Ray Dalio, founder of hedge fund giant Bridgewater, sees more pain ahead

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Ray Dalio founded Bridgewater Associates in his Manhattan apartment in 1975 and, through astute analysis of macroeconomic trends, grew it into a hedge fund behemoth with assets of around $150 billion. Along the way, he developed a set of principles that were later articulated in lectures, tweets, and books that helped shape the corporate culture of “radical transparency” and transformed Bridgewater into an “ideas meritocracy.” Dalio recently handed over leadership of the Westport, Connecticut-based company to the next generation of leaders, but remains a works council member, investor and leadership mentor.

Dalio, 73, is stepping down at a time when Bridgewater’s flagship fund, Pure Alpha, is in full swing — it’s up more than 22% this year through Oct. 31 — but the world feels bad. After years of loose monetary and fiscal policies and debt-driven growth, many nations are struggling with runaway inflation, and central bankers are raising interest rates to cool gains. Higher interest rates, in turn, have hurt equity and bond markets and threaten to plunge major economies into recession next year. In the US, meanwhile, the population remains highly polarized as external conflicts between superpowers threaten to end decades of relative peace.

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