Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Worthwhile article by Ray Dalio
Old 07-18-2019, 06:57 PM   #1
Full time employment: Posting here.
 
Join Date: Apr 2005
Posts: 514
Worthwhile article by Ray Dalio

I’ll admit to skimming some of the historical analysis in Part 1 of this piece but found the last couple of decades of that section plus all kinds f Part 2 well worth a careful read. Dalio seems to me to be as good as it gets in providing deeply informed actionable advice. His recommendations won’t be popular with the Bogleheads crowd but those willing to look beyond plain vanilla stock and bond index fund portfolios are certain to find this lengthy screed of interest.

http://https://www.linkedin.com/pulse/paradigm-shifts-ray-dalio/?published=t
__________________

kevink is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-18-2019, 07:00 PM   #2
Recycles dryer sheets
 
Join Date: May 2013
Posts: 291
Fascinating - thank you
__________________

footenote is offline   Reply With Quote
Old 07-19-2019, 12:29 PM   #3
Thinks s/he gets paid by the post
Rianne's Avatar
 
Join Date: Aug 2017
Location: Champaign
Posts: 2,220
Wow, what an education. Somewhat easy to understand for someone like me. I'll bookmark and refer to this article. I plan to reread.
__________________
"If you want to go fast, go alone. If you want to go far, go together.
Rianne is offline   Reply With Quote
Old 07-19-2019, 12:32 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jan 2018
Location: Tampa
Posts: 4,700
So is anyone going to add gold to their portfolio?
__________________
TGIM
Dtail is online now   Reply With Quote
Old 07-19-2019, 12:39 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 5,264
gold!
__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Old 07-19-2019, 12:41 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Apr 2005
Location: Midwest
Posts: 2,129
Quote:
Originally Posted by Dtail View Post
So is anyone going to add gold to their portfolio?
The way I read it, he uses the term "reinflation" and a reinflationary period but never actually says we're heading for "inflation" in the classic sense. ie a lot.

Also, the subtext is that this period should last about 10 yrs. I think we should all be able to hold on. None of it sounded particularly alarmist. Yes, gold might do better than stocks but unless you go fairly big and guess right how much of a difference will it make?

Unless I misread him.....?
razztazz is offline   Reply With Quote
Old 07-19-2019, 12:43 PM   #7
Thinks s/he gets paid by the post
steelyman's Avatar
 
Join Date: Feb 2011
Location: NC Triangle
Posts: 4,373
The “Permanent Portfolio” came to mind when I read the piece (not advocating for or against).
__________________

steelyman is offline   Reply With Quote
Old 07-19-2019, 12:47 PM   #8
Full time employment: Posting here.
RetireBy90's Avatar
 
Join Date: Feb 2009
Location: Cville
Posts: 729
Kevink, thanks for the post. I read the link and while I didn't follow completely all the details, I noted the similarities between the period following crash of 29/30 and our own crash of 08/09. I have noted that people who lived through the depression were affected for the rest of their lives and suspect that we will be affected in much the same way. Of course I have been wrong before, could be wrong about this also.
__________________
FIRE 31 Aug, 2018
RetireBy90 is offline   Reply With Quote
Old 07-19-2019, 12:59 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 8,706
You've said about 4 different ways that it's interesting in worth a read, but not a single bit of a summary. Could you please provide one?
RunningBum is offline   Reply With Quote
Old 07-19-2019, 01:03 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 21,832
Quote:
Originally Posted by RunningBum View Post
You've said about 4 different ways that it's interesting in worth a read, but not a single bit of a summary. Could you please provide one?
I'm curious too. I only skimmed, but it struck me as a reasonable and insightful analysis of business cycles. I'm less convinced this leads to anything actionable. I'll try a more thourough read later, or maybe we'll get more insights along the way.

-ERD50
ERD50 is online now   Reply With Quote
Old 07-19-2019, 01:04 PM   #11
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky inlets
Posts: 30,319
Thanks for the heads up.

This looks like a continuation of a longer discussion by Dalio and his views on the economy and investing. He wrote a book (h/t NW-Bound, here), the book can be downloaded in PDF without cost directly from his website, here. Although the table of contents says over 400 pages, it’s really about a 30 page analysis and the rest is appendices and data. Highly recommended for anyone who wants some more depth to the LinkedIn post in the OP.
MichaelB is online now   Reply With Quote
Old 07-19-2019, 01:08 PM   #12
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky inlets
Posts: 30,319
Quote:
Originally Posted by RunningBum View Post
You've said about 4 different ways that it's interesting in worth a read, but not a single bit of a summary. Could you please provide one?
Lack of economic growth will lead to zero level interest rates in the US, Euro area and Japan are already there. The sum of outstanding debt, continuing deficits and unfounded liabilities will lead to monetaziton of debt in the US and other developed economies. This will result in currencies losing value. Gold as a portfolio holding will provide substantial real return during that period.
MichaelB is online now   Reply With Quote
Old 07-19-2019, 02:29 PM   #13
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 3,765
Quote:
Originally Posted by kevink View Post
... Dalio seems to me to be as good as it gets in providing deeply informed actionable advice. ...
Does he have a multi-year history of accurate predictions and few failed predictions? IOW a complete score card?

