2nd July 2012: Ray Dalio

I’ve spent the past few weeks reading about Bridgewater hedge fund founder Ray Dalio who is notorious for his management principles (PDF). The Economist and Barron’s have profiled Dalio recently and he updated his model of how the economy works. Dalio also did extensive interviews for Maneet Ahuja‘s The Alpha Masters and Jack D. Schwager‘s Hedge Fund Market Wizards. Dalio’s secret is to find 15 different and uncorrelated alpha streams; to separate alpha from beta exposure; to have a 6-18 month timeframe for holding; and to control transaction and execution costs.