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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 previous saying that you simply don’ wish 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 acquired 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 foul yr that he predicted it. He additionally appeared to have married very wealthy and someway then acquired his fund going.
Inititally, he additionally appeared to have some actually good years which earned him the popularity and introduced in property, however over time je grew to become a horrible psychopath who terrorized everybody along with his “ideas”. His fixation on these “ideas” that he (unsuccessfully) tried to codify into some form of AI/Professional system additionally led to a fairly 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 did not 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 will not be the one case of a well-known Hedge Fund Supervisor who truly will not be such investor however primarily salesman. As now we have not too long ago seen with Invoice Hwang (Archegos) Gabe Plotkin (Melvin) and Tiger International, loads of these Hedge Fund Billionaires aren’t geniuses in any respect however extra like “One trick ponys” that always handle to counterpoint themselves at the price of their shoppers.
As in different instances, folks 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 incorrect. Staff have been carrying round Ipads with actual time ranking methods to fee one another which in lots of instances led to doom loops as everybody tried to not be the subsequent sufferer and as an alternative tried to push another person over the cliff. Generally he employed very senior folks into senior roles (liek Larry Culp, fromer CEO of Danaher, now GE), however these folks ususally left after just a few months as soon as they understood what they acquired 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 in a position to make the identical amount of cash elsewhere. In the direction of the tip of his time at Bridgewater, Dalio grew to become increasingly more fixated on educating his “ideas” to every and anybody who would hear.
The guide is a fasciniating learn on how uncontrolled issues can get in an organization, the place the founder has all the facility and isn’t held accountable by an impartial board or comparable our bodies.
The one adverse level in regards to the guide is that there’s comparatively little to learn in regards to the precise investing, however that is perhaps as a consequence of the truth that Bridgewater as such was probably not about investing.
In any case I can advocate the guide as a fairly distinctive “backstage” story on one of the vital well-known Macro Hedge funds of all occasions.
*) for some purpose, I should 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 every now and then
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