Until I see that kind of data I ignore the babble of noise from the gaggles of prognosticators. And I haven't seen that data from any of them yet.
OldShooter is offline   Reply With Quote
Old 07-19-2019, 02:51 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 25,789
Can we use money to keep score?

Dalio started his hedge fund Bridgewater Associates out of his apartment in 1975. It became the world's largest hedge fund in 2005. His net worth is currently $18.4 billion.

Nobody can be 100% right, but Dalio is more often right than wrong judging from that record.

Now, there are people who make more money, such as Bill Gates or Bezos, but the latter make money from running businesses, and not from pure investing.

To know more about Dalio, read: https://en.wikipedia.org/wiki/Ray_Dalio.


PS. What I like about Dalio is that he runs his firm in a very democratic manner. Employees are allowed to challenge his views and to present their own analysis for all to hear.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 07-19-2019, 02:52 PM   #15
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky inlets
Posts: 30,319
Quote:
Originally Posted by OldShooter View Post
Does he have a multi-year history of accurate predictions and few failed predictions? IOW a complete score card?

Until I see that kind of data I ignore the babble of noise from the gaggles of prognosticators. And I haven't seen that data from any of them yet.
This isn’t really a forecast, it’s more of an analysis and conclusion. Anyone interested in economic analysis and investing should read it.

I think this thread isn’t about his ability to forecast or whether his message is “right or wrong”, it’s an alert to forum members that Dalio’s post is available for reading.
MichaelB is online now   Reply With Quote
Old 07-19-2019, 02:58 PM   #16
Moderator
Jerry1's Avatar
 
Join Date: Nov 2014
Posts: 3,149
Quote:
Originally Posted by steelyman View Post
The “Permanent Portfolio” came to mind when I read the piece (not advocating for or against).
Same here. I don't doubt some gold will cushion your portfolio against inflation, but I just don't think I'm willing to buy enough of it to make a significant difference. Even 10% on about $2M is $200K in gold. I can't see me going that high with gold in my portfolio.

The Permanent Portfolio has 25% gold. No way I'd be comfortable with $500K in gold. A bit of a dilemma because I'm in general agreement with the premise of the article and the Permanent Portfolio.
__________________
Every day when I open my eyes now it feels like a Saturday - David Gray
Jerry1 is online now   Reply With Quote
Old 07-19-2019, 03:03 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 25,789
Dunno about gold, but talking about bonds and stocks not doing as well in the future as in the past, even Bogle had been telling us that, time and time again.

Bogle of course does not advise buying gold, only that outsized investment returns should not be expected with stocks and bonds in the years ahead. Just hang on and lower our expectations is Bogle's message. That does not contradict what Dalio says.

And by the way, the above is also Shiller's message.

Warren's message is to hold stocks, because it's the best thing to have. He does not claim to know what the return will be, other than it beats "other stuff". That may mean that it will lose less than the alternatives. Warren never cares for gold, and that's a big contrast with Dalio.

PS. Dalio just turned gold bug now, as far as I know.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 07-19-2019, 03:39 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Jan 2018
Location: Tampa
Posts: 4,700
Quote:
Originally Posted by NW-Bound View Post
Can we use money to keep score?

Dalio started his hedge fund Bridgewater Associates out of his apartment in 1975. It became the world's largest hedge fund in 2005. His net worth is currently $18.4 billion.

Nobody can be 100% right, but Dalio is more often right than wrong judging from that record.

Now, there are people who make more money, such as Bill Gates or Bezos, but the latter make money from running businesses, and not from pure investing.

To know more about Dalio, read: https://en.wikipedia.org/wiki/Ray_Dalio.


PS. What I like about Dalio is that he runs his firm in a very democratic manner. Employees are allowed to challenge his views and to present their own analysis for all to hear.
He is successful no doubt. That doesn't mean necessarily that a trading strategy that a hedge fund uses, can be translated to individual investment strategies. Hedge funds often also have access to information that the generic individual investor doesn't have.
The hedge fund also makes quite a bit of money on the management of assets, plus taking a piece of the generated profits.
__________________
TGIM
Dtail is online now   Reply With Quote
Old 07-19-2019, 03:42 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 25,789
Not all hedge funds have the record of Bridgewater. In fact, many (most?) of them trail the S&P.

Yes, it is true that one cannot read what Dalio writes, then mimics what he does to make the same money.

As MichaelB said, his paper is an economic analysis. It is not a stock trading newsletter for which he is trying to sell subscriptions.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 07-19-2019, 03:44 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 5,264
Quote:
Originally Posted by NW-Bound View Post
PS. Dalio just turned gold bug now, as far as I know.
i'm wondering if investing in a gold fund (TGLDX for example) would provide similar inflation protection?
__________________

__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Interesting Commentary by Ray Dalio RenoJay FIRE and Money 26 01-08-2019 09:30 AM
Worthwhile albeit depressing article kevink FIRE Related Public Policy 22 06-29-2013 09:33 AM
Ray Dalio, Chief Investment Officer, Bridgewater Associates Hal3 FIRE and Money 0 02-13-2009 09:49 AM

» Quick Links

 
All times are GMT -6. The time now is 07:49 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
×