The Case Against Bridgewater Isn't Proven
Ray Dalio loves criticism but also judges it rigorously.
Photographer: Jason Alden/BloombergA piece in Grant's Interest Rate Observer, the charmingly cranky Wall Street newsletter, about Bridgewater Associates LP, the world's largest hedge-fund firm, has been getting a lot of attention this week.1507838728956 It is titled "The face on the Wall Street milk carton," and it starts with some general tut-tutting at Bridgewater co-founder and spiritual leader Ray Dalio for spending a lot of time writing a book and tweeting and giving TED talks and doing other things that "have one thing in common: They are not investing."
This is true, but of course, if you had to describe in two words what Bridgewater's 1,500 employees do, "not investing" would be a pretty good fit. They have a computer to do the investing! Bridgewater runs on algorithms, and famously few of its employees have much visibility into how the algorithms actually work. They instead spend their time marketing the firm, doing investor relations, and -- crucially -- evaluating and critiquing one another. I once explained my theory of Bridgewater: