Ray Dalio is the founder, chairman and co-chief investment officer (CIO) of Bridgewater Associates, one of the largest and most successful hedge funds in the world. A self-made billionaire, Dalio is well-known in the investing world for the consistently high performance of the funds he oversees as well as his unique perspectives on investing and company culture.
Early Life and Education
Dalio was born in 1949 in the Jackson Heights neighborhood of Queens, New York. His father was a jazz musician and his mother a housewife. At age 8, Dalio moved to the New York City suburb of Manhasset with his family. As Dalio described it, he was a poor student as a youth, with little interest in studying. At 12, he began caddying at a nearby golf course frequented by investors from the city. A tip provided by one such investor led Dalio to spend $300 he had earned caddying on shares in Northeast Airlines. Shortly thereafter, the airline merged with a rival, tripling Dalio's money in the process. He was hooked.
Dalio completed his undergraduate work at nearby Long Island University. After graduation, he developed an interest in commodities futures during a summer job working on the floor of the New York Stock Exchange. He continued trading commodities futures for his personal account as he completed an MBA at Harvard University. Upon graduation, Dalio took a job as a risk consultant to commodities producers for a brokerage headed by Sanford Weill, who went on to serve as the chairman of Citigroup decades later. Dalio lasted just one year at the firm before he was let go in 1975, reportedly for a rash of poor personal decisions.
Fresh out of work at 26, Dalio decided to start up his own advisory firm in his two-bedroom apartment, calling it Bridgewater Associates. The company started off with a few clients who had followed Dalio from his previous job. As he hustled for more business, Dalio began producing a regular newsletter with market briefings and investment notes. The quick popularity of the newsletter resulted in a growing list of corporations, pension funds and others willing to pay Dalio for his insights. By 1985, Dalio's reputation had grown so much that he was able to convince the World Bank to allow him to manage a $5 million fixed-income retirement fund.
In 1989, Kodak came to Dalio for advice on its retirement fund, which was allocated primarily to stocks. Dalio suggested a highly diversified investment strategy to reduce risk while maintaining a high level of returns. Shortly thereafter, Bridgewater launched its first hedge fund with capital from Kodak and Loews Corporation. In the ensuing years, Bridgewater has developed several hedge funds primarily targeted at institutional investors, including public and private pension funds, university endowments, charitable foundations and sovereign wealth funds. According to company statements in 2016, Bridgewater manages $154 billion in global investments, making it the largest hedge fund in the world.
Net Worth & Current Influence
Ray Dalio ranked 29th on the 2015 Forbes 400 list of the richest Americans, with an estimated fortune of $15.3 billion. He remains an exceptionally influential investor in his role as co-CIO of Bridgewater.
Dalio also remains an influential thinker and analyst, speaking at global business and economic meetings, such as the World Economic Forum, and appearing on television. In 2011, he put down his thoughts on the principles of life and corporate management in a free, self-published e-book titled, "Principles." He has also produced educational materials on economics and investing topics for the Bridgewater website, EconomicPrinciples.org.
Dalio is a signatory to the Giving Pledge program, an initiative spearheaded by Bill Gates to encourage the world's wealthiest people to commit the majority of their wealth to charitable causes. He has reportedly begun philanthropic activities through the Dalio Foundation, which has reported assets of $842 million. Alongside his wife, Barbara, Dalio has given funds to a wide variety of charitable and scientific causes, including education, the environment, child health care and public health.
Most Influential Quotes
"Constantly probe the people who report to you, and encourage them to probe you." Here Dalio describes the culture he fosters at Bridgewater, which is founded on radical transparency and an intolerance for dishonesty.
"An economy is not a complicated thing; it just has a lot of moving parts." One of the world's most successful investors, Dalio believes people can understand the economy through cause and effect relationships, which operate like interconnecting gears in a machine. If a person understands how the parts of the economy interconnect, he can understand the economy, Dalio believes.