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Jim Grant Is 'Bearish' on Bridgewater as Dalio Grabs Spotlight

Image: Jim Grant Is 'Bearish' on Bridgewater as Dalio Grabs Spotlight
Ray Dalio (Astrid Stawiarz/Getty Images)

Thursday, 05 October 2017 04:07 PM

Jim Grant, editor of Grant’s Interest Rate Observer, said he’s bearish on Bridgewater Associates because founder Ray Dalio has become less focused on investing, while the firm lacks transparency and has produced lackluster returns.

In a five-page critique of the world’s largest hedge fund, Grant said Dalio has been preoccupied with his new book, sitting for media interviews and sending Tweets.

“Such activities have one thing in common: They are not investing,” Grant writes in the Oct. 6 issue of his newsletter. “Yet here he is, laying it all out to the world again, Tweeting, promoting his book, attacking the press -- necessarily doing less of his day job than he would otherwise do.”

Bridgewater has “lately performed no better than the typical hedge fund,” Grant writes. The billionaire has been opining on subjects from the rise of populism to his affinity for China, which are distraction from making money, Grant said.

Russell Sherman, a spokesman for Bridgewater, declined to comment. Dalio, 68, shares the role of chief investment officer with Bob Prince and Greg Jensen.

Dalio last month published “Principles,” a 600-page tome detailing the practices that the money manager says have made his Westport, Connecticut-based firm successful. The book is No. 2 on the New York Times bestseller list of advice books and an Amazon.com top seller.

Since the start of 2012, Bridgewater’s Pure Alpha II Fund has posted an annualized return of 2.5 percent, compared with its historic average of 12 percent. It’s down 2.8 percent this year through July.

Another concern that Grant cites is Bridgewater’s disclosures in government filings on assets, fees and ownership -- or lack thereof.

“Dalio & Co. opts for a qualitative approach (to disclosure), as if the SEC were suggesting a course of action rather than, say, requiring it,” Grant writes. This makes it difficult for investors to determine key metrics such as how much financial leverage Bridgewater employs, he said.

Grant started his newsletter in 1983 and clients include investors such as pension plans and wealthy individuals. Grant said on his website that his firm seeks to spot the next big market events and succeeded in identifying the 2008 U.S. housing crash and the 2009 recovery in credit. He’s predicted that the Federal Reserve will return to zero interest rates.

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Jim Grant, editor of Grant's Interest Rate Observer, said he's bearish on Bridgewater Associates because founder Ray Dalio has become less focused on investing, while the firm lacks transparency and has produced lackluster returns.In a five-page critique of the world's...
jim, grant, ray, dalio, bearish
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2017-07-05
Thursday, 05 October 2017 04:07 PM
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