas” that he (unsuccessfully) tried to codify into some type of AI/Knowledgeable system additionally led to a reasonably unhealthy funding efficiency. Their flagship fund underperformed a easy 60/40 Inventory/bond portfolio over the previous 10-12 years. Apparently as a perma bear, Dalio additionally didn’t see and react on the Covid crash.
Though not many deatails got, Bridgewater appeared to have used a realtively easy Quant mannequin primarily based on Momentum early on, which to start with gave them some edge, however they by no means appeared to have developed that additional.
My private opinion is that Dalio and Bridgewater isn’t the one case of a well-known Hedge Fund Supervisor who truly isn’t such a superb investor however primarily a superb salesman. As we’ve got lately seen with Invoice Hwang (Archegos) Gabe Plotkin (Melvin) and Tiger International, a number of these Hedge Fund Billionaires aren’t geniuses in any respect however extra like “One trick ponys” that usually handle to complement themselves at the price of their purchasers.
As in different instances, individuals have been drawn to Bridewater due to the excessive salaries, however each worker was in danger to get publicly “questioned” by the boss if she or he mentioned soemthing unsuitable. Workers have been carrying round Ipads with actual time score programs to charge one another which in lots of instances led to doom loops as everybody tried to not be the following sufferer and as an alternative tried to push another person over the cliff. Generally he employed very senior individuals into senior roles (liek Larry Culp, fromer CEO of Danaher, now GE), however these individuals ususally left after just a few months as soon as they understood what they obtained into.
As most workers additionally had nothing to do with investing, it was additionally laborious to depart as a result of they’d not been capable of make the identical amount of cash elsewhere. In direction of the top of his time at Bridgewater, Dalio turned increasingly fixated on educating his “ideas” to every and anybody who would pay attention.
The guide is a fasciniating learn on how uncontrolled issues can get in an organization, the place the founder has all the ability and isn’t held accountable by an unbiased board or related our bodies.
The one unfavourable level in regards to the guide is that there’s comparatively little to learn in regards to the precise investing, however that is possibly as a result of the truth that Bridgewater as such was probably not about investing.
In any case I can suggest the guide as a reasonably distinctive “backstage” story on probably the most well-known Macro Hedge funds of all instances.
*) for some motive, I will need to have subscribed to Ray Dalio in some unspecified time in the future in time as a result of I nonetheless discover some Emails from Dalio in my Spam folder occasionally
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