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Ray Dalio, who runs the world’s biggest hedge fund at Bridgewater Associates, said a few weeks ago at Davos that 2013 would be the year when large amounts of cash moved into markets, and that investors should position for price appreciation in risky assets.Today, Bloomberg’s Kelly Bit has details from one of the secretive firm’s recent client conference calls, which fleshes out the firm’s bullish thesis in a bit more detail.
Bit says that on the call, Bridgewater co-CIO Bob Prince told clients, “You want to be borrowing cash and hold almost anything against it.”
The firm’s key thesis is that the big move out on the risk spectrum – meant to be induced by central bank easing as investors search for yield opportunities – hasn’t even happened yet.
However, investor behaviour clearly signals a desire for yield opportunities, which is why Prince says it won’t even take much economic growth to light a fire under risky assets.
Bridgewater is “long equities around the world” and “generally shifting to long commodities positions,” Prince said during the call. Hedge funds that make long bets are anticipating the prices of various securities will rise. The firm also has a “moderate long position in developed market corporate credit,” he said.
Bridgewater is positive on currencies including the British pound, Korean won, Mexican peso and Russian ruble, according to a chart in the transcript showing the firm’s current views, which Prince referred to during the call. The firm is bearish on the Japanese yen, Australian dollar and Canadian dollar, the chart shows.