(August 20, 2012, New York) Ray Dalio was the hedge fund world's most successful investor in 2010 and 2011, with his $120 billion Bridgewater Associates LP. His firm invests based on his understanding of macroeconomic principles. Why he is focusing now in emerging markets will be analyzed at Hedge Funds Leaders Forum 2012, "Getting Ready to Manage $5 Trillion by 2016" (http://www.HedgeFundsLeadersForum.com).
In his second-quarter letter , Dalio said he believed global equity markets were pricing in "fairly pessimistic" long-term earnings growth rates and the worst real earnings growth rate in 100 years, while companies still "retain plenty of ability to protect their operating margins and profitability by keeping labor costs down," despite global financial conditions posing a headwind to top-line revenue growth. He also noted that the dividend yield of U.S. non-financial corporation is higher than U.S. government note yields for only the second time in the past 50 years, and companies had ample liquidity to cover their dividends.
These are Dalio's biggest new stock purchases in the second quarter: iShares MSCI Brazil Index, Cliffs Natural Resources, Honeywell International and Las Vegas Sands. Dalio's firm bought 2,002,700 shares of the largest new buy, iShares MSCI Brazil Index at an average price of $56 in the second quarter. The holding now has a 1.5% weighting in Bridgewater's portfolio. The stock dropped more than $20 from its year-to-date peak in the first quarter to its year-to-date trough in the second quarter, when Dalio bought it. The top stocks within the MSCI Brazil Index Fund are Petrobras, Itau Unibanco and Vale. Its last year's return was a loss of 26.85%, and its three-year return was 3.08%.
Dalio commented in his second quarter letter that the quarter was negative for most emerging market debt, and that declines in commodity prices, particularly oil, "contributed to the slight underperformance in Indonesia, Brazil and Russia." He also said Japan and emerging markets underperformed the world equity markets during the period, with returns well below the global average.
On September 25 in New York, October 9 in Chicago and December 12 in London, hundreds of the most important players in alternative investments will gather for all-star agendas at Hedge Funds Leaders Forum 2012, "Getting Ready to Manage $5 Trillion by 2016" (http://www.HedgeFundsLeadersForum.com). A virtual who's who will soon follow as one legendary manager after another will take the stage. Billions of investable assets will be represented by influential local and international investors who will listen with rapt attention as star managers and analysts discuss and debate the biggest issues facing the industry today.
Hedge Funds Leaders Forum 2012, "Getting Ready to Manage $5 Trillion by 2016" will provide attendees in New York, Chicago and London with the most up-to-date review of where this ever-changing industry stands and how regulatory and alpha expectation s will impact it. Recognized managers, investors, experts, regulators, and strategists will return to Hedge Funds Leaders Forum 2012 to provide the information practitioners are looking for in an open and unbiased environment, highly conducive to the most efficient and effective networking.
Hedge Funds Leaders Forum 2012 is produced by Golden Networking (http://www.goldennetworking.net), the premier networking community for business executives, entrepreneurs and investors. Panelists, speakers and sponsors are invited to contact Golden Networking by sending an email to firstname.lastname@example.org.