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Meta Title - Who is Ray Dalio? | Principles by Ray Dalio

Meta Description - Ray Dalio, the founder of Bridgewater Associates

continues to be the best hedge fund manager in the world. Read the blog
to know about him.

Blog Title - Ray Dalio: Why is he called the Steve Jobs of Investing?

URL - ray-dalio-why-is-he-called-the-steve-jobs-of-investing

No.of Words - 1190

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Raymond Thomas Dalio, the Co-Chairman and Co-Cheif Investment

Officer of Bridgewater Associates and the best performing hedge fund
manager continued to maintain his position even in 2020.

Over the years, Ray Dalio, a renowned hedge fund manager, has been
often called the ‘Steve Jobs of investing.’

But, why so?

The geeks from the investment world would surely be aware of who he is!

In this blog, we are going to navigate through the story of Ray Dalio and
this will help to conclude why he has been given the above title!
An Investor Since Childhood
A New Yorker by heart Ray Dalio’s father was a jazz musician and his
mother was a homemaker. But, he did not take up the path of music. On
the contrary, as a child, he was a very curious, an independent thinker,
sports lover and more of a lazy lad.

For making some money, young Ray Dalio did a couple of part-time jobs
like mowing lawns of his neighbour and shovelling snow from driveways. At
the age of 12, he picked up the work of caddy at a posh golf club. The golf
club was sort of a cliche place for people working on Wall Street to play
and discuss stocks.

While working there he eventually started to pick up tips regarding

investment and this increased his interest. He started to save a portion
from his wages and finally bought shares in North East Airline worth $300 at
a young age.

The investment did well as the shares he bought multiplied by 3 times. He

disliked the culture of rote memorization followed in schools hence he got
indulged in something that intrigued him from a very young age. He would
collect coupons for free annual reports from the Fortune 500 companies,
would then spot the good investment options and continued to invest
throughout his high school.

After finishing school he took up the course of Bachelors in Arts in

transcendental meditation from Long Island University. During his
graduation years, Ray Dalio got a chance to know about commodity
futures through one of his classmates. He found commodities to be a
lucrative investment route therefore he decided to learn more about them.
In the meantime, once the graduation degree was in his hands, he went on
to pursue Masters in Business Administration for Harvard School of
Business.
Yes, dear readers, he is a Harvard alumnus.

Beginning of the Professional Career

Once out of college, he started to work as a clerk at the New York Stock
Exchange.

It served as a learning experience for Ray Dalio as he learnt about the

currency market, price movements and how investors react in the market
and much more. During the course of his work, he observed that most of
the things that occurred were due to cause-effect relationships and that
everything can be broken into simpler bits with logical thinking.

And, this was how he formulated his approach for trading or investing.

Further, he went on to work with popular firms like Dominick and Dominick
as a director of commodities, Shearson as an in-charge of future hedging
business. By then Ray Dalio had become such an informed man that at
Shearson, he would help the clients to manage the risks associated with
price movement in the stock market and due to this reason he was trusted
by many associates and clients.

Finally, after he got out from Shearson, Ray Dalio (aged 26 years) decided
to open his own firm and that is when Bridgewater Associates came into
being in 1975.

How did Bridgewater Associates Start?

The foundation of the world’s biggest hedge fund, Bridgewater Associates
was laid at Ray Dalio’s 2 bedroom apartment in New York.

The story of how the name ‘Bridgewater’ was chosen for the firm is worth a
read.
When Ray Dalio decided to start his own firm, he wanted to sell
commodities from the United States to other countries. It would have been
an attempt to ‘bridge the waters’ between various nations. Hence, the term
‘Bridgewater’ came into being. But, as the work progressed the firm’s focus
turned towards providing consultancy services.

When Ray Dalio started his firm, he would always put himself into the
client’s shoes and then suggest to them the ways he would take up if he
were in their position in the market. He helped them with their accounts,
made them understand the company financials and awarded them the
market risks and how to deal with them.

As he helped the clients he would note down the principles or facts that
helped him to make investment decisions while helping the clients. These
can be termed as macro observations of Ray Dalio. These points helped
him to analyze the price movements in the market and ultimately make
wise investment decisions.

Where does the Firm Stand Today?

Bridgewater Associates is the world’s biggest hedge fund company with an
impressive asset under management (AUM) worth $160 billion. Over the
last 23 years, the company has delivered 11.5% returns per year. One of the
sot striking point to mention here is that this return (of 11.5% per year) is
almost double the return given by S&P 500.

In fact, Bridgewater Associates was one of those private firms of the United
States which survived the financial crisis of 2008 with an AUM of $50 billion
at that time. After the financial crisis, Ray Dalio’s Bridgewater Associated
emerged even stronger and by 2011 it reached the mark of $100 billion
(AUM).

These statistics are a testimony of how humongous the firm is and has
been!
Books By Ray Dalio & Philanthropic Work
Ray Dalio, apart from being a successful entrepreneur also mentors people
who are just starting out in the business world. In fact, he is known to be
one of the shrewdest men in the investment world due to his views of
finance and economics and he has written several books to share it with
the world. The books written by Ray Dalio include:

1) Principles (2017)
2) Principles for Sucess (2005)
3) The Changing World Order: Why Nations Succeed and Fail (2021)
4) Principles for Navigating Big Debt Crisis (2018)

Out of these books, one of the most celebrated works is Principles by Ray
Dalio, where he has summarized all the important learning of his
successful career. The book is unique in the sense that it provides practical
lessons themed around economics, investment, management and life.
Such advice and lessons cannot be found in traditional business textbooks,
press or articles.

If we talk about the philanthropic work, then Ray Dalio has not been behind!

He has pledged to give half of his net worth to various charities by

becoming part of The Giving Pledge campaign. Along with this, he has his
own organization by the name of Dalio Philanthropies through which he
carries out all philanthropic activities. Lastly, as the statistics show, since
2003 (the year of its inception), Ray Dalio and his family have made
charities worth more than $1 billion through it.

I hope by now you would have understood why this American investor is
called the Steve Jobs of investing!