06 Ray Dalio & Bridgewater Associates

In the spring of 2007, when the US financial market was still booming, an investment firm began worrying about the risks of excessive financial leverage.

This company is Bridgewater Associates, a renowned hedge fund.

After looking through the public accounts of the world's top institutions, Bridgewater predicted the hypothetical losses related to bad debts at $839 billion.

In December 2007, Ray Dalio warned the US Treasury Department and White House economic advisers about the imminent crisis. But apparently, they ignored him.

The 2008 stock market crash and the Fed's expansionary monetary policy that followed fulfilled Dalio's prophecy.

Ray Dalio was born in New York City on August 8,1949. His father was Marino Dailio, a jazz musician.

At the age of 12, he started caddying at an exclusive golf club, where many of the customers worked on Wall Street, including Gorge Leib.

Later he was given a summer job by Leib's son at his trading firm. He soon became fascinated by investing and marched on his own investment journey.

He invested $300 in Northeast Airlines stock when he was a teenager, and saw the stock price triple after the company merged with Delta Air Lines.

In the following months, he doubled down on his investments with his savings and earnings from the market. Before high school, Dalio managed to build up a portfolio worth several thousand dollars.

Later he attended CW Post Graduate College of Long Island University and received an MBA from Harvard Business School in 1973.

In 1975, Dalio set up Bridgewater from his two-bedroom apartment in New York City.

It was initially a consultancy firm, advising clients on capital management and risk control, but later it grew into a hedge fund.

Dalio established himself on Wall Street as his firm delivered relatively good performance during the 1987 market crisis.

This helped him attract some big-name clients such as McDonald's, the World Bank ( 1985), and Kodak (1989).

In 2013, Bridgewater Associates became the largest hedge fund in the world.

Ray Dalio takes a top-down investing approach, factoring into various macro elements, such as inflation, interest rates, and GDP growth to make decisions. This is why he is known as an investor who "looks from a bird's eye view" at the financial market.

In real trading, Dalio uses computer models and algorithms to apply his thinking.

New Yorker magazine describes Dalio as "a big-picture thinker coupled to a street-smart trader."

Dalio popularizes many widely used investment principles and practices, such as risk parity, portable alpha, and more.