Bridgewater Associates’ Ray Dalio is our kind of guy. He’s a truth seeking guy who believes in transparency.
“I believe that truth is healthy and that most people can get what they want if they understand what is true and learn how to successfully deal with it. But I recognize that some people have problems applying this to their and others’ mistakes and weaknesses. That is because there commonly exists a stupid paradigm that “successful” people don’t make mistakes and don’t have weaknesses, whereas the truth is that everyone makes mistakes and has weaknesses. I believe that most important difference between “successful” people and “unsuccessful” people is that the successful people recognize their mistakes so that they learn from them and they recognize their weaknesses so they develop strategies to get around them,” says Dalio.
Ray Dalio’s Bridgewater Associates manages $86 Billion in hedge funds and other vehicles. Dalio’s Pure Alpha was among the most successful hedge funds in 2010, returning 38%. Pure Alpha gained 8.7% in 2009, 14% in 2008 and 18% over the last 10 years. There weren’t many hedge funds that had positive returns in 2008, so it’s very likely that Bridgewater’s Pure Alpha strategy may really be “pure alpha”. Most long/short equity hedge funds have 30-80% beta exposure, which is why they lost so much money in 2008.
Bridgewater had 402 positions in its latest 13F filing, with a total value of nearly $6 Billion. Here are Ray Dalio‘s top 30 stock holdings (excluding ETFs):
| Company | Ticker | Return | Value (Millions) |
| Microsoft Corp | MSFT | -2.4% | 54 |
| GENERAL ELECTRIC CO | GE | 16.6% | 31 |
| ORACLE CORP | ORCL | 7.1% | 28 |
| AMERICAN EXPRESS CO | AXP | 9.4% | 25 |
| NOVELLUS SYSTEMS INC | NVLS | 23.5% | 25 |
| APPLIED MATERIALS INC | AMAT | 14.0% | 24 |
| NEWMONT MINING CORP | NEM | -7.4% | 23 |
| ITT EDUCATIONAL SERVICES INC | ESI | 7.3% | 21 |
| CEPHALON INC | CEPH | -5.1% | 20 |
| Pulte Group Inc | PHM | 1.7% | 18 |
| TRW Automotive Holdings Corp | TRW | 15.8% | 18 |
| CAPITAL ONE FINANCIAL CORP | COF | 22.4% | 18 |
| Health Management Associates Inc | HMA | -0.5% | 17 |
| Macy’s Inc | M | -2.7% | 17 |
| Lexmark International Inc | LXK | 15.5% | 17 |
| Tyson Foods Inc | TSN | 7.4% | 17 |
| VISHAY INTERTECHNOLOGY INC | VSH | 21.5% | 17 |
| H&R BLOCK INC | HRB | 11.3% | 17 |
| PEPSICO INC | PEP | -2.2% | 16 |
| Abercrombie & Fitch Co | ANF | -4.8% | 16 |
| L-3 Communications Holdings Inc | LLL | 13.5% | 16 |
| TEMPLE-INLAND INC | TIN | 15.6% | 15 |
| CAPITALSOURCE INC | CSE | 15.1% | 15 |
| PARKER HANNIFIN CORP | PH | 8.8% | 15 |
| DELL INC | DELL | 3.1% | 15 |
| Illinois Tool Works Inc | ITW | 4.5% | 15 |
| Guess ? Inc | GES | -3.2% | 15 |
| Kohl’s Corp | KSS | -2.9% | 15 |
| COMPUTER SCIENCES CORP | CSC | -3.4% | 15 |
| ADOBE SYSTEMS INC | ADBE | 9.4% | 15 |
These thirty stocks returned 6.8% since the end of 2010, beating the SPY by 0.9 percentage points.
The largest position in Bridgewater’s 13F portfolio was Microsoft. Richard Perry’s Perry Capital, Leon Cooperman’s Omega Advisors, Barry Rosenstein’s Jana Partners, Curtis Schenker’s Scoggin Capital, David Einhorn’s Greenlight Capital, Brevan Howard, and Whitney Tilson’s T2 Partners are other hedge funds with Microsoft investments.
Bridgewater’s third largest stock holding, Oracle, is also held by Thomas Steyer’s Farallon Capital and Lee Ainslie’s Maverick Capital.
Andreas Halvorsen’s Viking Global just added CapitalOne Financial (COF) in its portfolio.
Seth Klarman’s Baupost has CapitalSource Inc (CSE) in its portfolio but started to reduce it by 21% during fourth quarter.
Whitney Tilson is also shorting Dalio’s ITT Educational Services (ESI).
